ZWEIG TOTAL RETURN FUND INC, DEF 14A, 1996-03-21

ZWEIG TOTAL RETURN FUND INC
DEF 14A, 1996-03-21

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<PAGE>

THE ZWEIG TOTAL RETURN FUND, INC.
900 THIRD AVENUE, NEW YORK, NEW YORK 10022
(212) 755-9860

March 25, 1996

Dear Shareholder:

You are invited to attend the Annual Meeting of Shareholders of The Zweig
Total Return Fund, Inc. to be held on Wednesday, May 15, 1996 at 1:30 P.M. at
The St. Regis Hotel, located at 2 East 55th Street (between Fifth and Madison
Avenues), New York, New York.

This will be our eighth shareholders' meeting and it will give you an
opportunity to hear a report on the Fund and to discuss other matters of
interest to you as a shareholder.

We hope that you will be able to attend the meeting. Whether or not you plan
to attend, please complete, date, sign and mail the enclosed proxy card to
assure that your shares are represented at the meeting.

Martin E. Zweig,
Chairman of the Board
and President
<PAGE>

THE ZWEIG TOTAL RETURN FUND, INC.
900 THIRD AVENUE, NEW YORK, NEW YORK 10022
(212) 755-9860
----------------

NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
MAY 15, 1996
----------------

To the Shareholders:

The Annual Meeting of Shareholders of The Zweig Total Return Fund, Inc., a
Maryland corporation (the "Fund"), will be held on Wednesday, May 15, 1996 at
1:30 P.M. at The St. Regis Hotel, located at 2 East 55th Street (between Fifth
and Madison Avenues), New York, New York for the following purposes:

(1) To elect two Directors to serve until the Annual Meeting of
Shareholders in 1999, and until their respective successors are
elected and qualify, and to elect one Director to serve until the
Annual Meeting of Shareholders in 1998, and until his successor is
elected and qualifies;

(2) To ratify the selection of Coopers & Lybrand L.L.P. as independent
certified public accountants of the Fund for the year ending
December 31, 1996; and

(3) To transact such other business as may properly come before the
Meeting or any adjournments thereof.

Shareholders of record as of the close of business on March 15, 1996 are
entitled to notice of and will be entitled to vote at the Meeting and at any
and all adjournments thereof.

By Order of the Board of Directors
Martin E. Zweig,
Chairman of the Board

New York, New York
March 25, 1996

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IMPORTANT:

YOU ARE INVITED TO ATTEND THE MEETING. WHETHER OR NOT YOU PLAN TO ATTEND
THE MEETING IN PERSON, YOU ARE REQUESTED TO COMPLETE, DATE AND SIGN THE
ENCLOSED PROXY CARD AND RETURN IT PROMPTLY IN THE ENVELOPE PROVIDED, WHICH
IS ADDRESSED FOR YOUR CONVENIENCE AND REQUIRES NO POSTAGE IF MAILED IN THE
UNITED STATES. YOUR PROMPT RETURN OF THE ENCLOSED PROXY CARD MAY SAVE THE
FUND THE NECESSITY AND EXPENSE OF FURTHER SOLICITATIONS TO ASSURE A QUORUM
AT THE MEETING. A PROXY WILL NOT BE REQUIRED FOR ADMISSION TO THE MEETING.
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<PAGE>

THE ZWEIG TOTAL RETURN FUND, INC.
900 THIRD AVENUE, NEW YORK, NEW YORK 10022

----------------

PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
MAY 15, 1996

----------------

This Proxy Statement is furnished in connection with the solicitation of
proxies on behalf of the Board of Directors of The Zweig Total Return Fund,
Inc., a Maryland corporation (the "Fund"), for use at the Annual Meeting of
Shareholders to be held at The St. Regis Hotel, located at 2 East 55th Street,
New York, New York, on Wednesday, May 15, 1996 at 1:30 P.M., and at any and
all adjournments thereof, for the purposes set forth in the accompanying
Notice of Annual Meeting dated March 25, 1996.

If the accompanying form of proxy is properly executed and returned in time
to be voted at the Meeting, the shares covered thereby will be voted in
accordance with the instructions marked thereon by the shareholders. Executed
proxies that are unmarked will be voted (1) for the election of the three
nominees of the Board of Directors as Directors of the Fund, and (2) for the
proposal to ratify the Board of Directors' selection of Coopers & Lybrand
L.L.P. as independent certified public accountants of the Fund for the year
ending December 31, 1996. A shareholder can revoke the proxy prior to its use
by appearing at the Meeting and voting in person, by giving written notice of
such revocation to the Secretary of the Fund, or by returning a subsequently
dated proxy.

The Board of Directors has fixed the close of business on March 15, 1996 as
the record date for the determination of shareholders entitled to notice of
and to vote at the Meeting. As of the record date, 75,372,177 shares of the
Fund's common stock were outstanding. To the best of the Fund's knowledge, no
person beneficially owns more than five percent of the outstanding shares of
the common stock of the Fund.

The Annual Report of the Fund for the year ended December 31, 1995,
including financial statements, has been mailed to shareholders of record at
the close of business on that date, and to persons who became shareholders of
record between that time and the close of business on March 15, 1996.

The Fund will furnish, without charge, another copy of the Fund's December
31, 1995 Annual Report to any shareholder who requests it by contacting the
Fund's Administrator, Zweig/Glaser Advisers, 5 Hanover Square, New York, New
York 10004, Attention: Shareholder Services; Toll-free telephone number 1-800-
272-2700.

This Proxy Statement and the accompanying form of proxy will be first sent
to shareholders on or about March 25, 1996.

PROPOSAL 1
ELECTION OF DIRECTORS

The members of the Fund's Board of Directors are divided into three classes
with the term of office of one class expiring each year. At the forthcoming
Annual Meeting, two Directors will be elected to serve a three-year term
(until the third succeeding Annual Meeting in 1999) and until their respective
successors are duly elected and qualify, and one Director will be elected to
serve two-year term (until
<PAGE>

the second succeeding Annual Meeting in 1998) and until his successor is duly
elected and qualifies. Unless authority to vote for the election of Directors
is withheld, the enclosed proxy will be voted for the election of the nominees
named below. While management has no reason to believe that the nominees will
not be available as candidates, should such a situation arise, proxies may be
voted for the election of such other persons as a Director, as the holders of
the proxies may, in their discretion, determine.

The Board of Directors has appointed a Nominating Committee which makes
annual recommendations as to the individuals to be nominated by the Board of
Directors for election as Directors at the forthcoming Annual Meeting and
selects candidates for election by the Board of Directors to fill any
vacancies in the Board of Directors, including those resulting from an
increase in the number of Directors. The Nominating Committee consists of at
least two Directors who are not "interested persons" (as defined in the
Investment Company Act of 1940, as amended) of the Fund or the Fund's
investment adviser.

Based on the recommendations made by the Nominating Committee at its meeting
held in January, 1996, the Board of Directors has nominated Elliot S. Jaffe
and Robert E. Smith, each of whom is presently a Director of the Fund, for re-
election to the Board to serve until the third succeeding Annual Meeting in
1999, and until their respective successors are duly elected and qualify, and
Alden C. Olson, who is presently a Director of the Fund, for re-election to
the Board, to serve until the second succeeding Annual Meeting in 1998, and
until his successor is duly elected and qualifies.

Background information with respect to the nominees for election and five
Directors whose terms of office will continue after the forthcoming Annual
Meeting appears below.

2
<PAGE>

<TABLE>
<CAPTION>
SHARES OF FUND
OWNED BENEFICIALLY
SERVED AS AND PERCENT OF TOTAL
BUSINESS EXPERIENCE DIRECTOR OUTSTANDING SHARES
NOMINEE AGE DURING PAST FIVE YEARS SINCE ON JANUARY 1, 1996(1)
------- --- ---------------------- --------- ---------------------
<S> <C> <C> <C> <C>
Alden C. Olson.......... 67 Director of The Zweig Fund, Inc.; 1996 1,000(2)(3)
2711 Ramparte Path Director of First National Bank
Holt, Michigan 48842 of Michigan; formerly, Professor
of Financial Management, Invest-
ments at Michigan State Univer-
sity
<CAPTION>
DIRECTORS WHOSE TERMS
WILL CONTINUE(7) AGE
--------------------- ---
<S> <C> <C> <C> <C>
Edward S. Babbitt, Jr.*. 52 President and Director of Avatar 1988 33,452(2)(4)
900 Third Avenue Investors Associates Corp.; Di-
New York, NY 10022 rector of Zweig Securities Advi-
sory Service, Inc.; General
Partner of BK Partners; Director
of RYMAC Mortgage Investment
Corp.; formerly Vice President
of the Fund; formerly Vice Pres-
ident and Director of Zweig To-
tal Return Advisors, Inc.; Di-
rector and formerly Vice Presi-
dent of The Zweig Fund, Inc.;
formerly Vice President and Di-
rector of Zweig Advisors Inc.
Charles H. Brunie*...... 65 Chairman of Oppenheimer Capital; 1988 10,212(2)
21 Elm Rock Road Bronx- Chairman Emeritus, Board of
ville, NY 10708 Trustees of the Manhattan Insti-
tute for Policy Research.
James B. Rogers, Jr..... 53 Private Investor; Director of The 1988 1,347(2)
352 Riverside Drive New Zweig Fund, Inc.; Chairman of
York, NY 10025 Beeland Interests; Regular Com-
mentator on CNBC; Author of "In-
vestment Biker: On the Road with
Jim Rogers;" Director of Emerg-
ing Markets Brewery Fund.
Anthony M. Santomero.... 49 Richard K. Mellon Professor of 1988 1,000(2)
Steinberg-Dietrich Hall Finance, The Wharton School,
Wharton School University of Pennsylvania; Di-
University of rector of The Zweig Fund, Inc.;
Pennsylvania Director of Municipal Fund for
Philadelphia, PA New York Investors; Director of
19104 Municipal Fund for California
Investors; Trustee of Compass
Capital Funds.
</TABLE>

3
<PAGE>

<TABLE>
<CAPTION>
SHARES OF FUND
OWNED BENEFICIALLY
SERVED AS AND PERCENT OF TOTAL
DIRECTORS WHOSE TERMS BUSINESS EXPERIENCE DIRECTOR OUTSTANDING SHARES
WILL CONTINUE(7) AGE DURING PAST FIVE YEARS SINCE ON JANUARY 1, 1996(1)
--------------------- --- ---------------------- --------- ---------------------
<S> <C> <C> <C> <C>
Martin E. Zweig*........ 53 Chairman of the Board and Presi- 1988 57,092(2)(4)(5)(6)
900 Third Avenue dent of the Fund; President and
New York, NY 10022 Director of Zweig Total Return
Advisors, Inc. (the "Adviser");
Chairman of the Board and Presi-
dent of The Zweig Fund, Inc.;
President and Director of Zweig
Advisors Inc.; President and Di-
rector of Zweig Securities Advi-
sory Service, Inc.; Co-Chairman
of Research of Avatar Investors
Associates Corp.; Managing Di-
rector of the Managing General
Partner of Zweig-DiMenna Part-
ners, L.P. and Zweig-DiMenna
Special Opportunities, L.P.;
President and Director of Zweig-
DiMenna International Managers,
Inc.; Chairman of Zweig/Glaser
Advisers; President of Zweig Se-
ries Trust; President and Direc-
tor of Gotham Advisors, Inc. and
Euclid Advisors, Inc.; formerly
General Partner of Zweig-Katzen
Investors, L.P.; Member of the
Undergraduate Executive Board of
The Wharton School, University
of Pennsylvania.
</TABLE>
- --------
* Directors who may be considered to be "Interested Persons," as that term
is defined in the Investment Company Act of 1940, as amended (the "Act"). Dr.
Zweig is considered an interested person of the Fund and the Adviser because
he is an officer and director of the Fund and the Adviser and owns 60.56% of
the outstanding common stock of the Adviser. Mr. Babbitt is considered an
interested person of the Fund and the Adviser because of, among other things,
his affiliation with Zweig Securities Corp., a broker-dealer registered under
the Securities Exchange Act of 1934. Mr. Smith is considered an interested
person of the Fund and the Adviser because he is a partner of the law firm
that acts as legal counsel to the Fund and the Adviser. Mr. Brunie may be
considered to be an interested person of the Fund and the Adviser to the
extent that he may be deemed to be indirectly affiliated with a broker-dealer
registered under the Securities Exchange Act of 1934. In January 1996, Mr.
Babbitt sold 5 shares of the Adviser's common stock, representing 5% of the
Adviser's outstanding common stock, to Dr. Zweig (who purchased 3.43 of such
shares) and another shareholder of the Adviser for the aggregate sum of
$637,000.

(1) The information as to beneficial ownership is based on statements
furnished to the Fund by the Directors. Except as otherwise indicated, each
person has sole voting and investment power with respect to the shares listed
as owned by him. Fractional shares are rounded off to the nearest whole share.

4
<PAGE>

(2) Less than 1/2 of 1%.

(3) The information with respect to Professor Olson's beneficial ownership
is as of February 29, 1996.

(4) Includes 30,467 shares owned by an affiliate, as to which he has shared
voting and investment power.

(5) Includes 22,809 shares owned by the Adviser, as to which he has sole
voting and investment power.

(6) Includes 392 shares owned by Dr. Zweig's individual retirement account,
as to which he has sole voting and investment power.

(7) Messrs. Babbitt, Brunie and Rogers will continue in office until the
Annual Meeting in 1997, and until their respective successors are duly elected
and qualify, and Messrs. Santomero and Zweig will continue in office until the
Annual Meeting in 1998, and until their respective successors are duly elected
and qualify.

SHARE OWNERSHIP

Directors and officers of the Fund, as a group, owned beneficially less than
1/2 of 1% of the outstanding shares of the common stock of the Fund on January
1, 1996.

COMPENSATION OF DIRECTORS AND OFFICERS

During the year ended December 31, 1995, the Fund paid Directors' fees,
aggregating $51,000, to the Directors who were not interested persons of the
Fund or the Adviser. The Fund pays each Director who is not an interested
person of the Fund or the Adviser an annual fee of $8,000 and a fee of $1,000
for attendance at each meeting of the Board of Directors or a committee of the
Board, and reimburses them for their actual out-of-pocket expenses relating to
attendance at such meetings.

Set forth below is the compensation paid by the Fund and The Zweig Fund,
Inc. to current Directors for the year ended December 31, 1995. The Fund does
not pay any pension or retirement benefits to its Directors.

<TABLE>
<CAPTION>
AGGREGATE COMPENSATION TOTAL COMPENSATION FROM
DIRECTOR FROM THE FUND THE FUND AND THE ZWEIG FUND, INC.
- -------- ---------------------- ---------------------------------
<S> <C> <C>
Elliot S. Jaffe....... $14,000 $28,000
James B. Rogers, Jr. . $13,000 $26,000
Anthony M. Santomero.. $15,000 $30,000
</TABLE>

Jeffrey Lazar, Vice President and Treasurer of the Fund, and Stuart B.
Panish, Vice President and Secretary of the Fund, are the only executive
officers of the Fund not disclosed in the above listing of Directors. Mr.
Lazar has been an officer of the Fund since its inception in 1988. Mr. Lazar
is 36 years old and was, on January 1, 1996, the beneficial owner of 1,298
shares of the common stock of the Fund,

5
<PAGE>

of which 395 shares are owned by his individual retirement account. Mr. Lazar
is Vice President, Treasurer and Secretary of the Adviser. He is also Vice
President and Treasurer of The Zweig Fund, Inc. and Vice President, Treasurer
and Secretary of its investment adviser, Zweig Advisors Inc. Mr. Panish is 39
years old and has been Vice President and Secretary of the Fund and The Zweig
Fund, Inc. since May 1995 and was, on January 1, 1996, the owner of 200 shares
of the common stock of the Fund. Prior to becoming counsel to the Adviser and
certain of its affiliates in June 1993, Mr. Panish was Special Counsel--
Securities at Rosenman & Colin LLP. Several of the Fund's officers and
Directors are also officers and directors of the Adviser and/or affiliated
with the Administrator and participate in the fees paid to the Adviser and/or
the Administrator (see "Investment Adviser and Administrator"), although the
Fund will make no direct payments to them. The Adviser and the Administrator
pay the compensation and certain expenses of their personnel who serve as
Directors and officers of the Fund. Rosenman & Colin LLP, of which Robert E.
Smith is a partner, represented the Fund in connection with its initial public
offering in 1988 and represents the Fund in connection with various legal
matters.

COMMITTEES AND BOARD OF DIRECTORS' MEETINGS

The Board of Directors has a standing Audit Committee, which consists of
Messrs. Jaffe, Olson and Santomero, each of whom is not an interested person
of the Fund. The Audit Committee's primary functions include recommending the
Fund's independent certified public accountants for selection by the Board and
ratification by the shareholders and reviewing the scope of the annual audit
conducted by such accountants.

Messrs. Rogers and Santomero, each of whom is not an interested person of
the Fund, and Mr. Smith are members of the Nominating Committee of the Board
of Directors, which considers candidates for election to fill vacancies on the
Board of Directors. The Nominating Committee will consider recommendations
from shareholders for possible nominees. Such recommendations should be
accompanied by a biography of the recommended candidate and should be
submitted to the Secretary of the Fund. The Fund has no standing compensation
committee.

The Board of Directors of the Fund held four meetings during the year ended
December 31, 1995. The Board of Directors held one meeting in February, 1996.
The Nominating Committee held one meeting during the year ended December 31,
1995 and met in advance of the February, 1996 Board meeting, at which time the
Nominating Committee recommended the nominees for re-election to the Board.
The Audit Committee held two meetings during the year ended December 31, 1995
and one meeting in February, 1996. Each of the nominees and each of the
Directors whose terms will continue after the forthcoming annual meeting
attended at least 75% of the total number of Board meetings and his respective
committee meetings held during the 1995 year.

THE BOARD OF DIRECTORS RECOMMENDS THAT SHAREHOLDERS VOTE FOR THE RE-ELECTION
OF THE THREE NOMINEES TO THE FUND'S BOARD OF DIRECTORS.

6
<PAGE>

PROPOSAL 2

RATIFICATION OR REJECTION OF SELECTION OF INDEPENDENT
CERTIFIED PUBLIC ACCOUNTANTS

At the recommendation of the Audit Committee, the Board of Directors of the
Fund, including a majority of the Directors who are not interested persons of
the Fund, has selected the firm of Coopers & Lybrand L.L.P. to serve as
independent certified public accountants of the Fund for the year ending
December 31, 1996, subject to the right of the Fund by vote of a majority of
the outstanding voting securities of the Fund (which is defined in the Act to
mean the lesser of either (A) the vote of 67% or more of the shares of the
Fund present at the Meeting, if the holders of more than 50% of the
outstanding shares are present or represented by proxy, or (B) the vote of
more than 50% of the outstanding shares) at any meeting called for the purpose
to terminate such employment immediately without penalty. The Board's
selection is submitted to the shareholders for ratification or rejection.

Services performed by Coopers & Lybrand L.L.P. during the most recent year
included audit of the financial statements of the Fund and services related to
filings with the Securities and Exchange Commission. The Fund knows of no
direct or indirect financial interest of such firm in the Fund.

A representative of Coopers & Lybrand L.L.P. is expected to be present at
the Meeting and will have the opportunity to make a statement if he so desires
and to respond to questions from shareholders. Ratification of the selection
of Coopers & Lybrand L.L.P. requires the affirmative vote of a majority of the
votes cast at the Meeting.

THE BOARD OF DIRECTORS RECOMMENDS THAT SHAREHOLDERS VOTE FOR THE
RATIFICATION OF THE SELECTION OF COOPERS & LYBRAND L.L.P. AS INDEPENDENT
CERTIFIED PUBLIC ACCOUNTANTS FOR THE YEAR ENDING DECEMBER 31, 1996.

INVESTMENT ADVISER AND ADMINISTRATOR

Zweig Total Return Advisors, Inc., with its principal business office
located at 900 Third Avenue, New York, New York 10022, is the Fund's
investment adviser.

Zweig/Glaser Advisers (the "Administrator") serves as the Fund's
administrator. The Administrator's offices are located at 5 Hanover Square,
New York, New York 10004. Martin E. Zweig and Eugene J. Glaser are the
Chairman and President, respectively, and the principal owners of the
Administrator.

COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES EXCHANGE ACT OF 1934

Section 16(a) of the Securities Exchange Act of 1934 requires, among other
persons, the officers and directors of the Fund and the Adviser to file
reports of ownership and changes in ownership of the shares of common stock of
the Fund with the Securities and Exchange Commission and the New York Stock
Exchange. The Securities and Exchange Commission's regulations also require
such reporting persons to furnish the Fund with copies of all Section 16(a)
forms they file. Based on its review of these reports and on written
representations from the reporting persons that no other reports were
required, the Fund believes that, during the year ended December 31, 1995,
there was compliance with all Section 16(a) reporting requirements applicable
to its reporting persons.

7
<PAGE>

ADDITIONAL INFORMATION

OTHER MATTERS

The Board of Directors knows of no matters to be presented at the Meeting
other than those specified in the accompanying Notice of Annual Meeting.
However, if any other matter is properly presented before the Meeting, it is
the intention of the persons named as proxies to vote in accordance with their
best judgment.

EXPENSES

The Fund will bear the expense of the Meeting, including preparation,
printing and mailing of the enclosed form of proxy and accompanying Notice of
Annual Meeting and this Proxy Statement. The Fund, upon request, will
reimburse banks, brokers and others for their reasonable expenses in
forwarding proxy solicitation material to the beneficial owners of the Fund's
common stock. In order to obtain the necessary quorum at the Meeting,
supplementary solicitation may be made by mail, telephone or personal
interviews by officers or employees of the Fund or Adviser.

VOTE REQUIRED

The election of Directors (Proposal 1) requires a plurality of the votes
cast at the Meeting. The ratification of the selection of the independent
certified public accountants (Proposal 2) requires the affirmative vote of a
majority of the votes cast at the Meeting. The following principles of
Maryland law apply to the voting of shares of common stock at the Meeting. The
presence in person or by proxy of shareholders entitled to vote a majority of
the outstanding shares will constitute a quorum. Shares represented by proxy
or in person at the Meeting, including shares represented by proxies that
reflect abstentions, will be counted as present in the determination of a
quorum. An abstention as to any particular matter, however, does not
constitute a vote "for" or "against" and will be disregarded in calculating
the votes cast as to such matter. "Broker non-votes" (i.e., where a broker or
nominee submits a proxy specifically indicating the lack of discretionary
authority to vote on a matter) will be treated in the same manner as
abstentions. Votes will be tabulated by The Shareholder Services Group, Inc.,
the Fund's transfer agent.

PROPOSALS FOR 1997 MEETING

Any proposals of shareholders that are intended to be presented at the
Fund's 1997 Annual Meeting of Shareholders must be received at the Fund's
principal executive offices no later than November 26, 1996, and must comply
with all other legal requirements in order to be included in the Fund's proxy
statement and form of proxy for that meeting.

New York, New York
March 25, 1996

By Order of the Board of Directors
Martin E. Zweig,
Chairman of the Board

8
<PAGE>

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THE ZWEIG TOTAL RETURN FUND, INC.
ANNUAL MEETING OF SHAREHOLDERS
MAY 15, 1996
PROXY SOLICITED ON BEHALF OF BOARD OF DIRECTORS
The undersigned shareholder of The Zweig Total Return Fund, Inc., a Maryland
corporation (the "Fund"), hereby appoints MARTIN E. ZWEIG and JEFFREY LAZAR,
and each of them, with full power of substitution and revocation, as proxies to
represent the undersigned at the Annual Meeting of Shareholders of the Fund to
be held at The St. Regis Hotel, located at 2 East 55th Street, New York, New
York, on May 15, 1996 at 1:30 P.M., at any and all adjournments thereof, and
thereat to vote all shares of the Fund which the undersigned would be entitled
to vote, with all powers the undersigned would possess if personally present in
accordance with the instructions on the reverse side of this proxy.
WHEN THIS PROXY IS PROPERLY EXECUTED, THE SHARES REPRESENTED HEREBY WILL BE
VOTED AS SPECIFIED. IF NO SPECIFICATION IS MADE, THIS PROXY WILL BE VOTED FOR
THE ELECTION OF ALL NOMINEES AS DIRECTORS, FOR THE OTHER PROPOSAL AND IN THE
DISCRETION OF THE PROXIES WITH RESPECT TO ALL OTHER MATTERS WHICH MAY PROPERLY
COME BEFORE THE MEETING AND ANY ADJOURNMENTS THEREOF. THE UNDERSIGNED
ACKNOWLEDGES RECEIPT OF THE ACCOMPANYING NOTICE OF ANNUAL MEETING AND PROXY
STATEMENT.
(CONTINUED, AND TO BE SIGNED AND DATED ON THE REVERSE SIDE.)

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<PAGE>

- --------------------------------------------------------------------------------

PLEASE MARK BOXES [*] OR [X] IN BLUE OR BLACK INK.
1. GRANTING [_] WITHHOLDING [_] authority to vote for the election as
directors of all the nominees listed below:
Elliot S. Jaffe, Alden C. Olson and Robert E. Smith
(Instructions: To withhold authority to vote for any individual nominee, strike
a line through the nominee's name.)
2. With respect to the proposal to ratify the selection of Coopers & Lybrand
L.L.P. as independent certified public accountants of the Fund for the year
ending December 31, 1996. FOR [_] AGAINST [_] ABSTAIN [_]
3. In their discretion, on such other matters as may properly come before the
meeting and any adjournments thereof.
Please sign exactly as name or names
appear on this proxy. If stock is held
jointly, each holder should sign. If
signing as attorney, trustee, executor,
administrator, custodian, guardian or
corporate officer, please give full
title.
Dated: __________________________, 1996

_______________________________________
Signature
_______________________________________
Signature

Sign, Date and Return the Proxy Card Promptly Using the Enclosed Envelope.

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