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<SEC-DOCUMENT>0000950123-07-004627.txt : 20091204
<SEC-HEADER>0000950123-07-004627.hdr.sgml : 20091204

<ACCEPTANCE-DATETIME>20070328164816

<PRIVATE-TO-PUBLIC>

ACCESSION NUMBER:		0000950123-07-004627

CONFORMED SUBMISSION TYPE:	N-2/A

PUBLIC DOCUMENT COUNT:		14

FILED AS OF DATE:		20070328

DATE AS OF CHANGE:		20070419


FILER:


	COMPANY DATA:	

		COMPANY CONFORMED NAME:			ZWEIG TOTAL RETURN FUND INC

		CENTRAL INDEX KEY:			0000836412

		IRS NUMBER:				133474242

		STATE OF INCORPORATION:			MD

		FISCAL YEAR END:			1231



	FILING VALUES:

		FORM TYPE:		N-2/A

		SEC ACT:		1933 Act

		SEC FILE NUMBER:	333-139605

		FILM NUMBER:		07724737



	BUSINESS ADDRESS:	

		STREET 1:		900 THIRD AVE., 31ST FLOOR

		CITY:			NEW YORK

		STATE:			NY

		ZIP:			10022-4728

		BUSINESS PHONE:		800-272-2700



	MAIL ADDRESS:	

		STREET 1:		900 THIRD AVE., 31ST FLOOR

		CITY:			NEW YORK

		STATE:			NY

		ZIP:			10022-4728




FILER:


	COMPANY DATA:	

		COMPANY CONFORMED NAME:			ZWEIG TOTAL RETURN FUND INC

		CENTRAL INDEX KEY:			0000836412

		IRS NUMBER:				133474242

		STATE OF INCORPORATION:			MD

		FISCAL YEAR END:			1231



	FILING VALUES:

		FORM TYPE:		N-2/A

		SEC ACT:		1940 Act

		SEC FILE NUMBER:	811-05620

		FILM NUMBER:		07724738



	BUSINESS ADDRESS:	

		STREET 1:		900 THIRD AVE., 31ST FLOOR

		CITY:			NEW YORK

		STATE:			NY

		ZIP:			10022-4728

		BUSINESS PHONE:		800-272-2700



	MAIL ADDRESS:	

		STREET 1:		900 THIRD AVE., 31ST FLOOR

		CITY:			NEW YORK

		STATE:			NY

		ZIP:			10022-4728



</SEC-HEADER>

<DOCUMENT>
<TYPE>N-2/A
<SEQUENCE>1
<FILENAME>y32550a1nv2za.htm
<DESCRIPTION>AMENDMENT #1 TO FORM N-2
<TEXT>
<HTML>
<HEAD>
<TITLE>AMENDMENT #1 TO FORM N-2</TITLE>
</HEAD>
<BODY bgcolor="#FFFFFF">
<!-- PAGEBREAK -->
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>
<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>As
filed with the Securities and Exchange Commission on March&nbsp;28, 2007</B>
</DIV>


<DIV align="right" style="font-size: 10pt; margin-top: 12pt">Investment Company Act File No.&nbsp;811-05620<BR>
Securities Act File No.&nbsp;333-139605
</DIV>


<DIV style="width: 100%; border-bottom: 2pt solid black; font-size: 1pt">&nbsp;</DIV>
<DIV style="width: 100%; border-bottom: 1pt solid black; font-size: 1pt">&nbsp;</DIV>




<DIV align="center" style="font-size: 14pt; margin-top: 12pt"><B>SECURITIES AND EXCHANGE COMMISSION</B>
</DIV>

<DIV align="center" style="font-size: 12pt"><B>WASHINGTON, D.C. 20549</B>
</DIV>


<DIV align="Center" style="font-size: 10pt; margin-top: 6pt"><DIV align="center"><DIV style="font-size: 3pt; margin-top: 16pt; width: 26%; border-top: 1px solid #000000">&nbsp;</DIV></DIV>

</DIV>
<DIV align="center" style="font-size: 18pt; margin-top: 12pt"><B>FORM N-2</B>
</DIV>


<DIV align="Center" style="font-size: 10pt; margin-top: 6pt"><DIV align="center"><DIV style="font-size: 3pt; margin-top: 16pt; width: 26%; border-top: 1px solid #000000">&nbsp;</DIV></DIV>

</DIV>
<DIV align="center">
<TABLE cellspacing="0" border="0" cellpadding="0" width="100%" style="font-size: 12pt">
<TR style="font-size: 6pt">
    <TD width="7%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="88%">&nbsp;</TD>
</TR>
<TR valign="top">
    <TD align="center"><FONT face="Wingdings">&#111;</FONT></TD>
    <TD>&nbsp;</TD>
    <TD><B>REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933</B></TD>
</TR>
</TABLE>
</DIV>

<DIV align="center">
<TABLE cellspacing="0" border="0" cellpadding="0" width="100%" style="font-size: 12pt">
<TR style="font-size: 6pt">
    <TD width="7%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="88%">&nbsp;</TD>
</TR>
<TR valign="top">
    <TD align="center"><FONT face="Wingdings">&#254;</FONT></TD>
    <TD>&nbsp;</TD>
    <TD><B>Pre-effective Amendment No.&nbsp;1</B></TD>
</TR>
</TABLE>
</DIV>

<DIV align="center">
<TABLE cellspacing="0" border="0" cellpadding="0" width="100%" style="font-size: 12pt">
<TR style="font-size: 6pt">
    <TD width="7%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="88%">&nbsp;</TD>
</TR>
<TR valign="top">
    <TD align="center"><FONT face="Wingdings">&#111;</FONT></TD>
    <TD>&nbsp;</TD>
    <TD><B>Post-Effective Amendment No.</B></TD>
</TR>
</TABLE>
</DIV>


<DIV align="Center" style="font-size: 10pt; margin-top: 6pt"><B>and/or</B>

</DIV>
<DIV align="center">
<TABLE cellspacing="0" border="0" cellpadding="0" width="100%" style="font-size: 12pt">
<TR style="font-size: 6pt">
    <TD width="7%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="88%">&nbsp;</TD>
</TR>
<TR valign="top">
    <TD align="center"><FONT face="Wingdings">&#111;</FONT></TD>
    <TD>&nbsp;</TD>
    <TD><B>REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940</B></TD>
</TR>
</TABLE>
</DIV>

<DIV align="center">
<TABLE cellspacing="0" border="0" cellpadding="0" width="100%" style="font-size: 12pt">
<TR style="font-size: 6pt">
    <TD width="7%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="88%">&nbsp;</TD>
</TR>
<TR valign="top">
    <TD align="center"><FONT face="Wingdings">&#254;</FONT></TD>
    <TD>&nbsp;</TD>
    <TD><B>Amendment No.&nbsp;11</B></TD>
</TR>
</TABLE>
</DIV>


<DIV align="Center" style="font-size: 10pt; margin-top: 6pt"><DIV align="center"><DIV style="font-size: 3pt; margin-top: 16pt; width: 26%; border-top: 1px solid #000000">&nbsp;</DIV></DIV>

</DIV>
<DIV align="center" style="font-size: 24pt; margin-top: 12pt"><B>THE ZWEIG TOTAL RETURN FUND, INC.</B>
</DIV>

<DIV align="center" style="font-size: 10pt"><B>(</B><B><I>Exact name of Registrant as specified in charter</I></B><B>)</B></DIV>



<DIV align="Center" style="font-size: 10pt; margin-top: 6pt"><B>900 Third Avenue<BR>
New York, New York 10022</B><BR>
<B><I>(Address of Principal Executive Offices)</I></B>

</DIV>

<DIV align="Center" style="font-size: 10pt; margin-top: 6pt"><DIV align="center"><DIV style="font-size: 3pt; margin-top: 16pt; width: 26%; border-top: 1px solid #000000">&nbsp;</DIV></DIV>

</DIV>

<DIV align="Center" style="font-size: 10pt; margin-top: 6pt"><B><I>Registrant&#146;s Telephone Number, including Area Code:<BR>
212-451-1100</I></B>

</DIV>

<DIV align="Center" style="font-size: 10pt; margin-top: 6pt"><DIV align="center"><DIV style="font-size: 3pt; margin-top: 16pt; width: 26%; border-top: 1px solid #000000">&nbsp;</DIV></DIV>

</DIV>

<DIV align="Center" style="font-size: 10pt; margin-top: 6pt"><B>George R. Aylward<BR>
President<BR>
The Zweig Total Return Fund, Inc.<BR>
900 Third Avenue<BR>
New York, New York 10022</B><BR>
<B><I>(Name and Address of Agent for Service)</I></B>

</DIV>

<DIV align="Center" style="font-size: 10pt; margin-top: 6pt"><B>With Copies to:</B>

</DIV>

<DIV align="Center" style="font-size: 10pt; margin-top: 6pt"><B>Robert E. Smith, Esq.</B><BR>
Katten Muchin Rosenman LLP<BR>
575 Madison Avenue<BR>
New York, New York 10022

</DIV>

<DIV align="Center" style="font-size: 10pt; margin-top: 6pt"><B>Approximate date of proposed public offering:<BR>
As soon as practicable after the effective date of this Registration Statement</B>.

</DIV>

<DIV align="Center" style="font-size: 10pt; margin-top: 6pt"><DIV align="center"><DIV style="font-size: 3pt; margin-top: 16pt; width: 26%; border-top: 1px solid #000000">&nbsp;</DIV></DIV>

</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If any securities being registered on this form will be offered on a delayed or
continuous basis in reliance on Rule&nbsp;415 under the Securities Act of 1933, other than securities
offered in connection with a dividend reinvestment plan, check the following box. <FONT face="Wingdings">&#111;</FONT>
</DIV>

<DIV align="Center" style="font-size: 10pt; margin-top: 6pt"><DIV align="center"><DIV style="font-size: 3pt; margin-top: 16pt; width: 26%; border-top: 1px solid #000000">&nbsp;</DIV></DIV>

</DIV>
<DIV align="center" style="font-size: 10pt; margin-top: 12pt"><B>CALCULATION OF REGISTRATION FEE</B></DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="1%">&nbsp;</TD>
    <TD width="44%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD><!-- VRule -->
    <TD width="2%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD><!-- VRule -->
    <TD width="2%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD><!-- VRule -->
    <TD width="2%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD><!-- VRule -->
    <TD width="2%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>

    <TD width="1%">&nbsp;</TD>
</TR><TR style="font-size: 1px" valign="bottom">
    <TD nowrap align="left" colspan="23" style="border-bottom: 3px double #000000">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">    <TD width="1%">&nbsp;</TD>

    <TD>&nbsp;</TD>
    <TD style="border-right: 2px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD style="border-right: 2px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>Proposed</B></TD>
    <TD>&nbsp;</TD>
    <TD style="border-right: 2px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>Proposed</B></TD>
    <TD>&nbsp;</TD>
    <TD style="border-right: 2px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">    <TD width="1%">&nbsp;</TD>

    <TD>&nbsp;</TD>
    <TD style="border-right: 2px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>Amount</B></TD>
    <TD>&nbsp;</TD>
    <TD style="border-right: 2px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>Maximum</B></TD>
    <TD>&nbsp;</TD>
    <TD style="border-right: 2px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>Maximum</B></TD>
    <TD>&nbsp;</TD>
    <TD style="border-right: 2px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>Amount of</B></TD>
    <TD>&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">    <TD width="1%">&nbsp;</TD>

    <TD nowrap align="center"><B>Title of Securities</B></TD>
    <TD style="border-right: 2px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>Being</B></TD>
    <TD>&nbsp;</TD>
    <TD style="border-right: 2px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>Offering Price</B></TD>
    <TD>&nbsp;</TD>
    <TD style="border-right: 2px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>Aggregate</B></TD>
    <TD>&nbsp;</TD>
    <TD style="border-right: 2px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>Registration</B></TD>
    <TD>&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">    <TD width="1%">&nbsp;</TD>

    <TD nowrap align="center"><B>Being Registered</B></TD>
    <TD style="border-right: 2px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>Registered</B></TD>
    <TD>&nbsp;</TD>
    <TD style="border-right: 2px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>Per Share (1)</B></TD>
    <TD>&nbsp;</TD>
    <TD style="border-right: 2px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>Offering Price</B></TD>
    <TD>&nbsp;</TD>
    <TD style="border-right: 2px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>Fee</B></TD>
    <TD>&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD width="1%" style="border-top: 2px solid #000000">&nbsp;</TD>
                    <TD style="border-top: 2px solid #000000"><DIV style="margin-left:15px; text-indent:-15px">Common Stock,
par value
$0.001 per share</DIV></TD>
    <TD style="border-right: 2px solid #000000; border-top: 2px solid #000000">&nbsp;</TD>
    <TD style="border-top: 2px solid #000000">&nbsp;</TD>

<TD colspan="3" align="center" style="border-top: 2px solid #000000">23,400,000&nbsp;Shares</TD>
    <TD style="border-right: 2px solid #000000; border-top: 2px solid #000000">&nbsp;</TD>
    <TD style="border-top: 2px solid #000000">&nbsp;</TD>
    <TD align="center" style="border-top: 2px solid #000000">$5.75</TD>
    <TD style="border-top: 2px solid #000000">&nbsp;</TD>
    <TD style="border-top: 2px solid #000000">&nbsp;</TD>
    <TD style="border-right: 2px solid #000000; border-top: 2px solid #000000">&nbsp;</TD>
    <TD style="border-top: 2px solid #000000">&nbsp;</TD>

<TD align="center" style="border-top: 2px solid #000000">$134,550,000</TD>
    <TD style="border-top: 2px solid #000000">&nbsp;</TD>
    <TD style="border-top: 2px solid #000000">&nbsp;</TD>
    <TD style="border-right: 2px solid #000000; border-top: 2px solid #000000">&nbsp;</TD>
    <TD style="border-top: 2px solid #000000">&nbsp;</TD>
    <TD colspan="2" align="center" style="border-top: 2px solid #000000">$4130.69</TD>
    <TD style="border-top: 2px solid #000000">&nbsp;</TD>
    <TD width="1%" style="border-top: 2px solid #000000">&nbsp;</TD>
</TR>
<TR style="font-size: 1px" valign="bottom">
    <TD nowrap align="left" colspan="23" style="border-top: 3px double #000000">&nbsp;</TD>
</TR>

<!-- End Table Body -->
</TABLE>
</DIV>


<DIV align="left">
<DIV style="font-size: 3pt; margin-top: 3pt; width: 18%; border-top: 0px solid #000000">&nbsp;</DIV>
</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96"></TD>
</TR>

<TR valign="top">
    <TD nowrap align="left">(1)</TD>
    <TD>&nbsp;</TD>
    <TD>Estimated solely for the purposes of calculating the registration fee in accordance with
Rule 457(c) under the Securities Act of 1933. Based on the average of the high and low prices
for the Fund&#146;s Common Stock reported on the New York Stock
Exchange, Inc. on March&nbsp;22, 2007.</TD>
</TR>

</TABLE>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>The Registrant hereby amends this Registration Statement on such date or dates as may be necessary
to delay its effective date until the Registrant shall file a further amendment which specifically
states that this Registration Statement shall thereafter become effective in accordance with
Section&nbsp;8(a) of the Securities Act of 1933 or until this Registration Statement shall become
effective on such date as the Securities and Exchange Commission, acting pursuant to said Section
8(a), may determine.</B>
</DIV>


<DIV style="width: 100%; border-bottom: 1pt solid black; margin-top: 10pt; font-size: 1pt">&nbsp;</DIV>
<DIV style="width: 100%; border-bottom: 2pt solid black; font-size: 1pt">&nbsp;</DIV>





<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">







<DIV align="left">
<!-- TOC -->
</DIV>
<DIV align="left">
<A name="tocpage"></A>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>THE ZWEIG TOTAL RETURN FUND, INC.</B>
</DIV>


<DIV align="Center" style="font-size: 10pt; margin-top: 6pt"><B>FORM N-2</B>

</DIV>

<DIV align="Center" style="font-size: 10pt; margin-top: 6pt"><B>CROSS REFERENCE SHEET</B>

</DIV>

<DIV align="Center" style="font-size: 10pt; margin-top: 6pt"><B>Pursuant to Rule&nbsp;481(a)</B>

</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="49%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="38%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left" colspan="3">Item</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left" colspan="3" style="border-bottom: 1px solid #000000">Number</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="CENTER" style="border-bottom: 1px solid #000000">Form N-2</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" style="border-bottom: 1px solid #000000">Location in Prospectus</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom"><!-- Blank Space -->
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD colspan="5" nowrap valign="top" align="center"><U><B>Part A</B></U></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">1.</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Outside Front Cover
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Outside Front Cover Page of
Prospectus</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">2.</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Cover Pages; Other Offering Information
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Outside Front Cover of Prospectus</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">3.</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Fee Table and Synopsis
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Fund Expenses</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">4.</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Financial Highlights
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Financial Highlights</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">5.</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Plan of Distribution
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">The Offer</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">6.</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Selling Shareholders
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Not Applicable</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">7.</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Use of Proceeds
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">The Offer; Use of Proceeds</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">8.</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">General Description of the Registrant
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">The Fund; Market Price and Net
Asset Value Information;
Investment Objective and
Policies; Risk Factors and
Special Considerations</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">9.</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Management
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Management of the Fund;
Custodian, Dividend Paying
Agent, Transfer Agent and
Registrar</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">10.</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Capital Stock, Long-Term Debt, and Other
Securities
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Distributions; Distribution
Reinvestment and Cash Purchase
Plan; Taxation; Description of
Common Stock</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">11.</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Defaults and Arrears on Senior Securities
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Not Applicable</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">12.</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Legal Proceedings
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Legal Matters</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">13.</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Table of Contents of the Statement of
Additional Information
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Table of Contents of the
Statement of Additional
Information</TD>
</TR>
<!-- End Table Body -->
<TR><TD colspan="9"><FONT size="2">&nbsp;<A HREF="y32550a1exv99waw2.htm">EX-99.A.2: ARTICLES SUPPLEMENTARY</A></FONT></TD></TR>
<TR><TD colspan="9"><FONT size="2">&nbsp;<A HREF="y32550a1exv99wdw1.htm">EX-99.D.1: FORM OF SUBSCRIPTION CERTIFICATE</A></FONT></TD></TR>
<TR><TD colspan="9"><FONT size="2">&nbsp;<A HREF="y32550a1exv99wdw2.htm">EX-99.D.2: FORM OF NOTICE OF GUARANTEED DELIVERY</A></FONT></TD></TR>
<TR><TD colspan="9"><FONT size="2">&nbsp;<A HREF="y32550a1exv99wdw3.htm">EX-99.D.3: FORM OF NOMINEE HOLDER OVER-SUBSCRIPTION EXERCISE FORM</A></FONT></TD></TR>
<TR><TD colspan="9"><FONT size="2">&nbsp;<A HREF="y32550a1exv99wgw3.htm">EX-99.G.3: LETTER AGREEMENT</A></FONT></TD></TR>
<TR><TD colspan="9"><FONT size="2">&nbsp;<A HREF="y32550a1exv99wkw4.htm">EX-99.K.4: STOCK TRANSFER AGENT SERVICE AGREEMENT</A></FONT></TD></TR>
<TR><TD colspan="9"><FONT size="2">&nbsp;<A HREF="y32550a1exv99wkw5.htm">EX-99.K.5: SUBSCRIPTION AGENT AGREEMENT</A></FONT></TD></TR>
<TR><TD colspan="9"><FONT size="2">&nbsp;<A HREF="y32550a1exv99wkw6.htm">EX-99.K.6: INFORMATION AGENT AGREEMENT</A></FONT></TD></TR>
<TR><TD colspan="9"><FONT size="2">&nbsp;<A HREF="y32550a1exv99wl.htm">EX-99.L: OPINION AND CONSENT OF KATTEN MUCHIN ROSENMAN LLP</A></FONT></TD></TR>
<TR><TD colspan="9"><FONT size="2">&nbsp;<A HREF="y32550a1exv99wn.htm">EX-99.N: CONSENT OF PRICEWATERHOUSECOOPERS LLP</A></FONT></TD></TR>
</TABLE>
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left">
<!-- /TOC -->
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="49%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="38%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left" colspan="3">Item</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left" colspan="3" style="border-bottom: 1px solid #000000">Number</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" style="border-bottom: 1px solid #000000">Form N-2</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" style="border-bottom: 1px solid #000000">Location in SAI</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom"><!-- Blank Space -->
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD colspan="5" nowrap valign="top" align="center"><U><B>Part B</B></U></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">14.</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Cover Page
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Cover Page</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">15.</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Table of Contents
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Table of Contents</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">16.</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">General Information and History
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">The Fund (in Part A)</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">17.</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Investment Objectives and Policies
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Investment Objective
and Policies;
Investment
Restrictions</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">18.</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Management
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Management</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">19.</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Control Persons and Principal Holders of
Securities
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Principal Shareholders</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">20.</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Investment Advisory and Other Services
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Management of the Fund
(in Part A);
Custodian, Dividend
Paying Agent, Transfer
Agent and Registrar
(in Part A)</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">21.</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Portfolio Managers
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Management of the Fund
(in Part A); Portfolio
Managers</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">22.</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Brokerage Allocation and Other Practices
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Portfolio Transactions
and Brokerage</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">23.</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Tax Status
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Taxation</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">24.</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Financial Statements
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Financial Statements</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->2<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B><I>Subject to Completion, Dated </I></B><U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U><B><I>, 2007</I></B>
</DIV>


<DIV align="Center" style="font-size: 10pt; margin-top: 6pt"><B>18,720,000 SHARES OF COMMON STOCK<BR>
THE ZWEIG TOTAL RETURN FUND, INC.<BR>
ISSUABLE UPON EXERCISE OF NON-TRANSFERABLE<BR>
RIGHTS TO SUBSCRIBE FOR SUCH SHARES OF COMMON STOCK</B>

</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Zweig Total Return Fund, Inc. (the &#147;Fund&#148;) is issuing non-transferable rights (&#147;Rights&#148;)
to its shareholders of record as of the close of business on <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>, 2007 (the &#147;Record Date&#148;)
entitling the holders of these Rights to subscribe (the
&#147;Offer&#148;) for an aggregate of 18,720,000
shares of common stock, par value $0.001 per share (the &#147;Common Stock&#148;). Shareholders of record
will receive one Right for each outstanding Fund share owned on the Record Date. The Rights
entitle the holders to purchase one share of Common Stock for every five Rights held, and
shareholders of record who fully exercise their Rights will be entitled to subscribe for additional
shares of Common Stock pursuant to an over-subscription privilege described in this Prospectus.
The Fund may increase the number of shares of Common Stock subject to subscription by up to 25% of
the shares, or up to an additional 4,680,000 shares of Common
Stock, for an aggregate total of 23,400,000
shares. Fractional shares will not be issued upon the exercise of Rights. The Rights are
non-transferable and, therefore, may not be purchased or sold. The Rights will not be admitted for
trading on the New York Stock Exchange (&#147;NYSE&#148;) or any other exchange. See &#147;The Offer.&#148; THE
SUBSCRIPTION PRICE PER SHARE (THE &#147;SUBSCRIPTION PRICE&#148;) WILL BE EQUAL TO THE LOWER OF THE NET ASSET
VALUE PER SHARE OF THE FUND&#146;S COMMON STOCK (&#147;NAV&#148;) AT THE CLOSE OF BUSINESS ON <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>, 2007
(THE &#147;PRICING DATE&#148;) OR 95% OF THE AVERAGE OF THE LAST REPORTED SALES PRICE OF A SHARE OF THE
FUND&#146;S COMMON STOCK ON THE NYSE ON THE PRICING DATE AND THE FOUR PRECEDING BUSINESS DAYS.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>THE OFFER WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON </B><U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U><B>, 2007 UNLESS EXTENDED AS
DESCRIBED HEREIN (THE &#147;EXPIRATION DATE&#148;).</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Fund announced the Offer on December&nbsp;14, 2006. The Fund&#146;s Common Stock trades on the NYSE
under the symbol &#147;ZTR.&#148; Shares issued upon the exercise of Rights and the over-subscription
privilege will be listed for trading on the NYSE, subject to notice of issuance. The net asset
value per share of the Fund&#146;s Common Stock at the close of business on December&nbsp;14, 2006 and
<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>, 2007, the Record Date, were $5.14 and $&#95;&#95;&#95;, respectively, and the last reported sales
price of a share of the Fund&#146;s Common Stock on the NYSE on those dates were $5.80 and $&#95;&#95;&#95;,
respectively.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Fund is a diversified, closed-end management investment company. Its investment objective
is to seek the highest total return, consisting of capital appreciation and current income,
consistent with the preservation of capital. The Fund will invest up to 65% of its total assets in
U.S. government securities, non-convertible debt securities of domestic issuers rated among the two
highest rating categories of either Moody&#146;s Investors Services, Inc. (&#147;Moody&#146;s&#148;) or Standard &#038;
Poor&#146;s Corporation (&#147;S&#038;P&#148;) (or, if unrated, of comparable quality as determined by the investment
adviser, Phoenix/Zweig Advisers LLC (the &#147;Investment Adviser&#148;)), and certain
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->3<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left" style="font-size: 10pt; margin-top: 6pt">foreign government securities (collectively, the &#147;Bond Investments&#148;), and up to 50% of its
total assets in equity securities comprised of common, preferred and convertible preferred stock.
The equity investments will be in primarily large-capitalization companies but may also be in
investments in small- or medium-capitalization companies. The Fund may, however, under certain
circumstances, invest up to 75% of its total assets in equity securities as determined by the
Investment Adviser. The Fund also, as part of its Bond Investments, may invest up to 10% of its
total assets in non-convertible debt securities rated below the two highest rating categories of
Moody&#146;s or S&#038;P (or, if unrated, of comparable quality as determined by the Investment Adviser).
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Investment Adviser is a wholly-owned subsidiary of Phoenix Investment Partners, Ltd., a
wholly-owned investment management subsidiary of The Phoenix Companies, Inc., a NYSE listed
company. The Investment Adviser engages Zweig Consulting LLC (the &#147;Sub-Adviser&#148;) to perform asset
allocation research and analysis and provide advice thereon to the Investment Adviser. The extent
of the Fund&#146;s investment in debt and equity securities will be determined primarily on the basis of
asset allocation techniques developed by Dr.&nbsp;Martin E. Zweig, President of the Sub-Adviser, and his
staff. The Investment Adviser (and its predecessor) has provided investment advisory services to
the Fund since its inception. Dr.&nbsp;Zweig has been engaged in the business of providing investment
advisory services for over 35&nbsp;years. While the Investment Adviser seeks to reduce the risks
associated with investing in debt and equity securities by using these techniques, such risks
cannot be eliminated. See &#147;Investment Objective and Policies.&#148; No assurance can be given that the
Fund&#146;s investment objective will be realized. The Fund&#146;s administrator is Phoenix Equity Planning
Corporation (the &#147;Administrator&#148;). The Fund&#146;s Investment Adviser, Sub-Adviser and Administrator
will benefit from the Offer. See &#147;Management of the Fund.&#148;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE
COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY
STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>INVESTING IN THE FUND&#146;S COMMON SHARES INVOLVES RISKS. SEE &#147;RISK FACTORS AND SPECIAL
CONSIDERATIONS&#148; FOR FACTORS THAT SHOULD BE CONSIDERED BEFORE INVESTING IN THE COMMON SHARES OF THE
FUND.</B>
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="50%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="10%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="10%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Estimated Price</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Estimated Proceeds to Registrant</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000"><B>to Public (1)</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000"><B>Sales Load</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000"><B>or Other Persons (2) (3)</B></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Per Share</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">N/A</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Total Maximum (4)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">N/A</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->4<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>(Footnotes on the following page)</B>
</DIV>


<DIV align="Center" style="font-size: 10pt; margin-top: 6pt"><DIV align="center"><DIV style="font-size: 3pt; margin-top: 16pt; width: 26%; border-top: 1px solid #000000">&nbsp;</DIV></DIV>

</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt">The date of this Prospectus is <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>, 2007.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Upon the completion of the Offer, shareholders of record who do not fully exercise their
Rights will own a smaller proportional interest in the Fund than they owned prior to the Offer. In
addition, because the Subscription Price may be less than the net asset value per share as of the
Pricing Date, the Offer may result in an immediate dilution of the net asset value per share for
all shareholders. Although it is not possible to state precisely the amount of such decrease in net
asset value per share, if any, because it is not known how many shares will be subscribed for, what
the net asset value or market price of the Common Stock will be on the Pricing Date or what the
Subscription Price will be, such dilution could be minimal or substantial. Any such dilution will
disproportionately affect non-exercising shareholders. See &#147;The Offer&#148; and &#147;Risk Factors and
Special Considerations.&#148; Except as described in this Prospectus, shareholders of record will have
no right to rescind their subscriptions after receipt of their payment for shares by the
Subscription Agent.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This Prospectus sets forth concisely the information about the Fund that a prospective
investor ought to know before investing. Investors are advised to read this Prospectus and retain
it for future reference. A Statement of Additional Information, dated <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>, 2007 (the &#147;SAI&#148;),
containing additional information about the Fund, has been filed with the Securities and Exchange
Commission (the &#147;Commission&#148;) and is incorporated by reference in its entirety into this
Prospectus. The Table of Contents of the SAI appears on Page &#95;&#95;&#95;of this Prospectus.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Shareholders may obtain a copy, free of charge, of the SAI and the Fund&#146;s annual and
semi-annual report to shareholders, or request other information about the Fund, from, and should
direct all questions and inquires relating to the Offer to, the Fund&#146;s Information Agent,
Georgeson, Inc. Banks and Brokers should call (212)&nbsp;440-9800 collect and all other shareholders
should call (866)&nbsp;541-3552. The Fund makes available, free of charge, the SAI and the Fund&#146;s annual
and semi-annual report to shareholders at http://www.phoenixinvestments.com. The address of the
Fund is 900 Third Avenue, New York, New York 10022, and its telephone number is (212)&nbsp;451-1100. The
Commission maintains a web site (http://www.sec.gov) that contains the SAI and other information
regarding the Fund.
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><I>(Footnotes from the previous page)</I>
</DIV>



<DIV align="left">
<DIV style="font-size: 3pt; margin-top: 16pt; width: 18%; border-top: 1px solid #000000">&nbsp;</DIV>
</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96"></TD>
</TR>

<TR valign="top">
    <TD nowrap align="left">(1)</TD>
    <TD>&nbsp;</TD>
    <TD>Estimated, equal to the lower of the NAV at the close of business on <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>, 2007 or 95% of
the average of the last reported sales price of a share of the Fund&#146;s Common Stock on the NYSE on
<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>, 2007 and the four preceding business days.</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left">(2)</TD>
    <TD>&nbsp;</TD>
    <TD>Before deduction of offering expenses incurred by the Fund, estimated at approximately
$657,500.</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left">(3)</TD>
    <TD>&nbsp;</TD>
    <TD>The funds received by check prior to the final due date of this Offer will be deposited into a
segregated interest-bearing account (which interest will be paid to the Fund) pending proration and
distribution of the shares.</TD>
</TR>

</TABLE>


<P align="center" style="font-size: 10pt"><!-- Folio -->5<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">





<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96"></TD>
</TR>

<TR valign="top">
    <TD nowrap align="left">(4)</TD>
    <TD>&nbsp;</TD>
    <TD>Assumes all 18,720,000&nbsp;shares are purchased at the Estimated Subscription Price. Pursuant to the
over-subscription privilege, the Fund may, at the discretion of the Board of Directors, increase
the number of shares subject to subscription by up to 25% of the shares offered hereby. If the Fund
increases the number of shares subject to subscription by 25%, the Total Maximum Estimated
Subscription Price and Estimated Proceeds to the Fund will be $ <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> and $ <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>,
respectively. The offering expenses in connection with this offering will be charged against
paid-in capital of the Fund.</TD>
</TR>

</TABLE>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Certain numbers in this Prospectus have been rounded for ease of presentation and, as a result, may
not total precisely.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A REGISTRATION STATEMENT
RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION. THESE
SECURITIES MAY NOT BE SOLD NOR MAY OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION
STATEMENT BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES IN ANY STATE IN
WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION
UNDER THE SECURITIES LAWS OF ANY SUCH STATE.</B>
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->6<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="left">
<A name="101"></A>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>PROSPECTUS SUMMARY</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>The following summary is qualified in its entirety by reference to the more detailed
information included elsewhere in this Prospectus. Unless otherwise indicated, the information in
this Prospectus assumes that the allowable increase of 25% of the shares offered hereby pursuant to
the over-subscription privilege will not occur.</I>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>The Fund</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Zweig Total Return Fund, Inc. (the &#147;Fund&#148;) is a diversified, closed-end management
investment company registered under the Investment Company Act of 1940, as amended (the &#147;1940
Act&#148;). The Fund commenced operations in September&nbsp;1988. The Fund&#146;s investment objective is to
seek the highest total return, consisting of capital appreciation and current income, consistent
with the preservation of capital. The Fund will invest up to 65% of its total assets in U.S.
government securities, non-convertible debt securities of domestic issuers rated among the two
highest rating categories of either Moody&#146;s Investors Services, Inc. (&#147;Moody&#146;s&#148;) or Standard &#038;
Poor&#146;s Corporation (&#147;S&#038;P&#148;) (or, if unrated, of comparable quality as determined by the investment
adviser, Phoenix/Zweig Advisers LLC (the &#147;Investment Adviser&#148;)), and certain foreign government
securities (collectively, the &#147;Bond Investments&#148;), and up to 50% of its total assets in equity
securities comprised of common, preferred and convertible preferred stock. The equity investments
will be in primarily large-capitalization companies but may also be in investments in small- or
medium-capitalization companies. The Fund may, however, under certain circumstances, invest up to
75% of its total assets in equity securities as determined by the Investment Adviser.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Fund also, as part of its Bond Investments, may invest up to 10% of its total assets in
non-convertible debt securities rated below the two highest rating categories of Moody&#146;s or S&#038;P
(or, if unrated, of comparable quality as determined by the Investment Adviser). The Investment
Adviser determines the level of fixed income investments, and their average maturity, in the Fund
primarily on the basis of a bond model provided by Zweig Consulting LLC (the &#147;Sub-Adviser&#148;). The
bond model suggests an overall duration (a measure of risk in a bond portfolio) that is implemented
by the Fund&#146;s portfolio managers. The Fund&#146;s portfolio managers then incorporate fundamental
analysis to determine which specific bonds to own and what maturities to hold to arrive at the
overall duration of the portfolio. The overall bond portfolio generally has a blend of short,
medium and long-maturity bonds, which balances the overall duration risk with other yield curve
risks depending on the overall duration suggested by the bond model. The portfolio managers will
vary the maturities to arrive at the appropriate desired average. The Fund primarily invests its
Bond Investments in U.S. Treasury securities and agency securities of the highest quality.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Investment Adviser is a wholly-owned subsidiary of Phoenix Investment Partners, Ltd., a
wholly-owned investment management subsidiary of The Phoenix Companies, Inc. (&#147;Phoenix&#148;), a New
York Stock Exchange (&#147;NYSE&#148;) listed company. The Investment Adviser engages the Sub-Adviser to
perform asset allocation research and analysis and provide advice thereon to the Investment
Adviser. The extent of the Fund&#146;s investment in debt and equity
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->7<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left" style="font-size: 10pt; margin-top: 6pt">securities will be determined primarily on the basis of asset allocation techniques developed
by Dr.&nbsp;Martin E. Zweig, President of the Sub-Adviser, and his staff. The Investment Adviser (and
its predecessor) has provided investment advisory services to the Fund since its inception. Dr.
Zweig has been engaged in the business of providing investment advisory services for over 35&nbsp;years.
While the Investment Adviser seeks to reduce the risks associated with investing in debt and
equity securities by using these techniques, the risk of investment in debt and equity securities
cannot be eliminated. See &#147;Investment Objective and Policies.&#148; No assurance can be given that the
Fund&#146;s investment objective will be realized.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Fund&#146;s outstanding Common Stock, par value $0.001 per share (the &#147;Common Stock&#148;) is listed
and traded on the NYSE. The average weekly trading volume of the Common Stock on the NYSE during
the year ended December&nbsp;31, 2006 was 653,037 shares and was <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> shares as of <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>, 2007. As
of December&nbsp;31, 2006, the net assets of the Fund were $476,845,562.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Phoenix Equity Planning Corporation (the &#147;Administrator&#148;) serves as the Fund&#146;s administrator
and receives from the Fund an administrative fee computed at the annual rate of 0.065% of the
Fund&#146;s average daily net assets. The Fund pays the Investment Adviser a monthly investment
advisory fee computed at the annual rate of 0.70% of the Fund&#146;s average daily net assets. See
&#147;Management of the Fund.&#148;
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>Terms of the Offer</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Fund is issuing to its shareholders of record (&#147;Record Date Shareholders&#148;) as of the close
of business on <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>, 2007 (the &#147;Record Date&#148;) non-transferable rights (the &#147;Rights&#148;) to
subscribe for up to an aggregate of 18,720,000 Shares of Common Stock (the &#147;Shares&#148;) of the Fund.
The Fund may increase the number of shares of Common Stock subject to subscription by up to 25% of
the Shares, or up to an additional 4,680,000 Shares of Common Stock, for an aggregate total of
23,400,000 Shares. Each Record Date Shareholder is being issued one Right for each whole share of
Common Stock owned on the Record Date. The Rights entitle the holders thereof to subscribe for one
Share for every five Rights held (the &#147;Offer&#148;). Fractional Shares will not be issued upon the
exercise of Rights. If a Record Date Shareholder&#146;s total ownership is fewer than five shares, such
shareholder may subscribe for one Share.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Rights may be exercised at any time during the Subscription Period, which commences on
<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>, 2007 and ends at 5:00 p.m. New York City time, on <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>, 2007, unless extended
by the Fund until 5:00 p.m., New York City time, to a date not later than <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>, 2007 (such
date, as it may be extended, is referred to in this Prospectus as the &#147;Expiration Date&#148;). A Record
Date Shareholder&#146;s right to acquire during the Subscription Period at the Subscription Price (as
described below) one additional Share for every five Rights held is hereinafter referred to as the
&#147;Primary Subscription.&#148; The Rights are evidenced by subscription certificates (the &#147;Subscription
Certificates&#148;), which will be mailed to Record Date Shareholders, except as discussed in &#147;The Offer
&#151; Foreign Restrictions.&#148;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The subscription price per share (the &#147;Subscription Price&#148;) will be equal to the lower of the
net asset value per share of the Fund&#146;s Common Stock (&#147;NAV&#148;) at the close of business on
<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>, 2007 (the &#147;Pricing Date&#148;) or 95% of the average of the last reported sales price of
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->8<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left" style="font-size: 10pt; margin-top: 6pt">a share of the Fund&#146;s Common Stock on the NYSE on the Pricing Date and the four preceding
business days, unless the Offer is extended. Since the Expiration Date and the Pricing Date are
each <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>, 2007, Record Date Shareholders who choose to exercise their Rights will not know
at the time of exercise the Subscription Price for Shares acquired pursuant to such exercise.
Record Date Shareholders will have no right to rescind a purchase after receipt of their payment
for Shares by the Fund&#146;s subscription agent, Computershare Trust Company, N.A. (&#147;Computershare&#148; or
the &#147;Subscription Agent&#148;). There is no minimum number of Rights that must be exercised in order
for the Offer to close.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Pursuant to the over-subscription privilege (the &#147;Over-Subscription Privilege&#148;), any Record
Date Shareholder who fully exercises all Rights issued to such shareholder in the Primary
Subscription (other than those Rights that cannot be exercised because they represent the right to
acquire less than one Share) will be entitled to subscribe for additional Shares at the
Subscription Price. Shares available, if any, pursuant to the Over-Subscription Privilege are
subject to allotment and may be subject to increase, as is more fully discussed under &#147;The Offer &#151;
Over-Subscription Privilege.&#148; For purposes of determining the maximum number of Shares a Record
Date Shareholder may acquire pursuant to the Offer, Record Date Shareholders whose shares of Common
Stock are held of record by Cede &#038; Co. Inc. (&#147;Cede&#148;) or by any other depository or nominee will be
deemed to be the holders of the Rights that are issued to Cede or such other depository or nominee
on their behalf.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Rights are non-transferable. Therefore, only the underlying Shares will be listed for
trading on the NYSE or any other exchange.
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>Purpose of the Offer</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Board of Directors of the Fund has determined that it would be in the best interests of
the Fund and its shareholders to increase the assets of the Fund available for investment, thereby
enabling the Fund to more fully take advantage of investment opportunities consistent with the
Fund&#146;s investment objective. The Fund&#146;s Board of Directors has voted unanimously to approve the
terms of the Offer as set forth in this Prospectus.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In reaching its decision, the Board of Directors considered, among other things, advice by the
Investment Adviser and the Sub-Adviser, that new funds would allow the Fund additional flexibility
to capitalize on available investment opportunities without the necessity of having to sell
existing portfolio securities that the Investment Adviser believes should be held. Proceeds from
the Offer will allow the Investment Adviser to better take advantage of such existing and future
investment opportunities.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Board of Directors also considered that the Offer would provide shareholders with an
opportunity to purchase additional shares of the Fund below its market price. Although the Board
of Directors believe that a well-subscribed rights offering may result in certain economies of
scale which could reduce the Fund&#146;s expense ratio in future years, there is no assurance that by
increasing the size of the Fund, the Fund&#146;s aggregate expenses, and correspondingly, its expense
ratio, will be lowered. Finally, the Board of Directors considered that, because the Subscription
Price per Share may be less than the net asset value per share on the Pricing Date, the Offer may
result in dilution of the Fund&#146;s net asset value per share. The Board of Directors
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->9<!-- /Folio -->
</DIV>

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<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left" style="font-size: 10pt; margin-top: 6pt">believes that the factors in favor of the Offer outweigh this possible dilution. See &#147;Risk
Factors and Special Considerations &#151; Dilution &#151; Net Asset Value and Non-Participation in the
Offer.&#148;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Investment Adviser, Sub-Adviser and Administrator will benefit from the Offer because
their fees are based on the average net assets of the Fund. It is not possible to state precisely
the amount of additional compensation the Investment Adviser, Sub-Adviser or Administrator will
receive as a result of the Offer because it is not known how many Shares will be subscribed for and
because the proceeds of the Offer will be invested in additional portfolio securities, which will
fluctuate in value. See &#147;Management of the Fund.&#148;
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><I>The information agent (the &#147;Information Agent&#148;) for the Offer is:</I>
</DIV>


<DIV align="Center" style="font-size: 10pt; margin-top: 6pt">Georgeson, Inc.

</DIV>

<DIV align="Center" style="font-size: 10pt; margin-top: 6pt">Banks and Brokers Call Collect:<BR>
(212)&nbsp;440-9800<BR>
All Others Call Toll-Free:<BR>
(866)&nbsp;541-3552

</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Shareholders may also contact their brokers or nominees for information with respect to the
Offer.
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>Important Dates to Remember</B>
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="80%">&nbsp;</TD>
    <TD width="10%">&nbsp;</TD>
    <TD width="10%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left" style="border-bottom: 1px solid #000000"><B>Event</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" style="border-bottom: 1px solid #000000"><B>Date</B></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #cceeff">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Record Date
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top"><U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>, 2007</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Subscription Period
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top" nowrap><U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>, 2007 to
<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>, 2007*</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Expiration Date and Pricing Date
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top"><U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>, 2007*</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Subscription Certificates and Payment for Shares Due&#043;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top"><U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>, 2007*</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Notice of Guaranteed Delivery Due&#043;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top"><U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>, 2007*</TD>
</TR>
<TR valign="bottom">
<TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Subscription Certificates and Payment for Guarantees of Delivery Due
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top"><U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>, 2007*</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Confirmation to Participants
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top"><U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>, 2007*</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Final Payment for Shares
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top"><U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>, 2007*</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>



<DIV align="left">
<DIV style="font-size: 3pt; margin-top: 16pt; width: 18%; border-top: 1px solid #000000">&nbsp;</DIV>
</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96"></TD>
</TR>

<TR valign="top">
    <TD nowrap align="left">*</TD>
    <TD>&nbsp;</TD>
    <TD>Unless the Offer is extended to a date not later than <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>, 2007.</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left">&#043;</TD>
    <TD>&nbsp;</TD>
    <TD>Record Date Shareholders exercising Rights must deliver to the Subscription Agent by the
Expiration Date either (i)&nbsp;the Subscription Certificate together with payment or (ii)&nbsp;a Notice of
Guaranteed Delivery.</TD>
</TR>

</TABLE>


<P align="center" style="font-size: 10pt"><!-- Folio -->10<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">






<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>Risk Factors and Special Considerations</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following summarizes certain matters that should be considered, among others, in
connection with the Offer. This Prospectus contains certain forward-looking statements. Actual
results could differ materially from those projected in the forward-looking statements as a result
of certain uncertainties set forth below and elsewhere in this Prospectus.
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="30%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="65%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Dilution &#151; Net Asset Value and
Non-Participation in the Offer
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Record Date Shareholders who do
not fully exercise their Rights
will, upon the completion of
the Offer, own a smaller
proportional interest in the
Fund than they owned prior to
the Offer. In addition, an
immediate dilution of the net
asset value per share may be
experienced by all shareholders
as a result of the Offer
because the Subscription Price
per Share may be less than the
then current net asset value
per share, and the number of
shares outstanding after the
Offer may increase in greater
percentage than the increase in
the size of the Fund&#146;s assets.
Although it is not possible to
state precisely the amount of
such decrease in net asset
value per share, if any,
because it is not known at this
time what the Subscription
Price will be, what the net
asset value per share will be
on the Expiration Date, or what
proportion of the Shares will
be subscribed for, such
dilution could be minimal or
substantial. For example,
assuming (i)&nbsp;all Rights are
exercised, (ii)&nbsp;the Fund&#146;s net
asset value on the Expiration
Date is $ <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> per
share (the net asset value per
share on <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>, 2007),
and (iii)&nbsp;the Subscription
Price is $&nbsp;&nbsp;per share
(equal to the lower of the NAV
per share of the Fund&#146;s Common
Stock at the close of business
on <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>, 2007 or 95% of
the average of the last
reported sale price per share
of the Fund&#146;s Common Stock on
the NYSE on <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>, 2007
and the four preceding business
days), then the Fund&#146;s net
asset value per share would be
reduced by approximately
$<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> per share or &#95;&#95;&#95;%.</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Certain Investment Strategies
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">The extent of the Fund&#146;s
investment in debt and equity
securities will be determined
primarily on the basis of asset
allocation techniques developed
by Dr.&nbsp;Martin E. Zweig,
President of the Sub-Adviser,
and his staff. While the
Investment Adviser seeks to
reduce the risks associated
with investing in debt and
equity securities by using
these techniques, the risk of
investment in debt and equity
securities cannot be
eliminated. There is no
assurance that these asset
allocation techniques will
provide protection from the
risks of debt or equity
investment, enable the Fund to
be invested consistent with the
major trends of the market or
enable the Fund to achieve its
investment objective. See
&#147;Investment Objective and
Policies &#151; Investment
Objective.&#148; In addition,
although the Investment Adviser
believes that the special</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->11<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="30%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="65%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">investment methods discussed in
this Prospectus under
&#147;Investment Objectives and
Policies &#151; Special Investment
Methods&#148; (including purchasing
and selling, when such use is
deemed appropriate, stock index
and other futures contracts and
purchasing options on such
futures; purchasing and writing
listed put and call security
options and options on stock
indexes; short sales of
securities; borrowing from
banks to purchase securities;
investing in securities of
exchange traded funds, foreign
issuers and closed-end
investment companies; and
lending portfolio securities to
brokers, dealers, banks or
other recognized institutional
borrowers of securities) will
further the Fund&#146;s investment
objective and reduce losses
that might otherwise occur
during a time of general
decline in stock prices, no
assurance can be given that
these investment methods will
achieve this result. These
methods may subject an investor
in the Fund to greater than
average risks and costs.</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Credit Risk
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Investments in debt securities
involve credit risk. This is
the risk that the borrower will
not make timely payments of
principal and interest. The
Fund, as part of its Bond
Investments, may invest up to
10% of its total assets in
non-convertible debt securities
rated below the two highest
rating categories of Moody&#146;s or
S&#038;P (or, if unrated, of
comparable quality as
determined by the Investment
Adviser). Generally,
securities rated below
investment grade (high
yield-high risk fixed income
securities &#151; also sometimes
referred to as junk bonds) have
a greater chance that the
borrower will be unable to make
scheduled interest or principal
payments when due.
Furthermore, to the extent that
the Fund may invest in such
high yield-high risk fixed
income securities, this will
entail greater price volatility
and credit and interest rate
risk than investment-grade
securities. Analysis of the
creditworthiness of high
yield-high risk borrowers is
more complex than for
higher-rated securities, making
it more difficult for the
Investment Adviser to
accurately predict risk. If
the Fund pursues missed
interest or principal payments,
there is a risk that the Fund&#146;s
expenses could increase. In
addition, lower-rated
securities may not trade as
often and may be less liquid
than higher-rated securities.
There can be no assurance that
the credit rating of a Fund
investment will remain
unchanged over the period of
the Fund&#146;s ownership of that
investment.</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Interest Rate Risk
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">The Fund invests in fixed
income debt securities, which
gives rise to interest rate
risk. Such securities may
decline in value because of
changes in market interest
rates. When market interest
rates rise, the market value of
such securities generally will
fall. To the extent that the
Fund invests in fixed income</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->12<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="30%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="65%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">debt securities, the net asset
value and market price of the
Fund&#146;s shares tend to decline
if market interest rates rise.
Further, while longer term
fixed rate securities may pay
higher interest rates than
shorter term securities, longer
term fixed rate securities also
tend to be more sensitive to
interest rate changes and,
accordingly, tend to experience
larger changes in value as a
result of interest rate
changes.</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Equity Risk
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Equity investing includes,
among other risks, the risk
that the securities held by the
Fund will fall in market value
due to adverse market and
economic conditions,
perceptions regarding the
industries in which the issuers
of securities held by the Fund
participate and the particular
circumstances and performance
of particular companies whose
securities the Fund holds.
Depending on such fluctuations
in the market value of
securities, the net asset value
of the Fund may at any point in
time be less than at the time
the shareholder invested in the
Fund, even after taking into
account any reinvestment of
distributions.</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Small- and Medium-Capitalization Stock
Risk
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">While the Fund generally will
invest primarily in
large-capitalization companies,
the Fund may invest in
companies with small- or
medium-capitalizations. Small
and medium company stocks can
be more volatile than, and
perform differently from,
larger company stocks. There
may be less trading in a small
or medium company stocks, which
means that buy and sell
transactions in those stocks
could have a larger impact on
the stock prices than is the
case with larger company
stocks. Small and medium
companies may have fewer
business lines; therefore,
changes in any line of business
may have a greater impact on
small and medium company stock
prices than is the case for a
larger company. As a result,
the purchase or sale of more
than a limited number of shares
of a small or medium company
may affect its market price.
The Fund may need a
considerable amount of time to
purchase or sell its positions
in these securities. In
addition, small or medium
company stocks may not be as
well known to the investing
public.</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Unrealized Appreciation
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">As of December&nbsp;31, 2006, there
was $30,915,003 or
approximately $0.33 per share
of net unrealized appreciation
in the Fund&#146;s net assets of
$476,845,562; if realized and
distributed, or deemed
distributed, such gains would,
in general, be taxable to
shareholders, including holders
at that time of Shares acquired
upon the exercise of Rights.
See &#147;Taxation.&#148;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->13<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="30%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="65%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Discount From Net Asset Value
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">The Fund&#146;s shares of Common
Stock have traded in the market
above, at and below net asset
value since the commencement of
the Fund&#146;s operations in
September&nbsp;1988. The Fund
cannot predict whether the
Fund&#146;s Common Stock will in the
future trade at a premium to or
discount from net asset value.
The risk of the Common Stock
trading at a discount is a risk
separate from a decline in the
Fund&#146;s net asset value. See
&#147;Market Price and Net Asset
Value Information&#148; in this
Prospectus and &#147;Net Asset
Value&#148; in the Statement of
Additional Information (the
&#147;SAI&#148;).</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Distributions
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">The Fund&#146;s policy is to make
monthly distributions equal to
0.83% of its net asset value
(10% distribution yield on an
annualized basis), and a final
distribution at year-end
consisting of any remaining
undistributed net investment
income and any realized net
long-term capital gains in
excess of the Fund&#146;s capital
loss carryforward. If, for any
calendar year, the total
distributions exceed net
investment income and realized
net capital gains, the excess,
distributed from the Fund&#146;s
assets, will generally be
treated as a tax-free return of
capital (up to the amount of
the shareholder&#146;s tax basis in
his or her shares). The amount
treated as a tax-free return of
capital will reduce a
shareholder&#146;s adjusted basis in
his or her shares, thereby
increasing his or her potential
gain or reducing his or her
potential loss on the sale of
his or her shares.</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">A return of capital represents
a return of a shareholder&#146;s
original investment in the
Fund&#146;s shares, and should not
be confused with a dividend
yield reflecting solely a
return on investment.
Historically, the Fund&#146;s
distribution yield has included
taxable distributions of net
income and realized gains, and
distributions treated as
non-taxable return of capital.
See &#147;Risk Factors and Special
Considerations &#151;
Distributions.&#148; The Fund
anticipates future
distributions to be
characterized in a similar
manner. Pursuant to the
requirements of the 1940 Act
and other applicable laws, a
notice will accompany each
monthly distribution with
respect to the estimated source
of the distribution made.</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Capital loss carryovers will
reduce or, possibly, eliminate
the Fund&#146;s taxable capital
gains in the year(s) to which
such losses are carried, but
will not reduce the Fund&#146;s
current earnings and profits in
such year(s). Consequently, a
greater portion of the Fund&#146;s
distributions in the year(s) to
which the Fund carries and
applies its capital loss
carryovers may be taxable to
shareholders as ordinary income
dividends than would be the
case if the Fund did not have
capital loss carryovers. The</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->14<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="30%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="65%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Fund&#146;s shareholders thus
potentially could lose the
benefit of the Fund&#146;s capital
loss carryover to any year in
which the Fund makes excess
distributions because instead
of being treated as a
non-taxable return of capital,
the portion of the excess
distributions equal to the
Fund&#146;s capital gains that are
offset by the capital loss
carryover will likely be
taxable to the Fund&#146;s
shareholders, and if taxable,
will likely be treated as
ordinary income rather than as
capital gain. See &#147;Risk
Factors and Special
Considerations -
Distributions.&#148; Moreover,
excess distributions that are
paid out of capital gains or
other non-dividend income of
the Fund will not qualify for
the 15% preferential tax rate.</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">The Fund also might make
distributions to shareholders
that exceed the Fund&#146;s current
earnings and profits. In that
event, because the Fund does
not have positive accumulated
earnings and profits, the
excess distributions will be a
non-taxable return of capital
to a shareholder to the extent
the distribution does not
exceed the shareholder&#146;s tax
basis in his or her Fund
shares, but will also reduce
the shareholder&#146;s tax basis in
his or her Fund shares.</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">In the event the Fund
distributes amounts in excess
of its net investment income
and net realized capital gains,
such distributions will
decrease the Fund&#146;s total
assets and, therefore, have the
likely effect of increasing the
Fund&#146;s expense ratio. In
addition, in order to make such
distributions, the Fund may
have to sell a portion of its
investment portfolio at a time
when independent investment
judgment might not dictate such
action. Shares purchased
pursuant to the Offer will be
issued after the record date
for the monthly distribution
declared in <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>, and,
accordingly, the Fund will not
pay a monthly distribution with
respect to such Shares until
the distribution to be declared
and paid in the next month.</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Anti-takeover Provisions
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">The Fund has provisions in its
Articles of Incorporation and
By-Laws that may have the
effect of limiting the ability
of other entities or persons to
acquire control of the Fund, to
cause it to engage in certain
transactions or to modify its
structure. The Board of
Directors is divided into three
classes. At the annual meeting
of shareholders each year, the
term of one class will expire
and directors will be elected
to serve in that class for
terms of three years. This
provision could delay for up to
two years the replacement of a
majority of the Board of
Directors.</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->15<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>FUND EXPENSES</B>
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="88%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Shareholder Transaction Expenses</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Sales Load</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">N/A</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Annual Expenses </B>(as a percentage of the Fund&#146;s net assets) (1)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Management and Administration Fees</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">0.77</TD>
    <TD nowrap>%</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Other Expenses</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">0.24</TD>
    <TD nowrap>%</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Total Annual Expenses (2) (3)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">1.01</TD>
    <TD nowrap>%</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>



<DIV align="left">
<DIV style="font-size: 3pt; margin-top: 16pt; width: 18%; border-top: 1px solid #000000">&nbsp;</DIV>
</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96"></TD>
</TR>

<TR valign="top">
    <TD nowrap align="left">(1)</TD>
    <TD>&nbsp;</TD>
    <TD>Includes fees payable under the Investment Advisory Agreement and Administration Agreement (as
defined in this Prospectus). These fees are calculated on the basis of the Fund&#146;s average net
assets. The Investment Adviser is responsible for the payment of sub-advisory fees to the
Sub-Adviser. &#147;Other Expenses&#148; have been estimated for the current fiscal year. See &#147;Management of
the Fund.&#148;</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left">(2)</TD>
    <TD>&nbsp;</TD>
    <TD>The Total Annual Expenses in the table above includes fees and expenses incurred indirectly by
the Fund as a result of its investment in other investment companies. The Total Annual Expenses in
the table above is different from the ratio of expenses to average net assets given in the
Financial Highlights of this Prospectus, which reflects the operating expenses of the Fund and does
not include acquired fund fees and expenses.</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left">(3)</TD>
    <TD>&nbsp;</TD>
    <TD>The indicated 1.01% expense ratio excludes dividends on short sales. The Other Expenses
in the table above includes fees and expenses of 0.01% or less that were incurred indirectly by the
Fund as a result of its investment in other investment companies. The expense ratio assumes that
the Offer (including the Over-Subscription Privilege) is fully subscribed and assumes estimated net
proceeds from the Offer of approximately $<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> million (assuming an estimated Subscription
Price of $<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> per share). Other expenses for the fiscal year ended December&nbsp;31, 2006 were 0.24%
as a percentage of average net assets.</TD>
</TR>

</TABLE>



<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;THE FOREGOING FEE TABLE IS INTENDED TO ASSIST FUND INVESTORS IN UNDERSTANDING THE VARIOUS
COSTS AND EXPENSES THAT AN INVESTOR IN THE FUND WILL BEAR DIRECTLY OR INDIRECTLY.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>EXAMPLE</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;An investor would directly or indirectly pay the following expense on a $1,000 investment in
the Fund, assuming a 5% annual return throughout the periods:
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="21%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="21%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="21%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="21%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="center" style="border-bottom: 1px solid #000000">One Year</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" style="border-bottom: 1px solid #000000">Three Years</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" style="border-bottom: 1px solid #000000">Five Years</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" style="border-bottom: 1px solid #000000">Ten Years</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="margin-left:15px; text-indent:-15px">$10
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">$32
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">$56
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">$124</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->16<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This hypothetical example assumes that all dividends and other distributions are reinvested at
net asset value and that the 1.01% expense ratio listed under Total Annual Expenses remains the
same in the years shown. The above tables and the assumption in this example of a 5% annual return
are required by regulations of the Securities and Exchange Commission (the &#147;Commission&#148;) applicable
to all investment companies; the assumed 5% annual return is not a prediction of, and does not
represent, the projected or actual performance of the Fund&#146;s Shares. For a more complete
description of certain of the Fund&#146;s costs and expenses, see &#147;Management of the Fund &#151; Investment
Adviser and Sub-Adviser; &#151; Investment Advisory Agreement; and &#151; Administrator&#148; in this Prospectus
and &#147;Expenses&#148; and &#147;Portfolio Transactions and Brokerage&#148; in the SAI.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>This example should not be considered a representation of future expenses. The Fund&#146;s actual
expenses may be greater or less than those shown.</B>
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->17<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="left">
<A name="102"></A>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>FINANCIAL HIGHLIGHTS</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The table below sets forth certain specified information for a share of the Fund&#146;s Common
Stock outstanding throughout each period presented. This information is derived from the financial
and accounting records of the Fund. The financial highlights for the fiscal year ended December
31, 2006 and the prior nine years have been audited by PricewaterhouseCoopers LLP, independent
accountants, whose reports thereon were unqualified. The financial statements and notes thereto,
together with the report of independent accountants has been incorporated by reference in the SAI
and are available without charge by calling Mutual Fund Services at (800)&nbsp;272-2700 or upon written
request to the Fund&#146;s Administrator, Phoenix Equity Planning Corporation, One American Row,
Hartford, CT 06102.
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="20%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="39" style="border-bottom: 1px solid #000000"><B>Years Ended December 31,</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>2006</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>2005</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>2004</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>2003</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>2002</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>2001 </B>(5)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>2000</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>1999</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>1998</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>1997</B></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="39" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Per Share Data:</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Net asset value, beginning of year</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">5.28</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">5.62</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">5.70</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">5.81</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">6.63</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">7.48</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">7.89</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">8.43</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">8.61</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">8.29</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="39" align="left" style="border-top: 1px solid #000000">&nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Income From Investment Operations:</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Net investment income (1)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0.13</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0.12</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0.12</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0.09</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0.15</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0.18</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0.30</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0.28</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0.33</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0.36</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Net realized and unrealized
gains(losses) on investments</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0.22</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0.08</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0.18</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0.27</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(0.35</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(0.32</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0.02</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(0.01</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0.39</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0.80</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="39" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Total from investment operations</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0.35</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0.20</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0.30</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0.36</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(0.20</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(0.14</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0.32</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0.27</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0.72</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1.16</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="39" align="left" style="border-top: 1px solid #000000">&nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" style="border-top: 0px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" style="border-top: 0px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" style="border-top: 0px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" style="border-top: 0px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" style="border-top: 0px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" style="border-top: 0px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Dividends and Distributions:</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Dividends from net investment income</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(0.15</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(0.15</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(0.14</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(0.12</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(0.17</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(0.22</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(0.30</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(0.28</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(0.33</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(0.36</TD>
    <TD nowrap>)</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Distributions from net realized gains
on investments</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(0.07</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(0.15</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(0.09</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(0.25</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(0.13</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(0.46</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(0.48</TD>
    <TD nowrap>)</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Tax return of capital</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(0.30</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(0.24</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(0.11</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(0.35</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(0.45</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(0.49</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(0.19</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(0.41</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(0.05</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Dilutive effect of common stock
distributions</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(0.04</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="39" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Total Dividends and Distributions</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(0.52</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(0.54</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(0.38</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(0.47</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(0.62</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(0.71</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(0.74</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(0.82</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(0.84</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(0.84</TD>
    <TD nowrap>)</TD>
</TR>
<TR style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="39" nowrap align="left" style="border-top: 1px solid #000000">&nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Effect on net asset value as a result
of rights offering (2)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(0.06</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Net asset value, end of year</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">5.11</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">5.28</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">5.62</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">5.70</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">5.81</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">6.63</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">7.48</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">7.89</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">8.43</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">8.61</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="39" align="left" style="border-top: 3px double #000000">&nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->18<!-- /Folio -->
</DIV>

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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

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<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="39" style="border-bottom: 1px solid #000000"><B>Years Ended December 31,</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>2006</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>2005</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>2004</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>2003</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>2002</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>2001 </B>(5)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>2000</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>1999</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>1998</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>1997</B></TD>
</TR>

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<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Market value, end of year (3)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">5.89</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">4.70</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">5.35</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">5.01</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">5.49</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">7.05</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">6.57</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">6.50</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">8.88</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">9.44</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="39" align="left" style="border-top: 3px double #000000">&nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Total investment return (4)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">39.23</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(2.54</TD>
    <TD nowrap>)%</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">14.89</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(0.40</TD>
    <TD nowrap>)%</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(14.06</TD>
    <TD nowrap>)%</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">18.73</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">12.64</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(18.72</TD>
    <TD nowrap>)%</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">4.49</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">30.22</TD>
    <TD nowrap>%</TD>
</TR>
<TR style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="39" nowrap align="left" style="border-top: 3px double #000000">&nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
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    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Ratios/Supplemental Data:</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
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    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
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    <TD>&nbsp;</TD>
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    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Net assets, end of year (in thousands)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">476,846</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">490,027</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">522,101</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">525,687</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">532,763</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">601,655</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">671,056</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">714,637</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">757,212</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">677,133</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Ratio of expenses to average net
assets (excluding dividends on short
sales)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">1.00</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">1.06</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">1.28</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">1.03</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">0.99</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">1.04</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">1.00</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">0.97</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">0.97</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">1.04</TD>
    <TD nowrap>%</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Ratio of net investment income to
average net assets</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">2.47</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">2.18</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">2.13</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">1.66</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">2.37</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">2.51</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">3.87</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">3.50</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">3.88</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">4.30</TD>
    <TD nowrap>%</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Portfolio turnover rate</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">21.7</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">74.6</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">75.8</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">94.1</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">90.8</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">86.3</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">121.6</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">172.3</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">87.9</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">104.7</TD>
    <TD nowrap>%</TD>
</TR>
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</TABLE>
</DIV>



<DIV align="left">
<DIV style="font-size: 3pt; margin-top: 16pt; width: 18%; border-top: 1px solid #000000">&nbsp;</DIV>
</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96"></TD>
</TR>

<TR valign="top">
    <TD colspan="3">(1)&nbsp;&nbsp;Computed using average shares outstanding.</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD colspan="3">(2)&nbsp;&nbsp;Shares were sold at a 5% discount from the average market price.</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD colspan="3">(3)&nbsp;&nbsp;Closing Price &#151; New York Stock Exchange, Inc.</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD colspan="3">(4)&nbsp;&nbsp;Total investment return is calculated assuming a purchase of common stock on the opening of the first business day and a sale on the closing of the last business day of each period reported. Dividends and distributions, if any, are assumed for the purposes of this
calculation, to be reinvested at prices obtained under the Fund&#146;s Distribution Reinvestment and Cash Purchase Plan. Generally, total investment return based on net asset value will be higher than total investment return based on market value in periods where there is an
increase in the discount or a decrease in the premium of the market value to the net assets from the beginning to the end of such years. Conversely, total investment return based on net asset value will be lower than total investment return based on market value in periods
where there is a decrease in the discount or an increase in the
premium of the market value to the net asset value from the beginning
to end of such periods.</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD colspan="3">(5)&nbsp;&nbsp;As required, effective January&nbsp;1, 2001, the Fund adopted the provision of AICPA Audit and Accounting Guide for Investment Companies and began amortizing premium on debt securities. The effect of the change for the year ended December&nbsp;31, 2001 is shown below.</TD>
</TR>

</TABLE>


<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
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    <TD width="88%">&nbsp;</TD>
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    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
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<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Decrease net investment income</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">$</TD>
    <TD align="right">(0.02</TD>
    <TD nowrap>)</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Increase net realized and unrealized gains and losses</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">0.02</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Decrease ratio of net investment income</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(0.23</TD>
    <TD nowrap>)%</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->19<!-- /Folio -->
</DIV>

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<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="left">
<A name="103"></A>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>THE OFFER</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Terms of the Offer</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Fund is issuing to the Record Date Shareholders the Rights to subscribe for up to an
aggregate of 18,720,000 Shares. The Fund may increase the number of shares of Common Stock subject
to subscription by up to 25% of the Shares, or up to an additional
4,680,000 Shares, for an
aggregate total of 23,400,000 Shares. Each Record Date Shareholder is being issued one Right for
each whole share of Common Stock owned on the Record Date. The Rights entitle the holders thereof
to subscribe for one Share for every five Rights held (1 for 5). Fractional Shares will not be
issued upon the exercise of Rights. A Record Date Shareholder whose total ownership is fewer than
five shares of Common Stock and, accordingly, receives fewer than five Rights will be able to
subscribe for one Share upon the exercise of all of such Rights received and, if he or she
subscribes for one Share, may subscribe for additional Shares pursuant to the Over-Subscription
Privilege. Record Date Shareholders who otherwise have remaining fewer than five Rights will not
be able to purchase a Share upon the exercise of such Rights and will not be entitled to receive
any cash in lieu thereof, although such Record Date Shareholders may subscribe for additional
Shares pursuant to the Over-Subscription Privilege.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Rights may be exercised at any time during the Subscription Period, which commences on
<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>, 2007 and ends at 5:00 p.m. New York City time, on <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>, 2007, unless extended
by the Fund until 5:00 p.m., New York City time, to a date not later than <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>, 2007. See
&#147;Expiration of the Offer&#148; below. The Rights are evidenced by Subscription Certificates, which will
be mailed to Record Date Shareholders, except as discussed below under &#147;Foreign Restrictions.&#148;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Any Record Date Shareholder who fully exercises all Rights issued to such shareholder in the
Primary Subscription will be entitled to subscribe for additional Shares at the Subscription Price
pursuant to the terms of the Over-Subscription Privilege, as described below. Shares available, if
any, pursuant to the Over-Subscription Privilege are subject to allotment and may be subject to
increase, as is more fully discussed below under &#147;Over-Subscription Privilege.&#148; For purposes of
determining the maximum number of Shares a shareholder may acquire pursuant to the Offer, Record
Date Shareholders whose shares of Common Stock are held of record by Cede or by any other
depository or nominee will be deemed to be the holders of the Rights that are issued to Cede or
such other depository or nominee on their behalf.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Purpose of the Offer</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Board of Directors of the Fund has determined that it would be in the best interests of
the Fund and its shareholders to increase the assets of the Fund available for investment, thereby
enabling the Fund to more fully take advantage of investment opportunities consistent with the
Fund&#146;s investment objective. The Fund&#146;s Board of Directors has voted unanimously to approve the
terms of the Offer as set forth in this Prospectus.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In reaching its decision, the Board of Directors considered, among other things, advice by the
Investment Adviser and the Sub-Adviser that new funds would allow the Fund additional flexibility
to capitalize on available investment opportunities without the necessity of having to
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->20<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left" style="font-size: 10pt; margin-top: 6pt">sell existing portfolio securities that the Investment Adviser believes should be held.
Proceeds from the Offer will allow the Investment Adviser to better take advantage of such existing
and future investment opportunities.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Board of Directors also considered that the Offer would provide shareholders with an
opportunity to purchase additional shares of the Fund below its market price. The Board of
Directors also believes that a well-subscribed rights offering may result in certain economies of
scale which could reduce the Fund&#146;s expense ratio in future years. However, there is no assurance
that by increasing the size of the Fund, the Fund&#146;s aggregate expenses, and correspondingly, its
expense ratio, will be lowered. Finally, the Board of Directors considered that, because the
Subscription Price per Share may be less than the net asset value per share on the Pricing Date,
the Offer may result in dilution of the Fund&#146;s net asset value per share. The Board of Directors
believes that the factors in favor of the Offer outweigh this possible dilution. See &#147;Risk Factors
and Special Considerations &#151; Dilution &#151; Net Asset Value and Non-Participation in the Offer.&#148;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Investment Adviser, Sub-Adviser and Administrator will benefit from the Offer because
their fees are based on the average net assets of the Fund. It is not possible to state precisely
the amount of additional compensation the Investment Adviser, Sub-Adviser or Administrator will
receive as a result of the Offer because it is not known how many Shares will be subscribed for and
because the proceeds of the Offer will be invested in additional portfolio securities, which will
fluctuate in value. See &#147;Management of the Fund.&#148;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Fund may, in the future and at its discretion, choose to make additional rights offerings
from time to time for a number of shares and on terms that may or may not be similar to the Offer.
Any such future rights offerings will be made in accordance with the then applicable requirements
of the 1940 Act and the Securities Act of 1933, as amended.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Over-Subscription Privilege</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;To the extent Record Date Shareholders do not exercise all of the Rights issued to them, any
underlying Shares represented by such Rights will be offered by means of the Over-Subscription
Privilege to those Record Date Shareholders who have exercised all of the Rights issued to them and
who wish to acquire more than the number of Shares to which they are entitled. Only Record Date
Shareholders who exercise all the Rights issued to them may indicate on the Subscription
Certificate, which they submit with respect to the exercise of the Rights issued to them, how many
Shares they desire to purchase pursuant to the Over-Subscription Privilege. If sufficient Shares
remain after completion of the Primary Subscription, all over-subscription requests will be honored
in full. If sufficient Shares are not available to honor all over-subscription requests, the Fund
may, at the discretion of the Board of Directors, issue shares of Common Stock up to an additional
25% of the Shares available pursuant to the Offer, representing &#95;&#95;&#95; additional shares of
Common Stock in order to cover such over-subscription requests. Regardless of whether the Fund
issues additional Shares pursuant to the Offer and to the extent Shares are not available to honor
all over-subscription requests, the available Shares will be allocated among those who
over-subscribe based on the number of shares of Common Stock owned by them on the Record Date.
This allocation process may involve a series of allocations in order to assure that the total
number of Shares available for
</DIV>

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</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left" style="font-size: 10pt; margin-top: 6pt">over-subscription is distributed, as nearly as practicable, on a pro rata basis. The Fund
will not offer to sell in connection with the Offer any Shares that are not subscribed for pursuant
to the Primary Subscription or the Over-Subscription Privilege.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;To the extent Record Date Shareholders do not exercise all of the Rights issued to them, and
Record Date Shareholders who have exercised their Rights do not wish to participate in the
Over-Subscription Privilege, the Fund will deregister those underlying shares not sold thereunder.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Subscription Price</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Subscription Price for the Shares to be issued pursuant to the Offer will be equal to the
lower of the NAV at the close of business on <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>, 2007 (the &#147;Pricing Date&#148;) or 95% of the
average of the last reported sales price of a share of the Fund&#146;s Common Stock on the NYSE on the
Pricing Date and the four preceding business days, unless the Offer is extended. For example, if
the average of the last reported sales price of a share on the NYSE on the Pricing Date and the
four preceding business days of a share of the Fund&#146;s Common Stock is $5.75, and if the NAV is
$5.00, the Subscription Price will be $5.00 (equal to the lower of the NAV or 95% of $5.75). The
Subscription Price may be equal to or lower than the Fund&#146;s then current net asset value per share.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Fund announced the Offer on December&nbsp;14, 2006. The net asset value per share of Common
Stock at the close of business on December&nbsp;14, 2006 and <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>, 2007, was $5.14 and $&#95;&#95;&#95;,
respectively, and the last reported sales prices of a share of the Fund&#146;s Common Stock on the NYSE
on those dates was $5.80 and $&#95;&#95;&#95;, respectively.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Expiration of the Offer</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Offer will expire at 5:00 p.m., New York City time, on <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>, 2007, unless extended
by the Fund until 5:00 p.m., New York City time, to a date not later than <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>, 2007. The
Rights will expire on the Expiration Date and thereafter may not be exercised. Since the
Expiration Date and the Pricing Date will be the same date, Record Date Shareholders who decide to
acquire Shares in the Primary Subscription or pursuant to the Over-Subscription Privilege will not
know when they make such decision the purchase price of such Shares. Any extension of the Offer
will be followed as promptly as practicable by announcement thereof. Such announcement shall be
issued no later than 9:00 a.m., New York City time, on the next business day following the
previously scheduled Expiration Date. Without limiting the manner in which the Fund may choose to
make such announcement, the Fund will not, unless otherwise required by law, have any obligation to
publish, advertise or otherwise communicate any such announcement other than by making a release to
the Dow Jones News Service or such other means of announcement as the Fund deems appropriate.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Method of Exercise of Rights</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Subscription Certificates, which evidence the Rights, will be mailed to Record Date
Shareholders or, if a Record Date Shareholder&#146;s shares of Common Stock are held by Cede or any
other depository or nominee on their behalf, to Cede or such other depository or nominee. Rights
may be exercised by fully completing and signing the Subscription Certificate which
</DIV>

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</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left" style="font-size: 10pt; margin-top: 6pt">accompanies this Prospectus and mailing it in the envelope provided, or otherwise delivering
the completed and signed Subscription Certificate to the Subscription Agent, together with payment
in full for the Shares at the estimated payment price (the &#147;Estimated Payment Price&#148;) as described
below under &#147;Payment for Shares.&#148; Rights may also be exercised by a Record Date Shareholder
contacting his or her broker, bank or trust company, which can arrange, on his or her behalf, to
guarantee delivery of payment (using a &#147;Notice of Guaranteed Delivery&#148;) and of a properly completed
and executed Subscription Certificate. The broker, bank or trust company may charge a fee for this
service. Fractional Shares will not be issued. A Record Date Shareholder whose total ownership is
fewer than five shares of Common Stock and, accordingly, receives fewer than five Rights will be
able to subscribe for one Share upon the exercise of all of such Rights received and, if he or she
subscribes for one Share, will be able to request additional Shares pursuant to the terms of the
Offer applicable to the Over-Subscription Privilege. Record Date Shareholders who otherwise have
remaining fewer than five Rights will not be able to purchase a Share upon the exercise of such
Rights but will be able to request additional Shares pursuant to the terms of the Offer applicable
to the Over-Subscription Privilege. Completed Subscription Certificates must be received by the
Subscription Agent prior to 5:00 p.m., New York City time, on the Expiration Date (unless the
guaranteed delivery procedures are complied with as described below under &#147;Payment for Shares&#148;) at
the offices of the Subscription Agent at the address set forth below.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Shareholders Who Are Record Owners</I>. Shareholders who are record owners can choose between
either option set forth under &#147;Payment for Shares&#148; below. If time is of the essence, option (2),
under &#147;Payment for Shares&#148; below, will permit delivery of the Subscription Certificate and payment
after the Expiration Date.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Shareholders Whose Shares Are Held By A Nominee</I>. Shareholders whose shares are held by a
nominee, such as a broker, bank or trust company, must contact such nominee to exercise their
Rights. In that case, the nominee will complete the Subscription Certificate on behalf of the
shareholder and arrange for proper payment by one of the methods set forth under &#147;Payment for
Shares&#148; below.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Nominees</I>. Nominees who hold shares of Common Stock for the account of others must (to the
extent required by applicable law) notify the beneficial owners of such shares as soon as possible
to ascertain such beneficial owners&#146; intentions and to obtain instructions with respect to the
Rights. If the beneficial owner so instructs, the nominee should complete the Subscription
Certificate and submit it to the Subscription Agent with the proper payment described under
&#147;Payment for Shares&#148; below.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Information Agent</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Any questions or requests for assistance may be directed to the Information Agent at its
telephone number and address listed below:
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><I>The Information Agent for the Offer is:</I>
</DIV>


<DIV align="Center" style="font-size: 10pt; margin-top: 6pt">Georgeson, Inc.<BR>
17 State Street, 10<SUP style="font-size: 85%; vertical-align: text-top">th</SUP> Floor

</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->23<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="Center" style="font-size: 10pt; margin-top: 6pt">New York, NY 10004<BR>
Attn: David M. Bobker

</DIV>

<DIV align="Center" style="font-size: 10pt; margin-top: 6pt">Banks and Brokers Call Collect:<BR>
(212)&nbsp;440-9800<BR>
All Others Call Toll-Free:<BR>
(866)&nbsp;541-3552

</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Shareholders may also contact their brokers or nominees for information with respect to the
Offer.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Information Agent will receive a fee estimated to be approximately $7,500, which includes
reimbursement for all out-of-pocket expenses related to the Offer.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Subscription Agent</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Subscription Agent is Computershare Trust Company, N.A., which will receive for its
administrative, processing, invoicing and other services as subscription agent, a fee estimated to
be approximately $130,000, which includes reimbursement for all out-of-pocket expenses related to
the Offer. Signed Subscription Certificates must be sent, together with payment at the Estimated
Payment Price for all Shares subscribed in the Primary Subscription and Over-Subscription Privilege
by one of the methods described below, prior to 5:00 p.m., New York City time, on the Expiration
Date. Alternatively, if using a Notice of Guaranteed Delivery, the Notice of Guaranteed Delivery
(see &#147;Method of Exercise of Rights&#148; above) may also be sent by facsimile to (781)&nbsp;380-3388, with
the originals to be sent promptly thereafter by one of the methods described below. Facsimiles
should be confirmed by telephone to (781)&nbsp;930-4900.
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">(1)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>BY FIRST CLASS MAIL ONLY:</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Computershare Trust Company, N.A.<br>
Attention: Zweig Funds<br>
P.O. Box 859208<br>
Braintree, MA 02185</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">(2)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>BY EXPRESS MAIL OR OVERNIGHT COURIER:</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Computershare Trust Company, N.A.<br>
Attention: Zweig Funds<br>
161 Bay State Drive<br>
Braintree, MA 02184</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">(3)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>GUARANTEE OF DELIVERY: FOR ELIGIBLE INSTITUTIONS ONLY:</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Notice of Guaranteed Delivery may also be sent by facsimile to (781)&nbsp;380-3388, with the
originals to be sent promptly thereafter by one of the methods described above. Facsimiles should
be confirmed by telephone to (781)&nbsp;930-4900.
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->24<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>DELIVERY TO AN ADDRESS OTHER THAN ONE OF THE ADDRESSES LISTED ABOVE, OR TRANSMISSION VIA A
FACSIMILE NUMBER OTHER THAN AS LISTED ABOVE, WILL NOT CONSTITUTE VALID DELIVERY.</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Payment for Shares</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Record Date Shareholders who acquire Shares in the Primary Subscription and pursuant to the
Over-Subscription Privilege may choose between the following methods of payment:
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1)&nbsp;A Record Date Shareholder can send the Subscription Certificate together with payment for
the Shares acquired in the Primary Subscription and for additional Shares subscribed for pursuant
to the Over-Subscription Privilege to the Subscription Agent. Payment should be calculated on the
basis of the Estimated Payment Price of $<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> per Share for all Shares requested. To be
accepted, such payment, together with the executed Subscription Certificate, must be received by
the Subscription Agent at one of the Subscription Agent&#146;s offices at the addresses set forth above
prior to 5:00 p.m., New York City time, on the Expiration Date. The Subscription Agent will
deposit all monies received by it prior to the final payment date into a segregated
interest-bearing account (which interest will be paid to the Fund) pending proration and
distribution of the Shares. <B>A PAYMENT PURSUANT TO THIS METHOD MUST BE IN UNITED STATES DOLLARS BY
CHECK DRAWN ON A BANK LOCATED IN THE UNITED STATES, MUST BE PAYABLE TO THE ZWEIG TOTAL RETURN FUND,
INC. AND MUST ACCOMPANY A PROPERLY COMPLETED AND EXECUTED SUBSCRIPTION CERTIFICATE FOR SUCH
SUBSCRIPTION CERTIFICATE TO BE ACCEPTED.</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2)&nbsp;Alternatively, a subscription will be accepted by the Subscription Agent if, prior to
5:00 p.m., New York City time, on the Expiration Date, the Subscription Agent has received a Notice
of Guaranteed Delivery by facsimile (telecopy)&nbsp;or otherwise from a bank, a trust company, or a NYSE
member brokerage firm guaranteeing delivery of (i)&nbsp;payment of the Estimated Payment Price of
$<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> per share for the Shares subscribed for in the Primary Subscription and for any
additional Shares subscribed for pursuant to the Over-Subscription Privilege, and (ii)&nbsp;a properly
completed and executed Subscription Certificate. The Subscription Agent will not honor a Notice of
Guaranteed Delivery unless a properly completed and executed Subscription Certificate together with
full payment is received by the Subscription Agent by the close of business on the third business
day after the Expiration Date (<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>, 2007, unless the Offer is extended).
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Within four business days following the Expiration Date (<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>, 2007, unless the Offer is
extended, the &#147;Confirmation Date&#148;), a confirmation will be sent by the Subscription Agent to each
subscribing Record Date Shareholder (or, if the Record Date Shareholder&#146;s shares of Common Stock
are held by Cede or any other depository or nominee, to Cede or such depository or nominee),
showing (i)&nbsp;the number of Shares acquired pursuant to the Primary Subscription, (ii)&nbsp;the number of
Shares, if any, acquired pursuant to the Over-Subscription Privilege, (iii)&nbsp;the per Share and total
purchase price of the Shares, and (iv)&nbsp;any additional amount payable by such Record Date
Shareholder to the Fund or any excess to be refunded by the Fund to such Record Date Shareholder,
in each case based on the Subscription Price as determined on the Pricing Date. If any Record Date
Shareholder exercises his or her right to
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->25<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left" style="font-size: 10pt; margin-top: 6pt">acquire Shares pursuant to the Over-Subscription Privilege, any such excess payment which
would otherwise be refunded to the Record Date Shareholder will be applied by the Fund toward
payment for additional Shares acquired pursuant to exercise of the Over-Subscription Privilege.
Any additional payment required from a Record Date Shareholder must be received by the Subscription
Agent within ten business days after the Confirmation Date. Any excess payment to be refunded by
the Fund to a Record Date Shareholder will be mailed by the Subscription Agent to such Record Date
Shareholder as promptly as possible. All payments by a Record Date Shareholder must be in United
States dollars by money order or check drawn on a bank located in the United States of America and
payable to <B>THE ZWEIG TOTAL RETURN FUND, INC.</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Whichever of the two methods described above is used, issuance and delivery of certificates
for the Shares purchased are subject to collection of checks and actual payment pursuant to any
Notice of Guaranteed Delivery.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>RECORD DATE SHAREHOLDERS WILL HAVE NO RIGHT TO RESCIND THEIR SUBSCRIPTION AFTER RECEIPT OF
THEIR PAYMENT FOR SHARES BY THE SUBSCRIPTION AGENT, EXCEPT AS PROVIDED BELOW UNDER &#147;POSSIBLE
SUSPENSION OR WITHDRAWAL OF THE OFFER.&#148;</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If a Record Date Shareholder who acquires Shares pursuant to the Primary Subscription or
Over-Subscription Privilege does not make payment of any additional amounts due by the ninth
business day after the Confirmation Date, the Fund reserves the right to take any or all of the
following actions: (i)&nbsp;sell such subscribed and unpaid-for Shares to other Record Date
Shareholders, (ii)&nbsp;apply any payment actually received by it toward the purchase of the greatest
whole number of Shares which could be acquired by such holder upon exercise of the Primary
Subscription or Over-Subscription Privilege, or (iii)&nbsp;exercise any and all other rights or remedies
to which it may be entitled.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>THE METHOD OF DELIVERY OF SUBSCRIPTION CERTIFICATES AND PAYMENT OF THE SUBSCRIPTION PRICE TO
THE FUND WILL BE AT THE ELECTION AND RISK OF THE RIGHTS HOLDERS, BUT IF SENT BY MAIL IT IS
RECOMMENDED THAT SUCH CERTIFICATES AND PAYMENT BE SENT BY REGISTERED MAIL, PROPERLY INSURED, WITH
RETURN RECEIPT REQUESTED, AND THAT A SUFFICIENT NUMBER OF DAYS BE ALLOWED TO ENSURE DELIVERY TO THE
FUND AND CLEARANCE OF PAYMENT PRIOR TO 5:00 P.M., NEW YORK CITY TIME, ON THE EXPIRATION DATE.
BECAUSE UNCERTIFIED PERSONAL CHECKS MAY TAKE AT LEAST FIVE BUSINESS DAYS TO CLEAR AND, AT THE
DISCRETION OF THE FUND, MAY NOT BE ACCEPTED IF NOT CLEARED PRIOR TO THE EXPIRATION DATE, YOU ARE
STRONGLY ENCOURAGED TO PAY, OR ARRANGE FOR PAYMENT, BY MEANS OF CERTIFIED OR BANK CASHIER&#146;S CHECK.</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;All questions concerning the timeliness, validity, form and eligibility of any exercise of
Rights will be determined by the Fund, whose determinations will be final and binding. The Fund in
its sole discretion may waive any defect or irregularity, or permit a defect or irregularity to be
corrected within such time as it may determine, or reject the purported exercise of any Right.
Subscriptions will not be deemed to have been received or accepted until all irregularities
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->26<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left" style="font-size: 10pt; margin-top: 6pt">have been waived or cured within such time as the Fund determines in its sole discretion. The
Fund will not be under any duty to give notification of any defect or irregularity in connection
with the submission of Subscription Certificates or incur any liability for failure to give such
notification.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Possible Suspension or Withdrawal of the Offer</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As required by the Commission&#146;s registration form, the Fund has undertaken to suspend the
Offer until it amends this Prospectus if, subsequent to the effective date of the Fund&#146;s
Registration Statement, the Fund&#146;s net asset value declines more than 10% from its net asset value
as of such effective date. Accordingly, the Fund will notify Record Date Shareholders of any such
decline or increase and permit them to cancel their exercise of Rights.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Non-Transferability of Rights</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Rights are non-transferable and, therefore, may not be purchased or sold. The Rights will
not be listed for trading on the NYSE or any other exchange. However, the additional Shares of
Common Stock to be issued upon the exercise of the Rights and the Over-Subscription Privilege will
be listed for trading on the NYSE, subject to notice of issuance.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Delivery of Share Certificates</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Stock certificates for all Shares acquired in the Primary Subscription will be mailed promptly
after the expiration of the Offer and full payment for the subscribed Shares has been received and
cleared. Certificates representing Shares acquired pursuant to the Over-Subscription Privilege
will be mailed as soon as practicable after full payment has been received and cleared and all
allocations have been effected. Participants in the Fund&#146;s Distribution Reinvestment and Cash
Purchase Plan (the &#147;Plan&#148;) will have any Shares acquired in the Primary Subscription and pursuant
to the Over-Subscription Privilege credited to their shareholder distribution reinvestment accounts
in the Plan. Participants in the Plan wishing to exercise Rights for the shares of Common Stock
held in their accounts in the Plan must exercise them in accordance with the procedures set forth
above. Record Date Shareholders whose shares of Common Stock are held of record by Cede or by any
other depository or nominee on their behalf or their broker-dealer&#146;s behalf will have any Shares
acquired in the Primary Subscription credited to the account of Cede or such other depository or
nominee. Shares acquired pursuant to the Over-Subscription Privilege will be credited directly to
Cede or such other depository or nominee.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Foreign Restrictions</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Record Date Shareholders whose record addresses are outside the United States (for these
purposes, the United States includes its territories and possessions and the District of Columbia)
will receive written notice of the Offer; however, Subscription Certificates will not be mailed to
such shareholders. The Rights to which those Subscription Certificates relate will be held by the
Subscription Agent for such foreign Record Date Shareholders&#146; accounts until instructions are
received in writing with payment to exercise the Rights. If no such instructions are received by
the Expiration Date, such Rights will expire.
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->27<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Federal Income Tax Consequences</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The U.S. Federal income tax consequences to holders of Common Stock with respect to the Offer
will be as follows:
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;U.S. Shareholders who receive Rights pursuant to the Offer should not recognize taxable income
for U.S. Federal income tax purposes upon their receipt of the Rights. If Rights issued to a U.S.
Shareholder expire without being sold or exercised, no basis should be allocated to such Rights,
and such Shareholder should not recognize any gain or loss for U.S. Federal income tax purposes
upon such expiration.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The tax basis of a U.S. Shareholder&#146;s Common Stock should remain unchanged and the
shareholder&#146;s basis in the Rights should be zero, unless such U.S. Shareholder affirmatively and
irrevocably elects (in a statement attached to such shareholder&#146;s U.S. Federal income tax return
for the year in which the Rights are received) to allocate the basis in the Common Stock between
such Common Stock and the Rights in proportion to their respective fair market values on the date
of distribution.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A U.S. Shareholder who exercises Rights should not recognize any gain or loss for U.S. Federal
income tax purposes upon the exercise. The tax basis of the newly acquired Common Stock should
equal the Subscription Price paid for the Common Stock (plus the basis, if any, allocated to the
Rights in the manner described in the immediately preceding paragraph). See &#147;Taxation&#148; in this
Prospectus and in the SAI.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Each U.S. Shareholder is urged to consult his or her own tax advisor with respect to the
specific Federal, state and local tax consequences to such U.S. Shareholder of receiving Rights in
this offer.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Employee Plan Considerations</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Shareholders that are employee benefit plans subject to the Employee Retirement Income
Security Act of 1974, as amended (&#147;ERISA&#148;) (including corporate savings and 401(k) plans), Keogh or
H.R. 10 plans of self-employed individuals and Individual Retirement Accounts (&#147;IRAs&#148;)
(collectively, &#147;Plans&#148;) should be aware of the complexity of the rules and regulations governing
Plans and the penalties for noncompliance, and Plans should consult with their counsel regarding
the consequences of their exercise of Rights under ERISA and the Internal Revenue Code of 1986, as
amended (the &#147;Code&#148;).
</DIV>
<DIV align="left">
<A name="104"></A>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>USE OF PROCEEDS</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If all of the Rights are exercised in full and assuming a Subscription Price of $<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> per
share, the net proceeds to the Fund would be approximately $<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>, after deducting expenses
payable by the Fund in connection with the offering estimated to total $<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>. If the Fund
increases the number of shares of Common Stock subject to subscription by up to <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Shares, in
order to satisfy over-subscription requests, the additional net proceeds will be approximately
$<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>. However, there can be no assurance that all Rights will be exercised in full, and
the Subscription Price will not be determined until the close of business on the Expiration Date.
The Investment Adviser has advised the Fund that it anticipates that the net
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->28<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left" style="font-size: 10pt; margin-top: 6pt">proceeds of the Offer will be invested in investments conforming to the Fund&#146;s investment
objective and policies within three months from their receipt by the Fund. Pending such
investment, the proceeds will be invested in cash or cash equivalent short-term obligations
including, but not limited to, U.S. Government obligations, certificates of deposit, commercial
paper and short-term notes. See &#147;The Offer &#151; Purpose of the Offer.&#148;
</DIV>
<DIV align="left">
<A name="105"></A>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>THE FUND</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Fund, incorporated in Maryland on July&nbsp;21, 1988, is a diversified, closed-end management
investment company registered under the 1940 Act. The Fund&#146;s investment objective is to seek the
highest total return, consisting of capital appreciation and current income, consistent with the
preservation of capital. The Fund will invest up to 65% of its total assets in U.S. government
securities, non-convertible debt securities of domestic issuers rated among the two highest rating
categories of either Moody&#146;s or S&#038;P (or, if unrated, of comparable quality as determined by the
Investment Adviser), and certain foreign government securities (collectively, the &#147;Bond
Investments&#148;), and up to 50% of its total assets in equity securities comprised of common,
preferred and convertible preferred stock. The equity investments will be in investments in
primarily large-capitalization companies but may also be in investments in small- or
medium-capitalization companies. The Fund may, however, under certain circumstances, invest up to
75% of its total assets in equity securities as determined by the Fund&#146;s Investment Adviser. The
Fund also, as part of its Bond Investments, may invest up to 10% of its total assets in
non-convertible debt securities rated below the two highest rating categories of Moody&#146;s or S&#038;P
(or, if unrated, of comparable quality as determined by the Investment Adviser). See &#147;Investment
Objective and Policies.&#148;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Investment Adviser, Phoenix/Zweig Advisers LLC, is a Delaware limited liability company
and a wholly-owned subsidiary of Phoenix Investment Partners, Ltd., a Delaware corporation.
Phoenix/Zweig Advisers LLC and Phoenix Investment Partners, Ltd. are independent investment
advisory firms registered with the Commission under the Investment Advisers Act of 1940, as
amended. Such registration does not involve supervision or approval by the Commission of
investment advice rendered by the Investment Adviser. See &#147;Management of the Fund.&#148;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Sub-Adviser, Zweig Consulting LLC, is a New York limited liability company and an
investment advisory firm registered with the Commission under the Investment Advisers Act of 1940,
as amended. The President of the Sub-Adviser is Dr.&nbsp;Martin E. Zweig, who has been engaged in the
business of providing investment advisory services for over 35&nbsp;years. See &#147;Management of the
Fund.&#148;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Fund completed an initial public offering of 60,375,000 shares of its Common Stock in
September and October&nbsp;1988. The net proceeds to the Fund from such offering were approximately
$559,912,503. The Fund also received net proceeds of approximately $76&nbsp;million from its April&nbsp;1998
rights offering. As of <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>, 2007, the net assets of the Fund were $<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>, and
since inception, the Fund has paid or declared distributions (including dividends and capital gains
distributions) aggregating $<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>.
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->29<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Fund&#146;s principal office is located at 900 Third Avenue, New York, New York 10022, and its
telephone number is (212)&nbsp;451-1100.
</DIV>
<DIV align="left">
<A name="106"></A>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>MARKET PRICE AND NET ASSET VALUE INFORMATION</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Shares of the Fund&#146;s Common Stock are listed on the NYSE under the symbol &#147;ZTR.&#148; The
following table sets forth for the calendar quarters indicated: (i)&nbsp;the high and low closing prices
per share of the Fund&#146;s Common Stock on the NYSE; (ii)&nbsp;the net asset value per share of the Fund&#146;s
Common Stock on the day of the high or low closing price; and (iii)&nbsp;the percentage by which the
shares of Common Stock of the Fund traded at a premium over, or discount from, the Fund&#146;s high and
low net asset values per share.
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="10%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="10%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="10%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="10%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="10%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="10%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="10%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center">High</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center">Net Asset</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center">Premium</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center">Low</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center">Net Asset</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center">Premium</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="center" style="border-bottom: 1px solid #000000">Quarter Ended</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" style="border-bottom: 1px solid #000000">Sales Price*</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" style="border-bottom: 1px solid #000000">Value</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" style="border-bottom: 1px solid #000000">(Discount)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" style="border-bottom: 1px solid #000000">Sales Price*</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" style="border-bottom: 1px solid #000000">Value</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" style="border-bottom: 1px solid #000000">(Discount)</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #cceeff">
    <TD align="center" valign="top"><DIV style="margin-left:15px; text-indent:-15px">12/31/04
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">$5.35
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">$5.62
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">(4.80)%
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">$5.25
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">$5.59
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">(6.08)%</TD>
</TR>
<TR valign="bottom">
    <TD align="center" valign="top">3/31/05
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">$5.32
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">$5.60
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">(5.00)%
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">$5.12
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">$5.45
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">(6.06)%</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD align="center" valign="top">6/30/05
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">$5.24
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">$5.50
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">(4.73)%
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">$5.07
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">$5.40
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">(6.11)%</TD>
</TR>
<TR valign="bottom">
    <TD align="center" valign="top">9/30/05
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">$5.16
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">$5.41
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">(4.62)%
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">$5.10
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">$5.33
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">(4.32)%</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD align="center" valign="top">12/31/05
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">$5.12
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">$5.25
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">(2.48)%
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">$4.67
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">$5.26
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">(11.22)%</TD>
</TR>
<TR valign="bottom">
    <TD align="center" valign="top">3/31/06
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">$4.89
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">$5.22
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">(6.32)%
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">$4.71
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">$5.28
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">(10.80)%</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD align="center" valign="top">6/30/06
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">$4.89
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">$5.22
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">(6.32)%
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">$4.71
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">$5.05
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">(6.73)%</TD>
</TR>
<TR valign="bottom">
    <TD align="center" valign="top">9/30/06
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">$5.44
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">$5.13
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">6.04%
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">$4.80
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">$4.95
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">(3.03)%</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD align="center" valign="top">12/31/06
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">$5.91
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">$5.14
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">14.98%
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">$5.29
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">$5.08
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">4.13%</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>



<DIV align="left">
<DIV style="font-size: 3pt; margin-top: 16pt; width: 18%; border-top: 1px solid #000000">&nbsp;</DIV>
</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96"></TD>
</TR>

<TR valign="top">
    <TD nowrap align="left">*</TD>
    <TD>&nbsp;</TD>
    <TD>As reported by the NYSE.</TD>
</TR>

</TABLE>



<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Fund&#146;s shares of Common Stock have traded in the market above, at and below net asset
value since the commencement of the Fund&#146;s operations in September&nbsp;1988. The Fund&#146;s officers
cannot predict whether the Subscription Price will be at or below the Fund&#146;s net asset value per
Share on the Pricing Date. Since the Fund&#146;s inception in 1988, the Fund has generally maintained a
policy of making monthly distributions equal to 0.83% of its net asset value (10% on an annualized
basis). The Fund&#146;s officers believe that without this monthly distribution policy, there would
likely be a decrease in the amount of any premium at which the Fund&#146;s shares would be trading above
net asset value or an increase in the amount of any discount at which the Fund&#146;s shares would be
trading from net asset value; however, the Fund&#146;s officers cannot predict whether such policy will
have this effect in the future. See &#147;Distributions; Distribution Reinvestment and Cash Purchase
Plan.&#148; The Fund is authorized to repurchase its shares on the open market when the shares are
trading at a discount from net asset value. The Fund has not engaged in any such repurchases. See
&#147;Description of Common Stock &#151;Repurchase of Shares.&#148; Since the Fund&#146;s inception, the Board of
Directors has maintained a policy pursuant to which the Board of Directors considers the making of
tender offers of the Fund each quarter during periods
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->30<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left" style="font-size: 10pt; margin-top: 6pt">when the Fund&#146;s shares are trading at a discount from net asset value. The Fund has not made any
such tender offers. See &#147;Description of Common Stock &#151; Tender Offers.&#148; The Fund&#146;s Articles of
Incorporation provide that if during any fiscal quarter beginning on or after January&nbsp;1, 1990, the
Fund&#146;s shares trade, on the principal securities exchange on which they are traded, at an average
discount from net asset value of 10% or more, the Fund generally is required to submit to
shareholders within 60&nbsp;days after the end of such quarter, a proposal to convert the Fund to an
open-end investment company (the &#147;Conversion Proposal&#148;). Approval of the Conversion Proposal would
require the affirmative vote of a majority of the outstanding shares of the Fund entitled to be
voted thereon. The Fund submitted a Conversion Proposal to its shareholders in 2000, 2001 and 2004
since the Fund&#146;s shares had traded at an average discount from net asset value of 10% or more
during the quarter ended March&nbsp;31, 2000, the quarter ended December&nbsp;31, 2000 and the quarter ended
December&nbsp;31, 2003, respectively. The Fund&#146;s shareholders did not approve the Conversion Proposal on
any of those occasions. See &#147;Description of Common Stock &#151; Provision for Conversion to Open-End
Fund.&#148;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>, 2007, the net asset value per share of Common Stock was $<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> and the last
reported sales price was $<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>, representing a <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> from net asset value per share of
<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>%.
</DIV>
<DIV align="left">
<A name="107"></A>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>INVESTMENT OBJECTIVE AND POLICIES</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Investment Objective</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Fund&#146;s investment objective is to seek the highest total return, consisting of capital
appreciation and current income, consistent with the preservation of capital. The Fund will invest
up to 65% of its total assets in U.S. government securities, non-convertible debt securities of
domestic issuers rated among the two highest rating categories of either Moody&#146;s or S&#038;P (or, if
unrated, of comparable quality as determined by the Investment Adviser), and certain foreign
government securities (collectively, the &#147;Bond Investments&#148;), and up to 50% of its total assets in
equity securities comprised of common, preferred and convertible preferred stock. The equity
investments will be in investments in primarily large-capitalization companies but may also be in
investments in small- or medium-capitalization companies. If, however, the Investment Adviser
perceives a change in the relationship between the debt and equity markets (such as a change in the
spread between the yields of debt and equity securities) then, depending on the nature of such
change, the Fund may increase the percentage of its total assets invested in debt securities
(including money market instruments) or equity securities. The Fund will not, under any
circumstances, invest more than 75% of its total assets in equity securities. The Fund also, as
part of its Bond Investments, may invest up to 10% of its total assets in non-convertible debt
securities rated below the two highest rating categories of Moody&#146;s or S&#038;P (or, if unrated, of
comparable quality as determined by the Investment Adviser).
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The extent of the Fund&#146;s investment in debt and equity securities will be determined by the
Investment Adviser primarily on the basis of asset allocation techniques developed by Dr.&nbsp;Martin E.
Zweig, the President of the Fund&#146;s Sub-Adviser, and his staff. In an effort to meet the Fund&#146;s
investment objective, the Fund may use the following investment methods when such use
</DIV>

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</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left" style="font-size: 10pt; margin-top: 6pt">is deemed appropriate: purchasing and selling interest rate, stock index and other futures
contracts and purchasing options on such futures; purchasing and writing listed put and call
security options and options on stock indexes; short sales of securities; borrowing from banks to
purchase securities; investing in securities of exchange traded funds, foreign issuers and
closed-end investment companies; lending portfolio securities to brokers, dealers, banks or other
recognized institutional borrowers of securities; entering into repurchase or reverse repurchase
agreements; and purchasing when-issued and delayed-delivery securities. See &#147;Special Investment
Methods.&#148; During periods when the Investment Adviser believes an overall defensive position is
advisable, greater than 50% (and under certain circumstances perhaps all) of the Fund&#146;s total
assets may be temporarily invested in money market instruments and cash. There is no assurance that
the Fund will use any or all of such methods or, whether or not they are used, the Fund will
achieve its investment objective. The Fund&#146;s investment objective may not be changed without the
approval of a majority of the Fund&#146;s outstanding voting securities. As used in this Prospectus, the
term &#147;majority of the Fund&#146;s outstanding voting securities&#148; means the lesser of either (i)&nbsp;67% of
the shares represented at a shareholders meeting at which the holders of more than 50% of the
outstanding shares are present in person or by proxy, or (ii)&nbsp;more than 50% of the outstanding
shares.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Investment Policies</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The extent of the Fund&#146;s investment in debt and equity securities will be determined primarily
on the basis of asset allocation techniques developed by Dr.&nbsp;Martin E. Zweig, President of the
Sub-Adviser, and his staff. It is expected that the Investment Adviser will make most of the
decisions with respect to the extent of the Fund&#146;s investment in debt and equity securities based
on these techniques. The debt allocation techniques, which seek to identify the risks and trends in
the debt markets at any given time, will incorporate various indicators, including the momentum of
bond prices, short-term interest rate trends, inflation indicators and general economic and
liquidity indicators, as well as other market indicators and statistics which the Investment
Adviser believes tend to point to significant trends in the overall performance and the risk of the
debt markets. The equity allocation techniques, which seek to identify the risks and trends in the
equity markets at any given time, include general market indicators, including interest rate and
monetary analysis, market sentiment indicators, price and trading volume statistics, and measures
of valuation, as well as other market indicators and statistics which the Investment Adviser
believes tend to point to significant trends in the overall performance and the risk of the stock
market. These techniques are not an all-in or all-out approach that attempts to predict market tops
and bottoms. Instead, they are intended to be a gradual and disciplined approach that reacts to
changes in risk levels as determined by the indicators. The goal is to be invested consistent with
the major trends of the markets. There is no assurance that these asset allocation techniques will
provide protection from the risks of debt or equity investment, enable the Fund to be invested
consistent with the major trends of the markets or enable the Fund to achieve its investment
objective.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The maturities of the debt securities in the Fund&#146;s portfolio will vary based in large part on
the Investment Adviser&#146;s expectations of future changes in interest rates using the Investment
Adviser&#146;s own internal research and debt allocation techniques. The primary consideration in
choosing among bonds is managing risk related to changes in interest rate levels. A bond&#146;s duration
measures its sensitivity to changes in interest rates (interest rate risk). Duration is the
</DIV>

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</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left" style="font-size: 10pt; margin-top: 6pt">approximate percentage change in the price of a bond or bond portfolio in response to a 100
basis point (one percent) change in the general level of interest rates in the market. For example,
if a bond portfolio has an average duration of five years, the value of such bond portfolio would
increase by 5% if interest rates declined by 1% and conversely would decrease by 5% if interest
rates rose by 1%. The longer the duration, the greater the bond&#146;s price movement will be as
interest rates change. The Investment Adviser determines the level of fixed income investments,
and their average maturity, in the Fund primarily on the basis of a bond model provided by the
Sub-Adviser. The bond model suggests an overall duration (a measure of risk in a bond portfolio)
that is implemented by the Fund&#146;s portfolio managers. The Fund&#146;s portfolio managers then
incorporate fundamental analysis to determine which specific bonds to own and what maturities to
hold to arrive at the overall duration of the portfolio. The overall bond portfolio generally has
a blend of short, medium and long-maturity bonds, which balances the overall duration risk with
other yield curve risks depending on the overall duration suggested by the bond model. The
portfolio managers will vary the maturities to arrive at the appropriate desired average. The Fund
primarily invests the bond portfolio in U.S. Treasury securities and agency securities of the
highest quality.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The U.S. government securities (&#147;U.S. Government Securities&#148;) in which the Fund may invest are
securities issued or guaranteed by the U.S. government or its agencies or instrumentalities
(including repurchase agreements secured by such instruments). Certain of these securities,
including U.S. Treasury bills, notes and bonds, mortgage participation certificates guaranteed by
GNMA, and Federal Housing Administration debentures, are supported by the full faith and credit of
the United States. Other U.S. Government Securities issued or guaranteed by federal agencies or
government-sponsored enterprises are not supported by the full faith and credit of the United
States. These securities include obligations supported by the right of the issuer to borrow from
the U.S. Treasury, such as obligations of Federal Home Loan Banks, and obligations supported only
by the credit of the instrumentality, such as Federal National Mortgage Association bonds. Debt
securities of domestic issuers, other than U.S. Government Securities, will be generally limited to
those that are rated, as of the date of purchase, among the two highest rating categories (Aaa and
Aa) of Moody&#146;s or the two highest rating categories (AAA and AA) of S&#038;P. The Fund also, as part of
its Bond Investments, may invest up to 10% of its total assets in non-convertible debt securities
rated below the two highest rating categories of Moody&#146;s or S&#038;P (or, if unrated, of comparable
quality as determined by the Investment Adviser).
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The money market instruments in which the Fund may invest include U.S. Government Securities
or obligations issued or guaranteed by one or more foreign governments or any of their political
subdivisions, agencies or instrumentalities (&#147;Foreign Government Securities&#148;) having a maturity of
less than one year, commercial paper rated A-1 or higher by S&#038;P or Prime-1 or higher by Moody&#146;s, or
if such commercial paper is not rated, issued by companies which have an outstanding debt issue
rated Aa or higher by Moody&#146;s or AA or higher by S&#038;P, repurchase agreements secured by collateral
at least equal to the repurchase price, and certificates of deposit, bankers&#146; acceptances and other
short-term obligations issued by domestic branches of U.S. banks that are insured by the Federal
Deposit Insurance Corporation and have assets in excess of $500&nbsp;million.
</DIV>

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</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Fund may invest up to 10% of its total assets in Foreign Government Securities that, in
the opinion of the Investment Adviser, do not subject the Fund to unreasonable credit risks. The
percentage of the Fund&#146;s assets invested in Foreign Government Securities will vary depending on
the relative yields of such securities, the economic and financial markets of the countries in
which the investments are made, the interest rate climate of such countries and the relationship of
such countries&#146; currencies to the U.S. dollar. During the past year, the Fund has not owned any
Foreign Government Securities.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Fund&#146;s investments in equity securities provide the opportunity for enhanced returns
through capital appreciation. The Investment Adviser expects that the stocks in the Fund&#146;s
portfolio will be widely diversified by both industry and the number of issuers. The Investment
Adviser expects that a majority of the stocks in the Fund&#146;s portfolio will be selected on the basis
of a proprietary stock selection model that evaluates and ranks approximately 1,000 of the largest,
most liquid stocks. This stock selection model evaluates and ranks such stocks on the basis of
various factors, which may include earnings momentum, earnings growth, price-to-book value,
price-to-earnings, price-to-cash flow, cash flow trend, payout ratio trend and other market
measurements. The Investment Adviser then performs further analysis of certain of those companies
that have been identified by the stock selection model, in order to determine whether to purchase
those stocks. This stock selection model may evolve or be replaced by other stock selection models
intended to achieve the Fund&#146;s investment objective.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Special Investment Methods</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Fund may use some or all of the following special investment methods where their use
appears appropriate to the Investment Adviser. No assurance can be given that the Fund will use
any or all of such investment methods or, if used, that their use will achieve its investment
objective. The investment methods described below are subject to, and should be read in
conjunction with, the discussion under &#147;Investment Restrictions&#148; and &#147;Investment Objective and
Policies&#148; in the SAI. The restrictions set forth under &#147;Investment Restrictions&#148; are fundamental,
and thus may be changed only with the approval of a majority of the Fund&#146;s outstanding voting
securities.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><I>Futures Contracts and Related Options.</I>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Fund may purchase and sell stock index futures contracts and futures contracts based upon
interest rates and other financial instruments, and purchase options on such contracts. The Fund
will not write options on any futures contracts.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;There are certain risks associated with the use of futures contracts and related options. The
low margin normally required in such trading provides a large amount of leverage. Thus, a
relatively small change in the price of a contract can produce a disproportionately large profit or
loss, and the Fund may gain or lose substantially more than the initial margin on a trade.
Although the Fund intends to purchase or sell futures which appear to have an active market, there
is no assurance that a liquid market will exist for any particular contract at any particular time.
Thus, it may not be possible to close a futures position in anticipation of adverse price
movements. In addition, there may be an imperfect correlation between the price movements of the
futures contracts and price movements of the underlying portfolio securities.
</DIV>

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</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Fund may purchase or sell futures contracts and related options for any purpose deemed
appropriate, including but not limited to, managing the risks inherent in its investment strategy
generally and, in particular, in protecting against the effect that changes in general market
conditions and conditions affecting particular industries may have on the values of securities held
in the Fund&#146;s portfolio, or which the Fund intends to purchase.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;For example, the Fund may establish short positions in (sell)&nbsp;futures contracts to protect
against anticipated or potential declines in the market value of the Fund&#146;s portfolio of
securities. For instance, the Fund may establish a short position in stock index futures contracts
when it anticipates a general market or market sector decline that may adversely affect the market
value of the Fund&#146;s portfolio securities.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Where the Fund anticipates a significant market or market sector advance, establishing long
positions in (purchasing)&nbsp;stock index futures contracts affords protection against not
participating in such advance at a time when the Fund is not fully invested. Such a long position
would serve as a temporary substitute for the purchase of individual stocks, which may then be
purchased in an orderly fashion. As purchases of stock are made, an amount of stock index futures
contracts which is comparable to the amount of stock purchased may be terminated by offsetting
closing sales transactions.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><I>Security and Stock Index Options.</I>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Fund may purchase and write listed put and call options on securities and on stock indexes
that are traded on U.S. securities exchanges at such times as the Investment Adviser deems
appropriate and consistent with the Fund&#146;s investment objective. In general, the Fund may purchase
or write such options to hedge against anticipated or potential declines in the market value of the
Fund&#146;s portfolio of securities, or to facilitate the rapid implementation of investment strategies
if the Fund anticipates a significant market or market sector advance.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><I>Borrowing.</I>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Fund may from time to time increase its ownership of securities above the amounts
otherwise possible by borrowings from banks on an unsecured basis and investing the borrowed funds.
In addition, the Fund may borrow to finance share repurchase or tender offer transactions when its
shares are trading at a discount from their net asset value. See &#147;Description of Common Stock &#151;
Repurchase of Shares; Tender Offers.&#148; Any such borrowing will be made only from banks, and
pursuant to the requirements of the 1940 Act, will only be made to the extent that the value of the
Fund&#146;s total assets, less its liabilities other than borrowings, is equal to at least 300% of all
borrowings including the proposed borrowing.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Borrowing for investment and to finance share repurchase or tender offer transactions
increases both investment opportunity and investment risk. Since substantially all of the Fund&#146;s
assets will fluctuate in value, but the obligation resulting from the borrowing is relatively
fixed, the Fund&#146;s shares will increase in value more when the Fund&#146;s assets increase in value and
decrease more when the Fund&#146;s assets decrease in value than would otherwise be the case. In
addition, the cost of borrowing may exceed the income or gain on any securities purchased with the
funds borrowed, in which case the Fund&#146;s net asset value will decline.
</DIV>

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</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><I>Exchange Traded Funds.</I>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Fund may invest in passively managed registered open-end investment companies or other
baskets of securities, such as unit investment trusts, which trade on a national securities
exchange or NASDAQ and are commonly called exchange-traded funds (&#147;ETFs&#148;). These investments
represent shares of ownership in ETFs that hold portfolios of securities which are designed to
generally correspond to and closely track the price and yield performance of an index of
securities. Accordingly, ETFs have risks similar to those of stocks and are subject to market
volatility. Investment returns may fluctuate so that invested shares, when redeemed or sold, may be
worth more or less than their original cost. ETFs may include, among others, the Nasdaq-100 Index
Tracking Stock (QQQ), Standard &#038; Poor&#146;s Depositary Receipts (SPDRS), the DIAMONDS Trust, and other
ETF&#146;s as determined from time to time by the Investment Adviser.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><I>Foreign Securities.</I>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Fund may invest up to 10% of its total assets in securities of foreign issuers and up to
10% of its total assets in Foreign Government Securities. Investments in foreign securities offer
potential benefits not available through investment solely in securities of domestic issuers.
Foreign securities offer the opportunity to invest in foreign issuers that appear to have growth
potential, or in foreign countries with economic policies or business cycles different from those
of the United States, or to reduce fluctuations in portfolio value by taking advantage of foreign
markets that do not move in a manner parallel to United States markets. The Fund may also enter
into foreign currency transactions in connection with its investment activity in foreign
securities.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Investments in foreign securities present special additional risks and considerations not
typically associated with investments in domestic securities. Foreign investments may be affected
by changes in foreign currency rates and exchange control regulations. There may be less
information available about a foreign company than a domestic company, and foreign companies may
not be subject to accounting, auditing and reporting standards and requirements comparable to those
applicable to domestic companies. Foreign securities may be less liquid and subject to greater
price volatility than domestic securities. The foreign markets also have different clearance and
settlement procedures. Foreign investments may also be subject to local economic or political
risks, political instability and possible nationalization of issuers or expropriation of their
assets which might adversely affect the Fund&#146;s ability to realize or liquidate its investment in
such securities. Furthermore, legal remedies for defaults and disputes may have to be pursued in
foreign courts whose procedures differ substantially from those of U.S. courts. In the event of a
default in payment on foreign securities, the Fund may incur increased costs to obtain and/or to
enforce a judgment against the foreign issuer (or the other parties to the transaction) in the
United States or abroad, and no assurance can be given that the Fund will be able to collect on any
such judgment.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><I>Closed-end Investment Companies.</I>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Fund may also invest in other closed-end investment companies if the Investment Adviser
believes that such investments will further the Fund&#146;s investment objective. If the Fund purchases
shares of another investment company at a discount which subsequently declines, the
</DIV>

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</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left" style="font-size: 10pt; margin-top: 6pt">performance of such investment generally would be better than if the Fund had purchased the
underlying portfolio investments of such other investment company. Such investments in other
investment companies will constitute less than 10% of the Fund&#146;s net assets.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><I>Short Sales.</I>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Fund may from time to time make short sales of securities. A short sale is a transaction
in which the Fund sells a security it does not own in anticipation of a decline in market price.
The Fund may make short sales to offset a potential decline in a long position or a group of long
positions, or if the Investment Adviser believes that a decline in the price of a particular
security or group of securities is likely. The Fund may also make short sales in an attempt to
maintain portfolio flexibility and facilitate the rapid implementation of investment strategies if
the Investment Adviser believes that the price of a particular security or group of securities is
likely to decline.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;When the Fund determines to make a short sale of a security, it must borrow the security. The
Fund&#146;s obligation to replace the security borrowed in connection with the short sale will be fully
secured by the proceeds from the short sale retained by the broker and by cash or liquid securities
deposited in a segregated account with the Fund&#146;s custodian.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Fund may make a short sale only if, at the time the short sale is made and after giving
effect thereto, the market value of all securities sold short is 25% or less of the value of its
net assets and the market value of securities sold short which are not listed on a national
securities exchange does not exceed 10% of the Fund&#146;s net assets.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In addition to the short sales described above, the Fund may make short sales &#147;against the
box.&#148; A short sale &#147;against the box&#148; is a short sale where, at the time of the short sale, the
Fund owns or has the immediate and unconditional right, at no added cost, to obtain the identical
security. The Fund would enter into such a transaction to defer a gain or loss for Federal income
tax purposes on the security owned by the Fund. Short sales against the box are not subject to the
collateral requirements described above or the percentage limitations on short sales described
above.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><I>Lending Portfolio Securities.</I>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Fund may lend portfolio securities, generally on a short-term basis, to brokers or dealers
in corporate or governmental securities, banks or other institutional borrowers of securities, and
financial institutions as a means of earning income. A borrower of securities from the Fund must
maintain with the Fund cash or U.S. Government Securities equal to at least 100% of the market
value of the securities borrowed. The Fund may not lend portfolio securities if such loan would
cause the aggregate amount of all outstanding securities loans to exceed 20% of the current market
value of the Fund&#146;s net assets. If a borrower becomes bankrupt or defaults on its obligation to
return the loaned security, delays or losses could result.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><I>Repurchase Agreements.</I>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Fund may from time to time acquire U.S. Government Securities and concurrently enter into
so-called &#147;repurchase agreements&#148; with the seller, a member bank of the Federal
</DIV>

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</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Reserve System or primary dealers in U.S. Government Securities, whereby the seller agrees to
repurchase such securities at the Fund&#146;s cost plus interest within a specified time (usually on the
next business day). Repurchase agreements offer a means of generating income from excess cash that
the Fund might otherwise hold. Delays in payment or losses may result if the other party to the
agreement defaults or becomes bankrupt. The Fund&#146;s repurchase agreements must be fully backed by
collateral that is marked to market, or priced, each day.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><I>Reverse Repurchase Agreements.</I>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Fund may enter from time to time into reverse repurchase agreements whereby the Fund sells
an underlying debt instrument and simultaneously obtains the commitment of the purchaser, a
commercial bank or a broker or dealer, to sell the security back to the Fund at an agreed upon
price on an agreed upon date. The value of the underlying securities will be required to be
maintained at a level at least equal at all times to the total amount of the resale obligation,
including the interest factor. The Fund receives payment for such securities only upon physical
delivery or evidence of book entry transfer by its custodian. The Fund will establish a segregated
account with the Fund&#146;s custodian, in which the Fund will maintain cash and U.S. Government
Securities or other high grade debt obligations at least equal in value to the total amount of the
repurchase obligation, including accrued interest. The value of the segregated securities will be
marked-to-market on a daily basis to ensure that such value is maintained. Reverse repurchase
agreements could involve certain risks in the event of default or insolvency of the other party,
including possible delays or restrictions upon the Fund&#146;s ability to dispose of the underlying
securities. An additional risk is that the market value of securities sold by the Fund under a
reverse repurchase agreement could decline below the price at which the Fund is obligated to
repurchase them. Reverse repurchase agreements will be considered borrowings by the Fund and as
such will be subject to the restrictions on borrowing described in the SAI under &#147;Investment
Restrictions.&#148; The value of all the Fund&#146;s reverse repurchase agreements will not exceed 5% of the
Fund&#146;s total assets.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><I>Below
Investment Grade Fixed Income Securities.</I>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Fund, as part of its Bond Investments, may invest up to 10% of its total assets in
non-convertible debt securities rated below the two highest rating categories of Moody&#146;s or S&#038;P
(or, if unrated, of comparable quality as determined by the Investment Adviser). Generally,
securities rated below investment grade (high yield-high risk fixed income securities &#151; also
sometimes referred to as junk bonds) have a greater chance that the issuer will be unable to make
scheduled interest or principal payments when due. Furthermore, to the extent that the Fund may
invest in such high yield-high risk fixed income securities, this will entail greater price
volatility and credit and interest rate risk than investment-grade securities. Analysis of the
creditworthiness of high yield-high risk issuers is more complex than for higher-rated securities,
making it more difficult for the Investment Adviser to accurately predict risk. If the Fund
pursues missed interest or principal payments, there is a risk that the Fund&#146;s expenses could
increase. In addition, lower-rated securities may not trade as often and may be less liquid than
higher-rated securities.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>When-Issued and Delayed-Delivery Securities.</I>
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->38<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Fund may from time to time purchase securities on a &#147;when-issued&#148; or &#147;delayed-delivery&#148;
basis whereby the Fund purchases a bond or stock with delivery of the security and payment deferred
to a future date. The money to purchase such securities will be invested in other securities until
the Fund receives delivery. This could increase the possibility that the Fund&#146;s net asset value
would increase or decrease faster than would otherwise be the case. There is no restriction on the
percentage of the Fund&#146;s assets that may be invested in when-issued or delay-delivery securities,
and such securities are not considered to be short sales for purposes of the Fund&#146;s Investment
Restrictions on short sales.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Securities purchased on a when-issued or delayed-delivery basis may expose the Fund to risk,
since such securities may experience fluctuations in value (based upon, in the case of bonds, the
public&#146;s perception of the creditworthiness of the issuer and changes, real or anticipated, in the
level of interest rates) prior to their time of delivery. In addition, the yield available in the
market when the delivery takes place actually may be higher than that obtained in the transaction
itself.
</DIV>
<DIV align="left">
<A name="108"></A>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>RISK FACTORS AND SPECIAL CONSIDERATIONS</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following discusses certain matters that should be considered, among others, in connection
with the Offer.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Dilution &#151; Net Asset Value and Non-Participation in the Offer</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Record Date Shareholders who do not fully exercise their Rights will, upon the completion of
the Offer, own a smaller proportional interest in the Fund than they owned prior to the Offer. In
addition, an immediate dilution of the net asset value per share may be experienced by all
shareholders as a result of the Offer because the Subscription Price may be less than the then
current net asset value per share, and the number of shares outstanding after the Offer may
increase in greater percentage than the increase in the size of the Fund&#146;s assets. Although it is
not possible to state precisely the amount of such decrease in net asset value per share, if any,
because it is not known at this time what the Subscription Price will be, what the net asset value
per share will be on the Pricing Date, or what proportion of the Shares will be subscribed for,
such dilution could be minimal or substantial. For example, assuming (i)&nbsp;all Rights are exercised,
(ii)&nbsp;the Fund&#146;s net asset value on the Pricing Date is
$<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> per share (the net asset value per
share on
<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>,
2007), and (iii)&nbsp;the Subscription Price is $<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> per share (equal to the
lower of the NAV at the close of business on <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>, 2007 or 95% of the average of the last
reported sale price of a share of the Fund&#146;s Common Stock on the NYSE on <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>, 2007, and the
four preceding business days), then the Fund&#146;s net asset value per share would be reduced by
approximately $<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> per share or &#95;&#95;&#95;%.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Leverage and Borrowing</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As discussed above under &#147;Investment Objectives and Policies &#151; Special Investment Methods,&#148;
the Fund is authorized to borrow. The Fund currently does not have any intention to borrow money.
Borrowings create an opportunity for greater capital appreciation with respect to the Fund&#146;s
investment portfolio, but at the same time such borrowing is speculative in that it will
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->39<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left" style="font-size: 10pt; margin-top: 6pt">increase the Fund&#146;s exposure to capital risk. In addition, borrowed funds are subject to
interest costs that may offset or exceed the return earned on the borrowed funds.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Certain Investment Strategies</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The extent of the Fund&#146;s investment in debt and equity securities will be determined primarily
on the basis of asset allocation techniques developed by Dr.&nbsp;Martin E. Zweig, President of the
Sub-Adviser, and his staff. While the Investment Adviser seeks to reduce the risks associated with
investing in debt and equity securities by using these techniques, such risks cannot be eliminated.
There is no assurance that these asset allocation techniques will provide protection from the
risks of equity investment, enable the Fund to be invested consistent with the major trends of the
market or enable the Fund to achieve its investment objective.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In addition, although the Investment Adviser may use one or more of the special investment
methods discussed above under &#147;Investment Objectives and Policies &#151; Special Investment Methods&#148; to
further the Fund&#146;s investment objective and/or reduce losses that might otherwise occur during a
time of general decline in stock prices, no assurance can be given that these investment methods
will be used or, if used, will achieve either or both of these results. These methods may subject
an investor in the Fund to greater than average risks and costs.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Credit Risk</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Investments in debt securities involve credit risk. This is the risk that the borrower will
not make timely payments of principal and interest. The Fund, as part of its Bond Investments, may
invest up to 10% of its total assets in non-convertible debt securities rated below the two highest
rating categories of Moody&#146;s or S&#038;P (or, if unrated, of comparable quality as determined by the
Investment Adviser). Generally, securities rated below investment grade (high yield-high risk
fixed income securities &#151; also sometimes referred to as junk bonds) have a greater chance that the
borrower will be unable to make scheduled interest or principal payments when due. Furthermore, to
the extent that the Fund may invest in such high yield-high risk fixed income securities, this will
entail greater price volatility and credit and interest rate risk than investment-grade securities.
Analysis of the creditworthiness of high yield-high risk borrowers is more complex than for
higher-rated securities, making it more difficult for the Investment Adviser to accurately predict
risk. If the Fund pursues missed interest or principal payments, there is a risk that the Fund&#146;s
expenses could increase. In addition, lower-rated securities may not trade as often and may be
less liquid than higher-rated securities. There can be no assurance that the credit rating of a
Fund investment will remain unchanged over the period of the Fund&#146;s ownership of that investment.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Interest Rate Risk</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Fund invests in fixed income debt securities, which gives rise to interest rate risk. Such
securities may decline in value because of changes in market interest rates. When market interest
rates rise, the market value of such securities generally will fall. To the extent that the Fund
invests in fixed income debt securities, the net asset value and market price of the Fund&#146;s shares
tend to decline if market interest rates rise. Further, while longer term fixed rate securities
may pay higher interest rates than shorter term securities, longer term fixed rate securities also
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->40<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left" style="font-size: 10pt; margin-top: 6pt">tend to be more sensitive to interest rate changes and, accordingly, tend to experience larger
changes in value as a result of interest rate changes.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;During periods of declining interest rates, the issuer of a security may exercise its option
to prepay principal earlier than scheduled, forcing the Fund to reinvest in lower yielding
securities. This is known as call or prepayment risk. Preferred and debt securities frequently
have call features that allow the issuer to redeem the securities prior to their stated maturities.
An issuer may redeem an obligation if the issuer can refinance the debt at a lower cost due to
declining interest rates or an improvement in the credit standing of the issuer. During periods of
rising interest rates, the average life of certain types of securities may be extended because of
slower than expected principal payments. This may lock in a below market interest rate, increase
the security&#146;s duration and reduce the value of the security. This is known as extension risk.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Equity Risk</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Equity investing includes, among other risks, the risk that the securities held by the Fund
will fall in market value due to adverse market and economic conditions, perceptions regarding the
industries in which the issuers of securities held by the Fund participate and the particular
circumstances and performance of particular companies whose securities the Fund holds. An
investment in the Fund represents an indirect economic stake in the securities owned by the Fund,
which are for the most part traded on securities exchanges or in the over-the-counter markets. The
market value of these securities, like other market investments, may move up or down, sometimes
rapidly and unpredictably, and the prices of most securities in a market can drop substantially at
any time. The net asset value of the Fund may at any point in time be less than at the time the
shareholder invested in the Fund, even after taking into account any reinvestment of distributions.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Small and Medium-Capitalization Stock Risk</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;While the Fund generally will invest primarily in large-capitalization companies, the Fund may
invest in companies with small- or medium-capitalizations. Small and medium company stocks can be
more volatile than, and perform differently from, larger company stocks. There may be less trading
in small or medium company stocks, which means that buy and sell transactions in those stocks could
have a larger impact on the stock prices than is the case with larger company stocks. Small and
medium companies may have fewer business lines; therefore, changes in any line of business may have
a greater impact on small and medium company stock prices than is the case for a larger company.
As a result, the purchase or sale of more than a limited number of shares of a small or medium
company may affect its market price. The Fund may need a considerable amount of time to purchase
or sell its positions in these securities. In addition, small or medium company stocks may not be
as well known to the investing public.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Unrealized Appreciation</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As of December&nbsp;31, 2006, there was $30,915,003 or approximately $0.33 per share of net
unrealized appreciation in the Fund&#146;s net assets of $476,845,562; if realized and distributed, or
deemed distributed, such gains would, in general, be taxable to shareholders, including holders at
that time of Shares acquired upon the exercise of Rights. See &#147;Taxation.&#148;
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->41<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Discount from Net Asset Value</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Fund&#146;s shares of Common Stock have traded in the market above, at and below net asset
value since the commencement of the Fund&#146;s operations in September&nbsp;1988. The Fund cannot predict
whether the Fund&#146;s Common Stock will in the future trade at a premium to or discount from net asset
value. The risk of the Common Stock trading at a discount is a risk separate from a decline in the
Fund&#146;s net asset value. See &#147;Market Price and Net Asset Value Information&#148; in this Prospectus and
&#147;Net Asset Value&#148; in the SAI.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Distributions</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Fund&#146;s policy is to make monthly distributions equal to 0.83% of its net asset value (10%
distribution yield on an annualized basis), and a final distribution at year-end consisting of any
remaining undistributed net investment income and any realized net long-term capital gains in
excess of the Fund&#146;s capital loss carryforward. If, for any calendar year, the total distributions
exceed net investment income and realized net capital gains, the excess will generally be treated
as a tax-free return of capital (up to the amount of the shareholder&#146;s tax basis in his or her
shares). The amount treated as a tax-free return of capital will reduce a shareholder&#146;s adjusted
basis in his or her shares, thereby increasing his or her potential gain or reducing his or her
potential loss on the sale of his or her shares.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Historically, the Fund&#146;s distribution yield has included distributions of net investment
income and realized gains that were taxable to the Fund&#146;s shareholders as ordinary income, and
distributions that were treated as a non-taxable return of capital. In 2006, the Fund had a 10%
distribution yield, which consisted of 2.9% as net investment income, 1.3% as gains taxable as
ordinary income and 5.8% as return of capital. In 2005, the Fund had a 10% distribution yield,
which consisted of 2.7% as net investment income, 2.7% as gains taxable as ordinary income and 4.6%
as return of capital. In the future, the Fund anticipates its distribution yield to be
characterized in a similar manner and be consistent with its policy of monthly distributions equal
to 0.83% of its net asset value (10% distribution yield on an annualized basis). Pursuant to the
requirements of the 1940 Act and other applicable laws, a notice will accompany each monthly
distribution with respect to the estimated source of the distribution made.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Fund had capital loss carryovers in the amount of $21,681,438&nbsp;million as of December&nbsp;31,
2006. Capital loss carryovers will reduce or, possibly, eliminate the Fund&#146;s taxable capital gains
in the year(s) to which such losses are carried, but will not reduce the Fund&#146;s current earnings
and profits in such year(s). Consequently, a greater portion of the Fund&#146;s distributions in the
year(s) to which the Fund carries and applies its capital loss carryovers may be taxable to
shareholders as ordinary income dividends than would be the case if the Fund did not have capital
loss carryovers. The Fund&#146;s shareholders thus potentially could lose the benefit of the Fund&#146;s
capital loss carryover to any year in which the Fund makes excess distributions, because instead of
being treated as a non-taxable return of capital, the portion of the excess distributions equal to
the Fund&#146;s capital gains that are offset by the capital loss carryover will likely be taxable to
the Fund&#146;s shareholders, and if taxable, will likely be treated as ordinary income rather than as
capital gain. Moreover, excess distributions that are paid out of capital gains or other
non-dividend income of the Fund will not qualify for the 15% preferential tax rate.
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->42<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>Illustration of Loss of Tax Benefit of Capital Loss Carryforwards<BR>
Related to Distributions in Excess of Taxable Gain</B>
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="86%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B><I>Shareholders pay additional taxes on distributions when a set of 3 conditions exist:</I></B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">1. Fund has current year gains (current earnings and profits)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center" nowrap><I>( line b below)</I></TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">2. Fund has accumulated losses from prior years (capital loss carryovers)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center"><I>( line c below)</I></TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">3. Fund pays out distributions that exceed &#147;required distributions&#148;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center"><I>( line e below)</I></TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="52%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B><I>Assume the following facts:</I></B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Net Income</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right"><I>(a</I></TD>
    <TD nowrap><I>)</I></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">10</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Current year gain (loss)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right"><I>(b</I></TD>
    <TD nowrap><I>)</I></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">5</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Capital loss carryover (CLCO)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right"><I>(c</I></TD>
    <TD nowrap><I>)</I></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">$</TD>
    <TD align="right">(10</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Distributions to shareholders</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right"><I>(d</I></TD>
    <TD nowrap><I>)</I></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">50</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Excess Distributions (normally Return Of Capital)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right"><I>(e</I></TD>
    <TD nowrap><I>)</I></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">40</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Amount of distributions taxable to shareholders</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right"><I>(f</I></TD>
    <TD nowrap><I>)</I></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">15</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Amount of capital loss carryover benefit lost</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right"><I>(g</I></TD>
    <TD nowrap><I>)</I></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">5</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B><I>Explanation: </I></B>Fund has current year gains (b)&nbsp;so shareholders pay taxes on distributions of current year gains (b). The benefit of the capital
loss carryover (CLCO) (g)&nbsp;is thereby lost on the portion of the excess distribution equal to the current year gain (b).
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Fund also might make distributions to shareholders that exceed the Fund&#146;s current
earnings and profits. In that event, because the Fund does not have positive accumulated earnings
and profits, the excess distributions will be a non-taxable return of capital to a shareholder to
the extent the distribution does not exceed the shareholder&#146;s tax basis in his or her Fund shares,
but will also reduce the shareholder&#146;s tax basis in his or her Fund shares.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In the event the Fund distributes amounts in excess of its net investment income and net
realized capital gains, such distributions will decrease the Fund&#146;s total assets and, therefore,
have the likely effect of increasing the Fund&#146;s expense ratio. In addition, in order to make such
distributions, the Fund may have to sell a portion of its investment portfolio at a time when
independent investment judgment might not dictate such action. Shares purchased pursuant to the
Offer will be issued after the record date for the monthly distribution declared in <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>, and,
accordingly, the Fund will not pay a monthly distribution with respect to such Shares until the
distribution to be declared and paid in the next month. See &#147;Distributions; Distribution
Reinvestment and Cash Purchase Plan&#148; for a discussion of the Fund&#146;s distribution policy.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Anti-takeover Provisions</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Fund has provisions in its Articles of Incorporation and By-Laws that may have the effect
of limiting the ability of other entities or persons to acquire control of the Fund, to cause it to
engage in certain transactions or to modify its structure. The Board of Directors is divided into
three classes. At the annual meeting of shareholders each year, the term of one class will expire
and directors will be elected to serve in that class for terms of three years. This provision
could delay for up to two years the replacement of a majority of the Board of Directors.
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->43<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;These provisions could have the effect of limiting shareholders&#146; opportunity to sell their
shares at a premium over prevailing market prices by discouraging a third party from seeking to
obtain control of the Fund in a tender offer or similar transaction. See &#147;Description of Common
Stock &#151; Special Voting Provisions.&#148;
</DIV>
<DIV align="left">
<A name="109"></A>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>MANAGEMENT OF THE FUND</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Board of Directors</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The management of the Fund, including general supervision of the duties performed by the
Investment Adviser under the Investment Advisory Agreement (as described below), is the
responsibility of the Fund&#146;s Board of Directors. For certain information regarding the Directors
and Officers of the Fund, see &#147;Management &#151; Directors and Officers&#148; in the SAI.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Investment Adviser and Sub-Adviser</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Investment Adviser, Phoenix/Zweig Advisers LLC, is a Delaware limited liability company,
with offices at 900 Third Avenue, New York, New York 10022. The Investment Adviser became the
Fund&#146;s investment adviser on January&nbsp;1, 2000, following the acquisition of Zweig Total Return
Advisors, Inc., the Fund&#146;s former investment adviser, Zweig/Glaser Advisers, the Fund&#146;s former
administrator, and Zweig Securities Corp. by Phoenix Investment Partners, Ltd. on March&nbsp;1, 1999
(the &#147;Acquisition&#148;). The Investment Adviser is a wholly owned subsidiary of Phoenix Investment
Partners, Ltd., wholly-owned investment management subsidiary of The Phoenix Companies, Inc., a
NYSE-listed company. Phoenix/Zweig Advisers LLC and Phoenix Investment Partners, Ltd. are
registered with the Commission under the Investment Advisers Act of 1940, as amended. As of
December&nbsp;31, 2006, Phoenix Investment Partners, Ltd. had approximately $58&nbsp;billion in assets under
management.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Pursuant to an investment advisory agreement dated March&nbsp;1, 1999 (the &#147;Investment Advisory
Agreement&#148;), the Investment Adviser is responsible for the actual management of the Fund&#146;s
portfolio. The responsibility for making decisions to buy, sell or hold a particular investment
rests with the Investment Adviser, subject to the supervision of the Board of Directors and the
applicable provisions of the 1940 Act. The Investment Adviser is also obligated to provide the
Fund with such executive, administrative, data processing, clerical, accounting and bookkeeping
services and statistical and research data as are deemed advisable by the Board of Directors,
except to the extent these services are provided by an administrator hired by the Fund. The
Investment Adviser may consider analyses from various other sources, including broker-dealers with
which the Fund does business and affiliates of the Investment Adviser.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Under a services agreement (the &#147;Sub-Advisory Agreement&#148;) with the Investment Adviser, the
Sub-Adviser, Zweig Consulting LLC, performs asset allocation research and analysis and provides
advice thereon to the Investment Adviser. The extent of the Fund&#146;s investment in debt and equity
securities is determined by the Investment Adviser primarily utilizing asset allocation techniques
developed by Dr.&nbsp;Martin E. Zweig, President of the Sub-Adviser, and his staff.
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->44<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;For the services provided by the Investment Adviser under the Investment Advisory Agreement,
the Fund pays the Investment Adviser a monthly fee computed at the annual rate of 0.70% of the
Fund&#146;s average daily net assets during the previous month. For the fiscal years ended December&nbsp;31,
2006, 2005 and 2004, the Fund accrued investment advisory fees of $3,336,985, $3,511,302 and
$3,652,785, respectively. The Investment Adviser will pay the Sub-Adviser an annual fee equal to
40% of the investment advisory fees received by the Investment Adviser from the Fund, payable
monthly in arrears.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Board of Directors, including a majority of the disinterested Directors, has the
responsibility under the 1940 Act to approve the continuance of the Investment Advisory Agreement
and the Sub-Advisory Agreement. At a meeting of the Directors held on February&nbsp;15, 2006, the Board
of Directors, including a majority of the disinterested Directors, approved the continuance of the
Investment Advisory Agreement and the Sub-Advisory Agreement until March&nbsp;1, 2007. A discussion
regarding the basis for the approval of this continuance is contained in the Fund&#146;s June&nbsp;30, 2006
Semi-Annual Report to Shareholders. At a meeting of the Directors held on February&nbsp;20, 2007, the
Board of Directors, including a majority of the disinterested Directors, approved the continuance
of the Investment Advisory Agreement and the Sub-Advisory Agreement until March&nbsp;1, 2008. A
discussion regarding the basis for the approval of this continuance will be contained in the Fund&#146;s
June&nbsp;30, 2007 Semi-Annual Report to Shareholders.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;PXP Securities Corp. or any other brokerage affiliate (the &#147;Brokerage Affiliate&#148;) may act as a
broker for the Fund. In order for the Brokerage Affiliate to effect any portfolio transactions for
the Fund, the commissions, fees or other remuneration received by the Brokerage Affiliate must be
reasonable and fair compared to the commissions, fees or other remuneration paid to other brokers
in connection with comparable transactions involving similar securities being purchased or sold on
an exchange during a comparable period of time. The Fund will not deal with the Brokerage
Affiliate in any portfolio transaction in which the Brokerage Affiliate would act as principal.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Dr.&nbsp;Martin E. Zweig</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Dr.&nbsp;Martin E. Zweig, the President of the Sub-Adviser, has been in the business of providing
investment advisory services for over 35&nbsp;years. Dr.&nbsp;Zweig and his associates determine asset
allocation strategies to assist the Investment Adviser in its management of the Fund.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Portfolio Managers</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Investment Adviser&#146;s day-to-day stock and bond selections for the Fund are made by Mr.
Carlton Neel and Mr.&nbsp;David Dickerson.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Mr.&nbsp;Neel is a graduate of Brown University, (B.A., 1990). Mr.&nbsp;Neel has been Senior Vice
President of the Fund since April&nbsp;2003 and from March&nbsp;1999 to June&nbsp;2002. Mr.&nbsp;Neel has also been
Senior Vice President of Euclid Advisors LLC since April&nbsp;2003, as well as from January&nbsp;2000 to June
2002. From July&nbsp;2002 to April&nbsp;2003, Mr.&nbsp;Neel founded and managed Shelter Rock Capital Partners,
L.P. Formerly, he was Senior Vice President of Phoenix-Zweig
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->45<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Trust from July&nbsp;1995 to March&nbsp;1999, Vice President of Zweig Advisors Inc. from July&nbsp;1995 to
December&nbsp;1999 and Vice President of Zweig Total Return Advisors, Inc. from July&nbsp;1995 to December
1999.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Mr.&nbsp;Dickerson is a graduate of Harvard University (B.A., 1993), and the Stern School of
Business, New York University (M.B.A., 2000). Mr.&nbsp;Dickerson has been a Senior Vice President of
the Fund since April&nbsp;2003, and was a Vice President of the Fund from January&nbsp;2000 to June&nbsp;2002. He
has also been a Senior Vice President of Euclid Advisors LLC since April&nbsp;2003, and served as a Vice
President from April&nbsp;2000 to June&nbsp;2002. From July&nbsp;2002 to April&nbsp;2003, Mr.&nbsp;Dickerson founded and
managed Shelter Rock Capital Partners, L.P. Prior to that, Mr.&nbsp;Dickerson has worked in various
portfolio management and analyst positions with the Fund since 1993.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The SAI provides additional information about the Portfolio Managers&#146; compensation, other
accounts managed by the Portfolio Managers, and the Portfolio Managers&#146; ownership of securities of
the Fund.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Investment Advisory Agreement</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Investment Advisory Agreement sets forth the services to be provided by and the fees to be
paid to each party, as described above. The Investment Advisory Agreement provides that the
Investment Adviser&#146;s liability to the Fund and its shareholders is limited to situations involving
its own willful misfeasance, bad faith or gross negligence in the performance of its duties or by
reason of its reckless disregard of its duties and obligations under the Investment Advisory
Agreement.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The services of the Investment Adviser to the Fund are not deemed to be exclusive, and the
Investment Adviser or any affiliate thereof may provide similar services to other investment
companies and other clients or engage in other activities.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Investment Advisory Agreement obligates the Investment Adviser to provide advisory
services and to pay all expenses arising from the performance of its obligations under the
Investment Advisory Agreement, as well as the fees of all Directors of the Fund who are employees
of the Investment Adviser or any of its affiliates. The Fund pays all other expenses incurred in
the operation of the Fund including, but not limited to, direct charges relating to the purchase
and sale of portfolio securities, interest charges, fees and expenses of attorneys and auditors,
taxes and governmental fees, cost of stock certificates and any other expenses (including clerical
expenses) of issuance, sale or repurchase of shares of the Fund&#146;s Common Stock, expenses in
connection with the Fund&#146;s Distribution Reinvestment and Cash Purchase Plan, membership fees in
trade associations, expenses of registering and qualifying shares of the Fund&#146;s common stock for
sale under Federal and state securities laws, expenses of obtaining and maintaining any stock
exchange listings of the Fund&#146;s Common Stock, expenses of printing and distributing reports,
prospectuses, shareholder notices and proxy materials, expenses of corporate data processing and
related services, shareholder record-keeping and shareholder account services (including salaries
of shareholder relations personnel), expenses of auditors and escrow agents, expenses of printing
and filing reports and other documents filed with governmental agencies, expenses of annual and
special shareholders&#146; meetings, fees and disbursements of the
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->46<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Fund&#146;s administrator, transfer agents, custodians and subcustodians (if any), expenses of
disbursing dividends and distributions, fees, expenses and out-of-pocket costs of Directors of the
Fund who are not interested persons of the Fund or the Investment Adviser, insurance premiums and
litigation, indemnification and other expenses not expressly provided for in the Investment
Advisory Agreement or the Administration Agreement.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Investment Advisory Agreement will remain in effect from year to year if approved annually
(i)&nbsp;by the Board of Directors of the Fund or by the holders of a majority of the Fund&#146;s outstanding
voting securities, and (ii)&nbsp;by a majority of the Directors who are not parties to the Investment
Advisory Agreement or interested persons of any such party. The Investment Advisory Agreement
terminates on its assignment by either party, and may be terminated without penalty on not more
than 60&nbsp;days&#146; prior written notice at the option of either party thereto, or by the affirmative
vote of the holders of a majority of the Fund&#146;s outstanding voting securities.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Investment Advisory Agreement provides that the Fund may use &#147;Zweig&#148; as part of its name
for so long as the Investment Adviser serves as investment adviser to the Fund. The Fund has
agreed that, in the event the Investment Advisory Agreement is terminated, the Fund will promptly
take such actions as may be necessary to change its corporate name to one not containing the word
&#147;Zweig,&#148; and the Fund will thereafter not transact business in a corporate name using the word
&#147;Zweig&#148; in any form or combination whatsoever. Phoenix Investment Partners, Ltd. has obtained,
pursuant to an agreement, an exclusive worldwide license to use the word &#147;Zweig&#148; with respect to
its investment advisory business.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Sub-Advisory Agreement</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Sub-Advisory Agreement sets forth the services to be provided by and the fees to be paid
to the Sub-Adviser. The Sub-Adviser has been engaged by the Investment Adviser to perform asset
allocation techniques, research and analysis and provide advice thereon to the Investment Adviser.
Pursuant to the Sub-Advisory Agreement, the services are rendered by Dr.&nbsp;Martin E. Zweig and his
designated research associates on behalf of the Sub-Adviser.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;For services provided by the Sub-Adviser to the Fund under the Sub-Advisory Agreement, the
Investment Adviser will pay the Sub-Adviser an annual fee equal to 40% of the investment advisory
fees received by the Investment Adviser from the Fund, payable monthly in arrears.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Sub-Advisory Agreement will remain in effect until March 1 of each year, provided that
from year to year it has been approved annually (i)&nbsp;by the Board of Directors of the Fund or by the
holders of a majority of the Fund&#146;s outstanding voting securities, and (ii)&nbsp;by a majority of the
Directors who are not parties to the Sub-Advisory Agreement or interested persons of any such
party. The Sub-Advisory Agreement terminates on its assignment by either party, and may be
terminated without penalty on not more than 60&nbsp;days&#146; prior written notice at the option of the
Fund&#146;s Board of Directors, or by the affirmative vote of the holders of a majority of the Fund&#146;s
outstanding voting securities. In addition, either the Investment Adviser or the Sub-Adviser has
the right not to renew the Sub-Advisory Agreement by giving 60&nbsp;days&#146; prior written notice to the
other party.
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->47<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Administrator</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Administrator, Phoenix Equity Planning Corporation, serves as the Fund&#146;s administrator
pursuant to an assignment by Zweig/Glaser Advisers of the Administration Agreement dated March&nbsp;1,
1999 (the &#147;Administration Agreement&#148;). The Administrator generally assists in the administration
of the Fund&#146;s day to day corporate affairs, subject to the overall authority of the Fund&#146;s Board of
Directors. The Administrator determines the Fund&#146;s net asset value daily, prepares such figures
for publication on a weekly basis, maintains certain of the Fund&#146;s books and records that are not
maintained by the Investment Adviser, custodian or transfer agent, assists in the preparation of
financial information for the Fund&#146;s income tax returns, proxy statement, quarterly and annual
shareholder reports, assists in the preparation of Commission Reports and responds to shareholder
inquiries.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Fund pays the Administrator a monthly fee computed at an annual rate of 0.065% of the
Fund&#146;s average daily net assets during the previous month. Prior to March&nbsp;1, 2006, the Fund paid
the Administrator a monthly fee computed at an annual rate of 0.13% of the Fund&#146;s average daily net
assets during the previous month. For the fiscal years ended December&nbsp;31, 2006, 2005 and 2004, the
Fund accrued administrative fees of $361,210, $652,099, and $678,374.
</DIV>
<DIV align="left">
<A name="110"></A>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>DISTRIBUTIONS; DISTRIBUTION REINVESTMENT AND CASH PURCHASE PLAN</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Fund&#146;s policy is to make monthly distributions equal to 0.83% of its net asset value (10%
on an annualized basis), and a final distribution at year-end consisting of any remaining
undistributed net investment income and the Fund&#146;s realized net long-term capital gains in excess
of its capital loss carryforward. If, for any calendar year, the total distributions exceed net
investment income and net realized capital gains, the excess will generally be treated as a
tax-free return of capital (up to the amount of the shareholder&#146;s tax basis in his or her shares).
The amount treated as a tax-free return of capital will reduce a shareholder&#146;s adjusted basis in
his or her shares, thereby increasing his or her potential gain or reducing his or her potential
loss on the sale of his or her shares.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Fund had capital loss carryovers in the amount of $21.7&nbsp;million as of December&nbsp;31, 2006.
The Fund had total 2006 distributions of $47.9&nbsp;million of which $14.0&nbsp;million was net investment
income; $6.7&nbsp;million was current year gains taxable as ordinary income; and $27.3&nbsp;million in
distributions in excess of earnings and profits. The Fund paid out 10% in distributions of which
2.9% was income, 1.3% gains and 5.8% return of capital.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Capital loss carryovers will reduce or, possibly, eliminate the Fund&#146;s taxable capital gains
in the year(s) to which such losses are carried, but will not reduce the Fund&#146;s current earnings
and profits in such year(s). Consequently, a greater portion of the Fund&#146;s dividend distributions
in the year(s) to which the Fund carries and applies its capital loss carryovers may be taxable to
shareholders as ordinary income dividends than would be the case if the Fund did not have capital
loss carryovers. Moreover, to the extent that such ordinary income dividends are paid out of
capital gains or other non-dividend income of the Fund, they might not qualify for the 15%
preferential tax rate.
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->48<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Fund also might make distributions to shareholders that exceed the Fund&#146;s current
earnings and profits. In that event, because the Fund does not have positive accumulated earnings
and profits, the excess distributions will be a non-taxable return of capital to a shareholder to
the extent the distribution does not exceed the shareholder&#146;s tax basis in its Fund shares, but
will also reduce the shareholder&#146;s tax basis in its Fund shares.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In calculating the amount of each monthly distribution, the Fund&#146;s net asset value will be
measured as of the business day immediately preceding the declaration date of such distribution.
Pursuant to the requirements of the 1940 Act and other applicable laws, a notice will accompany
each monthly distribution with respect to the estimated source of the distribution made.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In the event the Fund distributes amounts in excess of its net investment income and net
realized capital gains, such distributions will decrease the Fund&#146;s total assets and, therefore,
have the likely effect of increasing the Fund&#146;s expense ratio. In addition, in order to make such
distributions, the Fund may have to sell a portion of its investment portfolio at a time when
independent investment judgment might not dictate such action.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Shares purchased pursuant to the Offer will be issued after the record date for the monthly
distribution declared in &#95;&#95;&#95;, and, accordingly, the Fund will not pay a monthly distribution
with respect to such Shares until the distribution to be declared and paid in the next month.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Shareholders may elect to receive all distributions in cash paid by check mailed directly to
the shareholder by Computershare, as dividend paying agent. Pursuant to the Fund&#146;s Automatic
Reinvestment and Cash Purchase Plan (or the &#147;Plan&#148;), shareholders not making such election will
have all such amounts automatically reinvested by Computershare, as the Plan agent, in whole or
fractional shares of the Fund, as the case may be.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If the Directors of the Fund declare a distribution payable either in shares or in cash, as
shareholders may have elected, then nonparticipants in the Plan will receive cash and participants
in the Plan will receive the equivalent in shares determined as follows: Whenever the market price
of the shares on the record date for the distribution is equal to or exceeds their net asset value,
participants will be issued shares at the higher of net asset value or 95% of the closing market
price of the shares on the NYSE on the previous trading day. If the shares&#146; net asset value at
such time exceeds their market price, or if the Fund should declare a distribution payable only in
cash, Computershare, as agent for the participants, will buy shares on the NYSE or elsewhere in the
open market, for the participants&#146; accounts. If, before Computershare has completed its purchases,
the market price equals or exceeds the net asset value of the shares, Computershare is permitted to
cease purchasing the shares in the open market and the Fund may issue the remaining shares at a
price equal to the higher of net asset value or 95% of the then market price. Computershare will
apply all cash received as a distribution to purchase shares on the open market as soon as
practicable after the payment date of such distribution, but in no event later than 30&nbsp;days after
such date, except where necessary to comply with applicable provisions of the Federal securities
laws.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Participants in the Plan have the option of making additional cash payments monthly to
Computershare for investment in the Fund&#146;s shares. Such payments may be made in any amount
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->49<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left" style="font-size: 10pt; margin-top: 6pt">from $100 to $3,000. Computershare will use all such payments received from participants to
purchase shares on the open market on or about the fifteenth day of each month (or the closest
business day thereto, if a weekend or holiday). To avoid unnecessary cash accumulations, and also
to allow ample time for receipt and processing by Computershare, it is suggested that participants
send voluntary cash payments to Computershare at least five business days prior to the date for
which a voluntary purchase is desired. A participant may withdraw a voluntary cash payment by
written notice, if the notice is received by Computershare at least five business days before such
payment is to be invested.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Computershare maintains all shareholder accounts in the Plan and furnishes written
confirmations of all transactions in the accounts, including information needed by shareholders for
personal and tax records. Shares in the account of each Plan participant will be held by
Computershare in non-certificated form in the name of the participant, and each shareholder&#146;s proxy
will include those shares purchased pursuant to the Plan.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;There is no charge to participants for reinvesting distributions or voluntary cash payments.
Computershare&#146;s fees for handling reinvestment of distributions will be paid by the Fund.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;There will be no brokerage charges with respect to shares issued directly by the Fund as a
result of distributions payable either in stock or in cash. However, each participant will pay a
pro-rata share of brokerage commissions incurred with respect to Computershare&#146;s open market
purchases in connection with the reinvestment of distributions as well as from voluntary cash
payments. With respect to purchases from voluntary cash payments, Computershare will charge each
participant a pro-rata share of the brokerage commissions. Brokerage charges for purchasing small
amounts of stock for individual accounts through the Plan are expected to be less than the usual
brokerage charges for such transactions, as Computershare will be purchasing shares for all
participants in blocks and prorating the lower commission thus attainable. Computershare may use
its affiliates and/or affiliates of the Investment Adviser for all trading activity relative to the
Plan on behalf of Plan participants. Such affiliates will receive a commission in connection with
such trading transactions.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If a shareholder desires to discontinue his or her participation in the Plan, the shareholder
may either (i)&nbsp;request Computershare to sell part or all of the shares in the account and remit the
proceeds to the shareholder, net of any brokerage commission, or (ii)&nbsp;ask Computershare for a
certificate for the number of full shares in his or her account, along with a check in payment for
any fractional shares.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Although many brokers do participate in the Plan on behalf of their customers, a participant
in the Plan who does change his or her broker may not be able to transfer the shares to another
broker and continue to participate in the Plan.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The automatic reinvestment of distributions will not relieve participants of any income tax
that may be payable on such distributions.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Experience under the Plan may indicate that changes are desirable. Accordingly, the Fund
reserves the right to amend or terminate the Plan as applied to any voluntary cash payments
</DIV>

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</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left" style="font-size: 10pt; margin-top: 6pt">made and any dividend or distribution paid subsequent to written notice of the change sent to
participants in the Plan. The Plan also may be amended or terminated by Computershare, with the
Fund&#146;s prior written consent, upon written notice sent to participants in the Plan. All
correspondence concerning the Plan should be directed to Computershare Trust Company, N.A., P.O.
Box 859208, Braintree, MA 02185.
</DIV>
<DIV align="left">
<A name="111"></A>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>DESCRIPTION OF COMMON STOCK</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The authorized capital stock of the Fund consists of 500,000,000 shares of Common Stock, par
value $0.001 per share, of which 93,448,955 shares were outstanding as of March&nbsp;14, 2007. The
Shares when issued, will be fully paid and nonassessable. All shares of Common Stock are equal as
to dividends, assets and voting privileges and have no conversion, preemptive or exchange rights.
In the event of liquidation, each share of Common Stock is entitled to its proportion of the Fund&#146;s
assets after payment of debts and expenses. Shareholders are entitled to one vote per share. All
voting rights for directors are non-cumulative, which means that the holders of more than 50% of
the shares of common stock can elect 100% of the directors if they choose to do so, and, in such
event, the holders of the remaining shares of common stock will not be able to elect any directors.
The Fund&#146;s outstanding shares of Common Stock are, and the Shares offered hereby will be, listed
on the NYSE under the symbol &#147;ZTR.&#148;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Fund has no present intention of offering additional shares beyond this Offer, except
that additional shares may be issued under the Distribution Reinvestment and Cash Purchase Plan.
See &#147;Distributions; Distribution Reinvestment and Cash Purchase Plan.&#148; Other offerings of its
Common Stock, if made, will require approval of the Fund&#146;s Board of Directors. Any additional
offering will be subject to the requirements of the 1940 Act that shares may not be sold at a price
below the then current net asset value (exclusive of underwriting discounts and commissions) except
in certain circumstances, including in connection with an offering to existing shareholders or with
the consent of a majority of the Fund&#146;s outstanding shareholders.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Repurchase of Shares; Tender Offers</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Fund is authorized to repurchase its shares on the open market when the shares are trading
at a discount from net asset value, and the Fund may incur debt to refinance share repurchase
transactions. In addition, pursuant to the 1940 Act, the Fund retains the right to repurchase its
shares under other circumstances on a securities exchange or such other open market designated by
the Commission (provided that the Fund has informed shareholders within the preceding six months of
its intention to repurchase such shares), by a tender offer open to all the Fund&#146;s shareholders, or
as otherwise permitted by the Commission. When a repurchase of Fund shares is to be made that is
not to be effected on a securities exchange or such an open market or by the making of a tender
offer, the 1940 Act provides that certain conditions must be met regarding, among other things,
distribution of net income, identity of the seller, price paid, brokerage commissions, prior notice
to shareholders of an intention to purchase shares and purchasing in a manner on a basis which does
not discriminate unfairly against the other shareholders indirectly through their interest in the
Fund. The Fund may incur debt to finance share repurchase transactions (see &#147;Investment
Restrictions&#148; in the SAI).
</DIV>

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</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;When the Fund repurchases its shares for a price below their net asset value, the net asset
value of the shares that remain outstanding will be enhanced, but this does not necessarily mean
that the market price of those outstanding shares will be affected, either positively or
negatively. The Fund has not repurchased any shares of its Common Stock.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Since the Fund&#146;s inception in 1988, the Board of Directors has maintained a policy pursuant to
which the Board of Directors considers the making of tender offers of the Fund each quarter during
periods when the Fund&#146;s shares are trading at a discount from net asset value. The Board may at any
time, however, decide that the Fund should not make tender offers. The net asset value at which
shares may be tendered will be established at the close of business on the last day the tender
offer is open. Since the Fund&#146;s inception, however, the Fund has not made any tender offers for the
shares of its Common Stock.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Any acquisition of shares by the Fund (whether through a share repurchase or a tender offer)
will decrease the total assets of the Fund and therefore have the effect of increasing the Fund&#146;s
expense ratio. Furthermore, if the Fund borrows to finance share repurchases or tender offers,
interest on such borrowings will reduce the Fund&#146;s net investment income. If the Fund must
liquidate a portion of its investment portfolio in connection with a share repurchase or tender
offer, such liquidation might be at a time when independent investment judgment might not dictate
such action and, accordingly, may increase the Fund&#146;s portfolio turnover and make it more difficult
for the Fund to achieve its investment objective.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Each person tendering shares will pay to the Fund a reasonable service charge to help defray
certain costs, including the processing of tender forms, effecting payment, postage and handling.
Any such service charge will be paid directly by the tendering shareholder and will not be deducted
from the proceeds of the purchase. The Fund&#146;s transfer agent will receive the fee as an offset to
these costs. The Fund expects the cost to the Fund of effecting a tender offer will exceed the
aggregate of all service charges received from those who tender their shares. Costs associated
with the tender will be charged against capital. During the pendency of any tender offer,
shareholders may ascertain the net asset value of the Fund&#146;s shares by calling a telephone number
as provided in any tender offer materials.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Provision For Conversion To Open-End Fund</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If during any fiscal quarter beginning on or after January&nbsp;1, 1990, the Fund&#146;s shares trade,
on the principal securities exchange on which they are traded, at an average discount from net
asset value of 10% or more (determined on the basis of the discount as of the end of the last
trading day in each week during such quarter), the Fund&#146;s Articles of Incorporation generally
require the Board of Directors to submit to shareholders a proposal to convert the Fund to an
open-end investment company (the &#147;Conversion Proposal&#148;). The Fund submitted a Conversion Proposal
to its shareholders in 2000, 2001 and 2004 since the Fund&#146;s shares had traded at an average
discount from net asset value of 10% or more during the quarter ended March&nbsp;31, 2000, the quarter
ended December&nbsp;31, 2000 and the quarter ended December&nbsp;31, 2003, respectively. The Fund&#146;s
shareholders did not approve the Conversion Proposal on any of those occasions. Approval of a
Conversion Proposal would require the affirmative vote of a majority of the
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->52<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left" style="font-size: 10pt; margin-top: 6pt">outstanding shares of the Fund entitled to be voted thereon. The Fund&#146;s Articles of
Incorporation provide, however, that a Conversion Proposal need not be submitted to shareholders
with respect to a quarter if a Conversion Proposal was submitted to shareholders with respect to
the immediately preceding quarter.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If the Fund converted to an open-end investment company, its shareholders could require the
company to redeem their shares at any time (except in certain circumstances as authorized by the
1940 Act) at the next determined net asset value of such shares, less such redemption charges, if
any, as might be in effect at the time of redemption, and such redemption payment must be made
within seven days. This may require changes in the Fund&#146;s
portfolio management, since such redemption requests could require the Fund&#146;s liquidation of a portion of its investment
portfolio at a time when independent investment judgment might not dictate such action and,
accordingly, may increase the Fund&#146;s portfolio turnover and make it more difficult for the Fund to
achieve its investment objective. In addition, if the Fund converted to an open-end investment
company, its shares would no longer be listed on any stock exchange,
and certain of the Fund&#146;s expenses (including transfer agency and shareholder services expenses) would be greater than
those that would be incurred by a closed-end investment company.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In the event the Fund&#146;s shareholders did not approve a proposal to convert the Fund to an
open-end investment company, the Fund would continue as a closed-end investment company, but
pursuant to the Fund&#146;s Articles of Incorporation, the Board of Directors would be required to
submit to the Fund&#146;s shareholders a subsequent Conversion Proposal with respect to any subsequent
quarter during which there was an average discount of 10% or more from net asset value, unless the
Conversion Proposal had been submitted to shareholders with respect to the immediately preceding
quarter. The Fund cannot predict whether any open market repurchases or tender offer purchases of
its shares made while the Fund is a closed-end investment company would decrease the discount from
net asset value. To the extent that any such open market repurchases or tender offer purchases
decreased the average discount from net asset value to below 10% for a fiscal quarter, the Fund
would not be required to submit to its shareholders the Conversion Proposal with respect to such
quarter.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Special Voting Provisions</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Fund has provisions in its Articles of Incorporation and By-Laws (collectively, the
&#147;Charter Documents&#148;) that could have the effect of limiting the ability of other entities or
persons to acquire control of the Fund, to cause it to engage in certain transactions or to modify
its structure. The Board of Directors is divided into three classes. At the annual meeting of
shareholders each year, the term of one class will expire and directors will be elected to serve in
that class for terms of three years. This provision could delay for up to two years the
replacement of a majority of the Board of Directors.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
maximum number of Directors (twelve)&nbsp;may be increased, or a Director may be removed from office, only by the affirmative vote of the holders of at least 75% of the
shares of the Fund entitled to be voted for the election of Directors. In addition, the affirmative
vote of the holders of 75% of the outstanding shares of the Fund is required to authorize the
conversion of the Fund from a closed-end to an open-end investment company (except pursuant
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->53<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left" style="font-size: 10pt; margin-top: 6pt">to the Conversion Proposal described above), to amend certain of the provisions of the Articles of
Incorporation or generally to authorize any of the following transactions:
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)&nbsp;merger or consolidation or statutory share exchange of the Fund with or into any other
corporation;
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)&nbsp;a sale of all or substantially all of the Fund&#146;s assets (other than in the regular course
of the Fund&#146;s investment activities); or
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii)&nbsp;a liquidation or dissolution of the Fund,
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;unless such action has been approved, adopted or authorized by the affirmative vote of
two-thirds of the total number of Directors fixed in accordance with the By-Laws, in which case the
affirmative vote of a majority of the Fund&#146;s outstanding shares is required. Such 75% voting
requirements described above, which are greater than the minimum requirements under Maryland law or
the Act, can only be changed by a similar 75% vote. Reference is made to the Charter Documents of
the Fund, on file with the Commission, for the full text of these provisions. See &#147;Further
Information.&#148;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The provisions of the Charter Documents described above and the Fund&#146;s right to repurchase or
make a tender offer for shares of its common stock could have the effect of depriving the owners of
shares of opportunities to sell their shares at a premium over prevailing market prices, by
discouraging a third party from seeking to obtain control of the Fund in a tender offer or similar
transaction. See &#147;Repurchase of Shares&#148; and &#147;Tender Offers.&#148;
</DIV>
<DIV align="left">
<A name="112"></A>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>TAXATION</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Federal Taxation of the Fund and its Distributions</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Fund has qualified and elected to be treated, and intends to continue to qualify and be
treated, as a regulated investment company under the Internal Revenue Code of 1986, as amended (the
&#147;Code&#148;). The Fund currently intends to distribute all or substantially all its investment company
taxable income (all taxable income and net short-term capital gains) and its net capital gain each
year, thereby avoiding the imposition on the Fund of Federal income and excise taxes on such
distributed income and gain. Such distributions from investment company taxable income, whether
paid in cash or in shares, will be taxable as ordinary income to shareholders of the Fund who are
subject to tax, and the Fund&#146;s capital gain distributions, whether paid in cash or in shares, will
be taxable as capital gain to such shareholders. Distributions in excess of the Fund&#146;s earnings
and profits will first reduce the adjusted tax basis of a shareholder&#146;s shares and, after such
adjusted tax basis is reduced to zero will constitute capital gain to such shareholder (assuming
such shares are held as a capital asset). For non-corporate U.S. shareholders, the Fund&#146;s capital
gains distributions and certain of its ordinary income distributions will be taxable at a maximum
marginal Federal income tax rate of 15%. Shareholders that are not subject to tax on their income
generally will not be required to pay tax on amounts distributed to them. Notwithstanding the
above, the Fund may decide to retain all or
</DIV>

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</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">part of any net capital gain for reinvestment. After the end of each taxable year, the Fund
will notify shareholders of the Federal income tax status of any distributions, or deemed
distributions, made by the Fund during such year. For a discussion of certain income tax
consequences to shareholders of the Fund, see &#147;Taxation&#148; in the SAI.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Federal Income Tax Consequences Relating to the Offer</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following discussion describes certain United States Federal income tax consequences of
the Offer generally applicable to citizens or residents of the United States and U.S. trusts,
estates, corporations and any other person who is generally subject to U.S. Federal income tax
(&#147;U.S. Shareholders&#148;). This summary is intended to be descriptive only and does not purport to be
a complete analysis or listing of all potential tax effects relevant to the ownership of Rights or
Common Stock. It assumes that each U.S. Shareholder holds Common Stock as a capital asset.
Additionally, this summary does not specifically address the U.S. Federal income tax consequences
that might be relevant to holders of Rights or Common Stock entitled to special treatment under the
U.S. Federal income tax laws, such as individual retirement accounts and other tax deferred
accounts, financial institutions, life insurance companies and tax-exempt organizations, and does
not discuss the effect of state, local and other tax laws. Further, this summary is based on
interpretations of existing law as of the date of this Prospectus as contained in the Code,
applicable current and proposed Treasury Regulations, judicial decisions and published
administrative positions of the Internal Revenue Service, all of which are subject to change either
prospectively or retroactively.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;U.S. Shareholders who receive Rights pursuant to the Offer should not recognize taxable income
for U.S. Federal income tax purposes upon their receipt of the Rights. If Rights issued to a U.S.
Shareholder expire without being sold or exercised, no basis should be allocated to such Rights,
and such Shareholder should not recognize any gain or loss for U.S. Federal income tax purposes
upon such expiration.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The tax basis of a U.S. Shareholder&#146;s Common Stock should remain unchanged and the
shareholder&#146;s basis in the Rights should be zero, unless such U.S. Shareholder affirmatively and
irrevocably elects (in a statement attached to such shareholder&#146;s U.S. Federal income tax return
for the year in which the Rights are received) to allocate the basis in the Common Stock between
such Common Stock and the Rights in proportion to their respective fair market values on the date
of distribution.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A U.S. Shareholder who exercises Rights should not recognize any gain or loss for U.S. Federal
income tax purposes upon the exercise. The tax basis of the newly acquired Common Stock should
equal the Subscription Price paid for the Common Stock (plus the basis, if any, allocated to the
Rights in the manner described in the immediately preceding paragraph). The holding period for
Common Stock acquired upon the exercise of Rights should begin on the date of exercise of the
Rights. See &#147;Taxation&#148; in the SAI.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Each U.S. Shareholder is urged to consult his or her own tax advisor with respect to the
specific Federal, state and local tax consequences to such U.S. Shareholder of receiving Rights in
this offer.
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->55<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="left">
<A name="113"></A>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>CUSTODIAN, DIVIDEND PAYING AGENT, TRANSFER AGENT AND REGISTRAR</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;State Street Bank and Trust Company, P.O. Box 5501, Boston, MA 02206-5501 serves as the Fund&#146;s
custodian. Computershare Trust Company, N.A., P.O. Box 859208, Braintree, Massachusetts 02185,
serves as the Fund&#146;s dividend paying agent, transfer agent and registrar.
</DIV>
<DIV align="left">
<A name="114"></A>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>EXPERTS</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The financial statements of the Fund for the year ended December&nbsp;31, 2006, and the financial
highlights included in this Prospectus, have been so included in reliance on the report of
PricewaterhouseCoopers LLP, Boston, Massachusetts, independent accountants, given on the authority
of said firm as experts in auditing and accounting.
</DIV>
<DIV align="left">
<A name="115"></A>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>LEGAL MATTERS</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The validity of the Shares under Maryland law will be passed on for the Fund by Venable LLP,
Baltimore, Maryland. Certain other matters may be passed on for the Fund by Katten Muchin Rosenman
LLP, New York, New York, which serves as counsel to the Fund.
</DIV>
<DIV align="left">
<A name="116"></A>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>FURTHER INFORMATION</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Further information concerning these securities and the Fund may be found in the Registration
Statement on file with the Commission, of which this Prospectus and the SAI incorporated by
reference herein constitute a part. Financial statements of the Fund for fiscal years ended
December&nbsp;31, 2005 and December&nbsp;31, 2006 are included in the Fund&#146;s annual reports to shareholders
for such years, copies of which are on file with and may be inspected at the Commission as
indicated below.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Fund is subject to the informational requirements of the Securities Exchange Act of 1934,
as amended (the &#147;Exchange Act&#148;), and the 1940 Act, and in accordance therewith, is required to file
periodic reports, proxy statements and other information with the Commission relating to its
business, financial condition and other matters. Such information is available for inspection at
the public reference facilities of the Commission at Room&nbsp;1024, 100 F Street, NE, Washington, DC
20549. Copies of such information are obtainable by mail, upon payment of the Commission&#146;s
customary charges, by writing to the Commission&#146;s principal office at 100 F Street, NE, Washington,
DC 20549 at prescribed rates. The Commission maintains a web site (http://www.sec.gov) that
contains periodic reports, proxy statements and other information regarding registrants that file
documents electronically with the Commission. Such reports and other information concerning the
Fund may also be inspected at the offices of the NYSE.
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->56<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="left">
<A name="117"></A>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>TABLE OF CONTENTS<BR>
OF<BR>
STATEMENT OF ADDITIONAL INFORMATION</B>
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="88%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">INVESTMENT OBJECTIVE AND POLICIES</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">INVESTMENT RESTRICTIONS</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">11</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">MANAGEMENT</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">13</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">INVESTMENT ADVISER AND SUB-ADVISER</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">21</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">PORTFOLIO MANAGERS</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">22</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">EXPENSES</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">25</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">PORTFOLIO TRANSACTIONS AND BROKERAGE</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">25</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">NET ASSET VALUE</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">27</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">TAXATION</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">27</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">INDEPENDENT ACCOUNTANTS</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">31</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">PRINCIPAL SHAREHOLDERS</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">31</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">FINANCIAL STATEMENTS</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">F-1</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>



<P align="center" style="font-size: 10pt"><!-- Folio -->57<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left" style="font-size: 10pt; margin-top: 6pt">No dealer, salesperson or any other person has been authorized to give any information or to make
any representations other than those contained in this Prospectus in connection with the offer made
by this Prospectus and, if given or made, such information or representations must not be relied
upon as having been authorized by the Fund, the Investment Adviser or the Sub-Adviser. This
Prospectus does not constitute an offer to sell or a solicitation of any offer to buy any security
other than the Shares of Common Stock offered by this Prospectus, nor does it constitute an offer
to sell or the solicitation of any offer to buy the Shares of Common Stock by anyone in any
jurisdiction in which such offer or solicitation is not authorized, or in which the person making
such offer or solicitation is not qualified to do so, or to any such person to whom it is unlawful
to make such offer or solicitation. Neither the delivery of this Prospectus nor any sale made
hereunder shall, under any circumstances, create any implication that information contained herein
is correct as of any time subsequent to the date hereof. However, if any material change occurs
while this Prospectus is required by law to be delivered, this Prospectus will be amended or
supplemented accordingly.
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><DIV align="center"><DIV style="font-size: 3pt; margin-top: 16pt; width: 26%; border-top: 1px solid #000000">&nbsp;</DIV></DIV>
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="88%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><A href="#101">Prospectus Summary</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">7</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><A href="#102">Financial Highlights</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">18</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><A href="#103">The Offer</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">20</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><A href="#104">Use of Proceeds</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">28</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><A href="#105">The Fund</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">29</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><A href="#106">Market Price and Net Asset Value
Information</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">30</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><A href="#107">Investment Objective and Policies</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">31</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><A href="#108">Risk Factors and Special Considerations</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">39</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><A href="#109">Management of the Fund</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">44</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><A href="#110">Distributions; Distribution Reinvestment
and Cash Purchase Plan</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">48</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><A href="#111">Description of Common Stock</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">51</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><A href="#112">Taxation</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">54</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><A href="#113">Custodian, Dividend Paying Agent,
Transfer Agent and Registrar</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">56</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><A href="#114">Experts</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">56</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><A href="#115">Legal Matters</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">56</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><A href="#116">Further Information</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">56</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><A href="#117">Table of Contents of Statement of
Additional Information</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">57</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><b>18,720,000 Shares of Common Stock</B>
</DIV>


<DIV align="Center" style="font-size: 10pt; margin-top: 6pt"><B>THE ZWEIG TOTAL RETURN FUND, INC.</B>

</DIV>

<DIV align="Center" style="font-size: 10pt; margin-top: 6pt"><B>Issuable Upon Exercise of<BR>
Non-Transferable Rights to<BR>
Subscribe for Such<BR>
Shares of Common Stock</B>

</DIV>

<DIV align="Center" style="font-size: 10pt; margin-top: 6pt"><DIV align="center"><DIV style="font-size: 3pt; margin-top: 16pt; width: 26%; border-top: 1px solid #000000">&nbsp;</DIV></DIV>

</DIV>

<DIV align="Center" style="font-size: 10pt; margin-top: 6pt"><B>PROSPECTUS</B>

</DIV>

<DIV align="Center" style="font-size: 10pt; margin-top: 6pt"><DIV align="center"><DIV style="font-size: 3pt; margin-top: 16pt; width: 26%; border-top: 1px solid #000000">&nbsp;</DIV></DIV>

</DIV>

<DIV align="Center" style="font-size: 10pt; margin-top: 6pt"><U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U><B>, 2007</B>

</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->59<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>The information in the Statement of Additional Information is not complete and may be changed.
These securities may not be sold until the registration statement filed with the Securities and
Exchange Commission is effective. The Statement of Additional Information is not an offer to sell
these securities and is not soliciting an offer to buy these securities in any state where the
offer is not permitted.</B>
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B><I>Subject to Completion, Dated </I></B><U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U><B><I>, </I></B>2007
</DIV>


<DIV align="Center" style="font-size: 10pt; margin-top: 6pt"><B>PART B</B>

</DIV>

<DIV align="Center" style="font-size: 10pt; margin-top: 6pt"><B>THE ZWEIG TOTAL RETURN FUND, INC.<BR>
900 Third Avenue, New York, N.Y. 10022</B>

</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><DIV align="center"><DIV style="font-size: 3pt; margin-top: 16pt; width: 26%; border-top: 1px solid #000000">&nbsp;</DIV></DIV>
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>STATEMENT OF ADDITIONAL INFORMATION</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This Statement of Additional Information (&#147;SAI&#148;) is not a Prospectus and should be read in
conjunction with the Fund&#146;s Prospectus, dated <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>, 2007 (the &#147;Prospectus&#148;). This SAI does
not include all information that a shareholder should consider before purchasing shares of the Fund
and investors should obtain and read the Prospectus prior to purchasing shares. A copy of the
Prospectus may be obtained without charge by calling the Fund&#146;s Information Agent, Georgeson, Inc.
Banks and Brokers should call (212)&nbsp;440-9800 collect and all other shareholders should call (866)
541-3552. You may also obtain a copy of the Prospectus on the Securities and Exchange Commission&#146;s
website (http://www.sec.gov). The address of the Fund is 900 Third Avenue, New York, New York
10022, and its telephone number is (212)&nbsp;451-1100. This SAI incorporates by reference the entire
Prospectus. Defined terms used herein shall have the same meaning as provided in the Prospectus.
The date of this SAI is <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>, 2007.
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><DIV align="center"><DIV style="font-size: 3pt; margin-top: 16pt; width: 26%; border-top: 1px solid #000000">&nbsp;</DIV></DIV>
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>TABLE OF CONTENTS</B>
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="88%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><A href="#118">INVESTMENT OBJECTIVE AND POLICIES</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><A href="#119">INVESTMENT RESTRICTIONS</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">11</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><A href="#120">MANAGEMENT</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">13</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><A href="#121">INVESTMENT ADVISER AND SUB-ADVISER</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">21</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><A href="#122">PORTFOLIO MANAGERS</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">22</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><A href="#123">EXPENSES</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">25</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><A href="#124">PORTFOLIO TRANSACTIONS AND BROKERAGE</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">25</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><A href="#125">NET ASSET VALUE</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">27</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><A href="#126">TAXATION</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">27</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><A href="#127">INDEPENDENT ACCOUNTANTS</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">31</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><A href="#128">PRINCIPAL SHAREHOLDERS</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">31</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><A href="#129">FINANCIAL STATEMENTS</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">F-1</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->2<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left">
<A name="118"></A>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>INVESTMENT OBJECTIVE AND POLICIES</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Fund&#146;s investment objective is to seek the highest total return, consisting of capital
appreciation and current income, consistent with the preservation of capital. The Fund will invest
up to 65% of its total assets in U.S. government securities, non-convertible debt securities of
domestic issuers rated among the two highest rating categories of either Moody&#146;s Investors
Services, Inc. (&#147;Moody&#146;s&#148;) or Standard &#038; Poor&#146;s Corporation (&#147;S&#038;P&#148;) (or, if unrated, of comparable
quality as determined by the Investment Adviser), and certain foreign government securities
(collectively, the &#147;Bond Investments&#148;), and up to 50% of its total assets in equity securities
comprised of common, preferred and convertible preferred stock. The equity investments will be in
primarily large-capitalization companies but may also be in investments in small- or
medium-capitalization companies. The Fund may, however, under certain circumstances, invest up to
75% of its total assets in equity securities, as determined by the Fund&#146;s Investment Adviser. The
Fund also, as part of its Bond Investments, may invest up to 10% of its total assets in
non-convertible debt securities rated below the two highest categories of Moody&#146;s or S&#038;P (or, if
unrated, of comparable quality as determined by the Investment Adviser).
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Investment Adviser engages the Fund&#146;s Sub-Adviser to perform asset allocation research and
analysis and provide advice thereon to the Investment Adviser. The extent of the Fund&#146;s investment
in debt and equity securities will be determined primarily on the basis of asset allocation
techniques developed by Dr.&nbsp;Martin E. Zweig, President of the Fund&#146;s Sub-Adviser, and his staff.
While the Investment Adviser seeks to reduce the risks associated with investing in debt and equity
securities by using these techniques, such risks cannot be eliminated. There is no assurance that
the Fund will achieve its investment objective. See &#147;Investment Objective and Policies&#148; in the
Prospectus.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following describes certain investment strategies in which the Investment Adviser may
engage, on behalf of the Fund, each of which may involve certain special risks.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Futures Contracts and Related Options</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Fund may purchase or sell futures contracts for any purpose deemed appropriate. Upon
entering into a futures contract, the Fund will initially be required to deposit with the custodian
an amount of initial margin using cash or U.S. Treasury bills equal to approximately 2% to 5% of
the contract amount. The nature of initial margin in futures transactions is different from that
of margin in securities transactions in that the futures contract initial margin does not involve
the borrowing of funds by customers to finance the transactions. Rather, the initial margin is in
the nature of a performance bond or good faith deposit on the contract which is returned to the
Fund upon termination of the futures contract, assuming all contractual obligations have been
satisfied. In addition to initial margin, the Fund is required to specifically designate on its
accounting records cash, liquid debt obligations, liquid equity securities or cash equivalents in
an amount equal to the notional value of all long futures contracts, less the initial margin
amount, to ensure that the use of such futures contracts is not leveraged. If the value of the
securities specifically designated declines, additional securities, cash or cash equivalents must
be specifically designated on the accounting records of the Fund so that the value of the
</DIV>

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</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left" style="font-size: 10pt; margin-top: 6pt">account will at least equal the amount of the Fund&#146;s commitments with respect to such futures
contracts.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Subsequent payments, called maintenance margin, to and from the broker, will be made on a
daily basis as the price of the underlying security fluctuates, making the long and short positions
in the futures contract more or less valuable, a process known as &#147;marking to the market.&#148; For
example, when the Fund has purchased a futures contract and the price of the underlying security
has risen, that position will have increased in value and the Fund will receive from the broker a
maintenance margin payment equal to that increase in value. Conversely, when the Fund has
purchased a futures contract and the price of the underlying security has declined, the position
would be less valuable and the Fund would be required to make a maintenance margin payment to the
broker. At any time prior to expiration of the futures contract, the Fund may elect to close the
position by taking an opposite position which will operate to terminate the Fund&#146;s position in the
futures contract. A final determination of maintenance margin is then made, additional cash is
required to be paid by or released to the Fund, and the Fund realizes a loss or a gain.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;While futures contracts based on securities provide for the delivery and acceptance of
securities, such deliveries and acceptances are very seldom made. Generally, the futures contract
is terminated by entering into an offsetting transaction. An offsetting transaction for a futures
contract sale is effected by the Fund entering into a futures contract purchase for the same
aggregate amount of the specific type of financial instrument with the same delivery date. If the
price in the sale exceeds the price in the offsetting purchase, the Fund immediately is paid the
difference and thus realizes a gain. If the offsetting purchase price exceeds the sales price, the
Fund pays the difference and realizes a loss. Similarly, the closing out of a futures contract
purchase is effected by the Fund entering into a futures contract sale. If the offsetting sale
price exceeds the purchase price, the Fund realizes a gain, and if the purchase price exceeds the
offsetting price, the Fund realizes a loss.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;There are several risks in trading futures contracts. Market prices of futures contracts may
be affected by certain factors. First, all participants in the futures market are subject to
initial margin and maintenance margin requirements. Rather than meeting maintenance margin
requirements, investors may close futures contracts through offsetting transactions which could
distort the normal relationship between the securities and futures markets. Second, from the point
of view of speculators, the margin requirements in the futures market are less onerous than margin
requirements in the securities market. Therefore, increased participation by speculators in the
futures market may also cause temporary price distortions.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In addition, the hours of trading for futures contracts may not conform to the hours during
which the underlying securities are traded. To the extent that the futures contracts markets close
after the markets for the underlying securities, significant price movements can take place in the
futures contracts markets that cannot be reflected in the markets of the underlying securities.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Positions in futures contracts may be closed out only on an exchange or board of trade which
provides a secondary market for such futures. Although the Fund intends to purchase or sell
futures only on exchanges or boards of trade where there appears to be an active secondary market,
there is no assurance that a liquid secondary market on an exchange or board of trade
</DIV>

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</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left" style="font-size: 10pt; margin-top: 6pt">will exist for any particular contract or at any particular time. In such event, it may not
be possible to close a futures position and, in the event of adverse price movements, the Fund
would continue to be required to make daily cash payments of maintenance margin.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;There are risks in trading futures contracts, even if such contracts are used for risk
management purposes. One such risk arises due to the imperfect correlation between movements in
the price of the futures contracts and movements in the price of the underlying securities. The
price of the futures contract may move more than or less than the price of the securities.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If the price of the futures contracts moves less than the price of the underlying securities,
the transaction will not be fully effective, but, if the price of the securities has moved in an
unfavorable direction, the Fund would be in a better position than if it had not entered into a
futures transaction at all. If the price of the securities has moved in a favorable direction,
this advantage will be partially offset by the movement in the price of the futures contract. If
the price of the futures contract moves more than the price of the security, the Fund will
experience either a loss or gain on the futures which will not be completely offset by movements in
the prices of the underlying securities.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;To compensate for the imperfect correlation of such movements in price, the Fund may buy or
sell futures contracts in a greater dollar amount than the dollar amount of the underlying
securities if the historical volatility of the prices of such securities have been greater than the
historical volatility of the futures contracts. Conversely, the Fund may buy or sell fewer futures
contracts if the historical volatility of the prices of the underlying securities is less than the
historical volatility of the futures contracts.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;It is also possible that, where the Fund has sold futures to protect its portfolio against a
decline in the market, the market may advance and the value of securities held in the Fund&#146;s
portfolio may decline. If this occurred, the Fund would lose money on the futures contracts and
also experience a decline in value in its portfolio securities. However, while this could occur
for a very brief period or to a very small degree, over time the value of a diversified portfolio
will tend to move in the same direction as the futures contracts.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Where futures are purchased to protect against a possible increase in the cost of securities
before the Fund is able to invest its cash (or cash equivalents) in an orderly fashion, it is
possible that the market may decline instead; if the Fund then concludes not to invest in the
relevant securities at that time because of concern as to possible further market decline or for
other reasons, the Fund will realize a loss on the futures contract that is not offset by a
reduction in the price of securities purchased.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Due to the possibility of price distortion in the futures market and because of the imperfect
correlation between movements in securities and movements in the prices of futures contracts, a
correct forecast of market trends by the Investment Adviser may still not result in a successful
risk management transaction over a very short period of time.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Security and Stock Index Options</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;When the Fund writes an option, an amount equal to the premium received by the Fund is
recorded as an asset and as an offsetting liability. The amount of the liability is &#147;marked-to-
</DIV>

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</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left" style="font-size: 10pt; margin-top: 6pt">market&#148; daily to reflect the current market value of the option, which is the last sale price
on the principal exchange on which such option is traded or, in the absence of a sale, the mean
between the latest bid and offering prices. If an option written by the Fund expires, or the Fund
enters into a closing purchase transaction, the Fund will realize a gain (or, in the latter case, a
loss, if the cost of a closing transaction exceeds the premium received) and the liability related
to such option will be extinguished.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The premium paid by the Fund for the purchase of a put option (its cost) is recorded initially
as an investment, the value of which is subsequently adjusted to the current market value of the
option. If the current market value of a put option exceeds its premium, the excess represents
unrealized appreciation; conversely, if the premium exceeds the current market value, the excess
represents unrealized depreciation. The current market value of an option purchased by the Fund
equals the option&#146;s last sale price on the principal exchange on which it is traded or, in the
absence of a sale, the mean between the latest bid and offering prices.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Fund may cover written call options with any assets, including equity securities and
noninvestment grade debt so long as the assets are liquid, unencumbered and marked to market daily
(&#147;liquid assets&#148;), specifically designated on the accounting records of the Fund in amounts
sufficient to ensure that it is able to meet its obligations under the written call option should
it be exercised. This method does not reduce the potential loss to the Fund should the value of
the underlying security increase and the option be exercised.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A written put option may be covered with liquid assets specifically designated on the
accounting records of the Fund. While this may help ensure that a Fund will have sufficient assets
to meet its obligations under the option contract should it be exercised, it will not reduce the
potential loss to the Fund should the value of the underlying security decrease and the option be
exercised.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;An option position may be closed out only on an exchange which provides a secondary market for
an option of the same series. Although the Fund generally will purchase or write only those
options for which there appears to be an active secondary market, there is no assurance that a
liquid secondary market on an exchange will exist for any particular option, or at any particular
time, and for some options no secondary market on an exchange may exist. In such event, it might
not be possible to effect closing transactions in particular options, with the result that the Fund
would have to exercise its options in order to realize any profit and would incur transaction costs
on the sale of underlying securities pursuant to the exercise of put options. If the Fund, as a
covered call option writer, is unable to effect a closing purchase transaction in a secondary
market, it will not be able to sell the underlying security until the option expires or it delivers
the underlying security upon exercise.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Reasons for the absence of a liquid secondary market on an exchange include the following: (a)
there may be insufficient interest in trading certain options; (b)&nbsp;restrictions may be imposed by
an exchange on opening transactions or closing transactions or both; (c)&nbsp;trading halts, suspensions
or other restrictions may be imposed with respect to particular classes or series of options or
underlying securities; (d)&nbsp;unusual or unforeseen circumstances may interrupt normal operations on
an exchange; (e)&nbsp;the facilities of an exchange or the Options Clearing Corporation (the &#147;OCC&#148;) may
not at all times be adequate to handle current trading volume; or
</DIV>

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</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">(f)&nbsp;one or more exchanges might, for economic or other reasons, decide or be compelled at some
future date to discontinue the trading of options (or a particular class or series of options), in
which event the secondary market on that exchange (or in that class or series of options) would
cease to exist, although outstanding options on that exchange that had been issued by the OCC as a
result of trades on that exchange would continue to be exercisable in accordance with their terms.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In addition, there is no assurance that higher-than-anticipated trading activity or other
unforeseen events might not, at times, render certain of the facilities of the OCC inadequate, and
thereby result in the institution by an exchange of special procedures which may interfere with the
timely execution of customers&#146; orders.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The amount of the premiums which the Fund may pay or receive may be adversely affected as new
or existing institutions, including other investment companies, engage in or increase their option
purchasing and writing activities.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In the event of a shortage of the underlying securities deliverable on exercise of a listed
option, the OCC has the authority to permit other, generally comparable securities to be delivered
in fulfillment of option exercise obligations. If the OCC exercises its discretionary authority to
allow such other securities to be delivered, it may also adjust the exercise prices of the affected
options by setting different prices at which otherwise ineligible securities may be delivered. As
an alternative to permitting such substitute deliveries, the OCC may impose special exercise
settlement procedures.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Exchange Traded Funds</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Fund may invest in passively managed registered open-end investment companies or other
baskets of securities, such as unit investment trusts, which trade on a national securities
exchange or NASDAQ and are commonly called exchange-traded funds (&#147;ETFs&#148;). These investments
represent shares of ownership in ETFs that hold portfolios of securities which are designed to
generally correspond to and closely track the price and yield performance of an index of
securities. Accordingly, ETFs have risks similar to those of stocks and are subject to market
volatility. Investment returns may fluctuate so that invested shares, when redeemed or sold, may be
worth more or less than their original cost. ETFs may include, among others, the Nasdaq-100 Index
Tracking Stock (QQQ), Standard &#038; Poor&#146;s Depositary Receipts (SPDRS), the DIAMONDS Trust, and other
ETF&#146;s as determined from time to time by the Investment Adviser.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Foreign Securities</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Fund may invest up to up to 10% of its total assets in securities of foreign issuers and
10% of its total assets in obligations issued or guaranteed by one or more foreign governments or
any of their political subdivisions, agencies or instrumentalities (&#147;Foreign Government
Securities&#148;). Investments in foreign securities offer potential benefits not available through
investment solely in securities of domestic issuers. Foreign securities offer the opportunity to
invest in foreign issuers that appear to have growth potential, or in foreign countries with
economic policies or business cycles different from those of the United States, or to reduce
fluctuations in portfolio value by taking advantage of foreign markets that do not move in a
</DIV>

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</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left" style="font-size: 10pt; margin-top: 6pt">manner parallel to United States markets. The Fund may also enter into foreign currency
transactions in connection with its investment activity in foreign securities.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Investments in foreign securities present special additional risks and considerations not
typically associated with investments in domestic securities. Foreign investments may be affected
by changes in foreign currency rates and exchange control regulations. There may be less
information available about a foreign company than a domestic company, and foreign companies may
not be subject to accounting, auditing and reporting standards and requirements comparable to those
applicable to domestic companies. Foreign securities may be less liquid and subject to greater
price volatility than domestic securities. Foreign brokerage commissions and custodial fees are
generally higher than those in the United States. The foreign markets also have different
clearance and settlement procedures and in certain markets there have been times when settlements
have been unable to keep pace with the volume of securities transactions, making it difficult to
conduct such transactions. Delays or problems with settlements might affect the liquidity of the
Fund&#146;s portfolio and might adversely affect the Fund&#146;s performance. Foreign investments may also
be subject to local economic or political risks, political instability and possible nationalization
of issuers or expropriation of their assets which might adversely affect the Fund&#146;s ability to
realize or liquidate its investment in such securities. Furthermore, some foreign securities are
subject to brokerage taxes levied by foreign governments, which have the effect of increasing the
cost of such investment and reducing the realized gain or increasing the realized loss on such
securities at the time of sale. Furthermore, legal remedies for defaults and disputes may have to
be pursued in foreign courts whose procedures differ substantially from those of the U.S. courts.
In the event of a default in payment on foreign securities, the Fund may incur increased costs to
obtain and/or to enforce a judgment against the foreign issuer (or the other parties to the
transaction) in the United States or abroad, and no assurance can be given that the Fund will be
able to collect on any such judgment.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Income earned or received by the Fund from sources within foreign countries may be reduced by
withholding and other taxes imposed by such countries. Tax conventions between certain countries
and the United States, however, may reduce or eliminate such taxes. Any such taxes paid by the
Fund will reduce its net income available for distribution to shareholders.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Pursuant to the provisions of Rule&nbsp;17f-5 under the Investment Company Act of 1940, as amended
(the &#147;1940 Act&#148;), the Fund&#146;s Board of Directors has delegated to the Fund&#146;s Custodian, State Street
Bank and Trust Company, as the Fund&#146;s Foreign Custody Manager the responsibilities for selecting
and monitoring any foreign custodians that may be used in connection with the Fund&#146;s investments in
foreign securities. Pursuant to and subject to the terms and conditions of the Custodian Contract
between State Street Bank and Trust Company and the Fund, State Street Bank and Trust Company will,
among other things, (i)&nbsp;determine that the assets held by foreign custodians are subject to
reasonable care, based on the standards applicable to custodians in the relevant market in which
such foreign custodian operates, (ii)&nbsp;determine that the foreign custodial arrangements are
governed by a written contract that provides reasonable care for the Fund&#146;s assets based on such
standards, (iii)&nbsp;establish a system to monitor the appropriateness of maintaining the Fund&#146;s assets
with a particular foreign custodian and any material changes in such contract, and (iv)&nbsp;report to
the Fund&#146;s Board of Directors with respect to the Fund&#146;s foreign custodial arrangements.
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->8<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Closed-End Investment Companies</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;When the Fund invests in other closed-end investment companies, the investments made by such
other investment companies will be effected by independent investment managers, and the Fund will
have no control over the investment management, custodial arrangements or operations of any
investments made by such investment managers. Some of the funds in which the Fund may invest could
also incur more risks than would be the case for direct investments made by the Fund. For example,
they may engage in investment practices that entail greater risks or invest in companies whose
securities and other investments are more volatile. In addition, the funds in which the Fund
invests may or may not have the same fundamental investment limitations as those of the Fund
itself. While a potential benefit of investing in closed-end investment companies would be to
realize value from a decrease in the discount from net asset value at which some closed-end funds
trade, there is also the potential that such discount could grow, rather than decrease.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;By investing in investment companies indirectly through the Fund, a shareholder of the Fund
will bear not only a proportionate share of the expenses of the Fund (including operating costs and
investment advisory and administrative fees) but also, indirectly, similar expenses of the
investment companies in which the Fund invests. The Fund will not (i)&nbsp;own more than 3% of the
voting securities of any one investment company; (ii)&nbsp;invest more than 5% of its assets in the
securities of any one investment company; or (iii)&nbsp;invest more than 10% of its assets in securities
issued by other investment companies.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Short Sales</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Fund may from time to time make short sales of securities. A short sale is a transaction
in which the Fund sells a security it does not own in anticipation of a decline in market price.
The Fund may make short sales to offset a potential decline in a long position or a group of long
positions, or if the Investment Adviser believes that a decline in the price of a particular
security or group of securities is likely. The Fund may also make short sales in an attempt to
maintain portfolio flexibility and facilitate the rapid implementation of investment strategies if
the Investment Adviser believes that the price of a particular security or group of securities is
likely to decline.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;When the Fund determines to make a short sale of a security, it must borrow the security. The
Fund&#146;s obligation to replace the security borrowed in connection with the short sale will be fully
secured by the proceeds from the short sale retained by the broker and by cash or liquid securities
deposited in a segregated account with the Fund&#146;s custodian. The Fund may have to pay a premium to
borrow the security. The Fund must also pay any dividends or interest payable on the security
until the Fund replaces the security.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If the price of the security sold short increases between the time of the short sale and the
time the Fund replaces the borrowed security, the Fund will incur a loss, and if the price declines
during this period, the Fund will realize a capital gain. Any realized capital gain will be
decreased, and any incurred loss increased, by the amount of transaction costs and any premium,
dividend or interest which the Fund may have to pay in connection with such short sale.
</DIV>

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</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In addition to the short sales described above, the Fund may make short sales &#147;against the
box.&#148; A short sale &#147;against the box&#148; is a short sale where, at the time of the short sale, the
Fund owns or has the immediate and unconditional right, at no added cost, to obtain the identical
security. The Fund would enter into such a transaction to defer a gain or loss for Federal income
tax purposes on the security owned by the Fund. Short sales against the box are not subject to the
collateral requirements described above or the percentage limitations on short sales described
below.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Fund may make a short sale only if, at the time the short sale is made and after giving
effect thereto, the market value of all securities sold short is 25% or less of the value of its
net assets and the market value of securities sold short which are not listed on a national
securities exchange does not exceed 10% of the Fund&#146;s net assets.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>When-Issued and Delayed-Delivery Securities</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Fund may purchase securities on a when-issued or forward commitment basis. These
transactions are also known as delayed-delivery transactions. (The phrase &#147;delayed delivery&#148; is
not intended to include purchases where a delay in delivery involves only a brief period required
by the selling partly solely to locate appropriate certificates and prepare them for submission for
clearance and settlement in the customary way.) Delayed-delivery transactions involve a commitment
by the Fund to purchase or sell securities at a future date (ordinarily up to 90&nbsp;days later). The
price of the underlying securities (usually expressed in terms of yield) and the date when the
securities will be delayed and paid for (the settlement date) are fixed at the time the transaction
is negotiated. When-issued purchases and forward commitments are negotiated directly with the
selling party.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;When-issued purchases and forward commitments enable the Fund to lock in what is believed to
be an attractive price or yield on a particular security for a period of time, regardless of future
changes in interest rates. For example, in periods of rising interest rates and falling bond
prices, the Fund might sell debt securities it owns on a forward commitment basis to limit its
exposure to falling prices. In periods of falling interest rates and rising prices, the Fund might
sell securities it owns and purchase the same or similar securities on a when-issued or forward
commitment basis, thereby obtaining the benefit of currently higher yields. The Fund will not
enter into such transactions for the purpose of leverage.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The value of securities purchased on a when-issued or forward commitment basis and any
subsequent fluctuations in their value will be reflected in the Fund&#146;s net asset value starting on
the date of the agreement to purchase the securities, and the Fund will be subject to the rights
and risks of ownership of the securities on that date. The Fund will not earn interest on
securities it has committed to purchase until they are paid for and received.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;When the Fund makes a forward commitment to sell securities it owns, the proceeds to be
received upon settlement will be included in the Fund&#146;s assets. Fluctuations in the market value
of the underlying securities will not be reflected in the Fund&#146;s net asset value as long as the
commitment to sell remains in effect. Settlement of when-issued purchases and forward commitment
transactions generally takes place up to 90&nbsp;days after the date of the transactions, but the Fund
may agree to a longer settlement period.
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->10<!-- /Folio -->
</DIV>

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<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Fund will make commitments to purchase securities on a when-issued basis or to purchase or
sell securities on a forward commitment basis only with the intention of completing the transaction
and actually purchasing or selling the securities. If deemed advisable as a matter of investment
strategy, however, the Fund may dispose of or renegotiate a commitment after it is entered into.
The Fund also may sell securities it has committed to purchase before those securities are
delivered to the Fund on the settlement date. The Fund may realize a capital gain or loss in
connection with these transactions.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;When the Fund purchases securities on a when-issued or forward-commitment basis, the Fund will
specifically designate on its accounting records securities having a value (determined daily) at
least equal to the amount of the Fund&#146;s purchase commitments. These procedures are designed to
ensure that the Fund will maintain sufficient assets at all times to cover its obligations under
when-issued purchase and forward commitments.
</DIV>
<DIV align="left">
<A name="119"></A>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>INVESTMENT RESTRICTIONS</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Fund has adopted the following fundamental policies which cannot be changed without the
approval of the holders of a majority of its outstanding voting securities (as defined under
&#147;Investment Objective and Policies&#148; in the Prospectus). Except as otherwise noted, all percentage
limitations set forth below apply immediately after a purchase or initial investment, and any
subsequent change in any applicable percentage resulting from market fluctuations does not require
elimination of any security or other investment from the portfolio. The Fund may not:
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.&nbsp;With respect to 75% of its total assets, invest in securities of any one issuer if
immediately after and as a result of such investment more than 5% of the total assets of the Fund,
taken at market value, would be invested in the securities of such issuer. This investment
restriction does not apply to investments in U.S. Government Securities.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.&nbsp;Purchase more than 10% of the outstanding voting securities, or any class of securities, of
any one issuer. This investment restriction does not apply to investments in U.S. Government
Securities.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.&nbsp;Purchase securities which would cause 25% or more of its total assets at the time of such
purchase to be concentrated in the securities of issuers engaged in any one particular industry or
group of related industries. This investment restriction does not apply to investments in U.S.
Government Securities.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.&nbsp;Purchase or sell real estate; provided that the Fund may invest in securities secured by
real estate or real estate interests or issued by companies which invest in real estate or real
estate interests.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.&nbsp;Purchase any securities on margin. For purposes of this investment restriction, the
following do not constitute margin purchases: (i)&nbsp;effecting short sales, to the extent permitted by
9. below, (ii)&nbsp;making margin deposits in connection with any futures contracts or any options the
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->11<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Fund may purchase, sell or write, or (iii)&nbsp;entering into any currency transactions.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.&nbsp;Lend any funds or other assets, except that the Fund may purchase publicly distributed debt
obligations (including repurchase agreements) consistent with its investment objective and
policies, and the Fund may make loans of portfolio securities if such loans do not cause the
aggregate amount of all outstanding securities loans to exceed 33 1/3% of the Fund&#146;s total assets,
provided that the loan is collateralized by cash or cash equivalents or U.S. Government Securities
in an amount equal, on a daily basis, to the market value of the securities loaned.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.&nbsp;Borrow money (through reverse repurchase agreements or otherwise), except (i)&nbsp;for temporary
emergency purposes in amounts not in excess of 5% of the value of the Fund&#146;s total assets at the
time the loan is made; or (ii)&nbsp;in an amount not greater than 33 1/3% of the Fund&#146;s total assets.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.&nbsp;Issue senior securities, as defined in the 1940 Act, or mortgage, pledge, hypothecate or in
any manner transfer, as security for indebtedness, any securities owned or held by the Fund except
as may be necessary in connection with borrowings mentioned in 7, above. For the purposes of this
investment restriction and 7, above, collateral or escrow arrangements with respect to the making
of short sales, writing of stock options, purchase of securities on a forward commitment or
delayed-delivery basis, and purchase of foreign currency forward contracts and collateral
arrangements with respect to margin for futures contracts and foreign currency forward contracts or
related options are not deemed to be a pledge of assets and neither such arrangements nor the
purchase or sale of futures contracts, foreign currency forward contracts or related options are
deemed to be the issuance of a senior security.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.&nbsp;Make any short sales of securities, unless at the time the short sale is made and after
giving effect thereto, (i)&nbsp;the market value of all securities sold short is 25% or less of the
value of the Fund&#146;s total assets, (ii)&nbsp;the market value of such securities sold short which are not
listed on a national securities exchange does not exceed 10% of the Fund&#146;s total assets, (iii)&nbsp;the
market value of all securities of any one issuer sold short does not exceed 2% of the Fund&#146;s total
assets, (iv)&nbsp;short sales are not made of more than 2% of the outstanding securities of one class of
any issuer, and (v)&nbsp;the Fund maintains collateral deposits consisting of cash or U.S. Government
Securities in a segregated account which, together with collateral deposited with the
broker-dealer, are at all times equal to 100% of the current market value of the securities sold
short. This investment restriction does not apply to short sales &#147;against the box.&#148; For the
purposes of this investment restriction, sales of securities on a when-issued or delayed-delivery
basis are not considered to be short sales.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.&nbsp;Underwrite securities of other issuers except insofar as it might be deemed to be an
underwriter for purposes of the Securities Act of 1933, as amended, in the resale of any securities
held in its own portfolio.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.&nbsp;Invest more than 10% of the Fund&#146;s total assets in securities that at the time of purchase
are subject to restrictions on disposition under the Securities Act of 1933, as amended.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12.&nbsp;Purchase or sell commodities or commodity or futures contracts or options on
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->12<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left" style="font-size: 10pt; margin-top: 6pt">commodity or futures contracts except in compliance with such rules and interpretations of the
Commodity Futures Trading Commission which exempt the Fund from regulation as a commodity pool
operator.
</DIV>
<DIV align="left">
<A name="120"></A>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>MANAGEMENT</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Directors and Officers</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The names and addresses of the Directors and Officers of the Fund are set forth below,
together with their positions and their principal occupations during the past five years and, in
the case of the Directors, their positions with certain other organizations and companies.
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><U>DISINTERESTED DIRECTORS</U>
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="18%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="14%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="36%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">Number of</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center">Term of</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">Portfolios in</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center">Office and</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">Fund</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="center">Name, Address, Age</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center">Length of</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">Complex</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center">Principal Occupation(s)</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="center">and</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center">Time</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">Overseen by</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center">During Past 5 Years and</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="center" style="border-bottom: 1px solid #000000">Position(s) with Fund</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" style="border-bottom: 1px solid #000000">Served</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000">Director</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" style="border-bottom: 1px solid #000000">Other Directorships Held</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:15px; text-indent:-15px">Charles H. Brunie<br>
<br>Brunie Associates
<br>320 Park Avenue,
<br>10<SUP style="font-size: 85%; vertical-align: text-top">th</SUP> Floor
<br>New York, NY 10022
<br><br>DOB: 7/17/30
<br><br>Director
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
Term: Until 2009.<br>
<br>Served since: 1988.
</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">2</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Director, The Zweig
Fund, Inc. (since
1998); Chairman,
Brunie Associates
(investments) (since
April&nbsp;2001);
Oppenheimer Capital
(1969-2000), Chairman
(1980-1990), Chairman
Emeritus (1990-2000);
Chairman Emeritus,
Board of Trustees,
Manhattan Institute
(since 1990); Trustee,
Milton and Rose D.
Friedman Foundation for
Vouchers (since 1999);
Trustee, Hudson
Institute (since 2002);
Trustee, American
Spectator (since 2002);
Chartered Financial
Analyst (since 1969).</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:15px; text-indent:-15px">Wendy Luscombe<BR> <BR>
480 Churchtown Rd.<BR>
Craryville, NY 12521<BR><BR>
DOB: 10/29/51<BR><BR>
Director
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Term: Until 2008. <BR><BR>
Served since: 2002.
</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">2</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Director of The
Zweig Fund, Inc.
(since 2002);
Co-lead Independent
Director of the
Zweig Total Return
Fund, Inc. and of
The Zweig Fund,
Inc. (since 2006);
Principal, WKL
Associates, Inc.
(Real Estate
Investment
Consultant) (since
1994); Fellow,
Royal Institution
of Chartered
Surveyors; Member,
Chartered Institute
of Arbitrators;
Director, Endeavour
Real Estate
Securities, Ltd.
(2000-2006);</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->13<!-- /Folio -->
</DIV>

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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="18%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="14%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="36%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">Number of</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center">Term of</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">Portfolios in</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center">Office and</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">Fund</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="center">Name, Address, Age</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center">Length of</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">Complex</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center">Principal Occupation(s)</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="center">and</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center">Time</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">Overseen by</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center">During Past 5 Years and</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="center" style="border-bottom: 1px solid #000000">Position(s) with Fund</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" style="border-bottom: 1px solid #000000">Served</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000">Director</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" style="border-bottom: 1px solid #000000">Other Directorships Held</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Director, PXRE,
Corp. (reinsurance)
(since 1994);
Member and Chairman
of Management
Oversight
Committee, Deutsche
Bank, International
Real Estate
Opportunity Fund 1A
and 1B (since
2003); Trustee,
Acadia Realty Trust
(since 2004).</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:15px; text-indent:-15px">Alden C. Olson <BR><BR>
2711 Ramparte Path<BR>
Holt, MI 48842<BR><BR>
DOB: 5/10/28<BR><BR>
Director
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top" nowrap>Term: Until 2007.<BR><BR>
Served since: 1996.
</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">2</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Director of The
Zweig Fund, Inc.
(since 1996);
Currently retired;
Chartered Financial
Analyst (since
1964); Professor
of Financial
Management,
Investments at
Michigan State
University (1959 to
1990).</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:15px; text-indent:-15px">James B. Rogers, Jr. <BR><BR>
352 Riverside Dr.<BR>
New York, NY 10025<BR><BR>
DOB: 10/19/42<BR><BR>
Director
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Term: Until 2009. <BR><BR>
Served since: 1988.
</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">2</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Director of The
Zweig Fund, Inc.
(since 1986);
Private investor
(since 1980);
Chairman, Beeland
Interests (Media
and Investments)
(since 1980);
Regular Commentator
on Fox News (since
2002); Author of
&#147;Investment Biker: On the Road with
Jim Rogers&#148;
(1994),&#147;Adventure
Capitalist&#148; (2003)
and &#147;Hot
Commodities&#148;
(2004); Director,
Emerging Markets
Brewery Fund
(1993-2002);
Director, Levco
Series&nbsp;Trust
(1996-2006).</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:15px; text-indent:-15px">R. Keith Walton <BR><BR>
315 Park Avenue South<BR>
New York, NY 10010<BR><BR>
DOB: 9/28/64<BR><BR>
Director
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Term: Until 2008.<BR><BR>
Served since: 2004.
</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">2</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Director of The
Zweig Fund, Inc.
(since 2004);
Co-lead Independent
Director of the
Zweig Total Return
Fund, Inc. and of
The Zweig Fund,
Inc. (since 2006);
Principal and Chief
Administrative
Officer, Global
Infrastructure
Partners (since
2007); Director,
Blue Crest Capital
Management Funds
(since 2006);
Executive Vice
President and
Secretary
(1996-2007) of the
University at
Columbia
University;
Director (since
2002), Member,
Executive Committee
(since 2002),
Chair, Audit
Committee (since
2003), Apollo
Theater Foundation,
Inc.; Director,
Orchestra of St.
Luke&#146;s (since
2000); Vice
President and
Trustee, The
Trinity Episcopal
School Corporation
(since 2003);
Member (since
1997), Nominating
and Governance</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->14<!-- /Folio -->
</DIV>

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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="18%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="14%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="36%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">Number of</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center">Term of</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">Portfolios in</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center">Office and</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">Fund</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="center">Name, Address, Age</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center">Length of</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">Complex</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center">Principal Occupation(s)</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="center">and</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center">Time</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">Overseen by</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center">During Past 5 Years and</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="center" style="border-bottom: 1px solid #000000">Position(s) with Fund</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" style="border-bottom: 1px solid #000000">Served</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000">Director</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" style="border-bottom: 1px solid #000000">Other Directorships Held</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Committee Board of Directors (since 2004), Council on Foreign Relations.</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><U>INTERESTED DIRECTOR</U>
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="19%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="16%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="36%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">Number of</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center">Term of</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">Portfolios in</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center">Office and</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">Fund</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="center">Name, Address, Age</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center">Length of</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">Complex</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center">Principal Occupation(s)</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="center">and</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center">Time</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">Overseen by</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center">During Past 5 Years and</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="center" style="border-bottom: 1px solid #000000">Position(s) with Fund</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" style="border-bottom: 1px solid #000000">Served</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000">Director</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" style="border-bottom: 1px solid #000000">Other Directorships Held</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:15px; text-indent:-15px">George R. Aylward<BR><BR>
56 Prospect Street<BR>
Hartford, CT 06115<BR><BR>
DOB: 8/17/64<BR><BR>
Director, Chairman
of the Board and
President
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Term: Until 2007. <BR>
Served since: 2006.
</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">2</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Director, The Zweig
Fund, Inc. (since
2006); Senior Vice
President and Chief
Operating Officer,
Asset Management, The
Phoenix Companies, Inc.
(2004-present);
President (since
November&nbsp;2006) and
Chief Operating Officer
(2004-present), Phoenix
Investment Partners,
Ltd.; President,
certain funds within
the Phoenix Funds
Family (since November
2006); Previously,
Executive Vice
President, Phoenix
Investment Partners,
Ltd. (2004-November
2006); Vice President,
Phoenix Life Insurance
Company (2002-2004);
Vice President, The
Phoenix Companies, Inc.
(2001-2004); Vice
President, Finance,
Phoenix Investment
Partners, Ltd.
(2001-2002); Assistant
Controller, Phoenix
Investment Partners, Ltd.
(1996-2001);
Executive Vice President,
certain
funds within the Phoenix Funds Family (2004-November&nbsp;2006).</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><U>OFFICERS WHO ARE NOT DIRECTORS</U>
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="19%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="15%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="36%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center">Position(s) with</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center">the Fund and</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center">Principal Occupation(s)</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center">Length of</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center">During Past 5 Years and</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="center" style="border-bottom: 1px solid #000000">Name, Address and Age</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" style="border-bottom: 1px solid #000000">Time Served</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" style="border-bottom: 1px solid #000000">Other Directorships Held</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:15px; text-indent:-15px">Carlton Neel <BR>
900 Third Avenue
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Executive Vice
President <BR>
since: 2003.
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Executive Vice President of The Zweig
Fund, Inc. (since 2003); Senior Vice
President and Portfolio Manager,
Phoenix/Zweig Advisers LLC</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->15<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="19%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="15%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="36%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center">Position(s) with</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center">the Fund and</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center">Principal Occupation(s)</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center">Length of</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center">During Past 5 Years and</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="center" style="border-bottom: 1px solid #000000">Name, Address and Age</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" style="border-bottom: 1px solid #000000">Time Served</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" style="border-bottom: 1px solid #000000">Other Directorships Held</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">New York, NY 10022<BR><BR>
DOB: 12/19/67
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Expires: Immediately following the
2007 Annual Meeting of
Shareholders.
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">(since 2003); Senior Vice President, Euclid
Advisers LLC (since 2004); Managing Director and Co-Founder, Shelter Rock Capital Partners, LP (2002-2003); Senior Vice President and Portfolio Manager,
Phoenix/Zweig Advisers LLC (1995-2002);
Vice President, JP Morgan &#038; Co.
(1990-1995).</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:15px; text-indent:-15px">David Dickerson <BR><BR>
900 Third Avenue <BR>
New York, NY 10022<BR><BR>
DOB: 12/27/67
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Senior Vice President since:
2003. <BR><BR>
Expires: Immediately following the
2007 Annual Meeting of
Shareholders.
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Senior Vice President of The Zweig Fund,
Inc. (since 2003); Senior Vice President
and Portfolio Manager, Phoenix/Zweig
Advisers LLC (since 2003); Senior Vice
President, Euclid Advisers LLC (since
2004); Managing Director and Co-Founder,
Shelter Rock Capital Partners, LP
(2002-2003); Vice President and Portfolio
Manager, Phoenix/Zweig Advisers LLC
(1993-2002).</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:15px; text-indent:-15px">Marc Baltuch <BR><BR>
900 Third Avenue <BR>
New York, NY 10022<BR><BR>
DOB: 9/23/45
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Vice President and Chief
Compliance Officer
since: 2004. <BR><BR>
Expires: Immediately following the
2007 Annual Meeting of
Shareholders.
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Vice President and Chief Compliance
Officer of The Zweig Fund, Inc. (since
2004); Chief Compliance Officer of
Phoenix/Zweig Advisers LLC (since 2004);
President and Director of Watermark
Securities, Inc.(since 1991); Secretary
of Phoenix-Zweig Trust (1989-2003);
Secretary of Phoenix-Euclid Market
Neutral Fund (1998-2002); Assistant
Secretary of Gotham Advisors, Inc.
(1990-2005); Chief Compliance Officer of
the Zweig Companies (since 1989) and of
the Phoenix Funds Complex (since 2004).</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:15px; text-indent:-15px">Kevin J. Carr <BR><BR>
One American Row <BR>
Hartford, CT 06102<BR><BR>
DOB: 8/30/54
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Secretary and Chief Legal Officer
since: 2005. <BR><BR>
Expires: Immediately following the
2007 Annual Meeting of
Shareholders.
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Secretary and Chief Legal Officer of The
Zweig Fund, Inc. (since 2005); Vice
President and Counsel, Phoenix Life
Insurance Company (since 2005); Vice
President, Counsel, Chief Legal Officer
and Secretary, certain Funds within
Phoenix Fund Complex (since 2005);
Compliance Officer of Investments and
Counsel, Travelers Life and Annuity
Company (January&nbsp;2005-May&nbsp;2005);
Assistant General Counsel, The Hartford
Financial Services Group (1999-2005).</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Moshe Luchins
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Vice President
since: 2004.
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Vice President of The Zweig Fund, Inc.
(since 2004); Associate Counsel (1996-2005), Associate</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->16<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="19%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="15%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="36%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center">Position(s) with</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center">the Fund and</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center">Principal Occupation(s)</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center">Length of</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center">During Past 5 Years and</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="center" style="border-bottom: 1px solid #000000">Name, Address and Age</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" style="border-bottom: 1px solid #000000">Time Served</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" style="border-bottom: 1px solid #000000">Other Directorships Held</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:15px; text-indent:-0px">900 Third Avenue <BR>
New York, NY 10022<BR><BR>
DOB: 12/22/71
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Expires: Immediately following the
2007 Annual Meeting of
Shareholders.
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">General Counsel
(since 2006) of the Zweig Companies.</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:15px; text-indent:-15px">Nancy Curtiss <BR><BR>
56 Prospect Street <BR>
Hartford, CT 06115<BR><BR>
DOB: 11/24/52
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Treasurer
since: 2003. <BR><BR>
Expires: Immediately following the
2007 Annual Meeting of
Shareholders.
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Treasurer of The Zweig Fund, Inc. (since
2003); Vice President, Operations (since
2003); Vice President, Fund Accounting
(1994-2003) and Treasurer (1996-2003),
Phoenix Equity Planning Corporation.
Treasurer, multiple funds in the Phoenix
Fund Complex (since 1994).</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:15px; text-indent:-15px">Jacqueline Porter <BR><BR>
56 Prospect Street <BR>
Hartford, CT 06115<BR><BR>
DOB: 2/19/58
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Vice President and Assistant
Treasurer
since: 2006. <BR><BR>
Expires: Immediately following the
2007 Annual Meeting of
Shareholders.
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Vice President and Assistant Treasurer of
The Zweig Fund, Inc. (since 2006);
Assistant Vice President, Fund
Administration, Phoenix Equity Planning
Corporation (since 1995); Vice President
and Assistant Treasurer, multiple funds
in the Phoenix Fund Complex (since 1995).</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>



<DIV align="left">
<DIV style="font-size: 3pt; margin-top: 16pt; width: 18%; border-top: 1px solid #000000">&nbsp;</DIV>
</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96"></TD>
</TR>

<TR valign="top">
    <TD nowrap align="left">*</TD>
    <TD>&nbsp;</TD>
    <TD>Director considered to be an &#147;interested person,&#148; as that term is defined in the 1940 Act.
George R. Aylward is considered an interested person because, among other things, he is an officer
of the Fund.</TD>
</TR>

</TABLE>



<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Fund&#146;s Board of Directors has appointed a standing Audit Committee and Nominating
Committee. The Fund&#146;s Board of Directors has adopted a written charter for the Fund&#146;s Audit
Committee. The purposes of the Audit Committee are set forth in the Audit Committee Charter. The
Audit Committee assists the Board of Directors in its oversight of the Fund&#146;s financial reporting
process. The Audit Committee of the Board of Directors will normally meet two times during each
full fiscal year with representatives of the independent auditors to discuss and review various
matters as contemplated by the Audit Committee Charter. The members of the Audit Committee,
Messrs.&nbsp;Brunie, Olson, Rogers and Walton and Ms.&nbsp;Luscombe, are &#147;independent&#148; within the meaning of
the 1940 Act and the NYSE corporate governance standards for audit committees. The Fund&#146;s Audit
Committee held four meetings during the year ended December&nbsp;31, 2006.
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->17<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Messrs.&nbsp;Brunie, Olson and Rogers, each of whom is not an interested person of the Fund, are
members of the Nominating Committee of the Board of Directors. The Nominating Committee considers
candidates for election to fill vacancies on the Board of Directors, and will consider
recommendations from shareholders for possible nominees. Shareholders are required to submit a
biography of the recommended candidate to the Secretary of the Fund. All shareholder recommended
nominee submissions must be received by the Fund by the deadline for submission of any shareholder
proposals which would be included in the Fund&#146;s proxy statement for the next annual meeting of the
Fund. This deadline can be found in the proxy statement for the Fund&#146;s most recent annual meeting.
When nominating a director candidate, shareholders must include in their notice to the Fund&#146;s
Secretary the required information, as specified in Article&nbsp;II &#150; Section&nbsp;3 of the By-Laws. Such
information includes (i)&nbsp;as to each person whom the shareholder proposes to nominate for election
as a director (A)&nbsp;the name, age, business address and residence address of such person, (B)&nbsp;the
principal occupation or employment of such person, (C)&nbsp;the class and number of shares of the
capital stock of the Fund that are beneficially owned by such person and (D)&nbsp;any other information
relating to such person that is required to be disclosed in solicitations of proxies for the
election of directors pursuant to Regulation&nbsp;14A under the Securities Exchange Act of 1934 or any
successor regulation thereto (including without limitation such person&#146;s written consent to being
named in the proxy statement as a nominee and to serving as a director if elected and whether any
person intends to seek reimbursement from the Fund of the expenses of any solicitation of proxies
should such person be elected a director of the Fund); and (ii)&nbsp;as to the shareholder giving the
notice (A)&nbsp;the name and address, as they appear on the Fund&#146;s books, of such shareholder, (B)&nbsp;the
class and number of shares of the capital stock of the Fund which are beneficially and/or owned or
record by such shareholder, (C)&nbsp;the nature of any such beneficial ownership of such stock, the
beneficial ownership of any such stock held of record by such shareholder but beneficially owned by
one or more other persons, and the length of time for which all such stock has been beneficially
owned and/or owned of record by such shareholder, (D)&nbsp;a representation that the shareholder is a
holder of record of shares of the Fund entitled to vote at such meeting and intends to appear in
person or by proxy at the meeting to present such nomination(s) and (E)&nbsp;whether the shareholder
intends or is part of a group which intends to solicit proxies from other shareholders in support
of such nomination(s).
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Fund&#146;s Nominating Committee held one meeting during the year ended December&nbsp;31, 2006. The
Fund does not have a standing compensation committee. All of the Directors, other than Mr.&nbsp;Brunie,
attended at least 75% of the total number of Board meetings, and his or her respective committee
meetings, held during the year ended December&nbsp;31, 2006.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Board of Directors, including a majority of the disinterested Directors, has the
responsibility under the 1940 Act to approve the continuance of the Investment Advisory Agreement
and the Sub-Advisory Agreement. Both the Investment Advisory Agreement and the Sub-Advisory
Agreement were approved to be continued until March&nbsp;1, 2007 at a meeting of the Directors held on
February&nbsp;15, 2006. A discussion regarding the basis for the approval of this continuance is
contained in the Fund&#146;s June&nbsp;30, 2006 Semi-Annual Report to Shareholders. At a meeting of the
Directors held on February&nbsp;20, 2007, the Board of Directors, including a majority of the
disinterested Directors, approved the continuance of the Investment Advisory Agreement and the
Sub-Advisory Agreement until March&nbsp;1, 2008. A discussion regarding the basis for the
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->18<!-- /Folio -->
</DIV>

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<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left" style="font-size: 10pt; margin-top: 6pt">approval of this continuance will be contained in the Fund&#146;s June&nbsp;30, 2007 Semi-Annual Report
to Shareholders.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Direct Ownership of Securities</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The dollar range of the Fund&#146;s securities owned by each Director in the Fund and the aggregate
dollar range of securities owned in the Zweig Fund Complex (as defined below under &#147;Executive
Compensation&#148;) is set forth below.
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="76%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center">Dollar Range of Equity</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center">Aggregate Dollar Range of Equity</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left" style="border-bottom: 1px solid #000000">Name of Director</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" style="border-bottom: 1px solid #000000">Securities in the Fund (1)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" style="border-bottom: 1px solid #000000">Securities in the Zweig Fund Complex</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Charles H. Brunie</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">Over $100,000</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">Over $100,000</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Wendy Luscombe</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">$10,001 - $50,000</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">$10,001 - $50,000</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Alden C. Olson</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">$10,001 - $50,000</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">$10,001 - $50,000</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">James B. Rogers, Jr.</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">$1 - $10,000</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">$10,001 - $50,000</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">R. Keith Walton</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">$1 - $10,000</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">$10,001 - $50,000</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">George R. Aylward</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">$1 - $10,000</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">$10,001 - $50,000</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>



<DIV align="left">
<DIV style="font-size: 3pt; margin-top: 16pt; width: 18%; border-top: 1px solid #000000">&nbsp;</DIV>
</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96"></TD>
</TR>

<TR valign="top">
    <TD nowrap align="left">(1)</TD>
    <TD>&nbsp;</TD>
    <TD>The information as to beneficial ownership is based on statements furnished to the Fund by
its Directors and reflects ownership as of December&nbsp;31, 2006, except for George R. Aylward whose
ownership is as of March&nbsp;14, 2007. Except as otherwise indicated, each person has sole voting and
investment power with respect to the shares owned by him or her. Fractional shares are rounded off
to the nearest whole share. The Directors and officers of the Fund, as a group, beneficially own
less than 1% of the outstanding shares of the Fund.</TD>
</TR>

</TABLE>



<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Executive Compensation</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The aggregate compensation paid to each of the Directors for the year ended December&nbsp;31, 2006
by the Fund and The Zweig Fund, Inc. (ZF), constituting all of the funds to which the Investment
Adviser provides investment advisory services (collectively, the &#147;Zweig Fund Complex&#148;), and the
total number of registered investment companies (and separate investment portfolios within those
companies) in the Zweig Fund Complex with respect to which any of the Directors serves as a
director or trustee are set forth below. The Fund does not pay any fees to, or reimburse expenses
of, its Director who is considered an &#147;interested person&#148; of the Fund. Neither the Fund nor any
other fund in the Zweig Fund Complex provides compensation in the form of pension or retirement
benefits to any of its directors or trustees.
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->19<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="76%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">Aggregate Compensation</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">Total Compensation from the Zweig</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left" style="border-bottom: 1px solid #000000">Name of Director</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000">from the Fund</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000">Fund Complex, Including the Fund</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Charles H. Brunie</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">19,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">38,000</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Wendy Luscombe</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">32,500</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">65,000</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Alden C. Olson</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">26,500</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">53,000</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">James B. Rogers, Jr.</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">25,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">50,000</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">R. Keith Walton</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">31,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">62,000</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">George R. Aylward</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">0</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Limitation of Directors&#146; and Officers&#146; Liability</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Fund&#146;s Articles of Incorporation limit the personal liability of its Officers and
Directors to the Fund and its shareholders for money damages to the maximum extent permitted by the
Maryland General Corporation Law. Accordingly, a shareholder will be able to recover money damages
against a Director or an Officer of the Fund only if he or she is able to prove that (a)&nbsp;the
action, or failure to act, by the Director or Officer was the result of active and deliberate
dishonesty which was material to the cause of action adjudicated in the proceeding, (b)&nbsp;the
Director or Officer actually received an improper benefit or profit in money, property or services
(in which case recovery is limited to the actual amount of such improper benefit or profit), or (c)
the Director or Officer acted with willful misfeasance, bad faith, gross negligence, or reckless
disregard of the duties involved in the conduct of his or her office. The limitation also does not
apply to claims against Directors or Officers arising out of their responsibilities under the
Federal securities laws. The Fund&#146;s Articles of Incorporation do not limit the right of the Fund
or any shareholder to sue for an injunction or any other nonmonetary relief in the event of a
breach of a Director&#146;s or Officer&#146;s duty of care or other breach of duty or responsibility.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Code of Ethics</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Fund, the Investment Adviser and the Sub-Adviser have each adopted Codes of Ethics
pursuant to Rule&nbsp;17j-1 under the 1940 Act. These codes of ethics set forth the terms and
conditions upon which personnel subject to the codes may invest in securities, including securities
that may be purchased or held by the Fund. These codes contains policies and procedures that,
among other things, prohibit personnel from trading on the basis of material nonpublic information,
place limitations on personal trading by personnel, impose preclearance on certain types of
trading, and impose reporting obligations on such personnel, including requiring initial and annual
reports of securities holdings. Copies of the Codes of Ethics can be reviewed and copied at the
Commission&#146;s Public Reference Room in Washington, D.C. Information on the operation of the Public
Reference Room may be obtained by calling the Commission at 1-202-942-8090. Copies of these Codes
of Ethics are also available on the EDGAR Database on the Commission&#146;s Internet site at
http://www.sec.gov, and copies of these codes may be obtained, after paying a duplicating fee, by
electronic request at the following E-mail address: publicinfo@sec.gov, or by writing the
Commission&#146;s Public Reference Section, Washington, D.C. 20549-0102.
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->20<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Proxy Voting</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Investment Adviser votes proxies relating to the Fund&#146;s portfolio securities in accordance
with procedures that have been approved by the Fund&#146;s Board of Directors. It is the intention of
the Fund to exercise stock ownership rights in portfolio securities in a manner that is reasonably
anticipated to further the best economic interests of shareholders of the Fund. Accordingly, the
Investment Adviser endeavors to analyze and vote all proxies that are considered likely to have
financial implications, and, where appropriate, to participate in corporate governance, shareholder
proposals, management communications and legal proceedings.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If in the voting of proxies, a conflict of interest arises between the interests of Fund
shareholders, on one hand, and those of the Investment Adviser or any affiliated person of the
Fund, on the other hand, the Investment Adviser may take one or more of the following actions,
among others, or otherwise give weight to the following factors, in addressing material conflicts
of interest in voting the proxies: (i)&nbsp;rely on the recommendations of an established, independent
third party with qualifications to vote proxies such as Institutional Shareholder Services; or (ii)
abstaining. The Investment Adviser will promptly notify the President of the Fund once any actual
or potential conflict of interest exists. The Investment Adviser will not waive any conflict of
interest or vote any conflicted proxies without the prior written approval of either the Board of
Directors or the President of the Fund, in which case the President will report on the conflict at
the next following meeting of the Board of Directors.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Shareholders may obtain information regarding how the Fund voted proxies during the most
recent 12-month period ended June&nbsp;30, 2006, free of charge by calling toll-free 1-800-243-1574 or
from the EDGAR Database on the Commission&#146;s Internet site at http://www.sec.gov.
</DIV>
<DIV align="left">
<A name="121"></A>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>INVESTMENT ADVISER AND SUB-ADVISER</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Investment Adviser, Phoenix/Zweig Advisers LLC, is a Delaware limited liability company,
with offices at 900 Third Avenue, New York, New York 10022. The Investment Adviser became the
Fund&#146;s investment adviser on January&nbsp;1, 2000, following the acquisition of Zweig Total Return
Advisors, Inc., the Fund&#146;s former investment adviser, Zweig/Glaser Advisers, the Fund&#146;s former
administrator, and Zweig Securities Corp. by Phoenix Investment Partners, Ltd. on March&nbsp;1, 1999
(the &#147;Acquisition&#148;). The Investment Adviser is a wholly-owned subsidiary of Phoenix Investment
Partners, Ltd., a wholly-owned investment management subsidiary of The Phoenix Companies, Inc., a
NYSE-listed company. Phoenix/Zweig Advisers LLC and Phoenix Investment Partners, Ltd. are Delaware
entities and independent advisory firms registered with the Commission under the Investment
Advisers Act of 1940, as amended. As of December&nbsp;31, 2006, Phoenix Investment Partners, Ltd. had
approximately $58&nbsp;billion of assets under management.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Pursuant to an investment advisory agreement dated March&nbsp;1, 1999 (the &#147;Investment Advisory
Agreement&#148;), the Investment Adviser is responsible for the actual management of the Fund&#146;s
portfolio. The responsibility for making decisions to buy, sell or hold a particular investment
rests with the Investment Adviser, subject to the supervision of the Board of Directors and the
applicable provisions of the 1940 Act. The Investment Adviser is also
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->21<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left" style="font-size: 10pt; margin-top: 6pt">obligated to provide the Fund with such executive, administrative, data processing, clerical,
accounting and bookkeeping services and statistical and research data as are deemed advisable by
the Board of Directors, except to the extent these services are provided by an administrator hired
by the Fund. The Investment Adviser may consider analyses from various other sources, including
broker-dealers with which the Fund does business and affiliates of the Investment Adviser. Under a
services agreement (the &#147;Sub-Advisory Agreement&#148;) with the Investment Adviser, the Sub-Adviser,
Zweig Consulting LLC, performs asset allocation research and analysis and provides advice thereon
to the Investment Adviser. The extent of the Fund&#146;s investment in debt and equity securities will
be determined primarily on the basis of asset allocation techniques developed by Dr.&nbsp;Martin E.
Zweig, President of the Sub-Adviser, and his staff.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;For the services provided by the Investment Adviser under the Investment Advisory Agreement,
the Fund will pay the Investment Adviser a monthly fee computed at the annual rate of 0.70% of the
Fund&#146;s average daily net assets during the previous month. For the fiscal years ended December&nbsp;31,
2006, 2005 and 2004, the Fund accrued investment advisory fees of $3,336,985, $3,511,302 and
$3,652,785, respectively.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;PXP Securities Corp. or any other brokerage affiliate (the &#147;Brokerage Affiliate&#148;) may act as a
broker for the Fund. In order for the Brokerage Affiliate to effect any portfolio transactions for
the Fund, the commissions, fees or other remuneration received by the Brokerage Affiliate must be
reasonable and fair compared to the commissions, fees or other remuneration paid to other brokers
in connection with comparable transactions involving similar securities being purchased or sold on
an exchange during a comparable period of time. The Fund will not deal with a Brokerage Affiliate
in any portfolio transaction in which the Brokerage Affiliate would act as principal.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Dr.&nbsp;Martin E. Zweig</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Dr.&nbsp;Martin E. Zweig, the President of the Sub-Adviser, has been in the business of providing
investment advisory services for over 35&nbsp;years. Dr.&nbsp;Zweig and his associates determine asset
allocation strategies to assist the Investment Adviser in its management of the Fund.
</DIV>
<DIV align="left">
<A name="122"></A>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>PORTFOLIO MANAGERS</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Portfolio Managers</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Fund&#146;s portfolio managers (each referred to as a &#147;portfolio manager&#148;) are listed below.
Each portfolio manager manages other investment companies and/or investment vehicles and accounts
in addition to the Fund. The following tables show, as of December&nbsp;31, 2006, the number of accounts
each portfolio manager managed in each of the listed categories and the total assets in the
accounts managed within each category.
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="64%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">Registered</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">Other Pooled</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left" style="border-bottom: 1px solid #000000">Portfolio Manager</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000">Investment Companies</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000">Investment Vehicles</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000">Other Accounts</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Carlton Neel</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">David Dickerson</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->22<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The dollar range of the Fund&#146;s securities owned by each portfolio manager and the aggregate
dollar range of securities owned in the Zweig Fund Complex (as defined above under &#147;Executive
Compensation&#148;) is set forth below.
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="76%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center">Dollar Range of Equity</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center">Aggregate Dollar Range of Equity</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left" style="border-bottom: 1px solid #000000">Portfolio Manager</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" style="border-bottom: 1px solid #000000">Securities in the Fund (1)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" style="border-bottom: 1px solid #000000">Securities in the Zweig Fund Complex</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Carlton Neel</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">$50,001 - $100,000</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">Over $100,000</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">David Dickerson</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">$10,001 - $50,000</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">Over $100,000</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1)&nbsp;The information as to beneficial ownership is based on statements furnished to the Fund by
its portfolio managers and reflects ownership as of December&nbsp;31, 2006. Except as otherwise
indicated, each person has sole voting and investment power with respect to the shares listed as
owned by him or her. Fractional shares are rounded off to the nearest whole share. The portfolio
managers of the Fund, as a group, beneficially own less than 1% of the outstanding shares of the
Fund.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;It is possible that conflicts of interest may arise in connection with the portfolio managers&#146;
management of the Fund&#146;s investments on the one hand and the investments of other accounts or
vehicles for which the portfolio managers are responsible on the other. For example, a portfolio
manager may have conflicts of interest in allocating management time, resources and investment
opportunities among the Fund and the other accounts or vehicles he advises. In addition, due to
differences in the investment strategies or restrictions among the Fund and the other accounts, a
portfolio manager may take action with respect to another account that differs from the action
taken with respect to the Fund. In some cases, another account managed by a portfolio manager may
provide more revenue to the Investment Adviser. While this may appear to create additional
conflicts of interest for the portfolio manager in the allocation of management time, resources and
investment opportunities, the Investment Adviser strives to ensure that portfolio managers endeavor
to exercise their discretion in a manner that is equitable to all interested persons. In this
regard, in the absence of specific account-related impediments (such as client-imposed restrictions
or lack of available cash), it is the policy of the Investment Adviser to allocate investment ideas
pro rata to all accounts with the same primary investment objective.
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->23<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Portfolio Manager Compensation Structure and Method</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Phoenix Investment Partners, Ltd. and its affiliated investment management firms
(collectively, &#147;PXP&#148;), believe that PXP&#146;s compensation program is adequate and competitive to
attract and retain high-caliber investment professionals. Investment professionals at PXP receive a
competitive base salary, an incentive bonus opportunity and a benefits package. Managing Directors
and portfolio investment professionals who supervise and manage others also participate in a
management incentive program reflecting their personal contribution and team performance. Highly
compensated individuals can also take advantage of a long-term Incentive Compensation program to
defer their compensation and potentially reduce their taxes.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The bonus package for portfolio managers is based upon how well the individual manager meets
or exceeds assigned goals and a subjective assessment of contribution to the team effort. Their
incentive bonus also reflects a performance component for achieving and/or exceeding performance
competitive with peers managing similar strategies. Such component is further adjusted to reward
investment personnel for managing within the stated framework and for not taking unnecessary risks.
This ensures that investment personnel will remain focused on managing and acquiring securities
that correspond to a fund&#146;s mandate and risk profile. It also avoids the temptation for portfolio
managers to take on more risk and unnecessary exposure to chase performance for personal gain.
Finally, portfolio managers and investment professionals may also receive The Phoenix Companies,
Inc. stock options and/or may be granted The Phoenix Companies, Inc. restricted stock at the
direction of the parent&#146;s Board of Directors.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Following is a more detailed description of the compensation structure of the Fund&#146;s portfolio
managers.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Base Salary</I>. Each portfolio manager is paid a fixed base salary, which is determined by PXP
and is designed to be competitive in light of the individual&#146;s experience and responsibilities.
PXP&#146;s management uses compensation survey results of investment industry compensation conducted by
an independent third party in evaluating competitive market compensation for its investment
management professionals.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Incentive Bonus</I>. The current Performance Incentive Plan for the Fund&#146;s portfolio managers is
made up of two components:
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1)&nbsp;Seventy percent of the target incentive is based on achieving investment area investment
goals and individual performance. The Investment Incentive pool will be established based on a
percentage (as determined by Phoenix Board of Directors Compensation Committee) of the Investment
Adviser&#146;s adjusted operating income. Performance of the Investment Adviser&#146;s closed-end and
open-end funds is measured over one, three and five-year periods against specified benchmarks
and/or peer groups. The Lipper Large Cap Core peer group is used as the benchmark for the equity
portion of the Fund, and the Lipper General U.S. Government Funds peer group is used for the fixed
income portion of the Fund. These benchmarks are subject to change dependent upon evaluation of
the appropriate groupings.
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->24<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2)&nbsp;Thirty percent of the target incentive is based on the profitability of PXP (subject to
a ROE performance threshold of the Phoenix Companies, Inc., the ultimate parent of the Adviser).
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A portion of the total incentive bonus can be paid in restricted stock units of the Phoenix
Companies, Inc., which vest over three years. Portfolio managers may also receive Phoenix stock
options and/or be granted Phoenix restricted stock at the direction of the Phoenix Board of
Directors.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Other Benefits</I>. Portfolio managers are also eligible to participate in broad-based plans
offered generally to PXP employees, including broad-based retirement, 401(k), health and other
employee benefit plans.
</DIV>
<DIV align="left">
<A name="123"></A>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>EXPENSES</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;For the fiscal years ended December&nbsp;31, 2006, 2005 and 2004, the Fund&#146;s net expenses amounted
to $4,828,295, $5,537,854 and $6,826,505, respectively.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Expenses of the Offer will be charged to capital. The Fund&#146;s annual expense ratio (excluding
dividends on short sales) was 1.00%, 1.06% and 1.28% of the Fund&#146;s average net assets for the
fiscal years ended December&nbsp;31, 2006, 2005 and 2004, respectively.
</DIV>
<DIV align="left">
<A name="124"></A>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>PORTFOLIO TRANSACTIONS AND BROKERAGE</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In the purchase and sale of portfolio securities for the Fund, the Investment Adviser will
seek the best combination of price (inclusive of brokerage commissions) and execution, and,
consistent with that policy, may give consideration to the research, statistical and other services
furnished by brokers or dealers to the Investment Adviser for its use. The Investment Adviser is
also authorized to place orders with brokers who provide supplemental investment, market research
and security and economic analysis, although the use of such brokers may result in a higher
brokerage charge to the Fund than the use of brokers selected solely on the basis of seeking the
best combination of price (inclusive of brokerage commissions) and execution for the same order.
Brokerage may be allocated entirely on the basis of net results to the Fund, including the
difficulty of the order and the reputation of the broker-dealer. Research and analysis received by
the Investment Adviser may benefit the Investment Adviser, the Sub-Adviser and their respective
affiliates in connection with their services to other clients, as well as the Fund. Subject to the
foregoing, the Fund may effect a portion of its securities transactions through affiliated
broker-dealers of the Investment Adviser, including PXP Securities Corp. In accordance with the
provisions of Rule&nbsp;17e-1 under the 1940 Act, the Fund&#146;s Board of Directors has adopted certain
procedures which are designed to provide that brokerage commissions paid to PXP Securities Corp.
and any other affiliated broker-dealers, are reasonable and fair as compared to the brokerage
commissions received by other brokers in connection with comparable transactions involving similar
securities being purchased or sold on securities
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->25<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left" style="font-size: 10pt; margin-top: 6pt">exchanges during a comparable period of time. The Fund, however, has no obligation to deal
with PXP Securities Corp. or any other broker-dealer in effecting portfolio transactions.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Fund paid brokerage commissions of $232,000 to brokers for the year ended December&nbsp;31,
2006, of which $0 was paid to PXP Securities Corp., representing 0% of the aggregate brokerage
commissions paid by the Fund and 0% of the aggregate amount of transactions involving the payment
of commissions for such year. The Fund paid brokerage commissions of $255,000 to brokers for the
year ended December&nbsp;31, 2005, of which $0 was paid to PXP Securities Corp., representing 0% of the
aggregate brokerage commissions paid by the Fund and 0% of the aggregate amount of transactions
involving the payment of commissions for such year. The Fund paid brokerage commissions of
$543,000 to brokers for the year ended December&nbsp;31, 2004, of which $0 was paid to PXP Securities
Corp., representing 0% of the aggregate brokerage commissions paid by the Fund and 0% of the
aggregate amount of transactions involving the payment of commissions for such year.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A portion of the securities in which the Fund will invest may be traded in the
over-the-counter markets, and the Fund intends to deal directly with the dealers who make markets
in the securities involved, except in those circumstances where better prices and execution are
available elsewhere. Fixed income securities purchased or sold on behalf of the Fund normally will
be traded in the over-the-counter market on a net basis (i.e. without a commission) through dealers
acting for their own account and not as brokers or otherwise through transactions directly with the
issuer of the instrument. Some fixed income securities may be purchased and sold on an exchange or
in over-the-counter transactions conducted on an agency basis involving a commission. Futures
transactions generally will be effected through those futures commission merchants the Fund
believes will obtain the most favorable results for the Fund.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;When the Fund and one or more accounts managed by the Investment Adviser or its affiliates
propose to purchase or sell the same security, the available opportunities will be allocated in a
manner the Investment Adviser believes to be equitable. In some cases, this procedure may affect
adversely the price paid or received by the Fund or the size of the position purchased or sold by
the Fund. In other cases, coordination with transactions for other accounts and the ability to
participate in volume or block transactions could benefit the Fund.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Portfolio Turnover</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Fund&#146;s portfolio turnover rates for the fiscal years ended December&nbsp;31, 2006, December&nbsp;31,
2005 and December&nbsp;31, 2004 were 21.7%, 74.6% and 75.8%, respectively. Portfolio turnover rate is
calculated by dividing the lesser of the Fund&#146;s annual sales or purchases of portfolio securities
by the monthly average value of securities in the portfolio during the year, excluding portfolio
securities the maturities of which at the time of acquisition were one year or less. Portfolio
turnover will not be a limiting factor in making investment decisions, and the Fund&#146;s investment
policies may result in portfolio turnover substantially greater than that of other investment
companies. A high rate of portfolio turnover (over 100%) involves greater brokerage commission
expense, which must be borne by the Fund and its shareholders. A high rate of portfolio turnover
may also result in the realization of capital gains, and to the extent that portfolio turnover
results in the realization of net short-term capital gains, such gains, when distributed, would be
taxed to shareholders at ordinary income tax rates.
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->26<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="left">
<A name="125"></A>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>NET ASSET VALUE</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The net asset value of the Fund&#146;s shares will be determined by the Administrator as of the
close of regular trading on the NYSE, on each day the NYSE is open for trading, by dividing the
Fund&#146;s total assets, less the Fund&#146;s total liabilities, by the total number of Shares outstanding.
Net asset value will be published weekly in a financial newspaper of general circulation.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Portfolio securities (including stock options) which are traded only on stock exchanges will
be valued at the last sale price. Securities traded in the over-the-counter market which are
National Market Systems securities will be valued at the last sale price. Other over-the-counter
securities will be valued on the basis of the mean between the current bid and asked prices
obtained from market makers in such securities. Debt securities that mature in 60&nbsp;days or less
will be valued at amortized cost, unless the Board of Directors determines that such valuation does
not constitute fair value. Debt securities that have an original maturity of less than 61&nbsp;days
will be valued at their cost, plus or minus amortized discount or premium, unless the Board of
Directors determines that such valuation does not constitute fair value. Futures and options
thereon which are traded on commodities exchanges will be valued at their closing settlement price
on such exchange. Securities and assets for which market quotations are not readily available, and
other assets, if any, will be valued at fair value as determined in good faith and pursuant to
procedures established by the Board of Directors of the Fund.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The outstanding shares of Common Stock are, and the Shares will be, listed on the New York
Stock Exchange, Inc. The Fund&#146;s Shares of Common Stock have traded in the market above, at and
below net asset value since the commencement of the Fund&#146;s operations in September&nbsp;1988. The
Fund&#146;s Officers cannot predict whether the Fund&#146;s Common Stock will trade in the future at a
premium or a discount to net asset value, and if so, the level of such premium or discount.
</DIV>
<DIV align="left">
<A name="126"></A>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>TAXATION</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following is a summary of the principal U.S. Federal income, and certain state and local,
tax considerations regarding the purchase, ownership and disposition of shares of the Fund. The
summary does not address special tax rules applicable to certain classes of investors, such as
tax-exempt entities, insurance companies and financial institutions. Each prospective shareholder
is urged to consult his or her own tax adviser with respect to the specific Federal, state, local
and foreign tax consequences of investing in the Fund. The summary is based on the laws in effect
on the date of this SAI, which are subject to change.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>General</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Fund has elected to be treated, has qualified and intends to continue to qualify for each
taxable year, as a regulated investment company under Subchapter M of the Internal Revenue Code of
1986, as amended (the &#147;Code&#148;). To so qualify, the Fund must comply with
</DIV>

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</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left" style="font-size: 10pt; margin-top: 6pt">certain requirements of the Code relating to, among other things, the source of its income and
the diversification of its assets.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If the Fund complies with such requirements, then in any taxable year for which the Fund
distributes, in accordance with the Code&#146;s timing requirements, ordinary income dividends of at
least 90% of its investment company taxable income, the Fund (but not its shareholders) will be
relieved of Federal income tax on any income of the Fund, including capital gains, that is
distributed to shareholders in accordance with the Code&#146;s requirements. However, if the Fund
retains any investment company taxable income or net capital gain, it will be subject to a tax at
regular corporate rates on the amount retained. If the Fund retains any net capital gain, the Fund
may designate the retained amount as undistributed capital gains in a notice to its shareholders
who, if subject to U.S. Federal income tax on capital gains, (i)&nbsp;will be required to include in
income for Federal income tax purposes, as capital gain, their shares of such undistributed amount,
and (ii)&nbsp;will be entitled to credit their proportionate shares of the tax paid by the Fund against
their U.S. Federal income tax liabilities, if any, and to claim refunds to the extent the credit
exceeds such liabilities. For U.S. Federal income tax purposes, the tax basis of shares owned by a
shareholder of the Fund will be increased by an amount equal under current law to 65% of the amount
of undistributed net capital gain included in the shareholder&#146;s gross income.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In order to avoid a 4% Federal excise tax, the Fund must distribute (or be deemed to have
distributed) by December&nbsp;31 of each calendar year at least 98% of its taxable ordinary income for
such year, at least 98% of the excess of its capital gains over its capital losses, and all taxable
ordinary income and the excess of capital gains over capital losses for the previous year that were
not distributed for such year and on which the Fund did not pay Federal income tax. The Fund
intends to distribute at least annually to its shareholders all or substantially all of its
investment company taxable income and its net capital gain, but reserves the right to retain and
designate as described in the above paragraph, its net capital gain.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Fund&#146;s investments, if any, in securities issued at a discount or providing for deferred
interest payments or payments of interest in kind will generally cause the Fund to realize income
prior to the receipt of cash payments with respect to these securities. Mark to market rules
applicable to certain options and futures contracts may also require that net gains be recognized
without a concurrent receipt of cash. In order to obtain cash to distribute its income or gains,
maintain its qualification as a regulated investment company and avoid Federal income or excise
taxes, the Fund may be required to liquidate portfolio securities that it might otherwise have
continued to hold.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Taxable U.S. Shareholders &#151; Distributions</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;For U.S. Federal income tax purposes, distributions by the Fund, whether reinvested in
additional shares or paid in cash, generally will be taxable to shareholders who are subject to
tax.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Distributions from the Fund&#146;s investment company taxable income will be taxable as ordinary
income, and generally cannot be offset by capital losses. For non-corporate shareholders, certain
of the Fund&#146;s ordinary income distributions received (or deemed received) in taxable years through
and including 2010 may qualify for the 15% Federal income tax rate applicable to &#147;qualified
dividend income.&#148; For corporate shareholders, certain of the Fund&#146;s
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->28<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left" style="font-size: 10pt; margin-top: 6pt">ordinary income distributions may qualify for the dividends received deduction. (However, the
entire dividend, including the deducted amount, is includable in determining a corporate
shareholder&#146;s alternative minimum taxable income.) So long as the Fund qualifies as a regulated
investment company and satisfies the 90% distribution requirement, capital gain dividends if
properly designated as such in a written notice to shareholders mailed not later than 60&nbsp;days after
the Fund&#146;s taxable year closes, will be taxed to shareholders as capital gain which, as to
non-corporate shareholders, will be taxable at a maximum marginal Federal income tax rate of 15%,
regardless of how long the shareholder has held his or her Fund shares. Distributions, if any,
that are in excess of the Fund&#146;s current and accumulated earnings and profits, as computed for
Federal income tax purposes, will first reduce a shareholder&#146;s tax basis in his or her shares and,
after such basis is reduced to zero, will constitute capital gains to a shareholder who holds his
or her shares as capital assets.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;All distributions, whether received in shares or in cash, as well as sales and exchanges of
Fund shares, must be reported by each shareholder who is required to file a U.S. Federal income tax
return. For Federal income tax purposes, dividends declared by the Fund in October, November or
December and paid during January of the following year are treated as if they were paid by the Fund
and received by such shareholders on December&nbsp;31 of the year declared. In addition, certain other
distributions made after the close of a taxable year may be &#147;spilled back&#148; and treated as paid by
the Fund (other than for purposes of avoiding the 4% excise tax) during such year. Such dividends
would be taxable to the shareholders in the taxable year in which the distribution was actually
made by the Fund.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Fund will send written notices to shareholders regarding the amount and Federal income tax
status of all distributions made during each calendar year.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;With respect to distributions paid in cash or, for shareholders participating in the
Distribution Reinvestment and Cash Purchase Plan (the &#147;Plan&#148;), reinvested in shares purchased in
the open market, the amount of the distribution for tax purposes is the amount of cash distributed
or allocated to the shareholder. With respect to distributions issued in shares of the Fund, the
amount of the distribution for tax purposes is the fair market value of the issued shares on the
payment date.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Distributions by the Fund result in a reduction in the net asset value of the Fund&#146;s shares
and may also reduce their market value. Should a distribution reduce the net asset value or market
value below a shareholder&#146;s cost basis, such distribution (to the extent paid from the Fund&#146;s
current or accumulated earnings and profits) would nevertheless be taxable to the shareholder as
ordinary income or capital gain as described above even though, from an investment standpoint, it
may constitute a partial return of capital. In particular, investors should be careful to consider
the tax implications of buying shares just prior to a distribution. Since the market price of
shares purchased at that time may include the amount of any forthcoming distribution, investors
purchasing shares just prior to a distribution will in effect receive a return of a portion of
their investment in the form of a distribution which nevertheless will be taxable to them.
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->29<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Taxable U.S. Shareholders &#151; Sale of Shares</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;When a shareholder&#146;s shares are sold, exchanged or otherwise disposed of, the shareholder will
generally recognize gain or loss equal to the difference between the shareholder&#146;s adjusted tax
basis in the shares and the cash, or fair market value of any property, received. Assuming the
shareholder holds the shares as a capital asset at the time of such sale or other disposition, such
gain or loss should be capital gain or loss which will be long-term if the shares were held for
more than one year, and short-term if the shares are held for one year or less. However, any loss
realized on the sale, exchange or other disposition of Fund shares with a tax holding period of six
months or less will be treated as a long-term capital loss to the extent of any capital gain
dividend received by the selling shareholder with respect to such shares. Additionally, any loss
realized on a sale or other disposition of shares of the Fund may be disallowed under &#147;wash sale&#148;
rules to the extent the shares disposed of are replaced with other shares of the Fund within a
period of 61&nbsp;days beginning 30&nbsp;days before and ending 30&nbsp;days after the shares are disposed of,
such as pursuant to a distribution reinvestment in shares of the Fund under the Plan. If
disallowed, the loss will be reflected in an adjustment to the basis of the shares acquired.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Backup Withholding</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Fund will be required to report to the Internal Revenue Service all distributions, as well
as gross proceeds from the sale or exchange of Fund shares with respect to which the Fund is a
payor (such as pursuant to a tender offer), except in the case of certain exempt recipients,
<U>i.e.</U>, corporations and certain other investors to which distributions are exempt from the
information reporting provisions of the Code. Under the backup withholding provisions of Code
Section&nbsp;3406 and applicable Treasury regulations, all such reportable distributions and proceeds
may be subject to backup withholding of Federal income tax at the rate of 28% in the case of
nonexempt shareholders who fail to furnish the Fund with their correct taxpayer identification
number and with certain required certifications or if the Internal Revenue Service or a broker
notifies the Fund that the number furnished by the shareholder is incorrect or that the shareholder
is subject to backup withholding as a result of failing to report interest or dividend income. The
Fund may refuse to accept any subscription that does not contain any required taxpayer
identification number or certification that the number provided is correct. If the backup
withholding provisions are applicable, any such distributions and proceeds, whether taken in cash
or reinvested in shares, will be reduced by the amounts required to be withheld. Any amounts
withheld would be credited against a shareholder&#146;s U.S. Federal income tax liability. Investors
should consult their tax advisers about the applicability of the backup withholding provisions.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Non-U.S. Shareholders</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Dividends paid to a shareholder who is not a U.S. person (i.e., a nonresident alien
individual, or a foreign corporation, foreign partnership, foreign trust or foreign estate)
ordinarily are subject to U.S. withholding tax at the rate of 30% (or a lower rate provided by an
applicable tax treaty) unless the dividends are effectively connected with a U.S. trade or business
of the shareholder, in which case the dividends are subject to tax on a net income basis at the
graduated rates applicable to U.S. individuals or domestic corporations and, in the case of a
shareholder that is a foreign corporation, may be subject to U.S. &#147;branch profit tax.&#148; However,
&#147;short-term capital gain dividends&#148; and &#147;interest-related dividends&#148; paid by the Fund with respect
to the
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->30<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Fund&#146;s 2006 and 2007 taxable years generally will be exempt from 30% withholding. &#147;Short-term
capital gain dividends&#148; generally are limited to the excess (if any) of the Fund&#146;s net short-term
capital gains over its net long-term capital losses, and &#147;interest-related dividends&#148; generally are
limited to the Fund&#146;s income (less expenses) from interest paid by U.S. issuers and interest paid
on deposits with U.S. banks. Capital gain distributions, including amounts retained by the Fund
which are designated as undistributed capital gains, to a non-U.S. shareholder will not be subject
to U.S. income or withholding tax unless the distributions are effectively connected with the
shareholder&#146;s trade or business in the U.S. or, in the case of a shareholder who is a nonresident
alien individual, if the shareholder is present in the U.S. for 183&nbsp;days or more during the taxable
year and certain other conditions are met.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Any gain realized by a shareholder who is not a U.S. person upon a sale or other disposition
of shares of the Fund will not be subject to U.S. Federal income or withholding tax unless the gain
is effectively connected with the shareholder&#146;s trade or business in the U.S., or in the case of a
shareholder who is a nonresident alien individual, if the shareholder is present in the U.S. for
183&nbsp;days or more during the taxable year and certain other conditions are met. Non-U.S. persons who
fail to furnish the Fund with an IRS Form W-8BEN or acceptable substitute Form W-8BEN may be
subject to backup withholding at the rate of 28% on capital gain dividends and the proceeds of
certain sales of their shares with respect to which the Fund is a payor (such as pursuant to a
tender offer). Investors who are not U.S. persons should consult their tax advisers about the U.S.
and non-U.S. tax consequences of ownership of shares of, and receipt of distributions from, the
Fund.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>State and Local Taxes</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Fund may be subject to state or local taxes in jurisdictions in which the Fund may be
deemed to be doing business. In addition, in those states or localities which have income tax
laws, the treatment of the Fund and its shareholders under such laws may differ from their
treatment under Federal income tax laws, and an investment in the Fund may have tax consequences
for shareholders different from those of a direct investment in the Fund&#146;s portfolio securities.
Shareholders should consult their own tax advisers concerning these matters.
</DIV>
<DIV align="left">
<A name="127"></A>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>INDEPENDENT ACCOUNTANTS</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;PricewaterhouseCoopers LLP, 125 High Street, Boston, Massachusetts 02110, serves as the
independent accountants for the Fund. In addition to reporting annually on the financial
statements of the Fund, the Fund&#146;s accountants also review certain filings of the Fund with the
Commission.
</DIV>
<DIV align="left">
<A name="128"></A>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>PRINCIPAL SHAREHOLDERS</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;There are no persons known to the Fund to be control persons of the Fund, as such term is
defined in Section&nbsp;2(a)(9) of the 1940 Act. Except for the following, there is no person known
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->31<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left" style="font-size: 10pt; margin-top: 6pt">to the Fund to hold beneficially 5% or more of the outstanding shares of the Fund. As of
March&nbsp;14, 2007, there were 93,448,955 outstanding shares of the Fund.
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="76%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left" style="border-bottom: 1px solid #000000"><B>Name and Address of Record Owner</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000"><B>Amount of Record Ownership</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000"><B>Percent of Class</B></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD><DIV style="margin-left:0px; text-indent:-0px">Cede &#038; Co.<BR>
55 Water Street<br>
New York, New York 10004</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">84,413,925</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">90.3</TD>
    <TD nowrap valign="top">%</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>



<P align="center" style="font-size: 10pt"><!-- Folio -->32<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left">
<A name="129"></A>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>FINANCIAL STATEMENTS</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The
audited financial statements and the notes thereto, together with the report of PricewaterhouseCoopers LLP thereon, are incorporated herein by reference to the Fund&#146;s Annual
Report to Shareholders for the fiscal year ended December&nbsp;31, 2006. The Fund will furnish, without
charge, a copy of the foregoing documents upon written request to the Fund&#146;s Administrator, Phoenix
Equity Planning Corporation, One American Row, Hartford, CT 06102, Attention: Shareholders
Services.
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->F-1<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">




<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>PART C<BR>
OTHER INFORMATION</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Item&nbsp;25. </B><B><I>Financial Statements and Exhibits</I></B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1)&nbsp;Financial Statements: The following financial statements and schedules of the Registrant
included in the Prospectus and/or SAI are filed with and made a part of this Registration
Statement: Statement of Assets and Liabilities, December&nbsp;31, 2006; Statement of Operations for the
fiscal year ended December&nbsp;31, 2006; Statement of Changes in Net Assets for the fiscal years ended
December&nbsp;31, 2006 and 2005; Schedule of Investments and Securities Sold Short, December&nbsp;31, 2006;
Notes to Financial Statements at December&nbsp;31, 2006; Financial Highlights for the five fiscal years
ended December&nbsp;31, 2006; all other schedules are omitted because the information is included
elsewhere in the Prospectus or SAI or is not required.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt">(2)&nbsp;Exhibits
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="8%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="88%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">(a)(1)
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">-
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Amended and Restated Articles of Incorporation. (Incorporated by reference to Exhibit (1)
of the Registrant&#146;s Amendment No.&nbsp;2 to the Registrant&#146;s Registration Statement (Filed on
September&nbsp;22, 1988, Securities Act File No.&nbsp;33-23252; Investment Company Act File No.
811-5620) (&#147;Amendment No.&nbsp;2&#148;))</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">(a)(2)
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">-
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Articles Supplementary.*</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">(b)
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">-
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Amended and Restated By-Laws. (Incorporated by reference to Exhibit&nbsp;99.77Q1 to the
Registrant&#146;s N-SAR-A for the period ending June&nbsp;30, 2004.)</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">(c)
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">-
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Not applicable.</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">(d)(1)
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">-
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Form of Subscription Certificate.*</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">(d)(2)
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">-
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Form of Notice of Guaranteed Delivery.*</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">(d)(3)
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">-
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Form of Nominee Holder Over-Subscription Exercise Form.*</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">(e)
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">-
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Distribution Reinvestment and Cash Purchase Plan.**</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">(f)
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">-
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Not applicable.</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">(g)(1)
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">-
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Investment Advisory Agreement with Zweig Total Return Advisors, Inc. dated March&nbsp;1, 1999.
(Incorporated by reference to Exhibit&nbsp;A to the Registrant&#146;s Proxy Statement dated January&nbsp;19,
1999.)</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">(g)(2)
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">-
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Amended and Restated Servicing Agreement by and among Phoenix/Zweig Advisers LLC and
Zweig Consulting LLC dated March&nbsp;2, 2004. (Incorporated by reference to Exhibit&nbsp;99.77Q2 to
the Registrant&#146;s N-SAR-A for the period ending June&nbsp;30, 2004.)</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">(g)(3)
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">-</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Letter Agreement, dated February&nbsp;2, 2007, between Phoenix/Zweig Advisers LLC and Zweig
Consulting LLC.*</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="8%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="88%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">(h)
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">-
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Not applicable.</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">(i)
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">-
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Not applicable.</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">(j)
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">-
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Custodian Contract with State Street Bank and Trust Company dated as of May&nbsp;1, 1997.**</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">(k)(1)
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">-
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Administration Agreement with Zweig/Glaser Advisers dated as of March&nbsp;1, 1999.**</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">(k)(2)
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">-
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Assignment of Administration Agreement by Zweig/Glaser Advisers to Phoenix Equity
Planning Corporation effective as of October&nbsp;31, 1999.**</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">(k)(3)
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">-
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Letter Agreement, dated March&nbsp;1, 2006, between Registrant and Phoenix Equity Planning
Corporation with respect to the Administration Agreement.**</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">(k)(4)
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">-
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Stock Transfer Agent Service Agreement with Computershare Trust Company, N.A. (formerly EquiServe Trust Company, N.A.)
dated as of September&nbsp;1, 2001.*</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">(k)(5)
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">-
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Subscription Agent Agreement between the Registrant and Computershare Trust Company, N.A.*</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">(k)(6)
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">-
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Information Agent Agreement between the Registrant and Georgeson, Inc.*</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">(l)
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">-
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Opinion and Consent of Katten Muchin Rosenman LLP.*</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">(m)
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">-
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Not applicable.</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">(n)
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">-
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Consent of PricewaterhouseCoopers LLP.*</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">(o)
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">-
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Not applicable.</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">(p)
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">-
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Not applicable.</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">(q)
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">-
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Not applicable.</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">(r)(1)
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">-
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Code of Ethics of the Registrant.**</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">(r)(2)
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">-
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Code of Ethics of Phoenix/Zweig Advisers LLC.**</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">(r)(3)
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">-
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Code of Ethics of Zweig Consulting LLC.**</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><U>Other Exhibits</U>: Powers of Attorney for George R. Aylward, Charles H. Brunie, Wendy
Luscombe, Alden C. Olson, James B. Rogers, Jr. and R. Keith Walton.**
</DIV>



<DIV align="left">
<DIV style="font-size: 3pt; margin-top: 16pt; width: 18%; border-top: 1px solid #000000">&nbsp;</DIV>
</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96"></TD>
</TR>

<TR valign="top">
    <TD nowrap align="left">*</TD>
    <TD>&nbsp;</TD>
    <TD>Filed herewith.</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left">**</TD>
    <TD>&nbsp;</TD>
    <TD>Previously filed as an exhibit to Registrant&#146;s Registration Statement on Form N-2 (File No.
333-139605) as filed with the Securities and Exchange Commission on December&nbsp;22, 2006.</TD>
</TR>

</TABLE>


<P align="center" style="font-size: 10pt"><!-- Folio -->2<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">






<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Item&nbsp;26. </B><B><I>Marketing Arrangements</I></B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Not applicable.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Item&nbsp;27. </B><B><I>Other Expenses of Issuance and Distribution</I></B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following table sets forth the estimated expenses expected to be incurred in connection
with the offering described in this Registration Statement:
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="88%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left" style="border-bottom: 1px solid #000000"><B>CATEGORY</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>ESTIMATED EXPENSES*</B></TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Legal Fees</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$230,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Transfer Agent/Subscription Agent</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$130,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Postage Fees</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$125,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Listing &#038; Registration Fees</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$100,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Printing Fees</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$&nbsp;&nbsp;60,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Information Agent</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$&nbsp;&nbsp;&nbsp;7,500</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Audit Fees</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$&nbsp;&nbsp;&nbsp;5,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>



<DIV align="left">
<DIV style="font-size: 3pt; margin-top: 16pt; width: 18%; border-top: 1px solid #000000">&nbsp;</DIV>
</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96"></TD>
</TR>

<TR valign="top">
    <TD nowrap align="left">*</TD>
    <TD>&nbsp;</TD>
    <TD>This information may be subject to future contingencies.</TD>
</TR>

</TABLE>



<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Item&nbsp;28. </B><B><I>Persons Controlled by or Under Common Control with Registrant</I></B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;None.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Item&nbsp;29. </B><B><I>Number of Holders of Securities as of March&nbsp;14, 2007</I></B>
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="88%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left" style="border-bottom: 1px solid #000000">Title of Class</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000">Number of Record Holders</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Common Stock, par value $0.001 per share</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">6,688</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Item&nbsp;30. </B><B><I>Indemnification</I></B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Under
Article&nbsp;VII, of the Registrant&#146;s Articles of Incorporation and Article&nbsp;V, Section&nbsp;1, of
the Registrant&#146;s By-Laws, any past or present director or officer of the Registrant will be
indemnified, and will be advanced expenses, to the fullest extent permitted by Maryland law, but
not in violation of Section 17(h) or 17(i) of the Investment Company Act of 1940, as amended.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As permitted by Section&nbsp;2-418(k) of the Maryland General Corporation Law, Article&nbsp;V, Section
6, of the Registrant&#146;s By-Laws provides that the Registrant shall have the power to purchase and
maintain insurance on behalf of any person who is or was a director, officer, employee or agent of
the Registrant or who, while a director, officer, employee or agent of the Registrant, is or was
serving at the request of the Registrant as a director, officer, partner, trustee, employee or
agent of another corporation, partnership, joint venture, trust, enterprise or employee benefit
plan, against any liability asserted against and incurred by him or her in any such capacity, or
arising out of his or her status as such, provided that, pursuant to the By-Laws no insurance may
be obtained by the Registrant for liabilities against which it would not have the power to
indemnify him or her under the Article of the By-Laws regarding indemnification or applicable law.
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->3<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Item&nbsp;31. </B><B><I>Business and Other Connections of Investment Adviser and Sub-Adviser</I></B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;For information regarding Dr.&nbsp;Martin E. Zweig, George R. Aylward, Carlton Neel, David
Dickerson, and Marc Baltuch see &#147;Management &#150;Directors and Officers&#148; in the SAI, which is
incorporated herein by reference.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;John H. Beers is the Vice President and Secretary of Phoenix/Zweig Advisers, LLC since 2002.
He also serves as Vice President and Litigation and Governance Counsel, and Assistant Secretary, of
The Phoenix Companies, Inc. and its subsidiary Phoenix Life Insurance Company. In addition he
serves the following subsidiaries of The Phoenix Companies, Inc.in the capacities indicated:
A.F.J.P. Prorenta, S.A. (Alternate Director); AGL Life Assurance Company (Vice President and
Assistant Secretary); American Phoenix Life and Reassurance Company (Vice President and Secretary);
BOA Properties, Inc. (Vice President and Secretary); DPCM Holding, Inc. (Vice President and
Secretary); Duff &#038; Phelps Investment Management Company (Vice President and Secretary);
Emprendimiento Compartido, S.A. (Alternate Director); Engemann Asset Management (Vice President and
Secretary); Euclid Advisers, LLC (Vice President and Secretary); Pasadena Capital Corporation (Vice
President and Secretary); PFG Distribution Company (Vice President and Assistant Secretary); PFG
Holdings, Inc. (Vice President and Assistant Secretary); Philadelphia Financial Group, Inc. (Vice
President and Assistant Secretary); PHL Variable Insurance Company (Vice President and Secretary);
Phoenix Distribution Holding Company (Vice President and Secretary); Phoenix Equity Planning
Corporation (Vice President and Secretary); Phoenix Founders, Inc. (Vice President and Secretary);
Phoenix Global Solutions, Inc. (Director/Vice President and Secretary); Phoenix International
Capital Corporation (Vice President and Secretary); Phoenix Investment Counsel, Inc. (Vice
President and Clerk); Phoenix Investment Management Company (Vice President and Secretary); Phoenix
Investment Partners, Ltd. (Vice President and Secretary); Phoenix Life and Annuity Company (Vice
President and Secretary); Phoenix Life and Reassurance Company of New York (Vice President and
Secretary); Phoenix National Trust Holding Company (Vice President and Secretary); Phoenix New
England Trust Holding Company (Vice President and Secretary); Phoenix Realty Equity Investments,
Inc. (Vice President and Secretary); Phoenix Realty Investors, Inc. (Vice President and Secretary);
Phoenix Variable Advisors, Inc. (Vice President and Secretary); PM Holdings, Inc. (Vice President
and Secretary); Practicare, Inc. (Vice President and Secretary); PXP Institutional Markets Group,
Ltd. (Vice President and Secretary); PXP International, Ltd. (Director); PXP Securities Corp. (Vice
President and Secretary); Rutherford Financial Corporation (Vice President and Secretary);
Rutherford, Brown &#038; Catherwood, LLC (Vice President and Secretary); Seneca Capital Management LLC
(Vice President and Secretary); The Phoenix Edge Series&nbsp;Fund (Assistant Secretary); Walnut Asset
Management, LLC (Vice President and Secretary); WS Griffith Advisors, Inc. (Vice President and
Secretary); and WS Griffith Securities, Inc. (Vice President and Secretary).
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Glenn H. Pease has been the Vice President and Treasurer of Phoenix/Zweig Advisers, LLC since
2002. He is currently Vice President, Finance, Phoenix Investment Partners, Ltd.; Vice President,
Finance, Phoenix Investment Counsel, Inc.; Vice President, Finance PXP Institutional Markets Group,
Ltd.; Vice President, Chief Financial Officer and Treasurer, PXP Securities Corp.; Vice President
and Treasurer, Seneca Capital Management, LLC; Vice President, Finance and Treasurer, Duff &#038; Phelps
Investment Management Co.; Vice President and Chief Financial Officer, Engemann Asset Management;
Vice President, Finance and
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->4<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Treasurer, Rutherford Financial Corporation; Vice President, Finance and Treasurer, Euclid
Advisors, LLC; Vice President, Finance and Treasurer, Phoenix Equity Planning Corporation, all
affiliates of the Investment Adviser.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Item&nbsp;32. </B><B><I>Location of Accounts and Records</I></B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Corporate records of the Registrant and records relating to the function of Phoenix/Zweig
Advisers LLC as Investment Adviser to the Registrant</I>:
</DIV>
<DIV align="left" style="font-size: 10pt; margin-left: 2%; margin-top: 6pt">Phoenix/Zweig Advisers LLC<BR>
900 Third Avenue<BR>
New York, NY 10022
</DIV>

<DIV align="left" style="font-size: 10pt; margin-left: 2%; margin-top: 6pt"><I>Records relating to its function as Administrator to the Registrant</I>:
</DIV>

<DIV align="left" style="font-size: 10pt; margin-left: 2%; margin-top: 6pt">Phoenix Equity Planning Corporation<BR>
One American Row<BR>
Hartford, CT 06102
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Records relating to its function as the Registrant&#146;s Dividend Paying Agent, Distribution
Reinvestment and Cash Purchase Plan Agent, Transfer Agent and Registrar</I>:
</DIV>
<DIV align="left" style="font-size: 10pt; margin-left: 2%; margin-top: 6pt">Computershare Trust Company, N.A.<BR>
P.O. Box 859208<BR>
Braintree, MA 02185
</DIV>

<DIV align="left" style="font-size: 10pt; margin-left: 2%; margin-top: 6pt"><I>Records relating to its function as Custodian of the Registrant</I>:
</DIV>

<DIV align="left" style="font-size: 10pt; margin-left: 2%; margin-top: 6pt">State Street Bank and Trust Company<BR>
P.O. Box 5501<BR>
Boston, MA 02206-5501
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Item&nbsp;33. </B><B><I>Management Services</I></B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Not applicable.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Item&nbsp;34. </B><B><I>Undertakings</I></B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">(a)&nbsp;Registrant undertakes to suspend offering of the shares covered hereby until it amends its
Prospectus contained herein if (1)&nbsp;subsequent to the effective date of this Registration Statement,
its net asset value per share declines more than ten percent from its net asset value per share as
of the effective date of this Registration Statement, or (2)&nbsp;its net asset value per share
increases to an amount greater than its net proceeds as stated in the Prospectus contained herein.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">(b)&nbsp;Registrant undertakes that:
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1)&nbsp;For purposes of determining any liability under the Securities Act of 1933, the
information omitted from the form of prospectus filed as part of this registration statement in
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->5<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left" style="font-size: 10pt; margin-top: 6pt">reliance upon Rule&nbsp;430A and contained in form of prospectus filed by the Registrant pursuant
to 497(h) under the Securities Act shall be deemed to be part of this registration statement as of
the time it was declared effective.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2)&nbsp;For the purpose of determining any liability under the Securities Act of 1933, each
post-effective amendment that contains a form of prospectus shall be deemed to be a new
registration statement relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide offering thereof.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;The Registrant undertakes to send by first class mail or other means designed to ensure equally
prompt delivery, within two business days of receipt of a written or oral request, any Statement of
Additional Information.
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->6<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="left">
<A name="130"></A>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>SIGNATURES</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Pursuant to the requirements of the Securities Act of 1933 and the Investment Company Act of
1940, the Registrant has duly caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of New York and
State of New York on the 27th
day of March, 2007.
</DIV>

<TABLE width="100%" border="0" cellspacing="0" cellpadding="0" style="font-size: 10pt">
<TR>
    <TD width="48%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="35%">&nbsp;</TD>
    <TD width="15%">&nbsp;</TD>
</TR>
<TR>
    <TD valign="top" align="left">&nbsp;</TD>
    <TD colspan="3" align="left">THE ZWEIG TOTAL RETURN FUND, INC.<BR>
&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD valign="top">By:&nbsp;&nbsp;</TD>

<TD colspan="2" style="border-bottom: 1px solid #000000" align="left">/s/ George R. Aylward&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left">George R. Aylward&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left"><I>President</I>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>
</TABLE>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Pursuant to the requirements of the Securities Act of 1933, this registration statement has
been signed by the following persons in the capacities and on the dates indicated:
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="30%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="30%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="30%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="center" style="border-bottom: 1px solid #000000">Signature</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" style="border-bottom: 1px solid #000000">Title</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" style="border-bottom: 1px solid #000000">Date</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom"><!-- Blank Space -->
    <TD align="center" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">

<TD align="center" valign="top"><DIV style="margin-left:15px; text-indent:-15px">/s/ George R. Aylward&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">Director, Chairman of the</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="font-size: 1pt; border-top: 1px solid #000000">&nbsp;</DIV>
George R. Aylward
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top" nowrap>Board and President
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">March 27, 2007</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD align="center" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="center" valign="top">/s/ Charles H. Brunie&nbsp;
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">Director
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">March 27, 2007</TD>
</TR>
<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="font-size: 1pt; border-top: 1px solid #000000">&nbsp;</DIV>
Charles H. Brunie
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD align="center" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="center" valign="top">/s/ Wendy Luscombe&nbsp;
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">Director
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">March 27, 2007</TD>
</TR>
<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="font-size: 1pt; border-top: 1px solid #000000">&nbsp;</DIV>
Wendy Luscombe
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD align="center" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="center" valign="top">/s/ Alden C. Olson&nbsp;
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">Director
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">March 27, 2007</TD>
</TR>
<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="font-size: 1pt; border-top: 1px solid #000000">&nbsp;</DIV>
Alden C. Olson
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD align="center" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="center" valign="top">/s/ James B. Rogers, Jr.&nbsp;
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">Director
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">March 27, 2007</TD>
</TR>
<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="font-size: 1pt; border-top: 1px solid #000000">&nbsp;</DIV>
James B. Rogers, Jr.
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD align="center" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="center" valign="top">/s/ R. Keith Walton&nbsp;
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">Director
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">March 27, 2007</TD>
</TR>
<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="font-size: 1pt; border-top: 1px solid #000000">&nbsp;</DIV>
R. Keith Walton
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>



<P align="center" style="font-size: 10pt"><!-- Folio -->7<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left">
<A name="131"></A>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>EXHIBIT INDEX</B>
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="8%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="88%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">(a)(1)
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">-
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Amended and Restated Articles of Incorporation. (Incorporated by reference to Exhibit (1)
of the Registrant&#146;s Amendment No.&nbsp;2 to the Registrant&#146;s Registration Statement (Filed on
September&nbsp;22, 1988, Securities Act File No.&nbsp;33-23252; Investment Company Act File No.
811-5620) (&#147;Amendment No.&nbsp;2&#148;))</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">(a)(2)
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">-
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Articles Supplementary.*</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">(b)
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">-
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Amended and Restated By-Laws. (Incorporated by reference to Exhibit&nbsp;99.77Q1 to the
Registrant&#146;s N-SAR-A for the period ending June&nbsp;30, 2004.)</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">(c)
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">-
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Not applicable.</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">(d)(1)
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">-
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Form of Subscription Certificate.*</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">(d)(2)
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">-
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Form of Notice of Guaranteed Delivery.*</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">(d)(3)
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">-
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Form of Nominee Holder Over-Subscription Exercise Form.*</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">(e)
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">-
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Distribution Reinvestment and Cash Purchase Plan.**</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">(f)
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">-
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Not applicable.</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">(g)(1)
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">-
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Investment Advisory Agreement with Zweig Total Return Advisors, Inc. dated March&nbsp;1, 1999.
(Incorporated by reference to Exhibit&nbsp;A to the Registrant&#146;s Proxy Statement dated January&nbsp;19,
1999.)</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">(g)(2)
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">-
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Amended and Restated Servicing Agreement by and among Phoenix/Zweig Advisers LLC and
Zweig Consulting LLC dated March&nbsp;2, 2004. (Incorporated by reference to Exhibit&nbsp;99.77Q2 to
the Registrant&#146;s N-SAR-A for the period ending June&nbsp;30, 2004.)</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">(g)(3)
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">-</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Letter Agreement, dated February&nbsp;2, 2007, between Phoenix/Zweig Advisers LLC and Zweig
Consulting LLC.*</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">(h)
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">-
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Not applicable.</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">(i)
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">-
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Not applicable.</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">(j)
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">-
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Custodian Contract with State Street Bank and Trust Company dated as of May&nbsp;1, 1997.**</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">(k)(1)
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">-
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Administration Agreement with Zweig/Glaser Advisers dated as of March&nbsp;1, 1999.**</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">(k)(2)
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">-
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Assignment of Administration Agreement by Zweig/Glaser Advisers to Phoenix Equity
Planning Corporation effective as of October&nbsp;31, 1999.**</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="8%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="88%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">(k)(3)
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">-
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Letter Agreement, dated March&nbsp;1, 2006, between Registrant and Phoenix Equity Planning
Corporation with respect to the Administration Agreement.**</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">(k)(4)
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">-
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Stock Transfer Agent Service Agreement with Computershare Trust Company, N.A. (formerly EquiServe Trust Company, N.A.)
dated as of September&nbsp;1, 2001.*</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">(k)(5)
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">-
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Subscription Agent Agreement between the Registrant and Computershare Trust Company, N.A.*</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">(k)(6)
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">-
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Information Agent Agreement between the Registrant and Georgeson, Inc.*</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">(l)
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">-
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Opinion and Consent of Katten Muchin Rosenman LLP.*</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">(m)
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">-
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Not applicable.</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">(n)
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">-
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Consent of PricewaterhouseCoopers LLP.*</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">(o)
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">-
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Not applicable.</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">(p)
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">-
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Not applicable.</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">(q)
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">-
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Not applicable.</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">(r)(1)
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">-
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Code of Ethics of the Registrant.**</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">(r)(2)
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">-
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Code of Ethics of Phoenix/Zweig Advisers LLC.**</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">(r)(3)
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">-
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Code of Ethics of Zweig Consulting LLC.**</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><U>Other Exhibits</U>: Powers of Attorney for George R. Aylward, Charles H. Brunie, Wendy
Luscombe, Alden C. Olson, James B. Rogers, Jr. and R. Keith Walton.**
</DIV>



<DIV align="left">
<DIV style="font-size: 3pt; margin-top: 16pt; width: 18%; border-top: 1px solid #000000">&nbsp;</DIV>
</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96"></TD>
</TR>

<TR valign="top">
    <TD nowrap align="left">*</TD>
    <TD>&nbsp;</TD>
    <TD>Filed herewith.</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left">**</TD>
    <TD>&nbsp;</TD>
    <TD>Previously filed as an exhibit to Registrant&#146;s Registration Statement on Form N-2 (File No.
333-139605) as filed with the Securities and Exchange Commission on December&nbsp;22, 2006.</TD>
</TR>

</TABLE>




<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

</BODY>
</HTML>
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.A.2
<SEQUENCE>2
<FILENAME>y32550a1exv99waw2.htm
<DESCRIPTION>EX-99.A.2: ARTICLES SUPPLEMENTARY
<TEXT>
<HTML>
<HEAD>
<TITLE>EX-99.A.2</TITLE>
</HEAD>
<BODY bgcolor="#FFFFFF">
<!-- PAGEBREAK -->
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>
<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV align="right" style="font-size: 10pt; margin-top: 12pt">Exhibit (a)(2)
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt">THE ZWEIG TOTAL RETURN FUND, INC.
</DIV>


<DIV align="Center" style="font-size: 10pt; margin-top: 6pt"><B>ARTICLES SUPPLEMENTARY</B>

</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Zweig Total Return Fund, Inc., a Maryland corporation having its principal office, in
Maryland, in Baltimore City, Maryland (hereinafter called the &#147;Corporation&#148;), hereby certifies
to the Maryland State Department of Assessments and Taxation that:
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;FIRST: Pursuant to Title 3, Subtitle 8 of the Maryland General Corporation Law (the
&#147;MGCL&#148;), by resolution of its Board of Directors adopted on August&nbsp;10, 2004, the Corporation
elected to become subject to Section&nbsp;3-804(c) of the MGCL with respect to vacancies on the Board
of Directors, subject to the provisions of the Investment Company Act of 1940, as amended.
Section&nbsp;3-804(c) of the MGCL provides that all vacancies on the Board of Directors, whether
resulting from the death, resignation, or removal of a director or from an increase in the size
of Board of Directors, may be filled only by vote of the remaining members of the Board of
Directors, even if they do not constitute a quorum, and further that a director elected by the
Board of Directors to fill a vacancy shall hold office for the remainder of the full term of the
class of directors in which the vacancy occurred and until a successor is elected and qualifies.
In the event of any inconsistency with the Charter or Bylaws of the Corporation, the aforesaid
provisions of the MGCL will govern, subject to the provisions of the Investment Company Act of
1940, as amended.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;IN WITNESS WHEREOF, the Corporation has caused these presents to be signed in its name
and on its behalf by its President and witnessed by its Secretary as of this 10th day of
August, 2004, and the undersigned officers acknowledge that these Articles Supplementary are
the act of the Corporation, that to the best of their knowledge, information and belief all
matters and facts set forth herein with respect to the authorization and approval of these
Articles Supplementary are true in all material respects, and that this statement is made
under the penalties of perjury.
</DIV>

<TABLE width="100%" border="0" cellspacing="0" cellpadding="0" style="font-size: 10pt">
<TR>
    <TD width="35%">&nbsp;</TD>
    <TD width="13%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="35%">&nbsp;</TD>
    <TD width="15%">&nbsp;</TD>
</TR>
<TR>
    <TD colspan="2" valign="bottom" align="left">WITNESS:</TD>
    <TD colspan="3" valign="bottom" align="left">THE ZWEIG TOTAL RETURN FUND, INC.</TD>
    <TD>&nbsp;</TD>
</TR>
<tr>
    <TD>&nbsp;</TD>
</tr>
<TR>
    <TD colspan="0" style="border-bottom: 1px solid #000000" align="left">/s/ Megan Huddleston
&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top">By:&nbsp;&nbsp;</TD>
    <TD colspan="2" style="border-bottom: 1px solid #000000" align="left">/s/ Daniel T. Geraci
&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">Megan Huddleston, Secretary&nbsp;</TD>
    <TD align="left">&nbsp;</TD>

    <TD>&nbsp;</TD>
    <TD colspan="2" align="left">Daniel T. Geraci, President&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>
<TR>
    <TD colspan="5"><DIV align="center">(STATE OF MARYLAND SEAL)</DIV></TD>
</TR>

</TABLE>


<P align="center" style="font-size: 10pt"><!-- Folio --><!-- /Folio -->
</DIV>

</BODY>
</HTML>
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.D.1
<SEQUENCE>3
<FILENAME>y32550a1exv99wdw1.htm
<DESCRIPTION>EX-99.D.1: FORM OF SUBSCRIPTION CERTIFICATE
<TEXT>
<HTML>
<HEAD>
<TITLE>EX-99.D.1</TITLE>
</HEAD>
<BODY bgcolor="#FFFFFF">
<!-- PAGEBREAK -->
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>
<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV align="right" style="font-size: 10pt; margin-top: 12pt">Exhibit (d)(1)
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>THE OFFER EXPIRES AT 5:00 P.M., EASTERN TIME, ON </B><U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U><B>, 2007*</B>
</DIV>


<DIV align="Center" style="font-size: 10pt; margin-top: 6pt"><B>THE ZWEIG TOTAL RETURN FUND, INC.<BR>
NON-TRANSFERABLE RIGHTS TO SUBSCRIBE FOR SHARES</B>

</DIV>

<DIV align="Center" style="font-size: 10pt; margin-top: 6pt"><B>Exercise Form</B>

</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt">Dear Shareholder:
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">You are entitled to exercise the Rights issued to you as of <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>, 2007, the Record Date for
the Fund&#146;s rights offering, to subscribe for the number of shares of common stock (&#147;Shares&#148;) of The
Zweig Total Return Fund, Inc. (&#147;Fund&#148;) shown on this Exercise Form pursuant to the Primary
Subscription upon the terms and conditions specified in the Fund&#146;s prospectus dated
<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>, 2007 (&#147;Prospectus&#148;). The terms and conditions of the rights offering (&#147;Offer&#148;) set forth in the
Prospectus are incorporated herein by reference. Capitalized terms not deemed herein have the
meanings attributed to them in the Prospectus. As a holder of Rights, you are entitled to purchase
one Share for each five Rights you exercise. In accordance with the Over-Subscription Privilege, as
a holder of Rights, you are also entitled to subscribe for additional Shares, if Shares remaining
after exercise of Rights pursuant to the Primary Subscription are available and you have fully
exercised all Rights issued to you. If sufficient Shares remain after completion of the Primary
Subscription, all over-subscriptions will be honored in full. If sufficient Shares are not
available after completion of the Primary Subscription to honor all over-subscriptions, the Fund
may issue up to an additional <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Shares in order to cover such over-subscription requests.
To the extent the Fund determines not to issue additional Shares to honor all over-subscriptions,
the available Shares will be allocated among those who over-subscribe based on the number of Rights
originally issued to them by the Fund, so that the number of Shares issued to shareholders who
subscribe pursuant to the Over-Subscription Privilege will generally be in proportion to the number
of Shares owned by them on the Record Date. The Fund will not offer or sell any Shares which are
not subscribed for pursuant to the Primary Subscription or the Over-Subscription Privilege.
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>SAMPLE CALCULATION</B>
</DIV>

<P>
<DIV style="width: 100%; border: 1px solid black; padding: 11px;">

<DIV align="Center" style="font-size: 10pt; margin-top: 6pt">

<DIV align="Center" style="font-size: 10pt; margin-top: 6pt"><U><B>Primary Subscription Entitlement (1-For-5)</B></U>

</DIV>

<DIV align="Center" style="font-size: 10pt; margin-top: 6pt">Number of Shares owned on the Record Date <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>

</DIV>

<DIV align="Center" style="font-size: 10pt; margin-top: 6pt">Number of Rights Issued* <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> &#247; 5 = <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> new Shares

</DIV>

<DIV align="Center" style="font-size: 10pt; margin-top: 6pt">* <I>Automatically rounded down to the nearest number of Rights evenly divisible by five.</I>

</DIV>
</DIV>

<DIV align="Center" style="font-size: 10pt; margin-top: 6pt">
</DIV>

</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>SUBSCRIPTION PRICE</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The
subscription price for the Shares to be issued pursuant to the Offer will be equal to the lower
of the NAV at the close of business on <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>, 2007 or 95% of the average of the last reported
sales price of a share of the Fund&#146;s common stock on the NYSE on the pricing date and the four
preceding business days, unless the Offer is extended. For example, if the average of the last
reported sales price of a share on the NYSE on the pricing date and the four preceding business
days of a share of the Fund&#146;s Common Stock is $5.75, and if the NAV is $5.00, the subscription
price will be $5.00 (equal to the lower of the NAV or 95% of $5.75). The subscription price may be
equal to or lower than the Fund&#146;s then current net asset value per share. This will be your final
subscription price for the new Shares.
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>METHOD OF EXERCISE OF RIGHTS</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>IN ORDER TO EXERCISE YOUR RIGHTS, YOU MUST EITHER (i)&nbsp;COMPLETE AND SIGN THIS EXERCISE FORM ON THE
BACK AND RETURN IT TOGETHER WITH PAYMENT AT THE ESTIMATED SUBSCRIPTION PRICE FOR THE SHARES, OR
(ii)&nbsp;PRESENT A PROPERLY COMPLETED NOTICE OF GUARANTEED DELIVERY, IN EITHER CASE TO THE SUBSCRIPTION
AGENT, COMPUTERSHARE TRUST COMPANY, N.A. BEFORE 5:00 P.M., EASTERN TIME, ON </B><U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U><B>, 2007
(&#147;EXPIRATION DATE&#148;).*</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Full payment of the Estimated Subscription Price per share for all Shares subscribed for pursuant
to both the Primary Subscription and Over-Subscription Privilege must accompany this Exercise Form
and must be made payable in United States dollars by money order or check drawn on a bank located
in the United States payable to The Zweig Total Return Fund, Inc. Alternatively, if a Notice of
Guaranteed Delivery is used, a properly completed and executed Exercise Form, and full payment, as
described in such notice, must be received by the Subscription Agent no later than the close of
business on the third business day after the Expiration Date. For additional information, see the
Prospectus.
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>THESE SUBSCRIPTION RIGHTS ARE NON-TRANSFERABLE</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-left: 50%; margin-top: 12pt">Account #:
</DIV>

<DIV align="left" style="font-size: 10pt; margin-left: 50%; margin-top: 12pt">Maximum Primary Shares Available:
</DIV>

<DIV align="left" style="font-size: 10pt; margin-left: 50%; margin-top: 12pt">Number of Rights issued:
</DIV>


<DIV align="right" style="font-size: 10pt; margin-top: 12pt">(continued on back)
</DIV>



<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><DIV align="left" style="font-size: 10pt; margin-top: 6pt">Stock
certificates for the Shares acquired pursuant to the Primary Subscription will be mailed
promptly after the expiration of the Offer and after full payment for the Shares subscribed for has
been received and cleared. Certificates representing Shares acquired pursuant to the Over-Subscription Privilege will be mailed as soon as practicable after full payment has been received
and cleared and all allocations have been effected. Any excess payment to be refunded by the Fund
to a shareholder will be mailed by the Subscription Agent to such shareholder as promptly as
possible.
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="30%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="65%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><B><I>BY FIRST CLASS MAIL:</I></B>
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top"><B><I>BY EXPRESS MAIL OR OVERNIGHT COURIER:</I></B></TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Computershare
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Computershare</TD>
</TR>
<TR valign="bottom">

<TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Attn:
The Zweig Total Return Fund, Inc.
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Attn: The Zweig Total Return Fund, Inc.</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Rights Offering
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Rights Offering</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">P.O. Box 859208
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">161 Bay State Drive</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Braintree, MA 02185
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Braintree, MA 02184</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 6pt">Delivery to an address other than one of the addresses listed above will not constitute valid
delivery.
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>PLEASE PRINT ALL INFORMATION CLEARLY AND LEGIBLY</B>
</DIV>

<P>
<DIV style="width: 100%; border: 1px solid black; padding: 11px;">


<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>SECTION 1: </B><U><B>OFFERING INSTRUCTIONS</B></U> <B><I>(check the appropriate boxes)</I></B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>IF YOU
WISH TO SUBSCRIBE FOR YOUR FULL ENTITLEMENT</B>:
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><FONT face="Wingdings">&#111;</FONT>&nbsp;&nbsp;I apply for ALL of my entitlement of new Shares pursuant to the Primary Subscription <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U><U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>
x $ <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> &#134; = $ <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 0pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(no. of new Shares)</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><FONT face="Wingdings">&#111;</FONT>&nbsp;&nbsp;I apply for new Shares pursuant to the Over-Subscription Privilege**
<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>
x $ <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> &#134; = $ <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 0pt">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(no. of additional Shares &#151; no maximum)
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>IF YOU DO NOT WISH TO APPLY FOR YOUR FULL ENTITLEMENT:</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><FONT face="Wingdings">&#111;</FONT>&nbsp;&nbsp;I apply for
<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U><U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U><U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U><U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U><U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>
x $ <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> &#134; = $ <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 0pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(no. of new Shares)</DIV>
<DIV align="right" style="font-size: 10pt; margin-top: 6pt">AMOUNT ENCLOSED $ <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>
</DIV>
</DIV>


<P>
<DIV style="width: 100%; border: 1px solid black; padding: 11px;">


<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>SECTION 2: </B><U><B>SUBSCRIPTION AUTHORIZATION</B></U>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">I acknowledge that I have received the Prospectus for this Offer and I hereby irrevocably subscribe
for the number of new Shares indicated above on the terms and conditions set in the Prospectus. I
understand and agree that I will be obligated to pay any additional amount to the Fund if the
Subscription Price as determined on the Pricing Date is in excess of the $<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> estimated
Subscription Price per Share.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">I hereby agree that if I fail to pay in full for the Shares for which I have subscribed, the Fund
may exercise any of the remedies provided for in the Prospectus.
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="15%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="10%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="73%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD nowrap valign="top"><DIV style="margin-left:0px; text-indent:-0px">Signature of subscriber(s)
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" valign="top" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" valign="top" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" valign="top" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD nowrap valign="top" colspan="3"><DIV style="margin-left:0px; text-indent:-0px">Telephone number (including area code) (<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>)
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">If you wish to have our Shares and refund check (if any) delivered to an address other than that
listed on this Exercise Form you must have your signature guaranteed by a member of the New York
Stock Exchange or a bank or trust company. Please provide the delivery address above and note if it
is a permanent change.
</DIV>
</DIV>




<DIV align="left">
<DIV style="font-size: 3pt; margin-top: 16pt; width: 18%; border-top: 1px solid #000000">&nbsp;</DIV>
</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96"></TD>
</TR>

<TR valign="top">
    <TD nowrap align="left">*</TD>
    <TD>&nbsp;</TD>
    <TD>Unless the Offer is extended by the Fund.<BR></TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left">**</TD>
    <TD>&nbsp;</TD>
    <TD>You can only over-subscribe if you have fully exercised your Primary Subscription Rights.</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left">&#134;</TD>
    <TD>&nbsp;</TD>
    <TD>NOTE: $<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> per share is an estimated price only. The Subscription Price will be
determined on <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>, 2007, the Pricing Date (unless extended; and could be higher or
lower depending on the changes in the net asset value and market
price of a Share).</TD>
</TR>

</TABLE>



<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B><I>Any questions regarding this Exercise Form and the Offer may be directed to<BR>
the Information Agent, Georgeson, Inc., toll-free at (866)&nbsp;541-3552.</I></B>
</DIV>



<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

</BODY>
</HTML>
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.D.2
<SEQUENCE>4
<FILENAME>y32550a1exv99wdw2.htm
<DESCRIPTION>EX-99.D.2: FORM OF NOTICE OF GUARANTEED DELIVERY
<TEXT>
<HTML>
<HEAD>
<TITLE>EX-99.D.2</TITLE>
</HEAD>
<BODY bgcolor="#FFFFFF">
<!-- PAGEBREAK -->
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>
<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV align="right" style="font-size: 10pt; margin-top: 12pt">Exhibit (d)(2)
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>THE ZWEIG TOTAL RETURN FUND, INC.</B>
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 6pt"><B>NOTICE OF GUARANTEED DELIVERY FOR COMMON SHARES<BR>
SUBSCRIBED FOR PURSUANT TO THE PRIMARY SUBSCRIPTION AND THE OVER-SUBSCRIPTION PRIVILEGE</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As set forth in the Fund&#146;s Prospectus under &#147;The Offer-Payment for Shares,&#148; this form (or one
substantially equivalent hereto) may be used as a means of effecting the subscription and payment
for Common Shares of The Zweig Total Return Fund, Inc. subscribed for pursuant to the Primary
Subscription and the Over-Subscription Privilege. Such form may be delivered by hand or sent by
facsimile transmission, overnight courier or mail to the Subscription Agent and must be received
prior to 5:00 P.M., New York City time, on <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>, 2007, the Expiration Date.*
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt">The Subscription Agent is:<BR>
COMPUTERSHARE TRUST COMPANY, N.A.<BR>
Attention: Zweig Funds
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="26%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="50%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="20%">&nbsp;</TD>
</TR>
<TR style="font-size: 10pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">By Express Mail or</TD>
</TR>
<TR style="font-size: 10pt" valign="bottom">
    <TD nowrap align="left" style="border-bottom: 1px solid #000000">By Mail:</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" style="border-bottom: 1px solid #000000">Overnight Courier:</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">P.O. Box 859208
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">161 Bay State Drive</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Braintree, MA 02185
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Braintree, MA 02184</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt">By Facsimile:<BR>
(781)&nbsp;380-3388</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 6pt">Fax Confirmation by Telephone to:<BR>
(781)&nbsp;930-4900</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;DELIVERY OF THIS INSTRUMENT TO AN ADDRESS, OR TRANSMISSION OF INSTRUCTIONS VIA A FACSIMILE
NUMBER, OTHER THAN AS SET FORTH ABOVE DOES NOT CONSTITUTE A VALID DELIVERY.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The bank, trust company or New York Stock Exchange member firm that completes this form must
communicate the guarantee and the number of Common Shares subscribed for (pursuant to both the
Primary Subscription and the Over-Subscription Privilege) to the Subscription Agent and must
deliver this Notice of Guaranteed Delivery to the Subscription Agent prior to 5:00 P.M., New York
City time, on <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>, 2007, the Expiration Date.* This Notice of Guaranteed Delivery guarantees
delivery to the Subscription Agent of (i)&nbsp;a properly completed and executed Subscription Rights
Certificate and (ii)&nbsp;delivery of payment in full (based on the lower of the NAV at the close of
business on <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>, 2007 (the &#147;Pricing Date&#148;) or 95% of the average of the
last reported sales price of a share of the Fund&#146;s Common Shares on the NYSE on the Pricing Date
and the four preceding business days) for all Common Shares for which a subscription is being made.
Failure to deliver this Notice or to make the delivery guaranteed herein will result in a
forfeiture of the Rights.
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="center" style="font-size: 10pt; margin-top: 18pt">GUARANTEE
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The undersigned, a bank or trust company having an office or correspondent in the United
States, or a New York Stock Exchange member firm, hereby guarantees delivery to the Subscription
Agent by 5:00 P.M., New York City time, on the third business day after the Expiration Date of a
properly completed and executed Subscription Rights Certificate and payment of the full
Subscription Price for the Common Shares subscribed for pursuant to the Primary Subscription and,
if applicable, the Over-Subscription Privilege as subscription for such Common Shares is indicated
herein and on the Subscription Rights Certificate.
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">*&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Unless extended by the Fund
</DIV>


<DIV align="right" style="font-size: 10pt; margin-top: 12pt">Broker Assigned Control # ______________________
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>THE ZWEIG TOTAL RETURN FUND, INC.</B>
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">1.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Primary Subscription:</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Number of Rights Exercised: <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U><U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U></TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Number of Common Shares subscribed for in Primary Subscription, for which you are guaranteeing
delivery of the Subscription Rights Certificate and full payment:</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Rights divided by 5 = <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Common Shares (ignore fractions)</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">2.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Over-Subscription Privilege:</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Number of Common Shares subscribed for pursuant to the Over-Subscription Privilege, for which
you are guaranteeing delivery of the Subscription Rights Certificate and full payment:</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U><U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Common Shares</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">3.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Totals:</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Total Number of Rights Exercised: <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U><U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U></TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Total Number of Common Shares subscribed for, for which you are guaranteeing delivery of the
Subscription Rights Certificate and full payment:</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Rights divided by 5 = <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Common Shares (ignore fractions)</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">4.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Method of Delivery (Check one):</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>/&nbsp;&nbsp;/ Through the Depository Trust Company (&#147;DTC&#148;)</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>/&nbsp;&nbsp;/ Direct to Computershare Trust Company, N.A., as the Subscription Agent.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Please assign above a unique control number for each guarantee submitted. This number needs to
be referenced on any direct delivery or any delivery through DTC. In addition, please note that if
you are guaranteeing for Common Shares subscribed for pursuant to the Over-Subscription Privilege
and are a DTC participant, you must also execute and forward to Computershare Trust Company, N.A. a
Nominee Over-Subscription Form.
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><DIV style="width: 100%; border-bottom: 1px solid #000000; font-size: 1px">&nbsp;</DIV>
Name of Firm
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><DIV style="width: 100%; border-bottom: 1px solid #000000; font-size: 1px">&nbsp;</DIV>Authorized Signature
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><DIV style="width: 100%; border-bottom: 1px solid #000000; font-size: 1px">&nbsp;</DIV>Name (Please print or type)
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><DIV style="width: 100%; border-bottom: 1px solid #000000; font-size: 1px">&nbsp;</DIV>Title:
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><DIV style="width: 100%; border-bottom: 1px solid #000000; font-size: 1px">&nbsp;</DIV>DTC Participant Number
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><DIV style="width: 100%; border-bottom: 1px solid #000000; font-size: 1px">&nbsp;</DIV>Contact Name
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><DIV style="width: 100%; border-bottom: 1px solid #000000; font-size: 1px">&nbsp;</DIV>Address
</DIV>
<DIV align="left" style="font-size: 10pt">
<table width="100%">
<TR style="font-size: 6pt">
<TD width="40%">&nbsp;</TD>
<TD width="40%">&nbsp;</TD>
<TD width="20%">&nbsp;</TD>
</TR>
<TR><TD colspan="3"><DIV style="width: 100%; border-bottom: 1px solid #000000; font-size: 1px">&nbsp;</DIV></TD></TR>
<TR style="font-size: 10pt">
<TD>City</TD>
<TD>State</TD>
<TD>Zip Code</TD>
</TR>
</table>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><DIV align="left"><DIV style="font-size: 3pt; margin-top: 16pt; width: 26%; border-top: 1px solid #000000">&nbsp;</DIV></DIV>
Phone Number
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><DIV align="left"><DIV style="font-size: 3pt; margin-top: 16pt; width: 26%; border-top: 1px solid #000000">&nbsp;</DIV></DIV>
Date
</DIV>



<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

</BODY>
</HTML>
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.D.3
<SEQUENCE>5
<FILENAME>y32550a1exv99wdw3.htm
<DESCRIPTION>EX-99.D.3: FORM OF NOMINEE HOLDER OVER-SUBSCRIPTION EXERCISE FORM
<TEXT>
<HTML>
<HEAD>
<TITLE>EX-99.D.3</TITLE>
</HEAD>
<BODY bgcolor="#FFFFFF">
<!-- PAGEBREAK -->
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>
<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="right" style="font-size: 10pt; margin-top: 12pt">Exhibit (d)(3)
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>THE ZWEIG TOTAL RETURN FUND, INC.</B>
</DIV>


<DIV align="Center" style="font-size: 10pt; margin-top: 6pt"><B>RIGHTS OFFERING<BR>
NOMINEE OVER-SUBSCRIPTION FORM</B>

</DIV>

<DIV align="Center" style="font-size: 10pt; margin-top: 6pt"><B>PLEASE COMPLETE ALL APPLICABLE INFORMATION</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">THIS FORM IS TO BE USED ONLY BY NOMINEES TO EXERCISE THE OVER-SUBSCRIPTION PRIVILEGE FOR THE
ACCOUNT OF PERSONS WHOSE RIGHTS HAVE BEEN EXERCISED AND DELIVERED IN THE PRIMARY SUBSCRIPTION
THROUGH THE FACILITIES OF A COMMON DEPOSITORY. ALL OTHER EXERCISES OF OVER-SUBSCRIPTION PRIVILEGES
MUST BE EFFECTED BY THE DELIVERY OF THE SUBSCRIPTION RIGHTS CERTIFICATE.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">THE TERMS AND CONDITIONS OF THE OFFER ARE SET FORTH IN THE FUND&#146;S PROSPECTUS DATED &#95;&#95;&#95;, 2007
(THE &#147;PROSPECTUS&#148;) AND ARE INCORPORATED HEREIN BY REFERENCE. COPIES OF THE PROSPECTUS ARE AVAILABLE
UPON REQUEST FROM THE INFORMATION AGENT, GEORGESON, INC. AT (212)&nbsp;440-9800 (CALL COLLECT).
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">THIS FORM IS VOID UNLESS RECEIVED BY THE SUBSCRIPTION AGENT BY 5:00 P.M., NEW YORK CITY TIME, ON
&#95;&#95;&#95;, 2007* (THE &#147;EXPIRATION DATE&#148;) UNLESS PRECEDED BY A NOTICE OF GUARANTEED
DELIVERY.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.&nbsp;The undersigned hereby certifies to the Fund and the Subscription Agent that it is a
participant in The Depository Trust Company (the &#147;Depository&#148;) and that it has either (i)&nbsp;exercised
Rights in the Primary Subscription by means of transfer to the Depository Account of the
Subscription Agent or (ii)&nbsp;delivered to the Subscription Agent a Notice of Guaranteed Delivery in
respect of the exercise of Rights in the Primary Subscription and will exercise the Rights called
for in such Notice of Guaranteed Delivery by means of transfer to such Depository Account of the
Subscription Agent.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.&nbsp;The undersigned hereby subscribes for Common Shares pursuant to the Over-Subscription
Privilege, to the extent available, and certifies to the Fund and the Subscription Agent that such
exercise pursuant to the Over-Subscription Privilege is for the account or accounts of persons
(which may include the undersigned) on whose behalf all Rights in the Primary Subscription have
been exercised, as set forth in the list attached to this form.**
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.&nbsp;The undersigned hereby agrees to make payment of the estimated Subscription Price of $ &#95;&#95;&#95;
for each Common Share subscribed for pursuant to the Over-Subscription Privilege to the
Subscription Agent at or before 5:00 P.M., New York City time, on the Expiration Date*, unless a
Notice of Guaranteed Delivery is delivered to the Subscription Agent at or before 5:00 P.M., New
York City time, on the Expiration Date, and hereby represents that (check appropriate box):
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">/&nbsp;&nbsp;&nbsp;/ payment of the actual Subscription Price will be delivered to the Subscription Agent
pursuant to the Notice of Guaranteed Delivery referred to above;
</DIV>


<DIV align="Center" style="font-size: 10pt; margin-top: 6pt">or

</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">/&nbsp;&nbsp;&nbsp;/ payment of the estimated Subscription Price in the aggregate amount of $&#95;&#95;&#95; is being
delivered to the Subscription Agent herewith;
</DIV>


<DIV align="Center" style="font-size: 10pt; margin-top: 6pt">or

</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">

</div>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">/&nbsp;&nbsp;&nbsp;/ payment of the estimated Subscription Price in the aggregate amount of $&#95;&#95;&#95; has been
delivered separately to the Subscription Agent;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">and, in the case of funds not delivered pursuant to a Notice of Guaranteed Delivery, is or was
delivered in the manner set forth below (check appropriate box and complete information relating
thereto):
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;/&nbsp;&nbsp;&nbsp;/ certified check
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;/&nbsp;&nbsp;&nbsp;/ certified bank
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;/&nbsp;&nbsp;&nbsp;/ bank draft
</DIV>



<DIV align="left">
<DIV align="left">
<DIV style="font-size: 3pt; margin-top: 16pt; width: 18%; border-top: 1px solid #000000">&nbsp;</DIV>
</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96"></TD>
</TR>

<TR valign="top">
    <TD nowrap align="left">*</TD>
    <TD>&nbsp;</TD>
    <TD>Unless extended by the Fund</TD>
</TR>

</TABLE>



<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><DIV align="center"><DIV style="font-size: 3pt; margin-top: 16pt; width: 100%; border-top: 1px solid #000000">&nbsp;</DIV></DIV>
Primary Subscription Confirmation Number
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><DIV align="center"><DIV style="font-size: 3pt; margin-top: 16pt; width: 100%; border-top: 1px solid #000000">&nbsp;</DIV></DIV>
Depository Participant Number
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><DIV align="center"><DIV style="font-size: 3pt; margin-top: 16pt; width: 100%; border-top: 1px solid #000000">&nbsp;</DIV></DIV>
Name of Depository Participant
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt">Registration into which Common Shares, and/or refund checks should be issued:
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><DIV align="center"><DIV style="font-size: 3pt; margin-top: 16pt; width: 100%; border-top: 1px solid #000000">&nbsp;</DIV></DIV>
</DIV>


<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96"></TD>
</TR>
<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top">
    <TD nowrap align="left">Name: </TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="border-bottom: 1px solid #000000">&nbsp;</DIV></TD>
</TR>
</TABLE>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96"></TD>
</TR>
<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top">
    <TD nowrap align="left">Address: </TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="border-bottom: 1px solid #000000">&nbsp;</DIV></TD>
</TR>
<TR valign="top">
    <TD colspan="3"><DIV style="border-bottom: 1px solid #000000">&nbsp;</DIV></TD>
</TR>
</TABLE>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96"></TD>
</TR>
<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top">
    <TD nowrap align="left">Certified TIN:</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="border-bottom: 1px solid #000000">&nbsp;</DIV></TD>
</TR>
</TABLE>

<TABLE width="100%" border="0" cellspacing="0" cellpadding="0" style="font-size: 10pt">
<TR>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="35%">&nbsp;</TD>
    <TD width="15%">&nbsp;</TD>
    <TD width="48%">&nbsp;</TD>
</TR>
<TR>
    <TD colspan="3" align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top" align="left">&nbsp;</TD>
</TR><TR>
    <TD valign="top">By:&nbsp;&nbsp;</TD>
    <TD colspan="2" style="border-bottom: 1px solid #000000" align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;</TD>
</TR><TR>
    <TD>&nbsp;</TD>
    <TD valign="top">Name:&nbsp;&nbsp;</TD>
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;</TD>
</TR><TR>
    <TD>&nbsp;</TD>
    <TD valign="top">Title:&nbsp;&nbsp;</TD>
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;</TD>
</TR>
</TABLE>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96"></TD>
</TR>
<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top">
    <TD nowrap align="left">Contact Name:</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="border-bottom: 1px solid #000000">&nbsp;</DIV></TD>
</TR>
</TABLE>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96"></TD>
</TR>
<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top">
    <TD nowrap align="left">Phone Number:</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="border-bottom: 1px solid #000000">&nbsp;</DIV></TD>
</TR>
</TABLE>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="36"></TD>
    <TD width="60"></TD>
</TR>
<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top">
    <TD nowrap align="left">Dated:</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="border-bottom: 1px solid #000000">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
</TR>
</TABLE>


<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">

</div>



<DIV align="left">
<DIV align="left">
<DIV style="font-size: 3pt; margin-top: 16pt; width: 18%; border-top: 1px solid #000000">&nbsp;</DIV>
</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96"></TD>
</TR>

<TR valign="top">
    <TD nowrap align="left">**</TD>
    <TD>&nbsp;</TD>
    <TD>PLEASE ATTACH A BENEFICIAL OWNER LISTING CONTAINING THE NUMBER OF RIGHTS OWNED BY EACH BENEFICIAL
OWNER, THE NUMBER OF RIGHTS EXERCISED IN THE PRIMARY SUBSCRIPTION ON BEHALF OF EACH SUCH OWNER AND
THE NUMBER OF ADDITIONAL COMMON SHARES REQUESTED ON BEHALF OF EACH SUCH OWNER PURSUANT TO THE
OVER-SUBSCRIPTION PRIVILEGE.</TD>
</TR>

</TABLE>




<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

</BODY>
</HTML>
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.G.3
<SEQUENCE>6
<FILENAME>y32550a1exv99wgw3.htm
<DESCRIPTION>EX-99.G.3: LETTER AGREEMENT
<TEXT>
<HTML>
<HEAD>
<TITLE>EX-99.G.3</TITLE>
</HEAD>
<BODY bgcolor="#FFFFFF">
<!-- PAGEBREAK -->
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>
<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV align="right" style="font-size: 10pt; margin-top: 12pt">Exhibit (g)(3)
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>Zweig Consulting LLC<BR>
900 Third Avenue, 30</B><SUP style="font-size: 85%; vertical-align: text-top"><B>th</b></SUP><b> Floor<BR>
New York, NY 10022</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-left: 50%; margin-top: 6pt">February&nbsp;2, 2007
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt">Phoenix/Zweig Advisers LLC<BR>
900 Third Avenue, 31<SUP style="font-size: 85%; vertical-align: text-top">st</SUP> Floor<BR>
New York, NY 10022
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Ladies and Gentlemen:
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This will confirm that we have agreed to amend and restate Section&nbsp;2.1 of the Amended and
Restated Servicing Agreement, dated as of March&nbsp;2, 2004, to read in its entirety as follows.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">2.1 Except as otherwise provided in Section&nbsp;2.2, this Agreement shall remain in
effect from year to year (the &#147;Term&#148;), unless the Company or Zweig shall, upon not less
than 60&nbsp;days prior written notice, notify the other party that it has determined not to
renew this Agreement effective the next succeeding March&nbsp;1, in which case this Agreement
shall terminate on the next succeeding March 1 during the Term; <U>provided</U>,
<U>however</U>, that, with respect to a particular Fund (and Services being performed by
Zweig hereunder with respect to such Fund), this Agreement shall terminate automatically on
the first March 1 during the Term (if any) at which the continuation of this Agreement with
respect to such Fund has not been specifically approved on or prior to such March 1 in
accordance with the requirements of the Investment Company Act of 1940 by (i)&nbsp;a majority
of such Fund&#146;s outstanding voting securities or a majority of its board of directors and
(ii)&nbsp;a majority of the directors who are not &#147;interested persons&#148;, as defined in the
Investment Company Act of 1940, cast in person at a meeting called for the purpose of
voting on such approval; and <U>provided</U>, <U>further</U>, that this Agreement shall
terminate immediately in full at such time (as any) as it has been terminated with respect
to both Funds.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Kindly indicate your agreement to the foregoing by signing and returning a copy of this letter
to us.
</DIV>

<TABLE width="100%" border="0" cellspacing="0" cellpadding="0" style="font-size: 10pt">
<TR>
    <TD width="48%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="35%">&nbsp;</TD>
    <TD width="15%">&nbsp;</TD>
</TR>
<TR>
    <TD valign="top" align="left">&nbsp;</TD>
    <TD colspan="3" align="left">Sincerely yours,<BR>
&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>

<TD colspan="3" style="border-bottom: 1px solid #000000" align="left">/s/ Martin E. Zweig
&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD colspan="3" align="left">Martin E. Zweig, <br>President&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>
</TABLE>

<TABLE width="100%" border="0" cellspacing="0" cellpadding="0" style="font-size: 10pt">
<TR>

    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="35%">&nbsp;</TD>
    <TD width="15%">&nbsp;</TD>
    <TD width="48%">&nbsp;</TD>
</TR>
<TR>
    <TD valign="top" align="left">&nbsp;</TD>
    <TD colspan="3" align="left">AGREED TO BY:<BR>
Phoenix/Zweig Advisers LLC<BR>
&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD valign="top">By:&nbsp;&nbsp;</TD>

<TD colspan="1" style="border-bottom: 1px solid #000000" align="left">/s/
Illegible
&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>
</TABLE>


<P align="center" style="font-size: 10pt"><!-- Folio --><!-- /Folio -->
</DIV>

</BODY>
</HTML>
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.K.4
<SEQUENCE>7
<FILENAME>y32550a1exv99wkw4.htm
<DESCRIPTION>EX-99.K.4: STOCK TRANSFER AGENT SERVICE AGREEMENT
<TEXT>
<HTML>
<HEAD>
<TITLE>EX-99.K.4</TITLE>
</HEAD>
<BODY bgcolor="#FFFFFF">
<!-- PAGEBREAK -->
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>
<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="right" style="font-size: 10pt; margin-top: 6pt">Exhibit&nbsp;(k)(4)
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><IMG src="y32550a1y3255001.gif" alt="(EQUISERVE LOGO)">
</DIV>


<DIV align="right" style="font-size: 10pt; margin-top: 12pt"><FONT style="font-variant: SMALL-CAPS"><B><U>Transfer Agent</U></B></FONT><B><U>&nbsp;&#151;&nbsp;</U></B><FONT style="font-variant: SMALL-CAPS"><B><U>Registrar</U></B></FONT>
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt">CERTIFIED COPY OF RESOLUTIONS OF<BR>
BOARD OF DIRECTORS OF<BR>
<B>THE ZWEIG TOTAL RETURN FUND, INC.</B>
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 6pt"><B>RESOLVED:</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;FIRST: Whereas State Street Bank and Trust Company is Transfer Agent and Registrar; and
EquiServe Trust Company, N.A. is hereby appointed successor Transfer Agent and Registrar for all
funds immediately upon the depletion or resilvering of all personalized security inventory
appointing and utilized by State Street Bank and Trust Company as Transfer Agent and Registrar by
September&nbsp;1, 2001 or thereafter at the discretion of the Transfer Agent, and EquiServe Trust
Company, N.A. having secured the aforementioned security inventory in its own name for utilization
in providing stock transfer and registrar services; and EquiServe Limited Partnership is currently
appointed Record Keeping Agent for both State Street Bank and Trust Company and EquiServe Trust
Company, N.A. for the transfer and registration of certificates representing certain shares for
which the Transfer Agent and Registrar currently provide services or will provide as hereafter
authorized by their respective certificates of incorporation.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SECOND: That the assignment of the transfer agency agreement, rights agreement or other
related agreement between State Street Bank and Trust Company and this Corporation to EquiServe
Trust Company, N.A. is hereby approved effective upon the appointment of EquiServe Trust Company,
N.A. as the Transfer Agent and Registrar as set forth in Paragraph&nbsp;FIRST above.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;THIRD: That this Corporation shall protect and hold the Transfer Agent-Registrar harmless
from all liability, claims of liability, and expense (including counsel fees) arising out of or in
connection with the Transfer Agent-Registrar acting upon any signature, certificate or other
document believed by it to be genuine and to have been signed by the proper person, or refusing in
good faith to transfer a certificate if it is not satisfied as to the propriety of the requested
transfer, or acting pursuant to any direction given by this corporation; that this Corporation
will upon request of the Transfer Agent-Registrar undertake at this Corporation&#146;s expense the
defense of any such claim; and that notwithstanding the death, resignation or removal of any
officer of this Corporation authorized to sign certificates of stock, the Transfer Agent-Registrar
may continue to countersign certificates bearing the manual or facsimile signature of such offer
until otherwise directed in writing by this Corporation.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;I, the undersigned, Jeffrey Lazar, Assistant Secretary of The Zweig Total Return Fund, Inc.,
the above named Corporation, do hereby certify that said Corporation was duly organized and is now
existing under the laws of the State of Maryland, and that the foregoing is a copy of resolutions
duly adopted by the Board of Directors of said Corporation at a meeting duly called and held on
September 24, 2001, at which a quorum was present and acting throughout, and that said resolutions
are still in full force and effect.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;IN WITNESS WHEREOF I have hereto set my hand and affixed the seal of the Corporation this 11<SUP style="font-size: 85%; vertical-align: text-top">th</SUP> day of
October, 2001.
</DIV>

<TABLE width="100%" border="0" cellspacing="0" cellpadding="0" style="font-size: 10pt">
<TR>
    <TD width="48%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="35%">&nbsp;</TD>
    <TD width="15%">&nbsp;</TD>
</TR>
<TR>
    <TD valign="top" align="left">&nbsp;</TD>
    <TD colspan="3" align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD colspan="3" style="border-bottom: 1px solid #000000" align="left">/s/ Jeffrey Lazar
&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD colspan="3" align="left">Assistant Secretary&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD colspan="3" align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>
</TABLE>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">(Corporate Seal)
</DIV>



<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>STATE STREET BANK &#038; TRUST COMPANY</B><BR><BR>
<B>STOCK TRANSFER AGENT SERVICES AGREEMENT FOR: </B><BR><BR>
<B>THE ZWEIG TOTAL RETURN FUND, INC.</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">This Agreement sets forth the terms and conditions under which State Street Bank &#038; Trust
Company (hereinafter referred to as &#147;State Street&#148;) will serve as sole Transfer Agent, Registrar,
Dividend Disbursement and Dividend Reinvestment Agent for the Common Stock of The Zweig Total
Return Fund, Inc. closed end mutual fund (hereinafter referred to as &#147;Zweig&#148;).
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><B>A.</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>TERM</B></TD>
</TR>

</TABLE>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">The term of this Agreement shall be for a period of three (3)&nbsp;years, commencing from the
effective date of this Agreement, September&nbsp;1, 1997.
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><B>B.</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>FEE FOR STANDARD SERVICES</B></TD>
</TR>

</TABLE>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">For the standard services as stated in Section&nbsp;C provided by State Street under this
Agreement, Zweig will be charged as follows:
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<DIV style="width: 100%; border-bottom: 1px solid #000000; font-size: 1px">&nbsp;</DIV>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 3pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<DIV style="width: 100%; border-bottom: 1px solid #000000; font-size: 1px">&nbsp;</DIV>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;$12,550&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Monthly Administrative fee
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<DIV style="width: 100%; border-bottom: 1px solid #000000; font-size: 1px">&nbsp;</DIV>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%"><B>Escalation: </B>This Agreement shall be self renewing, and providing that service mix and
volumes remain constant, the final year&#146;s fees listed under the Fee for Standard Services
section shall be increased by the accumulated change in the National Employment Cost
Index for Service Producing Industries (Finance, Insurance, Real Estate) for the
preceding years of the contract, as published by the Bureau of Labor Statistics of the
United States Department of Labor. Fees will be increased on this basis on each
successive contract anniversary thereafter.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%"><B>Open Accounts: </B>the terms of this Agreement will cover up to 14,000 Open Accounts per
annum. Excess to be billed at $5.00 per Open Account.
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><B>C.</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>STANDARD SERVICES</B></TD>
</TR>

</TABLE>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">State Street agrees to provide the following services to Zweig in accordance with the
standard fees set forth in Section&nbsp;B.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%"><B>Account Maintenance:</B>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">1.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Annual services as Transfer Agent, Registrar, Dividend Disbursement and
Dividend Reinvestment Agent.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">2.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Maintaining shareholder account, including the processing of new accounts,
preparation and mailing W-9 certifications to new accounts and closing accounts.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">3.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Posting and acknowledging address changes, tax ID number changes and W-9
certification, and all other routine file maintenance adjustments.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">3a.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>On-line remote access to shareholder and Fund database.</TD>
</TR>

</TABLE>
</DIV>
<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV style="margin-top: 6pt"><TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">



</TABLE>
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="60%"></TD>
    <TD width="5%"></TD>
    <TD width="35%"></TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD align="left" valign="top">&nbsp;
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top"><B>The Zweig Total Return Fund, Inc.<BR>
Page 2</B></TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">4.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Posting all transactions, including routine and non-routine debit and credit certificates. To
include all book or unissued shareholder transfer activity.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">5.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Issuance and registration of stock certificates annually.*</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">6.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Researching and responding to all written shareholder and broker inquiries and phone inquiries.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">7.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Daily Transfer Activity Journals reflecting ownership changes to be mailed to Zweig at the
close of each week if required.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">8.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Processing all New York Window items, mail items and legal transfers.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">9.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Processing Indemnity Bonds, placing certificate stop transfer orders and replacing lost certificates.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">10.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Coding multiple accounts at a single household to suppress duplicate report mailings.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">11.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Maintaining closed accounts.</TD>
</TR>

</TABLE>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0%"><B>Mailing &#038; Report Production Services:</B>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">1.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Addressing and mailing four (4)&nbsp;registered shareholder reports or letters via First Class
Mail per annum.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">2.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Preparing two (2)&nbsp;full or partial shareholder reports (including Statistical Reports) per annum.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">3.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Preparing twelve (12)&nbsp;sets of shareholder labels per annum.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">4.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Abandoned Property Reports provided at $1,000 per report and $3.00 per respondent.</TD>
</TR>

</TABLE>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0%"><B>Annual Meeting Services:</B>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">1.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Preparing one (1)&nbsp;full stockholder list as of the Annual Meeting record date.<BR></TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">2.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Addressing proxy cards for registered shareholders.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">3.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Enclosing and mailing proxy cards with proxy statement, annual report and postage paid return envelope to all registered shareholders.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">4.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Preparing one (1)&nbsp;set of registered broker labels and one (1)&nbsp;list of registered brokers for
the Broker Search.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">5.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Receiving, opening and examining returned proxies.<BR></TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">6.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Writing in connection with unsigned or improperly executed proxies.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">7.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Tabulating returned proxies to include an unlimited number of proposals.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">8.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Providing summary reports on the Proxy Vote Tabulation status as requested.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">9.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Interface with Solicitor appointed by Zweig.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">10.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Preparing one (1)&nbsp;final Annual Meeting list reflecting how each account has voted on each proposal.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">11.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Attending the Annual Meeting as Inspector of Election.</TD>
</TR>

</TABLE>
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>
<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="60%"></TD>
    <TD width="5%"></TD>
    <TD width="35%"></TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD align="left" valign="top">&nbsp;
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top"><B>The Zweig Total Return Fund, Inc.<BR>
Page 3</B></TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">12.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Respondent Bank Services to include:</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Processing each respondent bank omnibus proxy received.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Mailing respondent bank search cards.</TD>
</TR>

</TABLE>
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Note: all out-of-pocket expenses including overprinting proxy cards, card stock, envelopes, postage
and telecopy charges will be billed as incurred.
</DIV>



<DIV align="left" style="font-size: 10pt; margin-top: 12pt; margin-left: 2%"><B>Dividend
Disbursement Services:</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">As
Dividend Disbursing and Paying Agent, State Street will perform the
dividend related
services listed, pursuant to the following terms and conditions:
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>All funds must be received by 1:00 p.m. Eastern Time on
Payable Date or Mail Date via federal Funds Wire or State Street Bank Demand Deposit account debit.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">1.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Preparing and mailing monthly dividend checks with an additional enclosure.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">2.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Providing Automated Clearinghouse Funds (ACH)&nbsp;services.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">3.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Replacing lost dividend checks.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">4.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Providing photo copies of cashed dividend checks if requested.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">5.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Processing and record keeping of accumulated uncashed dividend.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">6.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Reconciling paid and outstanding dividend checks.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">7.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Coding RPO/SAUK accounts to suppress mailing dividend checks to undeliverable addresses.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">8.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Effecting wire transfer of funds to Depository Trust Company on payable date.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">9.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Preparing and filing Federal Information Returns (Form
1099-DIV) of dividends
paid during the year and mailing Forms 1099-DIV to each shareholder.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">10.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Preparing and filing State Information Returns of dividends
paid during the
year to shareholders resident within such State in accordance with current State Filing regulations.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">11.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Preparing and filing annual withholding return (Form&nbsp;1042) and payments to the
government of income taxes withheld from Non-resident Aliens and mailing Forms 1042 to each foreign
shareholder.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">12.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Performing the following duties as required by the Interest and Dividend Tax
Compliance Act of 1983:</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Withholding tax from shareholder accounts not in compliance
with the provisions of the Act.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Reconciling and reporting taxes withheld, including additional 1099 reporting
requirements, to the Internal Revenue Service.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Responding to shareholders regarding the regulations.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Mailing to new accounts which have had taxes withheld, to inform them of
procedures to be followed to cease future back-up withholding.
</TD>
</TR>
</TABLE>
</DIV>
<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV style="margin-top: 6pt"><TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">


</TABLE>
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="60%"></TD>
    <TD width="5%"></TD>
    <TD width="35%"></TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD align="left" valign="top">&nbsp;
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top"><B>The Zweig Total Return Fund, Inc.<BR>
Page 4</B></TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Annual mailing to pre-1984 accounts for which Tax Identification Numbers
(TIN)&nbsp;have not yet been certified.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Performing shareholder file adjustments to reflect TIN certifications.</TD>
</TR>

</TABLE>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">Note: Depository Wire charges required to fund dividend payments will be billed to Zweig
as an expense.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt; margin-left: 2%"><B>Dividend
Reinvestment Services:</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">As
Administrator for the Open Market and/or Original Issue Dividend Reinvestment Plans
(&#147;DRP&#148;), State Street will perform the listed DRP related services:
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">1.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Reinvestment and/or optional cash investment transactions of DRP participants.*</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">2.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Processing DTC monthly reinvestments at $250 per investment.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">3.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Preparing and mailing a year-to-date dividend reinvestment statement with an
additional enclosure to DRP participants upon completion of each monthly reinvestment.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">4.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Preparing and mailing a year-to-date optional cash investment statement to
participants upon the completion of each investment.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">5.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Maintaining DRP accounts and establishing new DRP accounts.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">6.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Processing sale/termination requests.*</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">7.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Processing withdrawal requests.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">8.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Providing Zweig with a Dividend Reinvestment Investment Summary Report for
each reinvestment and/or optional cash investment.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">9.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Providing Safekeeping for DRP participant stock certificates.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">10.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Researching and responding to shareholder inquiries regarding the Plan.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">11.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Preparing and mailing Forms 1099 and Forms 1042 to DRP participants and
completing related filings to the IRS.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">12.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Preparing, mailing and filing Form&nbsp;1099B relating to DRP sales.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 12pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><B>D.</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>LIMITATIONS</B></TD>
</TR>

</TABLE>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">The fees as stated in Section&nbsp;B include:
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The issuance and registration of 4,000 stock certificates per annum.
Excess to be billed at $1.50 per stock certificate.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>A total of 142,000 DRP transactions (defined as a dividend
reinvestment and/or cash investment), per annum. Excess to be billed at $1.25 each.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>A total of 3,500 DRP redemptions (sales or withdrawals) per annum.
Excess to be billed at $5.00 each.</TD>
</TR>


</TABLE>
</DIV>
<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV style="margin-top: 6pt"><TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">



</TABLE>
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="60%"></TD>
    <TD width="5%"></TD>
    <TD width="35%"></TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD align="left" valign="top">&nbsp;
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top"><B>The Zweig Total Return Fund, Inc.<BR>
Page 5</B></TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><B>E.</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>SERVICES NOT COVERED</B></TD>
</TR>

</TABLE>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">Items not included in the fees set forth in this Agreement for &#147;Standard Services&#148; Section
B such as payment of stock dividends or splits or any other services associated with a
special project will be billed separately on an appraisal basis.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">Services
required by legislation or regulatory fiat which become effective
after the date
of this Agreement shall not be a part of the Standard Services and shall be billed by
appraisal.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">All
out-of-pocket expenses such as telephone line charges associated with toll free
telephone calls, overprinting, insurance, stationary, envelopes, telecopy charges, excess
material storage and disposal will be billed to Zweig as incurred.
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><B>F.</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>OTHER TERMS &#38; CONDITIONS</B></TD>
</TR>

</TABLE>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">Good funds to cover postage expenses in relation to the mailing of Annual Meeting
materials by State Street by 1:00 p.m. Eastern Time on the scheduled mailing date.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">Overtime charges will be assessed in the event material is delivered late for
shareholder mailing unless the mail date is rescheduled to a later date. Such material includes, but is not
limited to: proxy statements, annual, semi and quarterly reports, dividend enclosures and
news releases. Receipt of material for mailing to shareholders must be received three (3)
full business days in advance of the scheduled mail date.
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><B>G.</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>BILLING DEFINITION OF ACCOUNT MAINTENANCE</B></TD>
</TR>

</TABLE>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">For billing purposes, number of accounts will be based on open accounts on file at the
beginning of each billing period, plus any new accounts added during the billing period.
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><B>H.</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>TERMINATION</B></TD>
</TR>

</TABLE>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">This Agreement may be terminated by either party upon sixty (60)&nbsp;days written notice to
the other. However, State Street may terminate this Agreement upon written notice to
Zweig if Zweig has breached its obligation as described in Section&nbsp;I set forth below by
failing to make payment of invoices for a period of three (3)&nbsp;consecutive months and
Zweig has failed to cure such breach within five (5)&nbsp;business days of receipt of such
notice.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">Should Zweig or State Street exercise its right to terminate this Agreement, all
out-of-pocket expenses associated with the transfer of records and material will be borne
by Zweig. Out-of-pocket expenses may, if required, include costs associated with any
year-end Federal and/or State tax reporting responsibilities.
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><B>I.</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>PAYMENT FOR SERVICES</B></TD>
</TR>

</TABLE>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">It
is agreed that invoices will be rendered and payable on a monthly
basis. Each billing
period will, therefore, be for a one (1)&nbsp;month duration. Zweig agrees to pay all fees and
reimbursable expenses within thirty days (30)&nbsp;following the
receipt of the respective
billing notice. Interest charges may begin to accrue on unpaid balances for more than
forty-five (45)&nbsp;days.
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="60%"></TD>
    <TD width="5%"></TD>
    <TD width="35%"></TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD align="left" valign="top">&nbsp;
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top"><B>The Zweig Total Return Fund, Inc.<BR>
Page 6</B></TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><B>J.</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>NON-ASSIGNABILITY</B></TD>
</TR>

</TABLE>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">This
Agreement, and the duties, obligations and services to be provided
herein, may not be
assigned or otherwise transferred without prior written consent of Zweig.
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><B>K.</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>CONFIDENTIALITY</B></TD>
</TR>

</TABLE>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">The information contained in this Agreement is confidential and proprietary in nature. By
receiving this Agreement, both parties agree that none of its directors, officers
employees, or agents without the prior written consent of the other party will divulge,
furnish or make accessible to any third party, except as permitted by
the next sentence,
any part of this Agreement or information in connection therewith which has been or may be
made available to it. In this regard, both parties agree that they will limit access to the
Agreement and such information to only those officers and employees with responsibilities
for analyzing the Agreement and to such independent consultants hired expressly for the
purpose of assisting in such analysis. In addition, both parties
agree that any persons to
whom such information is properly disclosed shall be informed of the confidential nature
of the Agreement and the information relating thereto, and shall be
directed to treat the
same appropriately.
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><B>L.</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>CONTRACT ACCEPTANCE</B></TD>
</TR>

</TABLE>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">In
witness whereof, the parties hereto have caused this Agreement to be executed by their
respective officers, hereunto duly agreed and authorized, as of the effective date of this
Agreement.
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="1%">&nbsp;</TD>
    <TD width="35%">&nbsp;</TD>
    <TD width="14%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="35%">&nbsp;</TD>
    <TD width="14%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top" colspan=2><DIV style="margin-left:0px; text-indent:-0px"><B>STATE STREET BANK<br>
&#038; TRUST COMPANY</B>
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD colspan=2 align="left" valign="top"><B>THE ZWEIG TOTAL RETURN<br>
FUND, INC.</B></TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
  <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">By:&nbsp;
</DIV></TD>
  <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"> /s/ Illegible
</DIV></TD>
    <TD>&nbsp;</TD>
  <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">By:&nbsp;
</DIV></TD>
    <TD align="left" valign="top">/s/ Jeffrey Lazar</TD>
    <TD>&nbsp;</TD>
</TR>

<TR style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD valign="top" style="border-top: 1px solid #000000"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD>&nbsp;</TD>
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Title: Vice President<br>
Date: June&nbsp;19, 1997
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Title: Vice President<br>
Date: June&nbsp;10, 1997</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>



<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
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</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.K.5
<SEQUENCE>8
<FILENAME>y32550a1exv99wkw5.htm
<DESCRIPTION>EX-99.K.5: SUBSCRIPTION AGENT AGREEMENT
<TEXT>
<HTML>
<HEAD>
<TITLE>EX-99.K.5</TITLE>
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<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV align="right" style="font-size: 10pt; margin-top: 12pt">Exhibit (k)(5)
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><U><B>SUBSCRIPTION AGENT AGREEMENT</B></U>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This Subscription Agent Agreement (the &#147;Agreement&#148;) is made as of March&nbsp;26, 2007 between The
Zweig Total Return Fund, Inc. (the &#147;Company&#148;), Computershare Shareholder Services, Inc., a
Delaware corporation and its fully owned subsidiary Computershare Trust Company, N.A., a national
banking (collectively, the &#147;Agent&#148; or individually &#147;CSS&#148; and the &#147;Trust Company&#148;, respectively).
All terms not defined herein shall have the meaning given in the prospectus (the &#147;Prospectus&#148;)
included in the (Registration Statement on Form N-2, Investment Company Act File No.&nbsp;811-05620
filed by the Company with the Securities and Exchange Commission on December&nbsp;22, 2006, as amended
by any amendment filed with respect thereto (the &#147;Registration Statement&#148;).
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;WHEREAS, the Company proposes to make subscription offer by issuing certificates or other
evidences of subscription rights, in the form designated by the Company (the &#147;Subscription
Certificates&#148;) to shareholders of record (the &#147;Shareholders&#148;) of its Common Stock, par value $0.001
per share (&#147;Common Stock&#148;), as of a record date specified by the Company (the &#147;Record Date&#148;),
pursuant to which each Shareholder will have certain rights (the &#147;Rights&#148;) to subscribe for shares
of Common Stock, as described in and upon such terms as are set forth in the Prospectus, a final
copy of which has been or, upon availability will promptly be, delivered to the Agent; and
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;WHEREAS, the Company wishes the Agent to perform certain acts on behalf of the Company, and
the Agent is willing to so act, in connection with the distribution of the Subscription
Certificates and the issuance and exercise of the Rights to subscribe therein set forth, all upon
the terms and conditions set forth herein.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;NOW, THEREFORE, in consideration of the foregoing and of the mutual agreements set forth
herein, the parties agree as follows:
</DIV>

<DIV style="margin-top: 12pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><B>1.</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><U><B>Appointment.</B></U></TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company hereby appoints the Agent to act as subscription agent in connection with the
distribution of Subscription Certificates and the issuance and exercise of the Rights in accordance
with the terms set forth in this Agreement and the Agent hereby accepts such appointment.
</DIV>

<DIV style="margin-top: 12pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><B>2.</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><U><B>Form and Execution of Subscription Certificates.</B></U></TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A.&nbsp;Each Subscription Certificate shall be irrevocable and non-transferable. The Agent shall,
in its capacity as Transfer Agent of the Company, maintain a register of Subscription Certificates
and the holders of record thereof (each of whom shall be deemed a &#147;Shareholder&#148; hereunder for
purposes of determining the rights of holders of Subscription Certificates). Each Subscription
Certificate shall, subject to the provisions thereof, entitle the Shareholder in whose name it is
recorded to the following:
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1)&nbsp;With respect to Record Date Shareholders only, the right to acquire during the
Subscription Period, as defined in the Prospectus, at the Subscription Price, as defined in the
Prospectus, a number of shares of Common Stock equal to one share of Common Stock for every five
Rights (the &#147;Primary Subscription Right&#148;); and
</DIV>


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<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2)&nbsp;With respect to Record Date Shareholders only, the right to subscribe for additional
shares of Common Stock, subject to the availability of such shares and to the allotment of such
shares as may be available among Record Date Shareholders who exercise Over-Subscription Rights on
the basis specified in the Prospectus; provided, however, that such Record Date Shareholder has
exercised all Primary Subscription Rights issued to him or her (the &#147;Over-Subscription Privilege&#148;).
</DIV>


<DIV style="margin-top: 12pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><B>3.</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><U><B>Rights and Issuance of Subscription Certificates</B></U><B>.</B></TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A.&nbsp;Each Subscription Certificate shall evidence the Rights of the Shareholder therein named
to purchase Common Stock upon the terms and conditions therein and herein set forth.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;B.&nbsp;Upon the written advice of the Company, signed by any of its duly authorized officers, as
to the Record Date, the Agent shall, from a list of the Company Shareholders as of the Record Date
to be prepared by the Agent in its capacity as Transfer Agent of the Company, prepare and record
Subscription Certificates in the names of the Shareholders, setting forth the number of Rights to
subscribe for the Company&#146;s Common Stock calculated on the basis of one Right for one share of
Common Stock recorded on the books in the name of each such Shareholder as of the Record Date. The
number of Rights that are issued to Record Date Shareholders will be rounded down by the Agent, to
the nearest number of Full Rights as Fractional Rights will not be issued. Each Subscription
Certificate shall be dated as of the Record Date and shall be executed manually or by facsimile
signature of a duly authorized officer of the Subscription Agent. Upon the written advice, signed
as aforesaid, as to the effective date of the Registration Statement, the Agent shall promptly
countersign and deliver the Subscription Certificates, together with a copy of the Prospectus,
instruction letter and any other document as the Company deems necessary or appropriate, to all
Shareholders with record addresses in the United States (including its territories and possessions
and the District of Columbia). Delivery shall be by first class mail (without registration or
insurance), except for those Shareholders having a registered address outside the United States
(who will only receive copies of the Prospectus, instruction letter and other documents as the
Company deems necessary or appropriate, if any), delivery shall be by air mail (without
registration or insurance) and by first class mail (without registration or insurance) to those
Shareholders having APO or FPO addresses. No Subscription Certificate shall be valid for any
purpose unless so executed.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;C.&nbsp;The Agent will mail a copy of the Prospectus, instruction letter, a special notice and
other documents as the Company deems necessary or appropriate, if any, but not Subscription
Certificates to Record Date Shareholders whose record addresses are outside the United States
(including its territories and possessions and the District of Columbia ) (&#147;Foreign Record Date
Shareholders&#148;). The Rights to which such Subscription Certificates relate will be held by the
Agent for such Foreign Record Date Shareholders&#146; accounts until instructions are received to
exercise, sell or transfer the Rights.
</DIV>

<DIV style="margin-top: 12pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><B>4.</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><U><B>Exercise</B></U><B>.</B></TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A.&nbsp;Record Date Shareholders may acquire shares of Common Stock on Primary Subscription and
pursuant to the Over-Subscription Privilege by delivery to the Agent as specified in the Prospectus
of (i)&nbsp;the Subscription Certificate with respect thereto, duly executed by such Shareholder in
accordance with and as provided by the terms and conditions of the Subscription Certificate,
</DIV>

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<DIV align="left" style="font-size: 10pt; margin-top: 6pt">together with (ii)&nbsp;the estimated purchase price, as disclosed in the Prospectus, for each share of
Common Stock subscribed for by exercise of such Rights, in U.S. dollars by money order or check
drawn on a bank in the United States, in each case payable to the order of the Company or CSS.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;B.&nbsp;Rights may be exercised at any time after the date of issuance of the Subscription
Certificates with respect thereto but no later than 5:00 P.M. New York time on such date as the
Company shall designate to the Agent in writing (the &#147;Expiration Date&#148;). For the purpose of
determining the time of the exercise of any Rights, delivery of any material to the Agent shall be
deemed to occur when such materials are received at the Shareholder Services Division of the Agent
specified in the Prospectus.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;C.&nbsp;Notwithstanding the provisions of Section&nbsp;4 (a)&nbsp;and 4 (b)&nbsp;regarding delivery of an
executed Subscription Certificate to the Agent prior to 5:00 P.M. New York time on the Expiration
Date, if prior to such time the Agent receives a Notice of Guaranteed Delivery by facsimile
(telecopy)&nbsp;or otherwise from a bank, a trust company or a New York Stock Exchange member
guaranteeing delivery of (i)&nbsp;payment of the full Subscription Price for the shares of Common Stock
subscribed for on Primary Subscription and any additional shares of Common Stock subscribed for
pursuant to the Over-Subscription Privilege, and (ii)&nbsp;a properly completed and executed
Subscription Certificate, then such exercise of Primary Subscription Rights and Over-Subscription
Rights shall be regarded as timely, subject, however, to receipt of the duly executed Subscription
Certificate and full payment for the Common Stock by the Agent within three Business Days (as
defined below) after the Expiration Date (the &#147;Protect Period&#148;) and full payment for their Common
Stock within ten Business Days after the Confirmation Date (as defined in Section&nbsp;4(d)). For the
purposes of the Prospectus and this Agreement, &#147;Business Day&#148; shall mean any day on which trading
is conducted on the New York Stock Exchange.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;D.&nbsp;The subscription price per share will be equal to the lower of the net asset value per
share of the fund&#146;s common stock (&#147;nav&#148;) at the close of business on <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>, 2007 (the &#147;pricing
date&#148;) or 95% of the average of the last reported sales price of a share of the fund&#146;s common stock
on the nyse on the pricing date and the four preceding business days. As soon as practicable after
the Pricing Date (the &#147;Confirm Date&#148;), CSS shall send to each exercising shareholder (or, if shares
of Common Stock on the Record Date are held by Cede &#038; Co. or any other depository or nominee, to
Cede &#038; Co. or such other depository or nominee) a confirmation showing the number of shares of
Common Stock acquired pursuant to the Primary Subscription, and, if applicable, the
Over-Subscription Privilege, the per share and total purchase price for such shares, and any
additional amount payable to the Company by such shareholder or any excess to be refunded by the
Company to such shareholder in the form of a check and stub, along with a letter explaining the
allocation of shares of Common Stock pursuant to the Over-Subscription Privilege.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;E.&nbsp;Any additional payment required from a shareholder must be received by CSS within ten
Business Days after the Confirmation Date and any excess payment to be refunded by the Company to a
shareholder will be mailed by CSS within ten Business Days after the Confirmation Date. If a
shareholder does not make timely payment of any additional amounts due in accordance with Section
4(D), CSS will consult with the Company in accordance with Section&nbsp;5 as to the appropriate action
to be taken. CSS will not issue or deliver certificates or Statements of Holding for shares
subscribed for
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left" style="font-size: 10pt; margin-top: 6pt">until payment in full therefore has been received, including collection of checks and payment
pursuant to notices of guaranteed delivery.
</DIV>

<DIV style="margin-top: 12pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><B>5.</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><U><B>Validity of Subscriptions</B></U><B>.</B></TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Irregular subscriptions not otherwise covered by specific instructions herein shall be
submitted to an appropriate officer of the Company and handled in accordance with his or her
instructions. Such instructions will be documented by the Agent indicating the instructing officer
and the date thereof.
</DIV>

<DIV style="margin-top: 12pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><B>6.</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><U><B>Over-Subscription</B></U><B>.</B></TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If, after allocation of shares of Common Stock to Record Date Shareholders, there remain
unexercised Rights, then the Agent shall allot the shares issuable upon exercise of such
unexercised Rights (the &#147;Remaining Shares&#148;) to shareholders who have exercised all the Rights
initially issued to them and who wish to acquire more than the number of shares for which the
Rights issued to them are exercisable. Shares subscribed for pursuant to the Over-Subscription
Privilege will be allocated in the amounts of such over-subscriptions. If the number of shares for
which the Over-Subscription Privilege has been exercised is greater than the Remaining Shares, the
Agent shall allocate the Remaining Shares to Record Date Shareholders exercising Over-Subscription
Privilege based on the number of shares of Common Stock owned by them on the Record Date. Any
remaining shares to be issued shall be allocated to holders of Rights acquired in the secondary
market based on the number of Rights exercised by such holders of Rights. The percentage of
Remaining Shares each over-subscribing Record Date Shareholder or other Rights holder may acquire
will be rounded up or down to result in delivery of whole shares of Common Stock. The Agent shall
advise the Company immediately upon the completion of the allocation set forth above as to the
total number of shares subscribed and distributable.
</DIV>

<DIV style="margin-top: 12pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><B>7.</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><U><B>Delivery of Shares</B></U><B>.</B></TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Agent will deliver (i)&nbsp;certificates or Statement of Holding reflecting new shares of
Company Common Stock in the Direct Registration System, representing those shares of Common Stock
purchased pursuant to exercise of Primary Subscription Rights as soon as practicable after the
corresponding Rights have been validly exercised and full payment for such shares has been received
and cleared and (ii)&nbsp;certificates or Statements of Holding representing those shares purchased
pursuant to the exercise of the Over-Subscription Privilege as soon as practicable after the
Expiration Date and after all allocations have been effected.
</DIV>

<DIV style="margin-top: 12pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><B>8.</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><U><B>Holding Proceeds of Rights Offering.</B></U></TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A.&nbsp;All proceeds received by CSS from Shareholders in respect of the exercise of Rights shall
be held by CSS, on behalf of the Company, in a segregated account (the &#147;Account&#148;). No interest
shall accrue to the Company or shareholders on funds held in the Account pending disbursement in
the manner described in Section&nbsp;4(E) above.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;B.&nbsp;CSS shall deliver all proceeds received in respect of the exercise of Rights to the
Company as promptly as practicable, but in no event later than ten business days after the
Confirmation Date.
</DIV>

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<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;C.&nbsp;The Company acknowledges that the bank accounts maintained by CSS in connection with the
services provided under this Agreement will be in its name and that CSS may receive investment
earnings in connection with the investment at CSS&#146;s risk and for its benefit of funds held in those
accounts from time to time.
</DIV>

<DIV style="margin-top: 12pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><B>9.</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><U><B>Reports</B></U><B>.</B></TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Daily, during the period commencing on <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>, until termination of the Subscription
Period, the Agent will report by telephone or telecopier, confirmed by letter, to an Officer of the
Company, data regarding Rights exercised, the total number of shares of Common Stock subscribed
for, and payments received therefor, bringing forward the figures from the previous day&#146;s report in
each case so as to show the cumulative totals and any such other information as may be mutually
determined by the Company and the Agent.
</DIV>

<DIV style="margin-top: 12pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><B>10.</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><U><B>Loss or Mutilation</B></U><B>.</B></TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If any Subscription Certificate is lost, stolen, mutilated or destroyed, the Agent may, on
such terms which will indemnify and protect the Company and the Agent as the Agent may in its
discretion impose (which shall, in the case of a mutilated Subscription Certificate include the
surrender and cancellation thereof), issue a new Subscription Certificate of like denomination in
substitution for the Subscription Certificate so lost, stolen, mutilated or destroyed.
</DIV>

<DIV style="margin-top: 12pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><B>11.</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><U><B>Compensation for Services</B></U><B>.</B></TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company agrees to pay to the Agent compensation for its services hereunder in accordance
with its Fee Schedule to act as Agent attached hereto as Exhibit&nbsp;A. The Company further agrees
that it will reimburse the Agent for its reasonable out-of-pocket expenses incurred in the
performance of its duties as such.
</DIV>

<DIV style="margin-top: 12pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><B>12.</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><U><B>Instructions, Indemnification and Limitation of Liability.</B></U></TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Agent undertakes the duties and obligations imposed by this Agreement upon the following
terms and conditions:
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A.&nbsp;The Agent shall be entitled to rely upon any instructions or directions furnished to it by
an appropriate officer of the Company, whether in conformity with the provisions of this Agreement
or constituting a modification hereof or a supplement hereto. Without limiting the generality of
the foregoing or any other provision of this Agreement, the Agent, in connection with its duties
hereunder, shall not be under any duty or obligation to inquire into the validity or invalidity or
authority or lack thereof of any instruction or direction from an officer of the Company which
conforms to the applicable requirements of this Agreement and which the Agent reasonably believes
to be genuine and shall not be liable for any delays, errors or loss of data occurring by reason of
circumstances beyond the Agent&#146;s control.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;B.&nbsp;The Company will indemnify the Agent and its nominees against, and hold it harmless from,
all liability and expense which may arise out of or in connection with the services described in
this Agreement or the instructions or directions furnished to the Agent relating to this Agreement
by an appropriate officer of the Company, except for any liability or expense which shall arise out
of the gross negligence, bad faith or willful misconduct of the Agent or such nominees.
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->5<!-- /Folio -->
</DIV>

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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Promptly after the receipt by the Agent of notice of any demand or claim or the commencement
of any action, suit, proceeding or investigation, the Agent shall, if a claim in respect thereof is
to be made against the Company, notify the Company thereof in writing. The Company shall be
entitled to participate as its own expense in the defense of any such claim or proceeding, and, if
it so elects at any time after receipt of such notice, it may assume the defense of any suit
brought to enforce any such claim or of any other legal action or proceeding. For the purposes of
this Section&nbsp;12, the term &#147;expense or loss&#148; means any amount paid or payable to satisfy any claim,
demand, action, suit or proceeding settled with the express written consent of the Agent, and all
reasonable costs and expenses, including, but not limited to, reasonable counsel fees and
disbursements, paid or incurred in investigating or defending against any such claim, demand,
action, suit, proceeding or investigation.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;C.&nbsp;The Agent shall be responsible for and shall indemnify and hold the Company harmless from
and against any and all losses, damages, costs, charges, counsel fees, payments, expenses and
liability arising out of or attributable to Agent&#146;s refusal or failure to comply with the terms of
this Agreement, or which arise out of Agent&#146;s negligence or willful misconduct or which arise out
of the breach of any representation or warranty of Agent hereunder, for which Agent is not
entitled to indemnification under this Agreement; provided, however, that Agent&#146;s aggregate
liability during any term of this Agreement with respect to, arising from, or arising in connection
with this Agreement, or from all services provided or omitted to be provided under this
Agreement, whether in contract, or in tort, or otherwise, is limited to, and shall not exceed, the
amounts paid hereunder by the Company to Agent as fees and charges, but not including reimbursable
expenses, during the twelve (12)&nbsp;calendar months immediately preceding the event for which recovery
from the Agent is being sought.
</DIV>

<DIV style="margin-top: 12pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><B>13.</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><U><B>Changes in Subscription Certificate</B></U><B>.</B></TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Agent may, without the consent or concurrence of the Shareholders in whose names
Subscription Certificates are registered, by supplemental agreement or otherwise, concur with the
Company in making any changes or corrections in a Subscription Certificate that it shall have been
advised by counsel (who may be counsel for the Company) is appropriate to cure any ambiguity or to
correct any defective or inconsistent provision or clerical omission or mistake or manifest error
therein or herein contained, and which shall not be inconsistent with the provision of the
Subscription Certificate except insofar as any such change may confer additional rights upon the
Shareholders.
</DIV>

<DIV style="margin-top: 12pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><B>14.</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><U><B>Assignment/Delegation</B></U><B>.</B></TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A.&nbsp;Except as provided in Section&nbsp;14(B) below, neither this Agreement nor any rights or
obligations hereunder may be assigned or delegated by either party without the written consent of
the other party.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;B.&nbsp;The Agent may, without further consent on the part of the Company, subcontract with other
subcontractors for systems, processing, telephone and mailing services, and post-exchange
activities, as may be required from time to time; provided, however, that the Agent shall be as
fully responsible to the Company for the acts and omissions of any subcontractor as it is for its
own acts and omissions.
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->6<!-- /Folio -->
</DIV>

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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;C.&nbsp;Except as explicitly stated elsewhere in this Agreement, nothing under this Agreement
shall be construed to give any rights or benefits in this Agreement to anyone other than the Agent
and the Company and the duties and responsibilities undertaken pursuant to this Agreement shall be
for the sole and exclusive benefit of the Agent and the Company.
</DIV>

<DIV style="margin-top: 12pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><B>15.</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><U><B>Governing Law</B></U><B>.</B></TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The validity, interpretation and performance of this Agreement shall be governed by the law of
the Commonwealth of Massachusetts and shall inure to the benefit of and the obligations created
hereby shall be binding upon the successors and permitted assigns of the parties hereto.
</DIV>

<DIV style="margin-top: 12pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><B>16.</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><U><B>Third Party Beneficiaries</B></U><B>.</B></TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This Agreement does not constitute an agreement for a partnership or joint venture between the
Agent and the Company. Neither party shall make any commitments with third parties that are
binding on the other party without the other party&#146;s prior written consent.
</DIV>

<DIV style="margin-top: 12pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><B>17.</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><U><B>Force Majeure</B></U><B>.</B></TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In the event either party is unable to perform its obligations under the terms of this
Agreement because of acts of God, strikes, terrorist acts, equipment or transmission failure or
damage reasonably beyond its control, or other cause reasonably beyond its control, such party
shall not be liabile for damages to the other for any damages resulting from such failure to
perform or otherwise from such causes. Performance under this Agreement shall resume when the
affected party or parties are able to perform substantially that party&#146;s duties.
</DIV>

<DIV style="margin-top: 12pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><B>18.</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><U><B>Consequential Damages</B></U><B>.</B></TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Neither party to this Agreement shall be liable to the other party for any consequential,
indirect, special or incidental damages under any provisions of this Agreement or for any
consequential, indirect, penal, special or incidential damages arising out of any act or failure to
act hereunder even if that party has been advised of or has foreseen the possibility of such
damages.
</DIV>

<DIV style="margin-top: 12pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><B>19.</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><U><B>Severability</B></U><B>.</B></TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If any provision of this Agreement shall be held invalid, unlawful, or unenforceable, the
valididty, legality, and enforceability of the remaining provisions shall not in any way be
affected or impaired.
</DIV>

<DIV style="margin-top: 12pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><B>20.</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><U><B>Counterparts</B></U><B>.</B></TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This Agreement may be executed in one or more counterparts, each of which shall be deemed an
original and all of which together shall be considered one and the same agreement.
</DIV>

<DIV style="margin-top: 12pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><B>21.</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><U><B>Captions.</B></U></TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The captions and descriptive headings herein are for the convenience of the parties only.
They do not in any way modify, amplify, alter or give full notice of the provisions hereof.
</DIV>

<DIV style="margin-top: 12pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><B>22.</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><U><B>Confidentiality</B></U><B>.</B></TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Agent and the Company agree that all books, records, informtion and data pertaining to the
business of the other party which are exchanged or received pursuant to the negotiation or the
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->7<!-- /Folio -->
</DIV>

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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left" style="font-size: 10pt; margin-top: 6pt">carrying out of this Agreement including the fees for services set forth in the attached
schedule shall remain confidential, and shall not be voluntarily disclosed to any other person,
except as may be required by law.
</DIV>

<DIV style="margin-top: 12pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><B>23.</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><U><B>Term and Termination.</B></U></TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This Agreement shall remain in effect until the earlier of (a)&nbsp;thirty (30)&nbsp;days after the
Expiration Date; (b)&nbsp;it is terminated by either party upon a material breach of this Agreement
which remains uncured for 30&nbsp;days after written notice of such breach has been provided; or (c)&nbsp;30
days&#146; written notice has been provided by either party to the other. Upon termination of the
Agreement, the Agent shall retain all canceled Certificates and related documentation as required
by applicable law.
</DIV>

<DIV style="margin-top: 12pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><B>24.</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><U><B>Notices.</B></U></TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Until further notice in writing by either party hereto to the other party, all
written reports, notices and other communications between the Exchange Agent and the Company
required or permitted hereunder shall be delivered or mailed by first class mail, postage prepaid,
telecopier or overnight courier guaranteeing next day delivery, addressed as follows:
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If to the Company, to:
</DIV>
<DIV align="left" style="font-size: 10pt; margin-left: 4%; margin-top: 6pt">The Zweig Total Return Fund, Inc.<BR>
900 Third Avenue<BR>
New York, NY 10022
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If to the Agent, to:
</DIV>
<DIV align="left" style="font-size: 10pt; margin-left: 4%; margin-top: 6pt">Computershare Trust Company, N.A.<BR>
c/o Computershare Shareholder Services, Inc.<BR>
250 Royall Street<BR>
Canton, MA 02021<BR>
Attn: Reorganization Department
</DIV>


<DIV style="margin-top: 12pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><B>25.</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><U><B>Survival</B></U><B>.</B></TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The provisions of Paragraphs 12, 15, 17-19, 22, and 24-26 shall survive any termination, for
any reason, of this Agreement.
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B><I>(Remainder of this page intentionally left blank)</I></B>
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->8<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">




<DIV style="margin-top: 12pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><B>26.</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><U><B>Merger of Agreement.</B></U></TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This Agreement constitutes the entire agreement between the parties hereto and supercedes any
prior agreement with respect to the subject matter hereof whether oral or written.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their
respective officers, hereunto duly authorized, as of the day and year first above written.
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="35%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="10%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="35%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="10%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD colspan="5" valign="top" align="left"><B>COMPUTERSHARE TRUST COMPANY, NA.</B></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="5" valign="bottom" align="left"><b>THE ZWEIG TOTAL RETURN FUND, INC.</b></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top">By:</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" valign="bottom" align="left">/s/ Illegible</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">By:</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" valign="bottom" align="left">/s/ Nancy G. Curtiss</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" valign="bottom" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" valign="bottom" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">Date:
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">3/26/07
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">Date:
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">3/26/07</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">Title:
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">Sr. Managing Director
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">Title:
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">Treasurer</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD colspan="5" valign="top" align="left"><b>COMPUTERSHARE SHAREHOLDER SERVICES, INC.</b></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top">By:</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" valign="bottom" align="left">/s/ Illegible</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" valign="bottom" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">Date:
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">3/26/07</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">Title:
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">Sr. Managing Director</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>



<P align="center" style="font-size: 10pt"><!-- Folio -->9<!-- /Folio -->
</DIV>

</BODY>
</HTML>
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.K.6
<SEQUENCE>9
<FILENAME>y32550a1exv99wkw6.htm
<DESCRIPTION>EX-99.K.6: INFORMATION AGENT AGREEMENT
<TEXT>
<HTML>
<HEAD>
<TITLE>EX-99.K.6</TITLE>
</HEAD>
<BODY bgcolor="#FFFFFF">
<!-- PAGEBREAK -->
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV align="right" style="font-size: 10pt; margin-top: 12pt">Exhibit (k)(6)
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt">March&nbsp;22, 2007
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The Zweig Total Return Fund<BR>
c\o Phoenix Investment Partners<BR>
56 Prospect Street<BR>
Hartford, CT 06115

</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Re : <U>Letter of Agreement</U>
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Gentlemen:
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">This Letter of Agreement, including the Appendix attached hereto (collectively, this &#147;Agreement&#148;),
sets forth the terms and conditions of the engagement of Georgeson Inc. (&#147;Georgeson&#148;) by The Zweig
Total Return Fund Inc. (the &#147;Company&#148;) to act as Information Agent in connection with its Rights
Offer (the &#147;Offer&#148;). The term of the Agreement shall be the term of the Offer, including any
extensions thereof.
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(a)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><i>Services</i>. Georgeson shall perform the services described in the Fees &#038; Services
Schedule attached hereto as Appendix&nbsp;I (collectively, the &#147;Services&#148;).</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(b)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><i>Fees</i>. In consideration of Georgeson&#146;s performance of the Services, the Company shall
pay Georgeson the amounts, and pursuant to the terms, set forth on the Fees &#038; Services
Schedule attached hereto as Appendix&nbsp;I.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(c)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><i>Expenses</i>. In connection with Georgeson&#146;s performance of the Services, and in addition
to the fees and charges discussed in paragraphs (b)&nbsp;and (d)&nbsp;hereof, the Company agrees
that it shall be solely responsible for the following costs and expenses, and that the
Company shall, at Georgeson&#146;s sole discretion, (i)&nbsp;reimburse Georgeson for such costs and
expenses actually incurred by Georgeson, (ii)&nbsp;pay such costs and expenses directly and/or
(iii)&nbsp;advance sufficient funds to Georgeson for payment of such costs and expenses:</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="8%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>expenses incidental to the Offer, including postage and freight charges incurred in
delivering Offer materials;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="8%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>expenses incurred by Georgeson in working with its agents or other parties involved in
the Offer, including charges for bank threshold lists, data processing, telephone
directory assistance, facsimile transmissions or other forms of electronic communication;</TD>
</TR>

</TABLE>
</DIV>
<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

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<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV style="margin-top: 6pt"><TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">



</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Phoenix Funds<BR>
March&nbsp;22, 2007<BR>
Page 2

</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="8%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>expenses incurred by Georgeson at the Company&#146;s request or for the Company&#146;s
convenience, including copying expenses, expenses relating to the printing of additional
and/or supplemental material and travel expenses of Georgeson&#146;s executives;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="8%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>any other fees and expenses authorized by the Company and resulting from extraordinary
contingencies which arise during the course of the Offer, including fees and expenses for
advertising (including production and posting), media relations, stock watch and
analytical services.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(d)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><I>Custodial Charges</I>. Georgeson agrees to check, itemize and pay on the Company&#146;s behalf the
charges of brokers and banks, with the exception of ADP Proxy Services which will bill the Company
directly, for forwarding the Company&#146;s offering material to beneficial owners. The Company agrees
to provide Georgeson, prior to the commencement of the initial distribution of offering materials
to such brokers and banks, with a preliminary payment equal to 75% of Georgeson&#146;s good faith
estimate of the charges which shall be assessed by such brokers and banks for two distributions of
such materials. The Company shall pay Georgeson an administrative fee of five dollars ($5.00) for
each broker and bank invoice paid by Georgeson on the Company&#146;s behalf. If the Company prefers to
pay these bills directly, please strike out and initial this clause before returning the executed
Agreement.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(e)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><I>Compliance with Applicable Laws</I>. The Company and Georgeson hereby represent to one another that
each shall use its best efforts to comply with all applicable laws relating to the Offer,
including, without limitation, the Securities Exchange Act of 1934, as amended, and the rules and
regulations promulgated thereunder.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(f)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><I>Indemnification</I>. The Company agrees to indemnify and hold harmless Georgeson and its
stockholders, officers, directors, employees, agents and affiliates against any and all claims,
costs, damages, liabilities, judgments and expenses, including the fees, costs and expenses of
counsel retained by Georgeson, which result from claims, action, suits, subpoenas, demands or other
proceedings brought against or involving Georgeson which directly relate to or arise out of
Georgeson&#146;s performance of the Services (except for costs, damages, liabilities, judgments or
expenses which shall have been determined by a court of law pursuant to a final and nonappealable
judgment to have directly resulted from Georgeson&#146;s gross
negligence or intentional misconduct). In
addition, the prevailing party shall be entitled to reasonable attorneys&#146; fees and court costs in
any action between the parties to enforce the provisions of this Agreement, including the
indemnification rights contained in this paragraph. The indemnity obligations set forth in this
paragraph shall survive the termination of this Agreement.</TD>
</TR>

</TABLE>
</DIV>
<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

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<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV style="margin-top: 6pt"><TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">



</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Phoenix Funds<BR>
March&nbsp;22, 2007<BR>
Page 3

</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(g)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><I>Governing Law.</I> This Agreement shall be governed by the substantive laws of the State
of New York without regard to its principles of conflicts of laws, and shall not be
modified in any way, unless pursuant to a written agreement which has been executed by
each of the parties hereto. The parties agrees that any and all disputes, controversies or
claims arising out of or relating to this Agreement (including any breach hereof) shall be
subject to the jurisdiction of the federal and state courts in New York County, New York
and the parties hereby waive any defenses on the grounds of lack of personal jurisdiction
of such courts, improper venue or forum non conveniens.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(h)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><I>Exclusivity.</I> The Company agrees and acknowledges that Georgeson shall be the sole
Information Agent retained by the Company in connection with the Offer, and that the
Company shall refrain from engaging any other Information Agent to render any Services, in
a consultative capacity or otherwise, in relation to the Offer.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(i)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><I>Additional Services.</I> In addition to the Services, the Company may from time to time
request that Georgeson provide it with certain additional consulting or other services.
The Company agrees that Georgeson&#146;s provision of such additional services shall be
governed by the terms of a separate agreement to be entered into by the parties at such
time or times, and that the fees charged in connection therewith shall be at Georgeson&#146;s
then-current rates.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(j)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><I>Confidentiality.</I> Georgeson agrees to preserve the confidentiality of (i)&nbsp;all material
non-public information provided by the Company or its agents for Georgeson&#146;s use in
fulfilling its obligations hereunder and (ii)&nbsp;any information developed by Georgeson based
upon such material non-public information (collectively, &#147;Confidential Information&#148;). For
purposes of this Agreement, Confidential Information shall not be deemed to include any
information which (w)&nbsp;is or becomes generally available to the public in accordance with
law other than as a result of a disclosure by Georgeson or any of its officers, directors,
employees, agents or affiliates; (x)&nbsp;was available to Georgeson on a nonconfidential basis
and in accordance with law prior to its disclosure to Georgeson by the Company; (y)
becomes available to Georgeson on a nonconfidential basis and in accordance with law from
a person other than the Company or any of its officers, directors, employees, agents or
affiliates who is not otherwise bound by a confidentiality agreement with the Company or
is not otherwise prohibited from transmitting such information to a third party; or (z)
was independently and lawfully developed by Georgeson based on information described in
clauses (w), (x), or (y)&nbsp;of this paragraph. The Company agrees that all reports, documents
and other work product provided to the Company by Georgeson pursuant to the terms of this
Agreement are for the exclusive use of the Company and may not be disclosed to any other person or entity
without the prior written consent of Georgeson. The confidentiality obligations set
forth in this paragraph shall survive the termination of this Agreement.</TD>
</TR>

</TABLE>
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>


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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>
<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Phoenix funds<BR>
March&nbsp;22, 2007<BR>
Page 4

</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(k)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><I>Entire Agreement; Appendix.</I> This Agreement constitutes the entire agreement and supersedes all
prior agreements and understandings, both written and oral, among, the parties hereto with respect
to the subject matter hereof. The Appendix to this Agreement shall be deemed to be incorporated
herein by references as if fully set forth herein. This Agreement shall be binding upon all successors
to the Company (by operation of law or otherwise).</TD>
</TR>

</TABLE>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">If the above is agreed to by you, please execute and return the enclosed duplicate of this
Agreement to Georgeson Inc., 17 State Street &#151; 10<SUP style="font-size: 85%; vertical-align: text-top">th</SUP> Floor, New York, New York 10004,
Attention: Marcy Roth, Contract Administrator.
</DIV>

<TABLE width="100%" border="0" cellspacing="0" cellpadding="0" style="font-size: 10pt">
<TR>
    <TD width="48%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="35%">&nbsp;</TD>
    <TD width="15%">&nbsp;</TD>
</TR>
<TR>
    <TD valign="top" align="left">&nbsp;</TD>
    <TD colspan="3" align="left">Sincerely,<BR>
<BR>
GEORGESON INC.<BR>
&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD valign="top">By:&nbsp;&nbsp;</TD>
    <TD colspan="2" style="border-bottom: 1px solid #000000" align="left">/s/ Patrick J. McHugh
&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left">Patrick J. McHugh&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top">Title:&nbsp;&nbsp;</TD>
    <TD colspan="2" align="left">Managing Director&nbsp;</TD>

</TR>
<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>
</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt">Agreed to and accepted as of<BR>
the date first set forth above.

</DIV>

<TABLE width="100%" border="0" cellspacing="0" cellpadding="0" style="font-size: 10pt">
<TR>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="35%">&nbsp;</TD>
    <TD width="15%">&nbsp;</TD>
    <TD width="48%">&nbsp;</TD>

</TR>
<TR>
    <TD colspan="3" align="left">The Zweig Total Return Fund Inc.<BR>
&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top" align="left">&nbsp;</TD>

</TR><TR>
    <TD valign="top">By:&nbsp;&nbsp;</TD>

<TD colspan="2" style="border-bottom: 1px solid #000000" align="left">/s/
Nancy G. Curtiss</TD>
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;</TD>
</TR><TR>
    <TD>&nbsp;</TD>
    <TD colspan="0" align="left">Title: </td>
<td colspan="2" align="left">Treasurer&nbsp;</TD>

    <TD align="left">&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>
</TABLE>


<P align="center" style="font-size: 10pt"><!-- Folio --><!-- /Folio -->
</DIV>

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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>
<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV align="right" style="font-size: 10pt; margin-top: 12pt"><U><B>APPENDIX I</B></U>
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><U><B>FEES &#038; SERVICES SCHEDULE</B></U>
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="80%">&nbsp;</TD>
    <TD width="12%">&nbsp;</TD>
    <TD width="8%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><u>BASE SERVICES</u>
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top"><u>$7,500</u></TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Advance review of Offer documents</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Strategic advice relating to the Offer</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Assistance in preparation of advertisements and news releases</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Dissemination of Offer documents to bank and broker community</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Communication with bank and broker community during Offer period</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><U>ADDITIONAL SERVICES</U>
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="80%">&nbsp;</TD>
    <TD width="12%">&nbsp;</TD>
    <TD width="8%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&#149;&nbsp;&nbsp;&nbsp;Direct telephone communication with retail (i.e., registered end NOBO shareholders)
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top"><U>TBD</U></TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>$4.50 per completed call (incoming and outgoing)</TD>
</TR>

</TABLE>
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">NOTE: The forgoing fees are <U>exclusive</U> of reimbursable expenses and custodial charges as
described in paragraphs (c)&nbsp;and (d)&nbsp;of this Agreement. In addition, the Company will be
charged a fee of $1,000 if the Offer is extended for any reason.
</DIV>

<P>
<DIV style="width: 100%; border: 1px solid black; padding: 11px;">


<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><U><B>FEE PAYMENT INSTRUCTIONS</B></U>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The Company shall pay Georgeson as follows:
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Upon execution of this Agreement, the Company shall pay Georgeson $7,500, which
amount is in consideration of Georgeson&#146;s commitment to represent the Company and is
non-refundable;</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>If applicable, immediately prior to the commencement of the mailing, the Company
shall advance to Georgeson a portion of anticipated custodial charges; and</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Upon completion of the Offer, the Company shall pay Georgeson the sum of (i)&nbsp;any
variable fees for Additional Services (<i>e.g.</i>, telephone calls) which shall have accrued over
the course of the Offer and (ii)&nbsp;all reimbursable expenses.</TD>
</TR>

</TABLE>
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Georgeson will send the Company an invoice for each of the forgoing payments.
</DIV>
</DIV>



<P align="center" style="font-size: 10pt"><!-- Folio --><!-- /Folio -->
</DIV>


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</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.L
<SEQUENCE>10
<FILENAME>y32550a1exv99wl.htm
<DESCRIPTION>EX-99.L: OPINION AND CONSENT OF KATTEN MUCHIN ROSENMAN LLP
<TEXT>
<HTML>
<HEAD>
<TITLE>EX-99.L</TITLE>
</HEAD>
<BODY bgcolor="#FFFFFF">
<!-- PAGEBREAK -->
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>
<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV align="right" style="font-size: 10pt; margin-top: 12pt">Exhibit (l)
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt">March&nbsp;27, 2007
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Securities and Exchange Commission<BR>
100 F Street, NE<BR>
Washington, D.C. 20549

</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Dear Ladies and Gentlemen:

</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We have acted as counsel to The Zweig Total Return Fund, Inc., a Maryland corporation (the
&#147;Company&#148;), and are rendering this opinion in connection with the filing of a Registration
Statement on Form N-2 (Securities Act File No.&nbsp;333-139605, Investment Company Act File No.
811-05620) (the &#147;Registration Statement&#148;), and the Prospectus included therein (the &#147;Prospectus&#148;),
with the Securities and Exchange Commission regarding the registration under the Securities Act of
1933 of an aggregate of 23,400,000&nbsp;shares of common stock of the Company, par value $.001 per
share (the &#147;Shares&#148;), with respect to a proposed rights offering by the Company.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We have made such examination as we have deemed necessary for the purpose of this opinion.
Based upon such examination, it is our opinion that, when the Registration Statement has become
effective under the Investment Company Act of 1940 and the Securities Act of 1933, when the Shares
have been qualified as and to the extent, if any, required under the laws of those jurisdictions in
which they are to be issued and sold, and when the Shares to be issued and sold by the Company have
been sold, issued and paid for as contemplated by the Registration Statement, such Shares will have
been legally issued, and will be fully paid and non-assessable.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As to matters governed by the laws of the State of Maryland, we have relied on the opinion of
Venable LLP that is attached to this opinion.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We hereby consent to the filing of this opinion as an exhibit to the Registration Statement
and to the reference to this firm in the Prospectus under the caption &#147;Legal Matters.&#148; We do not
thereby admit that we are &#147;experts&#148; as that term is used in the Securities Act of 1933 and the
regulations thereunder.
</DIV>

<TABLE width="100%" border="0" cellspacing="0" cellpadding="0" style="font-size: 10pt">
<TR>
    <TD width="48%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="35%">&nbsp;</TD>
    <TD width="15%">&nbsp;</TD>
</TR>
<TR>
    <TD valign="top" align="left">&nbsp;</TD>
    <TD colspan="3" align="left">Very truly yours,<BR>
<BR>
KATTEN MUCHIN ROSENMAN LLP<BR>
&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD valign="top">By:&nbsp;&nbsp;</TD>

<TD colspan="2" style="border-bottom: 1px solid #000000" align="left">/s/&nbsp;Daren
Domina</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left">A Partner&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>
</TABLE>


<P align="center" style="font-size: 10pt"><!-- Folio --><!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>
<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="30%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="25%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="20%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="10%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Two Hopkins Plaza, Suite&nbsp;1800
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Telephone 410-244-7400
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">www.venable.com</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><IMG src="y32550a1y3255002.gif" alt="(VENABLE LLP LOGO)">
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Baltimore, Maryland 21201
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Facsimile 410-244-7742</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><DIV style="width: 100%; border-bottom: 1px solid #000000; font-size: 1px">&nbsp;</DIV>
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt">March&nbsp;27, 2007
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Katten Muchin Rosenman LLP<BR>
575 Madison Avenue<BR>
New York, New York 10022

</DIV>

<DIV align="left" style="margin-top: 12pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; background: transparent; color: #000000">
<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD></TD>
</TR>
<TR valign="top">
    <TD nowrap align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Re:</TD>
    <TD>&nbsp;</TD>
    <TD>Registration Statement on Form&nbsp;N-2:<BR>1933 Act File No.: 333-139605<BR><u>1940 Act File No.: 811-05620</u></TD>
</TR>
</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Ladies and Gentlemen:
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We have served as Maryland counsel to The Zweig Total Return Fund, Inc., a Maryland
corporation registered under the Investment Company Act of 1940, as amended (the &#147;1940 Act&#148;), as a
closed-end management investment company (the &#147;Fund&#148;), in connection with certain matters of
Maryland law arising out of the registration of up to 24,000,000 shares (the &#147;Shares&#148;) of common
stock, $.001 par value per share, of the Fund, covered by the above-referenced Registration
Statement (the &#147;Registration Statement&#148;) filed by the Fund with the Securities and Exchange
Commission (the &#147;Commission&#148;) under the Securities Act of 1933, as amended (the &#147;1933 Act&#148;), and
the 1940 Act. Unless otherwise defined herein, capitalized terms used herein shall have the
meanings assigned to them in the Registration Statement. We understand that the Shares will be
issued pursuant to the exercise of rights (the &#147;Rights&#148;) to be distributed to stockholders of the
Fund.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In connection with our representation of the Fund, and as a basis for the opinion hereinafter
set forth, we have examined originals, or copies certified or otherwise identified to our
satisfaction, of the following documents (hereinafter collectively referred to as the &#147;Documents&#148;):
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. The Registration Statement, substantially in the form transmitted to the Commission under
the 1933 Act and the 1940 Act (the &#147;Registration Statement&#148;) and the prospectus (the &#147;Prospectus&#148;)
included therein;
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. The charter of the Fund, certified by the State Department of Assessments and Taxation of
Maryland (the &#147;SDAT&#148;);
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3. The Bylaws of the Fund, certified as of the date hereof by an officer of the Fund;
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4. Resolutions adopted by the Board of Directors of the Fund (the &#147;Resolutions&#148;) with respect
to the distribution of Rights and authorization and issuance of Shares upon the exercise of Rights,
certified as of the date hereof by an officer of the Fund;
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

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<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">




<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><IMG src="y32550a1y3255002.gif" alt="(VENABLE LLP LOGO)">
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><DIV style="width: 100%; border-bottom: 1px solid #000000; font-size: 1px">&nbsp;</DIV>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Katten Muchin Rosenman LLP<BR>
March&nbsp;27, 2007<BR>
Page 2

</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5. A certificate executed by an officer of the Fund, dated as of the date hereof;
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6. A certificate as of a recent date of the SDAT as to the good standing of the Fund; and
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7. Such other documents and matters as we have deemed necessary or appropriate to express the
opinion set forth below, subject to the assumptions, limitations and qualifications stated herein.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In expressing the opinion set forth below, we have assumed the following:
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. Each individual executing any of the Documents, whether on behalf of such individual or any
other person, is legally competent to do so.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. Each individual executing any of the Documents on behalf of a party (other than the Fund)
is duly authorized to do so.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3. Each of the parties (other than the Fund) executing any of the Documents has duly and
validly executed and delivered each of the Documents to which such party is a signatory, and such
party&#146;s obligations set forth therein are legal, valid and binding and are enforceable in
accordance with all stated terms.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4. All Documents submitted to us as originals are authentic. The form and content of all
Documents submitted to us as unexecuted drafts do not differ in any respect relevant to this
opinion from the form and content of such Documents as executed and delivered. All Documents
submitted to us as certified or photostatic copies conform to the original documents. All
signatures on all such Documents are genuine. All public records reviewed or relied upon by us or
on our behalf are true and complete. All representations, warranties, statements and information
contained in the Documents are true and complete. There has been no oral or written modification
of or amendment to any of the Documents, and there has been no waiver of any provision of any of
the Documents, by action or omission of the parties or otherwise.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Based upon the foregoing, and subject to the assumptions, limitations and qualifications
stated herein, it is our opinion that:
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. The Fund is a corporation duly incorporated, validly existing and in good standing under
and by virtue of the laws of the State of Maryland.
</DIV>



<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">




<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><IMG src="y32550a1y3255002.gif" alt="(VENABLE LLP LOGO)">
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><DIV style="width: 100%; border-bottom: 1px solid #000000; font-size: 1px">&nbsp;</DIV>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Katten Muchin Rosenman LLP<BR>
March&nbsp;27, 2007<BR>
Page 3

</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. The Shares to be issued pursuant to the exercise of Rights have been duly authorized and,
when and if delivered against payment therefor in accordance with the Resolutions and the
Registration Statement, such Shares will be validly issued, fully paid and nonassessable.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The foregoing opinion is limited to the substantive laws of the State of Maryland and we do
not express any opinion herein concerning any other law. We express no opinion as to compliance
with federal or state securities laws, including the securities laws of the State of Maryland.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The opinion expressed herein is limited to the matters specifically set forth herein and no
other opinion shall be inferred beyond the matters expressly stated. We assume no obligation to
supplement this opinion if any applicable law changes after the date hereof or if we become aware
of any fact that might change the opinion expressed herein after the date hereof.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;You may rely on this opinion in rendering your opinion to the Fund that is to be filed with
the Commission as an exhibit to the Registration Statement. We consent to the filing of this
opinion as an exhibit to the Registration Statement and to the reference to our firm under the
heading &#147;Legal Matters&#148; in the Prospectus. In giving this consent, we do not admit that we are
within the category of persons whose consent is required by Section&nbsp;7 of the 1933 Act.
</DIV>


<TABLE width="100%" border="0" cellspacing="0" cellpadding="0" style="font-size: 10pt">
<TR>
    <TD width="48%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="35%">&nbsp;</TD>
    <TD width="15%">&nbsp;</TD>
</TR>
<TR>
    <TD valign="top" align="left">&nbsp;</TD>
    <TD colspan="3" align="left">Very truly yours,<BR>
&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD colspan="3" align="left">/s/&nbsp;&nbsp;Venable LLP
&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD colspan="3" align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD colspan="3" align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>
</TABLE>


<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

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</HTML>
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.N
<SEQUENCE>11
<FILENAME>y32550a1exv99wn.htm
<DESCRIPTION>EX-99.N: CONSENT OF PRICEWATERHOUSECOOPERS LLP
<TEXT>
<HTML>
<HEAD>
<TITLE>EX-99.N</TITLE>
</HEAD>
<BODY bgcolor="#FFFFFF">
<!-- PAGEBREAK -->
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>
<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV align="right" style="font-size: 10pt; margin-top: 12pt">Exhibit (n)
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><U>CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM</U>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">We hereby consent to the incorporation by reference in this Registration Statement on Form N-2 of
our report dated February&nbsp;15, 2007, relating to the financial statements and financial highlights
which appears in the December&nbsp;31, 2006 Annual Report to Shareholders of The Zweig Total Return
Fund, Inc., which are also incorporated by reference into the Registration Statement. We also
consent to the references to us under the headings &#147;Financial Highlights&#148;, &#147;Experts&#148;, &#147;Independent
Accountants&#148; and &#147;Financial Statements&#148; in such Registration Statement.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt">/s/&nbsp;&nbsp;PricewaterhouseCoopers&nbsp;LLP<BR>
<BR>
Boston, Massachusetts<BR>
March&nbsp;27, 2007
</DIV>



<P align="center" style="font-size: 10pt"><!-- Folio --><!-- /Folio -->
</DIV>


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<DOCUMENT>
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<SEQUENCE>15
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<TEXT>
<HTML>
<HEAD>
<TITLE>RESPONSE LETTER</TITLE>
</HEAD>
<BODY bgcolor="#FFFFFF">
<!-- PAGEBREAK -->
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>
<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV align="right" style="font-size: 10pt; margin-top: 12pt"><FONT style="font-variant: SMALL-CAPS">Direct Dial</FONT><BR>
<FONT style="font-variant: SMALL-CAPS">(212)&nbsp;940-6517</FONT>
</DIV>


<DIV align="right" style="font-size: 10pt; margin-top: 6pt">E-mail Address<BR>
Daren.Domina@kattenlaw.com
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 50%">March&nbsp;27, 2007

</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Christian T. Sandoe<BR>
Senior Counsel<BR>
Division of Investment Management<BR>
U. S. Securities and Exchange Commission<BR>
Washington, D.C. 20549

</DIV>

<DIV align="left" style="margin-top: 12pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; background: transparent; color: #000000">
<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD></TD>
</TR>
<TR valign="top">
    <TD nowrap align="left">Re:</TD>
    <TD>&nbsp;</TD>
    <TD>The Zweig Total Return Fund, Inc.<BR>
<U>File Nos. 333-139605 and 811-05620</U></TD>
</TR>
</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt">Dear Mr.&nbsp;Sandoe:
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On behalf of The Zweig Total Return Fund, Inc. (the &#147;Fund&#148;), we submit this response to your
letter dated January&nbsp;19, 2007. Simultaneously herewith, the Fund is filing a revised Form N-2
reflecting the changes discussed below. The section headings and numbers below correspond to the
headings and numbers in your letter.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><U><B>PROSPECTUS</B></U>:
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>Cover Page</B>

</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.&nbsp;With regard to your comment pertaining to the Fund&#146;s description of the terms of the
offering in the first paragraph, the Fund has revised the first paragraph to present the
information in a more easily understandable manner.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Inside Cover Page</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.&nbsp;The Fund has confirmed that the prospectus fee table and example all dollar figures are
rounded to the nearest dollar and all percentages are rounded to the nearest hundredth of one
percent.
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Page 2<BR>
March&nbsp;27, 2007

</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Prospectus Summary &#151; The Fund (Page 1)</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.&nbsp;The Fund has revised the above referenced section to include the types of equity
securities in which the Fund will invest and to present the Fund&#146;s maturity strategy for the
portion of the portfolio that invests in debt securities and the market capitalization strategy for
the portion of the portfolio that invests in equity securities.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Prospectus Summary &#151; Risk Factors and Special Considerations (Page 4)</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.&nbsp;The Fund has revised the above referenced section to include the risks associated with
investing in equity and debt securities, including the credit risk and interest rate risks as they
relate to the Fund&#146;s investments in debt and equity securities. Additionally, the Fund has revised
this section to describe the risks particular to investments in smaller issuers with respect to its
investments in small- and mid-cap securities. The Fund also has made corresponding changes in the
Risk Factors and Special Considerations section of the Prospectus.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Prospectus Summary &#151; Risk factors and Special Considerations &#151; Certain Investment Strategies
(Page 5)</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.&nbsp;The Fund has revised the above referenced section to reflect that its investment objective
is total return.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Prospectus
Summary &#151; Risk Factors and Special Considerations &#151; Distributions (Page 6)</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.&nbsp;The Fund did not intend to suggest that the Fund intends to make return of capital
distributions before distributing its net-realized long-term capital gains, nor that the Fund
intends to make more than one distribution of realized long-term capital gains during the year.
Accordingly, we have revised the disclosure in this section.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In view of the Fund&#146;s current capital loss carryforwards situation, the Fund will not be
making more than one distribution of long-term capital gains per year in the near future.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.&nbsp;The sentence to which your comment refers, namely, the sentence stating that &#147;&#091;s&#093;uch
distribution policy may, under certain circumstances, have certain adverse consequences to the Fund
and its shareholders&#148;, was not intended to suggest that there are any additional negative tax
consequences to the Fund&#146;s distribution policy beyond those disclosed in the preceding sentence
(that distributions in excess of the Fund&#146;s earnings and profits will reduce a shareholder&#146;s
adjusted basis in his shares, thereby increasing his potential gain or reducing his potential loss
on a sale). Accordingly, we have deleted this sentence.
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->2<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Page 3<BR>
March&nbsp;27, 2007

</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Fund has revised the discussion of the Fund&#146;s managed distribution policy to include a
discussion of how it may negate the benefit of capital loss carryforwards in certain circumstances,
and has included a numerical example in &#147;Risk Factors and Special Considerations &#151; Distributions.&#148;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Fund also has revised the section to include the amount of capital loss carryforwards
available as of December&nbsp;31, 2006, and the actual amount of 2006 distributions that were related to
distributions in excess of earnings and profits.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Fund has opted to not include a description of the potential impact to the Fund if the
managed distribution policy is discontinued because the Fund does not intend to discontinue its
policy and the Fund believes that such discussion may be potentially misleading.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.&nbsp;The Fund has revised the aforementioned section to include a discussion about yield and
the potential misconceptions surrounding the term &#147;yield&#148; as it relates to managed distribution
polices, including the historical and anticipated characteristics of the Fund&#146;s distributions.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Financial Highlights (Page 9)</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.&nbsp;The Fund has updated the above referenced section, and corresponding sections, to provide
financial information for the fiscal year ended December&nbsp;31, 2006.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Over-Subscription Privilege (Page 11)</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.&nbsp;The Fund has revised the above referenced section to explain that the Fund will
de-register, if any, the shares remaining after the expiration of the Over-Subscription Period.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Use of Proceeds (Page 16)</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.&nbsp;The Fund has revised the above referenced section to provide that net proceeds will be
invested within three (3)&nbsp;months from the expiration date.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Management of the Fund &#151; Investment Adviser and Sub-Adviser (Page 28)</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12.&nbsp;The Fund&#146;s day-to-day stock and bond selections are made by its Portfolio Managers, Mr.
Carlton Neel and Mr.&nbsp;David Dickerson. The Fund has revised this section accordingly.
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->3<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Page 4<BR>
March&nbsp;27, 2007

</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><U><B>STATEMENT OF ADDITIONAL INFORMATION </B></U>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>Investment Restrictions (Page 9)</B>

</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;13.&nbsp;The purchase or sale of futures contracts, foreign currency forward contracts or related
options as set forth in investment restriction 8 will not be deemed to be the issuance of a senior
security as the Fund meets, and is in accordance with, the segregation requirements of Investment
Company Act Rel. No.&nbsp;10666 (April&nbsp;18, 1979), and therefore the 300- percent asset coverage
requirement of Section 18(f) of the Investment Company Act of 1940 would not apply. See SEC
No-Action Letter, Dreyfus Strategic Investing, 1987 WL 108242 (June&nbsp;22, 1987) and SEC No-Action
Letter, Merrill Lynch Asset Management, L.P., 1996 WL 429027 (July&nbsp;2, 1996).
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><U><B>GENERAL COMMENTS</B></U>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Fund does not intend to omit information from the final pre-effective amendment in
reliance upon Rule&nbsp;430A under the Securities Act of 1933. The Fund has not and does not intend to
submit an exemptive application or no-action request in connection with this registration
statement.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 50%">Sincerely,

</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt; margin-left: 50%">/s/&nbsp;&nbsp;Daren R. Domina

</DIV>



<P align="center" style="font-size: 10pt"><!-- Folio -->4<!-- /Folio -->
</DIV>


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