SCHEDULE
14A
PROXY
STATEMENT
PURSUANT
TO SECTION 14(A) OF THE SECURITIES EXCHANGE ACT OF 1934
Filed
by Registrant ☒
Filed
by Party other than the Registrant
Check
the appropriate box:
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☐ |
Preliminary
Proxy Statement |
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☐ |
Confidential
for Use of the Commission Only as permitted by Rule
14a-6(e)(2) |
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☒ |
Definitive
Proxy Statement |
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☐ |
Definitive
Additional Materials |
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☐ |
Soliciting
Material Pursuant to Rule 14a-11c or Rule 14a-12 |
Flaherty
& Crumrine Total Return Fund Incorporated
(Name
of Registrant as Specified in Its Charter)
(Name
of Person(s) Filing Proxy Statement, if other than the
Registrant)
Payment
of Filing Fee (Check the appropriate box):
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☐ |
Fee
computed on table below per Exchange Act Rules 14a-6(i)(1) and
0-11 |
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(1) |
Title
of each class of securities to which transaction applies:
________________________________________________ |
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(2) |
Aggregate
number of securities to which transaction applies:
________________________________________________ |
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(3) |
Per
unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11. (Set forth the amount on which
the filing fee is calculated and state how it was
determined):___________________________________________________________________________________ |
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(4) |
Proposed
maximum aggregate value of
transaction:________________________________________________________________________________ |
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(5) |
Total
fee
paid:____________________________________________________________________________________________________________ |
☐
Fee paid previously with preliminary
materials.
☐
Check box if any part of the fee is offset as
provided by Exchange Act Rule 0-11(a)(2) and identify the filing
for which the offsetting fee was paid previously. Identify the
previous filing by registration statement number, or the Form or
Schedule and the date of its filing.
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(1) |
Amount
previously paid: |
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(2) |
Form,
Schedule or Registration Statement No.: |
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FLAHERTY
& CRUMRINE PREFERRED AND INCOME FUND
INCORPORATED |
(NYSE:
PFD) |
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FLAHERTY
& CRUMRINE PREFERRED AND INCOME OPPORTUNITY FUND
INCORPORATED |
(NYSE:
PFO) |
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FLAHERTY
& CRUMRINE PREFERRED AND INCOME SECURITIES FUND
INCORPORATED |
(NYSE:
FFC) |
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FLAHERTY
& CRUMRINE TOTAL RETURN FUND INCORPORATED |
(NYSE:
FLC) |
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FLAHERTY
& CRUMRINE DYNAMIC PREFERRED AND INCOME FUND
INCORPORATED |
(NYSE:
DFP) |
301 E. Colorado Boulevard, Suite 800
Pasadena, California 91101
NOTICE OF ANNUAL MEETINGS OF SHAREHOLDERS
To Be Held on April 20, 2022
To the Shareholders:
Notice is hereby given that the Annual Meetings of Shareholders
(the “Annual Meetings”) of Flaherty & Crumrine Preferred and
Income Fund Incorporated, Flaherty & Crumrine Preferred and
Income Opportunity Fund Incorporated, Flaherty & Crumrine
Preferred and Income Securities Fund Incorporated, Flaherty &
Crumrine Total Return Fund Incorporated and Flaherty & Crumrine
Dynamic Preferred and Income Fund Incorporated (each, a “Fund” and
collectively, the “Funds”), each a Maryland corporation, will be
held on April 20, 2022, at 8:00 a.m. PDT, virtually via the
Internet, for the following purposes:
Each Fund:
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1. |
To elect Directors of each Fund
(Proposal 1). |
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2. |
To transact such other business as
may properly come before the Annual Meetings or any adjournments or
postponements thereof. |
Due to the ongoing coronavirus pandemic (“COVID-19”), and to
support the health and well-being of the Funds’ shareholders,
employees and community, the Annual Meetings will be conducted
exclusively online via live webcast. Shareholders may attend the
Annual Meetings online by visiting www.meetnow.global/MGPZG2H. To
participate in the Annual Meetings, shareholders will need to
follow the instructions herein. The Annual Meetings will begin
promptly at 8:00 a.m. PDT. The Funds encourage you to access the
Annual Meetings prior to the start time to allow for time to check
in. If you experience technical difficulties prior to or during the
Annual Meetings, you may call 1-866-774-4940 for technical
assistance. All shareholders will be required to enter their
individual 14-digit control number to enter the Annual Meetings.
Only shareholders of the Funds will be able to participate in the
Annual Meetings. Because the Annual Meetings will be completely
virtual, there will be no physical location for shareholders to
attend.
Please follow the instructions on your proxy card. Your individual
control number, which is required to enter the Annual Meetings, is
included on your proxy card(s) accompanying the Joint Proxy
Statement.
If you hold your shares through an intermediary, such as a broker,
bank or other custodian (i.e., in “street name”), you must register
in advance to access your individual control number to enter the
Annual Meetings virtually online via live webcast using the
instructions below. To register and receive your individual control
number, you must submit proof of your proxy power (“legal proxy”)
from your broker, bank or other nominee indicating that you are the
beneficial owner of the shares in the Fund(s), on the record date,
and authorizing you to vote along with your name and email address
to Computershare, Inc. (“Computershare”) in accordance with the
directions below. The letter must also state whether before the
Annual Meetings you authorized a proxy to vote for you, and if so,
how you instructed such proxy to vote. Requests for registration
must be labeled as “Legal Proxy” and be received no later than
April 15, 2022 at 2:00 p.m. PDT. You will receive a confirmation of
your registration and your individual control number by email after
Computershare receives your registration information. Requests for
registration for the Annual Meetings should be directed to
Computershare as follows:
By email:
Forward the email from your broker, or attach an image of your
legal proxy, to shareholdermeetings@computershare.com.
Your vote is important!
The Board of Directors of each Fund has fixed the close of business
on January 21, 2022 as the record date for the determination of
shareholders of each Fund entitled to notice of, and to vote at,
the Annual Meetings and any adjournments or postponements
thereof.
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By
Order of the Boards of Directors, |
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March 3, 2022 |
Chad C. Conwell |
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Secretary |
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Important Notice Regarding the Availability of Proxy Materials
for the Annual Meetings to be
Held on April 20, 2022
The notice of Annual Meetings, Joint Proxy Statement, proxy
cards and each Fund’s annual report, including audited financial
statements for the fiscal year ended November 30, 2021, are
available to you on the Funds’ website - www.preferredincome.com or
upon request, without charge, by writing to BNYIS c/o
Computershare, P.O. Box 505000, Louisville, KY, 40233-5000, United
States, or by calling 1-866-351-7446 (U.S. toll-free) or
1-201-680-6578 (International). You are encouraged to review all of
the information contained in the proxy materials before
voting.
Instructions to attend the Annual Meetings online via live
webcast are outlined herein and on your proxy card for the relevant
Fund.
SEPARATE PROXY CARDS ARE ENCLOSED FOR EACH FUND IN WHICH YOU OWN
SHARES. YOUR VOTE IS IMPORTANT REGARDLESS OF THE SIZE OF YOUR
HOLDINGS IN THE FUND. WHETHER OR NOT YOU PLAN TO ATTEND THE
RELEVANT ANNUAL MEETING(S), WE ASK THAT YOU PLEASE VOTE PROMPTLY.
INSTRUCTIONS FOR THE PROPER VOTING AND/OR EXECUTION OF PROXIES ARE
SET FORTH ON THE INSIDE COVER. SHAREHOLDERS MAY SUBMIT VOTING
INSTRUCTIONS BY SIGNING AND DATING THE PROXY CARD OR VOTING
INSTRUCTION FORM AND RETURNING IT IN THE ACCOMPANYING POSTAGE-PAID
ENVELOPE.
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INSTRUCTIONS FOR SIGNING PROXY CARDS
The following general rules for signing proxy cards may be of
assistance to you and may minimize the time and expense to the
Fund(s) involved in validating your vote if you fail to sign your
proxy card(s) properly.
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1. |
Individual Accounts: Sign
your name exactly as it appears in the registration on the proxy
card(s). |
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2. |
Joint Accounts: Either party
may sign, but the name of the party signing should conform exactly
to a name shown in the registration. |
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3. |
All Other Accounts: The
capacity of the individual signing the proxy card should be
indicated unless it is reflected in the form registration. For
example: |
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Registration
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Valid
Signature |
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Corporate Accounts
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(1)
ABC Corp. |
ABC
Corp. |
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(2)
ABC Corp. |
John Doe,
Treasurer |
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(3)
ABC Corp. c/o John Doe, Treasurer |
John
Doe |
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(4)
ABC Corp. Profit Sharing Plan |
John Doe,
Trustee |
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Trust Accounts
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(1)
ABC Trust |
Jane B.
Doe, Trustee |
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(2)
Jane B. Doe, Trustee u/t/d 12/28/78 |
Jane B.
Doe |
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Custodian or Estate Accounts
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(1) John
B. Smith, Cust.,
f/b/o John B. Smith, Jr. UGMA
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John B.
Smith |
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(2) John
B. Smith, Executor,
Estate of Jane Smith
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John B.
Smith, Executor |
ANNUAL MEETINGS OF SHAREHOLDERS
April 20, 2022
JOINT PROXY STATEMENT
This document is a joint proxy statement (“Joint Proxy Statement”)
for Flaherty & Crumrine Preferred and Income Fund Incorporated
(“Preferred and Income Fund” or “PFD”), Flaherty & Crumrine
Preferred and Income Opportunity Fund Incorporated (“Preferred and
Income Opportunity Fund” or “PFO”), Flaherty & Crumrine
Preferred and Income Securities Fund Incorporated (“Preferred and
Income Securities Fund” or “FFC”), Flaherty & Crumrine Total
Return Fund Incorporated (“Total Return Fund” or “FLC”) and
Flaherty & Crumrine Dynamic Preferred and Income Fund
Incorporated (“Dynamic Preferred Income Fund” or “DFP”) (each, a
“Fund” and collectively, the “Funds”). This Joint Proxy Statement
is furnished in connection with the solicitation of proxies by each
Fund’s Board of Directors (each, a “Board” and collectively, the
“Boards”) to be voted at the Annual Meeting of Shareholders for
each Fund to be held on April 20, 2022, at 8:00 a.m. PDT, virtually
via the Internet, and at any adjournments or postponements thereof
(each, an “Annual Meeting” and collectively, the “Annual
Meetings”). If you plan to attend the Annual Meetings virtually
online via live webcast, please follow the instructions as outlined
in the proxy card for the relevant Fund and this Joint Proxy
Statement.
This Joint Proxy Statement and the accompanying Notice of Annual
Meetings and proxy card for each Fund in which you own shares were
mailed on or about March 3, 2022 to shareholders of record as of
the close of business on January 21, 2022. Proxy solicitations will
be made, beginning on or about March 3, 2022, primarily by mail,
but proxy solicitations may also be made by telephone, Internet,
facsimile, e-mail, or personal interviews conducted by officers of
each Fund, Flaherty & Crumrine Incorporated (“Flaherty &
Crumrine”), the investment adviser of each Fund, BNY Mellon
Investment Servicing (US) Inc. (“BNYIS”), the transfer agent of
each Fund, and The Bank of New York Mellon (“BNY Mellon”), the
administrator of each Fund. With respect to FFC, FLC and DFP, proxy
solicitations may also be made by Destra Capital Advisors LLC, the
servicing agent for FFC, FLC and DFP. No proxy solicitation firm
will be used in connection with this Joint Proxy Statement.
The Funds will evenly split the expenses incurred in connection
with the preparation of this Joint Proxy Statement and virtual
hosting of the Annual Meetings. Each Fund will pay for its
respective expenses incurred in connection with printing and
mailing of this Joint Proxy Statement and its enclosures to
shareholders. Each Fund also will reimburse brokerage firms and
others for their expenses in forwarding solicitation material to
the beneficial owners of its shares.
References to the websites above or herein do not incorporate their
content into this Joint Proxy Statement.
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Important Notice Regarding the Availability of Proxy Materials
for the Annual Meetings to be
Held on April 20, 2022
The notice of Annual Meetings, Joint Proxy Statement, proxy
cards and each Fund’s annual report, including audited financial
statements for the fiscal year ended November 30, 2021, are
available to you on the Funds’ website - www.preferredincome.com or
upon request, without charge, by writing to BNYIS c/o
Computershare, P.O. Box 505000, Louisville, KY, 40233-5000, United
States, or by calling 1-866-351-7446 (U.S. toll-free) or
1-201-680-6578 (International). Each Fund’s annual report is also
available on the Securities and Exchange Commission’s (“SEC”)
website (www.sec.gov) or, for FFC, FLC and DFP only, by calling
Destra Capital Advisors LLC at 1-877-855-3434. You are encouraged
to review all of the information contained in the proxy materials
before voting.
Instructions to attend the Annual Meetings online via live
webcast are outlined herein and on your proxy card for the relevant
Fund.
SEPARATE PROXY CARDS ARE ENCLOSED FOR EACH FUND IN WHICH YOU OWN
SHARES. YOUR VOTE IS IMPORTANT REGARDLESS OF THE SIZE OF YOUR
HOLDINGS IN THE FUND. WHETHER OR NOT YOU PLAN TO ATTEND THE
RELEVANT ANNUAL MEETING(S), WE ASK THAT YOU PLEASE VOTE PROMPTLY.
INSTRUCTIONS FOR THE PROPER VOTING AND/OR EXECUTION OF PROXIES ARE
SET FORTH ON THE INSIDE COVER. SHAREHOLDERS MAY SUBMIT VOTING
INSTRUCTIONS BY SIGNING AND DATING THE PROXY CARD OR VOTING
INSTRUCTION FORM AND RETURNING IT IN THE ACCOMPANYING POSTAGE-PAID
ENVELOPE.
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If the enclosed proxy card(s) are properly executed and returned in
time to be voted at the relevant Annual Meeting(s), the Shares (as
defined below) represented thereby will be voted in accordance with
the instructions marked thereon. Unless instructions to the
contrary are marked thereon, a proxy will be voted “FOR” Proposal 1
at the relevant Annual Meeting. Any shareholder who has given a
proxy has the right to revoke it at any time prior to its exercise
either by attending the relevant Annual Meeting and voting his or
her Shares or by submitting a letter of revocation or a later-dated
proxy card to the appropriate Fund at 301 E. Colorado Boulevard,
Suite 800 Pasadena, California 91101 prior to the date of the
Annual Meetings.
Under the bylaws of each Fund, the presence in person or by proxy
of the holders of a majority of the outstanding shares of the Fund
entitled to vote shall be necessary and sufficient to constitute a
quorum for the transaction of business (a “Quorum”) at that Fund’s
Annual Meeting. In the event that a Quorum is not present at the
relevant Annual Meeting, or in the event that a Quorum is present
but sufficient votes to approve any of the proposals are not
received, the Chair of the Annual Meeting may adjourn the meeting
without assigning a specific date or from time to time to a date
not more than 120 days after the original record date without
notice other than announcement at the Annual Meeting. At such
adjourned meeting at which a Quorum shall be present, any business
may be transacted which might have been transacted at the relevant
Annual Meeting as originally notified. A shareholder vote may be
taken on a proposal in the Joint Proxy Statement relating to the
applicable Annual Meeting prior to any such adjournment if
sufficient votes have been received for approval of that proposal.
Once a Quorum has been established at the relevant Annual Meeting,
shareholders may continue to transact business, notwithstanding the
withdrawal of shareholders and the loss of a Quorum.
INFORMATION REGARDING ATTENDING THE MEETING
The Annual Meetings will be conducted exclusively online via live
webcast beginning promptly at 8:00 a.m. PDT on April 20, 2022. You
will be able to attend the Annual Meetings online, submit your
questions during the Annual Meetings and vote your shares
electronically at the relevant Annual Meetings by going to
www.meetnow.global/MGPZG2H and entering your 14 digit control
number, which is included on the proxy card(s) that you received.
Because the Annual Meetings are completely virtual, shareholders
will not be able to attend the Annual Meetings in person.
If you hold your shares through an intermediary, such as a broker,
bank or other custodian (i.e., in “street name”), you must register
in advance to access your individual control number to enter the
Annual Meetings virtually online via live webcast using the
instructions below. To register and receive your individual control
number, you must submit proof of your proxy power (“legal proxy”)
from your broker, bank or other nominee indicating that you are the
beneficial owner of the shares in the Fund(s), on the record date,
and authorizing you to vote along with your name and email address
to Computershare, Inc. (“Computershare”) in accordance with the
directions below. The letter must also state whether before the
Annual Meetings you authorized a proxy to vote for you, and if so,
how you instructed such proxy to vote. Requests for registration
must be labeled as “Legal Proxy” and be received no later than
April 15, 2022 at 2:00 p.m. PDT. You will receive a confirmation of
your registration and your individual control number by email after
Computershare receives your registration information. Requests for
registration for the Annual Meetings should be directed to
Computershare as follows:
shareholdermeetings@computershare.com.
Due to the ongoing coronavirus pandemic (“COVID-19”), we are
pleased to offer shareholders completely virtual Annual Meetings,
which provide worldwide access and communication, while protecting
the health and safety of our shareholders, Directors, management
and other stakeholders. We are committed to ensuring that
shareholders will be afforded the same rights and opportunities to
participate as they would at an in person meeting. We will try to
answer as many questions submitted by shareholders as time permits
that comply with the rules of conduct for the Annual Meetings.
However, we reserve the right to edit profanity or other
inappropriate language, or to exclude questions that are not
pertinent to meeting matters or that are otherwise inappropriate.
If substantially similar questions are received, we will group such
questions together and provide a single response to avoid
repetition.
Each Fund has one class of capital stock outstanding: common stock,
par value $0.01 per share (the “Common Stock” or the “Shares”).
Each Share is entitled to one vote at the relevant Annual Meeting
with respect to matters to be voted on, with pro rata voting rights
for any fractional Shares. On the record date, January 21, 2022,
the following number of Shares of each Fund were issued and
outstanding:
|
Name of
Fund |
|
Shares
Outstanding |
|
Flaherty
& Crumrine Preferred and Income Fund Incorporated
(PFD) |
|
12,396,471 |
|
Flaherty
& Crumrine Preferred and Income Opportunity Fund Incorporated
(PFO) |
|
13,046,266 |
|
Flaherty
& Crumrine Preferred and Income Securities Fund Incorporated
(FFC) |
|
47,349,437 |
|
Flaherty
& Crumrine Total Return Fund Incorporated (FLC) |
|
10,408,575 |
|
Flaherty
& Crumrine Dynamic Preferred and Income Fund Incorporated
(DFP) |
|
20,136,360 |
To the knowledge of each Fund and its Board, the following
shareholder(s), or “group” as that term is defined in Section 13(d)
of the Securities Exchange Act of 1934, as amended (the “1934
Act”), is the beneficial owner or owner of record of more than 5%
of the relevant Fund’s outstanding Shares as of January 21,
2022*:
|
Name and Address of
Beneficial/Record Owner
|
|
Title
of Class |
|
Amount
and Nature of Ownership |
|
Percent
of Class |
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Cede
& Co.**
Depository Trust Company
55
Water Street, 25th Floor
New
York, NY 10041
|
|
Common
Stock |
|
PFD
– (record)
PFO
– (record)
FFC
– (record)
FLC
– (record)
DFP
– (record)
|
|
98.51%
98.06%
99.88%
99.90%
99.96%
|
*
As
of January 21, 2022, the Directors and officers, as a group, owned
less than 1% of the Shares of each Fund.
**
A
nominee partnership of The Depository Trust Company.
This Joint Proxy Statement is being used to reduce the preparation,
printing, handling and postage expenses that would result from the
use of a separate proxy statement for each Fund. At each Fund’s
Annual Meeting, shareholders of the Fund will vote as a single
class. Shareholders of each Fund will vote separately for each of
PFD, PFO, FFC, FLC and DFP on the proposal(s) on which shareholders
of that Fund are entitled to vote at the relevant Annual Meeting. A
separate proxy card is enclosed for each Fund in which a
shareholder owns Shares. Thus, if the proposal at the relevant
Annual Meeting is approved by shareholders of one or more Funds and
not approved by shareholders of one or more other Funds, the
proposal will be implemented for the Fund or Funds that approved
the proposal and will not be implemented for any Fund that did not
approve the proposal. It is therefore essential that shareholders
complete, date and sign each enclosed proxy card. Shareholders of
each Fund are entitled to vote on the proposal(s) pertaining to
that Fund.
PROPOSAL 1: ELECTION OF DIRECTORS
At the Annual Meetings, shareholders are being asked to consider
the election of Directors of each Fund. The Board of each Fund is
divided into three classes, each class having a term of three
years. Each year the term of office of one class expires and the
successor or successors elected to such class serve for a term of
three years and until their successors are duly elected and
qualify.
Nominees for the Boards of Directors
Each Nominee named below is currently a Director of each Fund and
has consented to serve as a Director for the Fund(s) for which
he/she is nominated if elected at the relevant Annual Meeting. If a
designated Nominee declines or otherwise becomes unavailable for
election, however, the proxy confers discretionary power on the
persons named therein to vote in favor of a substitute nominee or
nominees. Each Nominee has been nominated for a term of three years
to expire at each Fund’s 2025 Annual Meeting of Shareholders and
until his/her successor is duly elected and qualifies. Shareholders
of each Fund’s Common Stock are entitled to elect the Nominees for
election to the Board of the relevant Fund.
|
Fund |
Nominees for
Election |
|
PFD |
R. Eric
Chadwick and Morgan Gust |
|
PFO |
R. Eric
Chadwick and Karen H. Hogan |
|
FFC |
R. Eric
Chadwick and Karen H. Hogan |
|
FLC |
R. Eric
Chadwick and Karen H. Hogan |
|
DFP |
R. Eric
Chadwick and Morgan Gust |
Information About Each Director’s or Nominee for Election as
Director’s Experience, Qualifications, Attributes or Skills
Directors or Nominees for election as Directors of the Funds,
together with information as to their positions with the Funds,
principal occupations, and other board memberships for the past
five years, are shown below.
|
Name, Address,
and Age
|
|
Current
Position(s)
Held with Funds
|
|
Term of Office
and Length of
Time Served*
|
|
Principal
Occupation(s)
During Past
Five Years
|
|
Number of Funds
In Fund Complex
Overseen
by Director**
|
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Other
Public Company
Board Memberships
During Past Five
Years
|
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NON-INTERESTED
DIRECTORS:
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Morgan
Gust
301
E. Colorado Boulevard
Suite
800
Pasadena,
CA 91101
Age:
74 |
|
Lead
Independent Director and
Nominating
and Governance Committee Chair |
|
Class II Director
FFC
– since inception
FLC –
since inception
Class III Director
PFD – since inception
PFO
– since inception
DFP
– since inception
|
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Majority
owner and Executive Manager of various entities engaged in
commercial farming, agriculture and real estate. |
|
5 |
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None |
| |
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David
Gale
301
E. Colorado Boulevard
Suite
800
Pasadena,
CA 91101
Age:
72 |
|
Director |
|
Class I Director
PFD – since 1997
PFO
– since 1997
FFC
– since inception
FLC –
since inception
Class II Director
DFP
– since inception
|
|
President
of Delta Dividend Group, Inc. (investments). |
|
5 |
|
None |
| |
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Karen H. Hogan
301 E. Colorado Boulevard
Suite 800
Pasadena, CA 91101
Age: 60
|
|
Director
and
Audit
Committee Chair |
|
Class I Director†
DFP –
since 2016
Class II Director†
PFD
– since 2016
PFO –
since 2016
Class III Director†
FFC
– since 2016
FLC
– since 2016
|
|
Board
Member, IKAR, a non-profit organization; Active Committee Member
and Volunteer to several non-profit organizations. |
|
5 |
|
None |
|
Name, Address,
and Age
|
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Current
Position(s)
Held with Funds
|
|
Term of Office
and Length of
Time Served*
|
|
Principal
Occupation(s)
During Past
Five Years
|
|
Number of Funds
In Fund Complex
Overseen
by Director**
|
|
Other
Public Company
Board Memberships
During Past Five
Years
|
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INTERESTED
DIRECTOR AND OFFICER:
|
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R. Eric Chadwick(1)
301
E. Colorado Boulevard
Suite 800
Pasadena, CA 91101
Age:
46
|
|
Director,
Chairman of the Board, Chief Executive Officer and
President |
|
Class II Director
PFO –
since 2016
Class III Director
PFD
– since 2016
FFC
– since 2016
FLC
– since 2016
DFP
– since 2016
|
|
Portfolio
Manager and President of Flaherty &
Crumrine. |
|
5 |
|
None |
| * |
The
Class I Director of PFD, FFC, FLC and DFP and the Class III
Director of PFO will serve until each Fund’s 2023 Annual Meeting of
Shareholders and until their successors are duly elected and
qualify. The Class II Director of PFD, FFC, FLC and DFP and the
Class I Director of PFO will serve until each Fund’s 2024 Annual
Meeting of Shareholders and until their successors are duly elected
and qualify. The Class II Nominees of PFO and the Class III
Nominees of PFD, FFC, FLC and DFP, if elected, will serve until
each Fund’s 2025 Annual Meeting of Shareholders and until their
successors are duly elected and qualify. |
| ** |
The
Flaherty & Crumrine fund complex (the “Fund Complex”) consists
solely of the Funds. |
| † |
Ms.
Hogan served as a Class I Director of PFD from 2005 – 2016, a Class
II Director of each of FFC and FLC from 2005 – 2016, a Class II
Director of DFP since inception – 2016 and a Class III Director of
PFO from 2005 – 2016. |
| (1) |
“Interested
person” of the Funds as defined in the Investment Company Act of
1940, as amended (the “1940 Act”). Mr. Chadwick is considered an
“interested person” because of his affiliation with Flaherty &
Crumrine. |
No Non-Interested Director of the Funds or their immediate family
members owned beneficially or of record any securities in Flaherty
& Crumrine, or a person directly or indirectly controlling,
controlled by, or under common control with the Flaherty &
Crumrine.
Mr. Chadwick was appointed as a Director of the Funds in January
2016 and was elected by each Fund’s shareholders to serve in that
capacity in April 2016. Each Director, other than Mr. Chadwick, has
been a Director of the Funds for at least 15 years (or since the
Fund’s inception, in the case of DFP). Additional information about
each Director follows (supplementing the information provided in
the table above) that describes some of the specific experiences,
qualifications, attributes or skills that each Director possesses
which the Boards believe have prepared them to be effective
Directors. The Boards believe that Directors should have the
ability to critically review, evaluate, question and discuss
information provided to them, and interact effectively with Fund
management, service providers and counsel. The Boards believe that
their members satisfy this standard. Experience relevant to having
this ability may be achieved through a Director’s educational
background; business, professional training or practice (e.g.,
accounting or law); public service or academic positions;
experience from service as a board member (including the Boards of
the Funds) or as an executive of investment funds, public companies
or significant private or not-for-profit entities or other
organizations; and/or other life experiences. The charter for the
Boards’ Nominating and Governance Committees (each a "Nominating
Committee" and collectively, the "Nominating Committees") contains
certain other factors considered by the Nominating Committees in
identifying and evaluating potential Director nominees. To assist
them in evaluating matters under federal and state law, the
Independent Directors (defined below) are counseled by their own
independent legal counsel, who participates in Board meetings and
interacts with Flaherty & Crumrine, and may also benefit from
information provided by the Funds’ and
Flaherty & Crumrine’s counsel. Both counsel to the
Independent Directors and counsel to the Funds and Flaherty &
Crumrine have significant experience advising funds and fund
directors. The Boards and their committees have the ability to
engage other experts as appropriate. The Boards evaluate their
performance on an annual basis.
R. Eric Chadwick – Mr. Chadwick was appointed as a
Director and Chair of the Board of each Fund in January 2016. Mr.
Chadwick has been the President of each Fund since April 2015 and,
previously, the Chief Financial Officer since 2004 (or in the case
of DFP, from its inception). Mr. Chadwick is also the President of
Flaherty & Crumrine and has served as a portfolio manager of
PFD and PFO since 1999 and as portfolio manager of each of FFC, FLC
and DFP since each Fund’s inception.
David Gale – In addition to his tenure as a Director
of the Funds, Mr. Gale has been President and Chief Executive
Officer of Delta Dividend Group, Inc., a San Francisco-based
investment management firm, since 1992. Prior to joining Delta
Dividend Group, Inc., Mr. Gale was a Principal with Morgan Stanley
from 1983 to 1990, and a Managing Director of Lehman Brothers
Holdings Inc. from 1990 to 1992. Mr. Gale previously served as a
director of Emmis Communications.
Morgan Gust – In addition to his tenure as a Director
of the Funds, Mr. Gust is a majority owner and executive manager of
various entities engaged in commercial farming, agriculture and
real estate. From 1990 to 2007, Mr. Gust served in various
capacities, including President, Executive Vice President, General
Counsel and Corporate Secretary of Giant Industries, Inc., a New
York Stock Exchange listed public company engaging in petroleum
refining and marketing. Mr. Gust previously served as lead director
of CoBiz Financial, Inc., a publicly traded bank holding company.
He is also a member of the Arizona State Bar. Mr. Gust was
designated the Lead Independent Director of each Fund in October
2016. He also serves as the Chair of the Nominating Committee of
each Fund’s Board.
Karen H. Hogan – In addition to her tenure as a
Director of the Funds, Ms. Hogan serves on the Board of IKAR, a
non-profit organization, and as a committee member and active
volunteer of several charitable and non-profit organizations. From
1985 to 1997, Ms. Hogan served as Senior Vice President of
Preferred Stock Origination, and previously Vice President of New
Product Development, at Lehman Brothers Holdings Inc. Ms. Hogan
also served as a director, member and chair of the audit committee
of New World Coffee, Inc. Ms. Hogan currently serves as Chair
of the Audit Committee of each Fund’s Board.
Board Composition and Leadership Structure
The 1940 Act requires that at least 40% of the Funds’ Directors not
be "interested persons" (as defined in the 1940 Act) of the Funds,
and therefore not affiliated with Flaherty & Crumrine
("Independent Directors"). To rely on certain exemptive rules under
the 1940 Act, a majority of the Funds’ Directors must be
Independent Directors and, for certain important matters, such as
the approval of investment advisory agreements or transactions with
affiliates, the 1940 Act or the rules thereunder require the
approval of a majority of the Independent Directors. Currently,
three of the Funds’ four Directors are Independent Directors. The
Chair of the Boards is an interested person of each Fund. The three
Independent Directors interact directly with the Chair and other
senior management of Flaherty & Crumrine at scheduled meetings
and between meetings as appropriate. Independent Directors have
been designated to chair the Audit Committees and the Nominating
Committees. The Board of each Fund has appointed Mr. Morgan Gust as
the Lead Independent Director. The Boards have determined that
their leadership structures and composition, in which the Chair of
the Boards is an "interested person" of the Funds, the Funds have a
Lead Independent Director and 75% of the Directors are Independent
Directors, are appropriate in light of the services that Flaherty
& Crumrine provides to the Funds.
Boards’ Oversight Role in Management
The Boards’ role in management of the Funds is oversight. As is the
case with virtually all investment companies (as distinguished from
operating companies), service providers to the Funds, primarily
Flaherty & Crumrine, have responsibility for the day-to-day
management of the Funds, which includes responsibility for risk
management (including management of investment performance and
investment risk, valuation risk, issuer and counterparty credit
risk, compliance risk and operational risk). As part of their
oversight, the Boards, acting at their scheduled meetings, or the
Chair, acting between Board meetings, regularly interacts with, and
receives reports from, senior personnel of service providers,
including the Funds’ and Flaherty & Crumrine’s Chief Compliance
Officer and portfolio management personnel. The Boards’ Audit
Committees (which consist of all the Independent Directors) meet
during their scheduled meetings, and between meetings the Chair of
the Audit Committees maintains contact, with the Funds’ independent
registered public accounting firm and the Funds’ Chief Financial
Officer. The Boards also receive periodic presentations from senior
personnel of Flaherty & Crumrine regarding risk management
generally, as well as periodic presentations regarding specific
operational, compliance or investment areas, such as business
continuity, personal trading, valuation and credit. The Boards have
adopted policies and procedures designed to address certain risks
to the Funds. In addition, Flaherty & Crumrine and other
service providers to the Funds have adopted a variety of policies,
procedures and controls designed to address particular risks to the
Funds. Different processes, procedures and controls are employed
with respect to different types of risks. However, it is not
possible to eliminate all of the risks applicable to the Funds. The
Boards also receive reports from counsel to the Funds and Flaherty
& Crumrine and the Independent Directors’ own independent legal
counsel regarding regulatory, compliance and governance matters.
The Boards’ oversight role does not make the Boards guarantors of
the Funds’ investments or activities.
Beneficial Ownership of Shares in Funds and Fund Complex for
each Director and Nominee for Election as Director
Set forth in the table below is the dollar range of equity
securities in each Fund and the aggregate dollar range of equity
securities in the Flaherty & Crumrine Fund Complex
beneficially owned by each Director and Nominee for election as
Director.
Name of
Director or
Nominee |
Dollar Range of Equity
Securities Held in a Fund*(1)
|
Aggregate Dollar Range of Equity
Securities in All Registered Investment
Companies Overseen by Director in
Family of Investment Companies*(2)
|
|
NON-INTERESTED
DIRECTORS/NOMINEES: |
|
|
PFD |
PFO |
FFC |
FLC |
DFP |
TOTAL |
|
Morgan
Gust |
E |
E |
D |
D |
D |
E |
|
David
Gale |
E |
D |
E |
D |
C |
E |
|
Karen H.
Hogan |
C |
C |
C |
C |
C |
E |
|
INTERESTED
DIRECTOR: |
|
R. Eric
Chadwick |
D |
E |
E |
D |
E |
E |
|
|
|
|
|
|
|
|
|
* |
Key
to Dollar Ranges |
| A. |
None |
| B. |
$1 -
$10,000 |
| C. |
$10,001
- $50,000 |
| D. |
$50,001
- $100,000 |
| E. |
over
$100,000 |
| All
Shares were valued as of December 31, 2021. |
|
(1) |
This
information has been furnished by each Director/Nominee as of
December 31, 2021. “Beneficial ownership” is determined in
accordance with Rule 16a-1(a)(2) under the 1934 Act. |
|
(2) |
As of
December 31, 2021, the Directors, Nominees and executive officers
of each Fund, as a group, owned less than 1% of the Shares of each
Fund. |
Officers of the Funds
The following table provides information concerning each of the
Fund’s officers.
|
Name, Address,
and Age
|
|
Current Position(s)
Held with Funds
|
|
Term of
Office and
Length of Time
Served* |
|
Principal Occupation During
Past Five Years
|
|
Chad C. Conwell
301
E. Colorado
Boulevard
Suite 800
Pasadena, CA 91101
Age:
49
|
|
Chief
Compliance Officer, Vice President and Secretary |
|
PFD
– since 2005
PFO
– since 2005
FFC
– since 2005
FLC
– since 2005
DFP
– since inception
|
|
Executive Vice
President, Chief Compliance Officer and Chief Legal Officer of
Flaherty & Crumrine. |
| |
|
Bradford S. Stone
47
Maple Street
Suite 403
Summit, NJ 07901
Age:
62
|
|
Chief
Financial Officer, Vice President and Treasurer |
|
PFD
– since 2003
PFO
– since 2003
FFC
– since 2003
FLC
– since inception
DFP
– since inception
|
|
Portfolio Manager,
Executive Vice President and Chief Financial Officer of Flaherty
& Crumrine. |
| |
|
|
|
|
|
|
|
Roger Ko
301
E. Colorado
Boulevard
Suite 800
Pasadena, CA 91101
Age:
47
|
|
Assistant
Treasurer |
|
PFD
– since 2014
PFO
– since 2014
FFC
– since 2014
FLC
– since 2014
DFP
– since 2014
|
|
Trader
of Flaherty & Crumrine. |
| |
|
|
|
|
|
|
|
Laurie C. Lodolo
301
E. Colorado
Boulevard
Suite 800
Pasadena, CA 91101
Age:
58
|
|
Assistant Compliance
Officer, Assistant Treasurer and
Assistant Secretary |
|
PFD
– since 2004
PFO
– since 2004
FFC
– since 2004
FLC
– since 2004
DFP
– since inception
|
|
Assistant Compliance
Officer and Secretary of Flaherty & Crumrine. |
*
Each
officer serves until his or her successor is elected and qualifies
or until his or her earlier resignation or removal.
Audit Committee
The role of each Fund’s Audit Committee is to assist the Board of
Directors in its oversight of: (i) the integrity of the Fund’s
financial statements and the independent audit thereof; (ii) the
Fund’s accounting and financial reporting policies and practices,
and its internal control over financial reporting; (iii) the Fund’s
compliance with legal and regulatory requirements; and (iv) the
independent auditor’s qualifications, independence and performance.
Each Fund’s Audit Committee is also required to prepare an audit
committee report pursuant to applicable laws and regulations for
inclusion in the Fund’s annual proxy statement. Each Audit
Committee operates pursuant to a charter (the “Audit Committee
Charter” or “Charter”) that was most recently reviewed and approved
by the Board of Directors of each Fund on January 20, 2022, and
which is available at www.preferredincome.com. As set forth in the
Charter, Fund management is responsible for the (i) preparation,
presentation and integrity of each Fund’s financial statements,
(ii) maintenance of appropriate accounting and financial reporting
principles and policies and (iii) maintenance of internal controls
and procedures designed to assure compliance with accounting
standards and applicable laws and regulations. The Funds’
independent registered public accounting firm, KPMG LLP (the
“independent accountants” or “KPMG”), is responsible for planning
and carrying out proper audits and reviews of each Fund’s financial
statements and expressing an opinion as to their conformity with
accounting principles generally accepted in the United States of
America.
Audit Committee Report
In performing its oversight function, at a meeting held on January
19, 2022, the Audit Committee of each Fund reviewed and discussed
with Fund management and the independent accountants, the audited
financial statements of the Fund as of and for the fiscal year
ended November 30, 2021, and discussed the audit of such financial
statements with the independent accountants.
In addition, the Audit Committee of each Fund discussed with the
independent accountants the matters required to be discussed by the
applicable requirements of the Public Company Accounting Oversight
Board (“PCAOB”) and the SEC. Each Audit Committee also received
from the independent accountants the written disclosures and
statements required by PCAOB Rule 3526, Communication with Audit
Committees Concerning Independence, as currently in effect and
discussed the impact that any such relationships might have on the
objectivity and independence of the independent accountants.
As set forth above, and as more fully set forth in each Fund’s
Audit Committee Charter, the Audit Committee has significant duties
and powers in its oversight role with respect to the Fund’s
financial reporting procedures, internal control systems, and the
independent audit process.
The members of each Audit Committee are not, and do not represent
themselves to be, professionally engaged in the practice of
auditing or accounting and are not employed by the Fund for
accounting, financial management or internal control. Moreover, the
Audit Committee relies on, and makes no independent verification
of, the facts presented to it or representations made by Fund
management or the independent accountants. Accordingly, the Audit
Committee’s oversight does not provide an independent basis to
determine that Fund management has maintained appropriate
accounting and financial reporting principles and policies, or
internal controls and procedures, designed to assure compliance
with accounting standards and applicable laws and regulations.
Furthermore, the Audit Committee’s considerations and discussions
referred to above do not provide assurance that the audit of each
Fund’s financial statements has been carried out in accordance with
generally accepted accounting standards or that the financial
statements are presented in accordance with generally accepted
accounting principles.
Based on its consideration of the audited financial statements and
the discussions referred to above with Fund management and the
independent accountants, and subject to the limitations on the
responsibilities and role of the Audit Committee set forth in the
Charter and those discussed above, the Audit Committee of each Fund
recommended to that Fund’s Board that the audited financial
statements be included in the Fund’s Annual Report for the fiscal
year ended November 30, 2021.
This
report was submitted by the Audit Committee of each Fund’s Board of
Directors
David Gale
Morgan Gust
Karen H. Hogan (Chair)
January 19, 2022
Each Audit Committee was established in accordance with Section
3(a)(58)(A) of the 1934 Act. Each Audit Committee met four times in
connection with its Board of Directors’ regularly scheduled
meetings during the fiscal year ended November 30, 2021. Each Audit
Committee is composed entirely of each Fund’s Independent Directors
who are also “independent” (as such term is defined by the New York
Stock Exchange (“NYSE”) under the listing standards applicable to
closed-end funds, as may be modified or supplemented (the “NYSE
Listing Standards”)), namely Ms. Hogan and Messrs. Gale and
Gust.
Nominating Committee
Each Board of Directors has a Nominating Committee composed
entirely of each Fund’s Independent Directors who are also
“independent” (as such term is defined by the NYSE Listing
Standards), namely Ms. Hogan and Messrs. Gale and Gust. The
Nominating Committee of each Fund met two times during the fiscal
year ended November 30, 2021.
The Nominating Committee of each Fund is responsible for
identifying individuals believed to be qualified to become Board
members; for recommending to the Board such nominees to stand for
election as Directors at each Fund’s annual meeting of shareholders
and to fill any vacancies on the Board; and for overseeing the
Board’s governance practices. Each Fund’s Nominating Committee has
a charter which is available on its website,
www.preferredincome.com.
Each Fund’s Nominating Committee believes that it is in the best
interest of each Fund and its shareholders to obtain highly
qualified candidates to serve as members of the Board. The
Nominating Committees have not established a formal process for
identifying candidates where a vacancy exists on the Board. In
nominating candidates, each Nominating Committee shall take into
consideration such factors as it deems appropriate, including
educational background; business, professional training or practice
(e.g., accounting or law); public service or academic positions;
experience from service as a board member (including the Boards of
the Funds) or as an executive of investment funds, public companies
or significant private or not-for-profit entities or other
organizations; and other life experiences. Each Fund’s Nominating
Committee may consider whether a potential nominee’s professional
experience, education, skills and other individual qualities and
attributes, including gender, race or national origin, would
provide beneficial diversity of skills, experience or perspective
to the Board’s membership and collective attributes. Each Fund’s
Nominating Committee will consider Director candidates recommended
by shareholders and submitted in accordance with applicable law and
procedures as described in this Joint Proxy Statement. (See
“Submission of Shareholder Proposals – 2023 Annual Meetings”
below).
Other Board-Related Matters
Shareholders who wish to send communications to the Board should
send them to the address of their Fund(s), 301 E. Colorado
Boulevard, Suite 800 Pasadena, California 91101, and to the
attention of the Board. All such communications will be directed to
the Board’s attention.
The Funds do not have a formal policy regarding Board member
attendance at the Annual Meetings. However, all the Directors of
each Fund attended the April 21, 2021 Annual Meetings of
Shareholders.
Board Compensation
Each Director of each Fund who is not a director, officer or
employee of Flaherty & Crumrine or any of its affiliates
receives from each Fund a fee of $9,000 per annum plus $750 for
each in person Board or Audit Committee meeting attended, $500 for
each in person Nominating Committee meeting attended, and $250 for
each telephone meeting attended. In addition, the Audit Committee
Chair receives from each Fund an annual fee of $3,000. Each
Director of each Fund is reimbursed for travel and out-of-pocket
expenses associated with attending Board and committee meetings.
During the fiscal year ended November 30, 2021, the Board of
Directors for each of PFD, PFO, FFC, FLC and DFP held six meetings
(two of which were telephone meetings). Each Director of each Fund
attended 100% of the Board meetings and 100% of any committee
meetings of which he or she is a member. The aggregate remuneration
paid to the Directors of each Fund for the fiscal year ended
November 30, 2021 is set forth below:
|
|
Annual
Directors Fees |
Board
Meeting and
Committee Meeting Fees* |
Travel
and Out-of-Pocket
Expenses** |
|
PFD |
$27,000 |
$25,500 |
$70 |
|
PFO |
$27,000 |
$25,500 |
$70 |
|
FFC |
$27,000 |
$25,500 |
$70 |
|
FLC |
$27,000 |
$25,500 |
$70 |
|
DFP |
$27,000 |
$25,500 |
$70 |
|
* |
Due
to the ongoing coronavirus pandemic, each quarterly meeting of the
Board and its committees held telephonically or virtually due to
COVID-19 safety protocols was treated as an in person
meeting. |
|
** |
Includes
reimbursement for travel and out-of-pocket expenses for both
“interested” and Independent Directors. |
| |
|
|
|
|
The table below sets forth additional information regarding the
compensation of each Fund’s Directors for the fiscal year ended
November 30, 2021. No executive officer or person affiliated with a
Fund received compensation from a Fund during the fiscal year ended
November 30, 2021 in excess of $60,000. Directors and executive
officers of the Funds do not receive pension or retirement benefits
from the Funds.
COMPENSATION TABLE
|
Name of
Person and Position |
Aggregate
Compensation from
each Fund |
Total
Compensation from the
Funds and Fund Complex Paid to
Directors* |
|
R. Eric Chadwick
Director, Chair of the Board, Chief Executive Officer and
President
|
$0 |
$0
(5) |
|
|
|
|
|
Morgan Gust
Lead
Independent Director, Nominating Committee Chair
|
$16,500 – PFD
$16,500 – PFO
$16,500 – FFC
$16,500 – FLC
$16,500 – DFP
|
$82,500
(5) |
|
|
|
|
|
David Gale
Director
|
$16,500 – PFD
$16,500 – PFO
$16,500 – FFC
$16,500 – FLC
$16,500 – DFP
|
$82,500
(5) |
|
|
|
|
|
Karen H. Hogan
Director, Audit Committee Chair
|
$19,500 – PFD
$19,500 – PFO
$19,500 – FFC
$19,500 – FLC
$19,500 – DFP
|
$97,500
(5) |
|
* |
Represents the total compensation paid for the fiscal year ended
November 30, 2021 to such persons by the Funds, which are
considered part of the same “fund complex” because they have a
common adviser. The parenthetical number represents the total
number of investment company directorships held by the Director or
Nominee in the Fund Complex as of November 30, 2021. |
Required Vote
The election of Messrs. Chadwick and Gust as Directors of PFD and
DFP and the election of Mr. Chadwick and Ms. Hogan as
Directors of PFO, FFC and FLC will require the affirmative vote of
a plurality of the votes cast by holders of the Shares of each such
Fund at the relevant Annual Meeting in person or by proxy.
Independent Registered Public Accounting Firm
KPMG, Two Financial Center, 60 South Street, Boston, Massachusetts
02111, has been selected to serve as each Fund’s independent
accountants for each Fund’s fiscal year ending November 30, 2022.
KPMG acted as the independent accountants for each Fund for the
fiscal year ended November 30, 2021. The Funds know of no direct
financial or material indirect financial interest of KPMG in the
Funds. A representative of KPMG will not be present at the Annual
Meetings, but will be available by telephone to respond to
appropriate questions and will have an opportunity to make a
statement.
Set forth in the table below are audit fees and non-audit related
fees billed to each Fund by KPMG for professional services for the
fiscal years ended November 30, 2020 and November 30, 2021,
respectively.
|
Fund |
|
|
Fiscal Year Ended
November 30
|
|
|
Audit Fees |
|
|
Audit-Related Fees |
|
|
Tax Fees* |
|
|
All Other Fees |
|
|
PFD |
|
|
|
2020 |
|
|
$ |
50,500 |
|
|
$ |
0 |
|
|
$ |
9,465 |
|
|
$ |
0 |
|
| |
|
|
|
2021 |
|
|
$ |
53,550 |
|
|
$ |
0 |
|
|
$ |
10,030 |
|
|
$ |
26,000 |
|
|
PFO |
|
|
|
2020 |
|
|
$ |
50,500 |
|
|
$ |
0 |
|
|
$ |
9,465 |
|
|
$ |
0 |
|
| |
|
|
|
2021 |
|
|
$ |
53,550 |
|
|
$ |
0 |
|
|
$ |
10,030 |
|
|
$ |
26,000 |
|
|
FFC |
|
|
|
2020 |
|
|
$ |
50,500 |
|
|
$ |
0 |
|
|
$ |
9,465 |
|
|
$ |
0 |
|
| |
|
|
|
2021 |
|
|
$ |
53,550 |
|
|
$ |
0 |
|
|
$ |
10,030 |
|
|
$ |
26,000 |
|
|
FLC |
|
|
|
2020 |
|
|
$ |
50,500 |
|
|
$ |
0 |
|
|
$ |
9,465 |
|
|
$ |
0 |
|
| |
|
|
|
2021 |
|
|
$ |
53,550 |
|
|
$ |
0 |
|
|
$ |
10,030 |
|
|
$ |
26,000 |
|
|
DFP |
|
|
|
2020 |
|
|
$ |
50,500 |
|
|
$ |
0 |
|
|
$ |
9,465 |
|
|
$ |
0 |
|
| |
|
|
|
2021 |
|
|
$ |
53,550 |
|
|
$ |
0 |
|
|
$ |
10,030 |
|
|
$ |
26,000 |
|
|
* |
“Tax
Fees” are those fees billed to each Fund by KPMG in connection with
tax consulting services, including primarily the review of each
Fund’s income tax returns. |
Each Fund’s Audit Committee Charter requires that the Audit
Committee pre-approve all audit and non-audit services to be
provided by the independent accountants to the Fund, and all
non-audit services to be provided by the independent accountants to
the Fund’s investment adviser and any entity controlling,
controlled by or under common control with the Fund’s investment
adviser (“affiliates”) that provide on-going services to each Fund,
if the engagement relates directly to the operations and financial
reporting of each Fund, or to establish detailed pre-approval
policies and procedures for such services in accordance with
applicable laws. All of the audit and non-audit services described
above for which KPMG billed each Fund fees for the fiscal years
ended November 30, 2020 and November 30, 2021, respectively, were
pre-approved by the Audit Committee, as applicable.
For each Fund’s fiscal years ended November 30, 2020 and November
30, 2021, respectively, KPMG did not provide any non-audit services
(or bill any fees for such services) to the Funds’ investment
adviser or any affiliates.
OTHER MATTERS TO COME BEFORE THE ANNUAL MEETINGS
Each Fund does not intend to present any other business at the
relevant Annual Meeting, nor is any Fund aware that any shareholder
intends to do so. If, however, any other matters are properly
brought before the Annual Meetings, the persons named in the
accompanying form of proxy will vote thereon in accordance with
their judgment.
ADDITIONAL INFORMATION
Investment Adviser, Administrator and Servicing Agent
Flaherty & Crumrine serves as the investment adviser to each
Fund, and its business address is 301 E. Colorado Boulevard, Suite
800, Pasadena, California 91101. BNY Mellon acts as the
administrator to each Fund and is located at 4400 Computer Drive,
Westborough, Massachusetts 01581. Destra Capital Advisors LLC acts
as the servicing agent to FFC, FLC and DFP and is located at 444
West Lake Street, Suite 1700, Chicago, Illinois 60606.
Submission of Shareholder Proposals - 2023 Annual
Meetings
All proposals by shareholders of each Fund that are intended to be
presented at each Fund’s next Annual Meeting of Shareholders to be
held in 2023 must be received by the relevant Fund for
consideration for inclusion in the relevant Fund’s proxy statement
relating to the meeting no later than November 3, 2022, and must
satisfy the requirements of federal securities laws.
Each Fund’s bylaws require shareholders wishing to nominate
Directors or make proposals to be voted on at the Fund’s annual
meeting to provide timely advance notice of the proposal in
writing. To be considered timely, any such advance notice must be
in writing delivered to or mailed and received at the principal
executive offices of the Fund at the address set forth on the first
page of this Joint Proxy Statement not earlier than the 150th day
nor later than 2:00 p.m., PDT, on the 120th day prior to the first
anniversary of the date of the proxy statement for the preceding
year’s annual meeting; provided, however, that in the event that
the date of the annual meeting is advanced or delayed by more than
30 days from the first anniversary of the date of the preceding
year’s annual meeting, notice by the shareholder to be timely must
be so delivered not earlier than the 150th day prior to the date of
such annual meeting and not later than 2:00 p.m., PDT, on the later
of the 120th day prior to the date of such annual meeting, as
originally convened, or the tenth day following the day on which
public announcement of the date of such meeting is first made.
Any such notice by a shareholder shall set forth the information
required by the Fund’s bylaws with respect to each matter the
shareholder proposes to bring before the annual meeting.
“Householding”
Please note that only one annual or semi-annual report or Joint
Proxy Statement may be delivered to two or more shareholders of a
Fund who share an address, unless the Fund has received
instructions to the contrary. To request a separate copy of an
annual report or semi-annual report or this Joint Proxy Statement,
or for instructions regarding how to request a separate copy of
these documents or regarding how to request a single copy if
multiple copies of these documents are received, shareholders
should contact BNYIS c/o Computershare, P.O. Box 505000,
Louisville, KY, 40233-5000, United States, or by calling
1-866-351-7446 (U.S. toll-free) or 1-201-680-6578
(International).
Voting Results
Each Fund will advise its shareholders of the voting results of the
matters voted upon at its Annual Meeting in its next Semi-Annual
Report to shareholders.
Broker Non-Votes and Abstentions
A proxy which is properly executed and returned accompanied by
instructions to withhold authority to vote represents a broker
“non-vote” (i.e., Shares held by brokers or nominees as to which
(i) instructions have not been received from the beneficial owners
or the persons entitled to vote and (ii) the broker or nominee does
not have discretionary voting power on a particular matter).
Proxies that withhold authority or broker non-votes (collectively,
“abstentions”) will be counted as Shares that are present and
entitled to vote at the relevant Annual Meeting for purposes of
determining the presence of a Quorum.
With respect to Proposal 1 for the Annual Meetings, abstentions do
not constitute a vote “for” the Nominees for Directors.
NOTICE TO BANKS, BROKER/DEALERS AND VOTING TRUSTEES AND THEIR
NOMINEES
Please advise the Funds whether other persons are the beneficial
owners of Shares for which proxies are being solicited from you,
and, if so, the number of copies of the Joint Proxy Statement and
other soliciting material you wish to receive to supply copies to
the beneficial owners of Shares.
IT IS IMPORTANT THAT PROXIES BE RETURNED PROMPTLY. SHAREHOLDERS
WHO DO NOT EXPECT TO ATTEND THE RELEVANT ANNUAL MEETING(S) ARE
THEREFORE URGED TO COMPLETE, SIGN, DATE AND RETURN ALL PROXY CARDS
OR VOTING INSTRUCTION FORM AS SOON AS POSSIBLE IN THE ENCLOSED
POSTAGE-PAID ENVELOPE.
EVERY
SHAREHOLDER’S VOTE IS IMPORTANT
| |
EASY
VOTING OPTIONS: |
| |
|
|
|
 |
VOTE
BY MAIL
Vote,
sign and date this Proxy
Card
and return in the
postage-paid
envelope
|
| |
|
|
| |
 |
VIRTUAL
MEETING
at
the following Website:
www.meetnow.global/MGPZG2H
on
April 20, 2022 at 8:00 a.m. PDT.
To
participate in the Virtual Meeting,
enter
the 14-digit control number from
the
shaded box on this card.
|
Please
fold along the perforation, detach and return the bottom portion in
the enclosed envelope.
|
PROXY
|
FLAHERTY
& CRUMRINE TOTAL RETURN FUND INCORPORATED
|
|
ANNUAL
MEETING OF SHAREHOLDERS
TO
BE HELD ON APRIL 20, 2022
THIS
PROXY IS BEING SOLICITED BY THE BOARD OF DIRECTORS. The
undersigned holder of shares of Common Stock of Flaherty &
Crumrine Total Return Fund Incorporated, a Maryland corporation
(the “Fund”), hereby appoints R. Eric Chadwick, Bradford S. Stone
and Chad C. Conwell, proxies for the undersigned, each with full
powers of substitution and revocation, to represent the undersigned
and to vote on behalf of the undersigned all shares of Common Stock
which the undersigned is entitled to vote at the Annual Meeting of
Shareholders of the Fund to be held virtually at the following
Website: www.meetnow.global/MGPZG2H at 8:00 a.m. PDT,
on April 20, 2022, and any adjournments or postponements thereof
(the “Meeting”). To participate in the Meeting enter the 14-digit
control number from the shaded box on this card.
The
undersigned hereby acknowledges receipt of the Notice of Annual
Meetings of Shareholders and Joint Proxy Statement and hereby
instructs said proxies to vote said shares as indicated hereon. In
their discretion, the proxies are authorized to vote upon such
other business as may properly come before the Meeting. A majority
of the proxies present and acting at the Meeting in person or by
substitute (or, if only one shall be so present, then that one)
shall have and may exercise all of the power and authority of said
proxies hereunder. The undersigned hereby revokes any proxy
previously given.
FLC_32521_022422
PLEASE
SIGN, DATE AND RETURN THE PROXY PROMPTLY USING THE ENCLOSED
ENVELOPE.
EVERY
SHAREHOLDER’S VOTE IS IMPORTANT
Important
Notice Regarding the Availability of Proxy Materials for
the
Annual
Meeting of Shareholders to be held virtually on April 20,
2022.
The
Notice of Annual Meetings of Shareholders, Joint Proxy Statement
and Proxy Card for this meeting are available at:
www.preferredincome.com
Please
fold along the perforation, detach and return the bottom portion in
the enclosed envelope.
TO
VOTE MARK BLOCKS BELOW IN BLUE OR BLACK INK AS SHOWN IN THIS
EXAMPLE: ☒
|
A |
|
Proposal |
THE
BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR” THE NOMINEES
LISTED. |
|
|
1. |
Election
of Directors: |
|
|
|
FOR |
WITHHOLD |
|
| |
01 R.
Eric Chadwick |
☐ |
☐ |
|
| |
02
Karen H. Hogan |
☐ |
☐ |
|
|
|
2. |
To vote and otherwise represent the undersigned on any other matter
that may properly come before the Meeting or any adjournment or
postponement thereof in the discretion of the Proxy
holder. |
|
B |
|
Authorized
Signatures ─ This section must be completed for your vote to be
counted.─ Sign and Date Below |
|
|
Note: |
Please
sign exactly as your name(s) appear(s) on this Proxy Card, and date
it. When shares are held jointly, each holder should sign. When
signing as attorney, executor, guardian, administrator, trustee,
officer of corporation or other entity or in another representative
capacity, please give the full title under the
signature. |
|
Date
(mm/dd/yyyy) ─ Please print date below |
|
Signature
1 ─ Please keep signature within the box |
|
Signature
2 ─ Please keep signature within the box |
|
/
/ |
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xxxxxxxxxxxxxx |
FLC
32521 |
xxxxxxxx |
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