<SEC-DOCUMENT>0001206774-14-000762.txt : 20191121
<SEC-HEADER>0001206774-14-000762.hdr.sgml : 20191121

<ACCEPTANCE-DATETIME>20140305194547

<PRIVATE-TO-PUBLIC>

ACCESSION NUMBER:		0001206774-14-000762

CONFORMED SUBMISSION TYPE:	PRE 14A

PUBLIC DOCUMENT COUNT:		3

CONFORMED PERIOD OF REPORT:	20140417

FILED AS OF DATE:		20140306

DATE AS OF CHANGE:		20140328


FILER:


	COMPANY DATA:	

		COMPANY CONFORMED NAME:			FLAHERTY & CRUMRINE TOTAL RETURN FUND INC

		CENTRAL INDEX KEY:			0001245648

		IRS NUMBER:				000000000

		STATE OF INCORPORATION:			MD

		FISCAL YEAR END:			1130



	FILING VALUES:

		FORM TYPE:		PRE 14A

		SEC ACT:		1934 Act

		SEC FILE NUMBER:	811-21380

		FILM NUMBER:		14671057



	BUSINESS ADDRESS:	

		STREET 1:		301 E COLORADO BLVD STE 720

		STREET 2:		C/O FLAHERTY & CRUMRINE INC

		CITY:			PASADENA

		STATE:			CA

		ZIP:			91101

		BUSINESS PHONE:		(626) 795-7300



	MAIL ADDRESS:	

		STREET 1:		301 E COLORADO BLVD STE 720

		STREET 2:		C/O FLAHERTY & CRUMRINE INC

		CITY:			PASADENA

		STATE:			CA

		ZIP:			91101



	FORMER COMPANY:	

		FORMER CONFORMED NAME:	FLAHERTY & CRUMRINE/CLAYMORE TOTAL RETURN FUND INC

		DATE OF NAME CHANGE:	20030623



</SEC-HEADER>

<DOCUMENT>
<TYPE>PRE 14A
<SEQUENCE>1
<FILENAME>fandctrfi_pre14a.htm
<DESCRIPTION>PRELIMINARY PROXY STATEMENT
<TEXT>

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<P align=center><FONT face="Times New Roman" size=2>SCHEDULE 14A<BR>PROXY
STATEMENT<BR></FONT><FONT face="Times New Roman" size=2>PURSUANT TO SECTION 14(A) OF THE
SECURITIES EXCHANGE ACT OF 1934 </FONT></P>
<P align=left><FONT face="Times New Roman" size=2>Filed by Registrant [X]</FONT><BR><FONT face="Times New Roman" size=2>Filed by Party other than the Registrant</FONT></P>
<P align=left><FONT face="Times New Roman" size=2>Check the appropriate box:<BR>[X]
Preliminary Proxy Statement<BR></FONT><FONT face="Times New Roman" size=2>[ ] Confidential
for Use of the Commission Only as permitted by Rule 14a-6(e)(2)<BR>[ ]
Definitive Proxy Statement<BR>[ ] Definitive Additional Materials<BR>[ ]
Soliciting Material Pursuant to Rule 14a-11c or Rule 14a-12</FONT></P>
<DIV align=center>
<TABLE style="LINE-HEIGHT: 14pt; BORDER-COLLAPSE: collapse" cellSpacing=0 cellPadding=0 width="10%" border=0>

  <TR vAlign=bottom>
    <TD style="BORDER-BOTTOM: #000000 1pt solid; text-align: center" noWrap width="100%"><FONT face="Times New Roman" size=2>
	Flaherty &amp; Crumrine Total Return Fund Incorporated
	</FONT></TD></TR>
  <TR>
    <TD style="text-align: center" width="100%"><FONT size=2 face="Times New Roman">(Name of Registrant as
      Specified in Its Charter)</FONT></TD></TR></TABLE><BR>
<TABLE style="LINE-HEIGHT: 14pt; BORDER-COLLAPSE: collapse" cellSpacing=0 cellPadding=0 width="10%" border=0>

  <TR vAlign=bottom>
    <TD style="BORDER-BOTTOM: #000000 1pt solid; text-align: center" width="100%"></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap style="text-align: center" width="100%"><FONT face="Times New Roman" size=2>&nbsp;&nbsp;&nbsp;(Name of Person(s) Filing Proxy
      Statement)&nbsp;&nbsp;&nbsp;</FONT></TD></TR></TABLE></DIV><BR>
<P align=left><FONT face="Times New Roman" size=2>Payment of Filing Fee (Check the
appropriate box):</FONT></P>
<P align=left><FONT face="Times New Roman" size=2>[X] No fee required</FONT><BR><FONT face="Times New Roman" size=2>[ ] Fee computed on table below per Exchange Act Rules
14a-6(i)(1) and 0-11 </FONT></P>
<TABLE cellSpacing=0 cellPadding=0 border=0>

  <TR>
    <TD vAlign=top noWrap><FONT face="Times New Roman" size=2>(1)</FONT></TD>
    <TD vAlign=top noWrap></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" width="100%"><FONT face="Times New Roman" size=2>Title of each class of securities to which transaction
      applies:<BR>&nbsp;</FONT></TD></TR>
  <TR>
    <TD vAlign=top noWrap></TD>
    <TD vAlign=top noWrap>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD width="100%"></TD></TR>
  <TR>
    <TD vAlign=top noWrap><FONT face="Times New Roman" size=2>(2)</FONT></TD>
    <TD vAlign=top noWrap></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" width="100%"><FONT face="Times New Roman" size=2>Aggregate number of securities to which transaction
      applies:<BR>&nbsp;</FONT></TD></TR>
  <TR>
    <TD colSpan=3>&nbsp;</TD></TR>
  <TR>
    <TD vAlign=top noWrap><FONT face="Times New Roman" size=2>(3)</FONT></TD>
    <TD vAlign=top noWrap></TD>
    <TD WIDTH="100%" STYLE="border-bottom: #000000 1pt solid; text-align: justify"><FONT face="Times New Roman" size=2>Per unit price or other underlying value of transaction computed
      pursuant to Exchange Act Rule 0-11. (Set forth the amount on which the
      filing fee is calculated and state how it was
    determined):<BR>&nbsp;</FONT></TD></TR>
  <TR>
    <TD colSpan=3>&nbsp;</TD></TR>
  <TR>
    <TD vAlign=top noWrap><FONT face="Times New Roman" size=2>(4)</FONT></TD>
    <TD vAlign=top noWrap></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" width="100%"><FONT face="Times New Roman" size=2>Proposed maximum aggregate value of
  transaction:<BR>&nbsp;</FONT></TD></TR>
  <TR>
    <TD colSpan=3>&nbsp;</TD></TR>
  <TR>
    <TD vAlign=top noWrap><FONT face="Times New Roman" size=2>(5)</FONT></TD>
    <TD vAlign=top noWrap></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" width="100%"><FONT face="Times New Roman" size=2>Total fee paid:<BR>&nbsp;</FONT></TD></TR></TABLE>
<P align=left><FONT face="Times New Roman" size=2>[ ] Fee paid previously with preliminary
materials.</FONT></P>
<P STYLE="text-align: justify"><FONT face="Times New Roman" size=2>[ ] Check box if any part of the fee is
offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for
which the offsetting fee was paid previously. Identify the previous filing by
registration statement number, or the Form or Schedule and the date of its
filing.</FONT></P>
<TABLE cellSpacing=0 cellPadding=0 border=0>

  <TR>
    <TD vAlign=top noWrap><FONT face="Times New Roman" size=2>(1)</FONT></TD>
    <TD vAlign=top noWrap></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" width="100%"><FONT face="Times New Roman" size=2>Amount previously paid:<BR>&nbsp;</FONT></TD></TR>
  <TR>
    <TD vAlign=top noWrap></TD>
    <TD vAlign=top noWrap>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD width="100%"></TD></TR>
  <TR>
    <TD vAlign=top noWrap><FONT face="Times New Roman" size=2>(2)</FONT></TD>
    <TD vAlign=top noWrap></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" width="100%"><FONT face="Times New Roman" size=2>Form, Schedule or Registration Statement
No.:<BR>&nbsp;</FONT></TD></TR>
  <TR>
    <TD colSpan=3>&nbsp;</TD></TR>
  <TR>
    <TD vAlign=top noWrap><FONT face="Times New Roman" size=2>(3)</FONT></TD>
    <TD vAlign=top noWrap></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" width="100%"><FONT face="Times New Roman" size=2>Filing Party:<BR>&nbsp;</FONT></TD></TR>
  <TR>
    <TD colSpan=3>&nbsp;</TD></TR>
  <TR>
    <TD vAlign=top noWrap><FONT face="Times New Roman" size=2>(4)</FONT></TD>
    <TD vAlign=top noWrap></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" width="100%"><FONT face="Times New Roman" size=2>Date Filed:<BR>&nbsp;</FONT></TD></TR></TABLE><BR>
<HR align=center width="100%" noShade SIZE=2>

<DIV style="PAGE-BREAK-BEFORE: always"></DIV><BR>



<P align=center><B><FONT face="Times New Roman" size=2>FLAHERTY &amp; CRUMRINE PREFERRED
INCOME FUND INCORPORATED (NYSE: PFD)<BR>FLAHERTY &amp; CRUMRINE PREFERRED INCOME
OPPORTUNITY FUND INCORPORATED (NYSE: PFO)<BR>FLAHERTY &amp; CRUMRINE PREFERRED
SECURITIES INCOME FUND INCORPORATED (NYSE: FFC)<BR>FLAHERTY &amp; CRUMRINE TOTAL
RETURN FUND INCORPORATED (NYSE: FLC)<BR>FLAHERTY &amp; CRUMRINE DYNAMIC
PREFERRED AND INCOME FUND INCORPORATED (NYSE: DFP)</FONT></B></P>
<P align=center><FONT face="Times New Roman" size=2>301 E. Colorado Boulevard, Suite
720<BR>Pasadena, California 91101 </FONT></P>
<P align=center><B><FONT face="Times New Roman" size=2>NOTICE OF ANNUAL MEETINGS OF
SHAREHOLDERS<BR></FONT></B><FONT face="Times New Roman" size=2>To Be Held on April 17, 2014
</FONT></P>
<P align=justify><FONT face="Times New Roman" size=2>To the Shareholders:</FONT></P>
<P align=justify><FONT face="Times New Roman" size=2><FONT size=3 face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>Notice is hereby given that the
Annual Meetings of Shareholders of Flaherty &amp; Crumrine Preferred Income Fund
Incorporated, Flaherty &amp; Crumrine Preferred Income Opportunity Fund
Incorporated, Flaherty &amp; Crumrine Preferred Securities Income Fund
Incorporated, Flaherty &amp; Crumrine Total Return Fund Incorporated and
Flaherty &amp; Crumrine Dynamic Preferred and Income Fund Incorporated (each, a
&#147;Fund&#148; and collectively, the &#147;Funds&#148;), each a Maryland corporation, will be held
at the offices of Flaherty &amp; Crumrine Incorporated, 301 E. Colorado
Boulevard, Suite 720, Pasadena, California 91101 at 9:00 a.m. PT, on April 17,
2014, for the following purposes:</FONT></P>
<TABLE style="BORDER-COLLAPSE: collapse" cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="99%" colSpan=2><P align=justify><FONT face="Times New Roman" size=2>Each
      Fund:</FONT></P></TD></TR>
  <TR>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%">&nbsp;</TD>
    <TD noWrap align=left width="98%"></TD></TR>
  <TR vAlign=bottom>
    <TD vAlign=top noWrap align=left width="1%"></TD>
    <TD vAlign=top noWrap align=left width="1%"><FONT face="Times New Roman" size=2>1.</FONT></TD>
    <TD vAlign=top noWrap align=left width="98%"><FONT face="Times New Roman" size=2>To elect Directors of each
      Fund (Proposal 1).</FONT></TD></TR>
  <TR>
    <TD vAlign=top noWrap align=left width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD vAlign=top noWrap align=left width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD vAlign=top noWrap align=left width="98%"></TD></TR>
  <TR vAlign=bottom>
    <TD vAlign=top noWrap align=left width="1%"></TD>
    <TD vAlign=top noWrap align=left width="1%"><FONT face="Times New Roman" size=2>2.</FONT></TD>
    <TD vAlign=top align=left width="98%"><FONT face="Times New Roman" size=2>To transact such other business as
      may properly come before the Annual Meetings or any adjournments or
      postponements thereof.</FONT></TD></TR></TABLE>
<P align=justify><B><FONT face="Times New Roman" size=2>Your vote is
important!</FONT></B></P>
<P align=justify><B><FONT face="Times New Roman" size=2></FONT></B><FONT face="Times New Roman" size=2>The Board of Directors of each Fund has fixed the close of business on
January 17, 2014 as the record date for the determination of shareholders of
each Fund entitled to notice of and to vote at the Annual Meetings and any
adjournments or postponements thereof.</FONT></P>
<TABLE style="LINE-HEIGHT: 14pt; BORDER-COLLAPSE: collapse" cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=bottom>
    <TD noWrap align=left width="69%"></TD>
    <TD noWrap align=left width="30%"><FONT face="Times New Roman" size=2>By Order of the Boards of
    Directors,</FONT></TD></TR>
  <TR>
    <TD width="99%" colSpan=2>&nbsp;</TD></TR>
  <TR>
    <TD width="99%" colSpan=2>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="69%"><FONT face="Times New Roman" size=2>March __, 2014</FONT></TD>
    <TD noWrap align=left width="30%"><FONT face="Times New Roman" size=2>Chad C. Conwell</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="69%"></TD>
    <TD noWrap align=left width="30%"><I><FONT face="Times New Roman" size=2>Secretary</FONT></I></TD></TR></TABLE><BR>
<DIV style="BORDER-RIGHT: 1pt solid; PADDING-RIGHT: 4pt; BORDER-TOP: 1pt solid; PADDING-LEFT: 4pt; PADDING-BOTTOM: 4pt; BORDER-LEFT: 1pt solid; WIDTH: 100%; PADDING-TOP: 4pt; BORDER-BOTTOM: 1pt solid">
<P align=center><B><FONT face="Times New Roman" size=2>Important Notice Regarding the
Availability of Proxy Materials for the Annual Meetings to Be<BR>Held on April
17, 2014 </FONT></B></P>
<P align=justify><B><FONT face="Times New Roman" size=2>The notice of Annual Meetings, joint
proxy statement, proxy cards and each Fund&#146;s annual report for the fiscal year
ended November 30, 2013 are available to you on the Funds&#146; website -
www.preferredincome.com. You are encouraged to review all of the information
contained in the proxy materials before voting. </FONT></B></P>
<P align=justify><B><FONT face="Times New Roman" size=2>To obtain directions to attend the
Annual Meetings and vote in person, please call 1-626-795-7300. </FONT></B></P>
<P align=justify><B><FONT face="Times New Roman" size=2>SEPARATE PROXY CARDS ARE ENCLOSED
FOR EACH FUND IN WHICH YOU OWN SHARES. </FONT></B><B><FONT face="Times New Roman" size=2>YOUR VOTE IS IMPORTANT REGARDLESS OF THE SIZE OF YOUR HOLDINGS IN THE
FUND. WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING, WE ASK THAT YOU PLEASE VOTE
PROMPTLY. INSTRUCTIONS FOR THE PROPER VOTING AND/OR EXECUTION OF PROXIES ARE SET
FORTH ON THE INSIDE COVER. SHAREHOLDERS MAY SUBMIT VOTING INSTRUCTIONS BY
SIGNING AND DATING THE PROXY CARD OR VOTING INSTRUCTION FORM AND RETURNING IT IN
THE ACCOMPANYING POSTAGE-PAID ENVELOPE. </FONT></B></P></DIV><BR>
<HR align=center width="100%" noShade SIZE=2>

<DIV style="PAGE-BREAK-BEFORE: always"></DIV><BR>
<P align=center><B><FONT face="Times New Roman" size=2>FLAHERTY &amp; CRUMRINE PREFERRED
INCOME FUND INCORPORATED (NYSE: PFD)<BR>FLAHERTY &amp; CRUMRINE PREFERRED INCOME
OPPORTUNITY FUND INCORPORATED (NYSE: PFO)<BR>FLAHERTY &amp; CRUMRINE PREFERRED
SECURITIES INCOME FUND INCORPORATED (NYSE: FFC)<BR>FLAHERTY &amp; CRUMRINE TOTAL
RETURN FUND INCORPORATED (NYSE: FLC) </FONT></B></P>
<P align=center><FONT face="Times New Roman" size=2>301 E. Colorado Boulevard, Suite
720<BR>Pasadena, California 91101 </FONT></P>
<P align=center><B><FONT face="Times New Roman" size=2>NOTICE OF SPECIAL MEETINGS OF
SHAREHOLDERS<BR></FONT></B><FONT face="Times New Roman" size=2>To Be Held on April 17,
2014</FONT></P>
<P align=left><FONT face="Times New Roman" size=2>To the Shareholders:</FONT></P>
<P align=justify><FONT face="Times New Roman" size=2><FONT size=3 face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>Notice is hereby given that the
Special Meetings of Shareholders of Flaherty &amp; Crumrine Preferred Income
Fund Incorporated, Flaherty &amp; Crumrine Preferred Income Opportunity Fund
Incorporated, Flaherty &amp; Crumrine Preferred Securities Income Fund
Incorporated and Flaherty &amp; Crumrine Total Return Fund Incorporated (each, a
&#147;Fund&#148; and collectively, the &#147;Funds&#148;), each a Maryland corporation, will be held
at the offices of Flaherty &amp; Crumrine Incorporated, 301 E. Colorado
Boulevard, Suite 720, Pasadena, California 91101 at 9:30 a.m. PT, on April 17,
2014, for the following purposes:</FONT></P>
<TABLE style="BORDER-COLLAPSE: collapse" cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="99%" colSpan=2><P align=justify><FONT face="Times New Roman" size=2>Each
      Fund:</FONT></P></TD></TR>
  <TR>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%">&nbsp;</TD>
    <TD noWrap align=left width="98%"></TD></TR>
  <TR vAlign=bottom>
    <TD vAlign=top noWrap align=left width="1%"></TD>
    <TD vAlign=top noWrap align=left width="1%"><FONT face="Times New Roman" size=2>1.</FONT></TD>
    <TD vAlign=top noWrap align=left width="98%"><FONT size=2 face="Times New Roman">To approve a change to each Fund&#146;s fundamental investment policy
      regarding investments in commodities (Proposal 1).</FONT></TD></TR>
  <TR>
    <TD vAlign=top noWrap align=left width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD vAlign=top noWrap align=left width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD vAlign=top noWrap align=left width="98%"></TD></TR>
  <TR vAlign=bottom>
    <TD vAlign=top noWrap align=left width="1%"></TD>
    <TD vAlign=top noWrap align=left width="1%"><FONT face="Times New Roman" size=2>2.</FONT></TD>
    <TD vAlign=top align=left width="98%"><FONT face="Times New Roman" size=2>To transact such other business as
      may properly come before the Special Meetings or any adjournments or
      postponements thereof.</FONT></TD></TR></TABLE>
<P align=justify><B><FONT face="Times New Roman" size=2>Your vote is
important!</FONT></B></P>
<P align=justify><B><FONT face="Times New Roman" size=2></FONT></B><FONT face="Times New Roman" size=2><FONT size=3 face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>The Board of Directors
of each Fund has fixed the close of business on January 17, 2014 as the record
date for the determination of shareholders of each Fund entitled to notice of
and to vote at the Special Meetings and any adjournments or postponements
thereof.</FONT></P>
<TABLE style="LINE-HEIGHT: 14pt; BORDER-COLLAPSE: collapse" cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=bottom>
    <TD noWrap align=left width="69%"></TD>
    <TD noWrap align=left width="30%"><FONT face="Times New Roman" size=2>By Order of the Boards of
    Directors,</FONT></TD></TR>
  <TR>
    <TD width="99%" colSpan=2>&nbsp;</TD></TR>
  <TR>
    <TD width="99%" colSpan=2>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="69%"><FONT face="Times New Roman" size=2>March __, 2014</FONT></TD>
    <TD noWrap align=left width="30%"><FONT face="Times New Roman" size=2>Chad C. Conwell</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="69%"></TD>
    <TD noWrap align=left width="30%"><I><FONT face="Times New Roman" size=2>Secretary</FONT></I></TD></TR></TABLE><BR>
<DIV style="BORDER-RIGHT: 1pt solid; PADDING-RIGHT: 4pt; BORDER-TOP: 1pt solid; PADDING-LEFT: 4pt; PADDING-BOTTOM: 4pt; BORDER-LEFT: 1pt solid; WIDTH: 100%; PADDING-TOP: 4pt; BORDER-BOTTOM: 1pt solid">
<P align=center><B><FONT face="Times New Roman" size=2>Important Notice Regarding the
Availability of Proxy Materials for the Special Meetings to Be<BR>Held on April
17, 2014 </FONT></B></P>
<P align=justify><B><FONT face="Times New Roman" size=2>The notice of Special Meetings,
joint proxy statement, proxy cards and each Fund&#146;s annual report for the fiscal
year ended November 30, 2013 are available to you on the Funds&#146; website -
www.preferredincome.com. You are encouraged to review all of the information
contained in the proxy materials before voting. </FONT></B></P>
<P align=justify><B><FONT face="Times New Roman" size=2>To obtain directions to attend the
Special Meetings and vote in person, please call 1-626-795-7300. </FONT></B></P>
<P align=justify><B><FONT face="Times New Roman" size=2>SEPARATE PROXY CARDS ARE ENCLOSED
FOR EACH FUND IN WHICH YOU OWN SHARES. </FONT></B><B><FONT face="Times New Roman" size=2>YOUR VOTE IS IMPORTANT REGARDLESS OF THE SIZE OF YOUR HOLDINGS IN THE
FUND. WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING, WE ASK THAT YOU PLEASE VOTE
PROMPTLY. INSTRUCTIONS FOR THE PROPER VOTING AND/OR EXECUTION OF PROXIES ARE SET
FORTH ON THE INSIDE COVER. SHAREHOLDERS MAY SUBMIT VOTING INSTRUCTIONS BY
SIGNING AND DATING THE PROXY CARD OR VOTING INSTRUCTION FORM AND RETURNING IT IN
THE ACCOMPANYING POSTAGE-PAID ENVELOPE. </FONT></B></P></DIV><BR>
<P align=center><FONT face="Times New Roman" size=2>- 2 -</FONT></P>
<HR align=center width="100%" noShade SIZE=2>

<DIV style="PAGE-BREAK-BEFORE: always"></DIV><BR>
<P align=center><B><FONT face="Times New Roman" size=2>FLAHERTY &amp; CRUMRINE PREFERRED
INCOME FUND INCORPORATED (NYSE: PFD)<BR>FLAHERTY &amp; CRUMRINE PREFERRED INCOME
OPPORTUNITY FUND INCORPORATED (NYSE: PFO)<BR>FLAHERTY &amp; CRUMRINE PREFERRED
SECURITIES INCOME FUND INCORPORATED (NYSE: FFC)<BR>FLAHERTY &amp; CRUMRINE TOTAL
RETURN FUND INCORPORATED (NYSE: FLC)<BR>FLAHERTY &amp; CRUMRINE DYNAMIC
PREFERRED AND INCOME FUND INCORPORATED (NYSE: DFP)</FONT></B></P>
<P align=center><FONT face="Times New Roman" size=2>301 E. Colorado Boulevard, Suite
720<BR>Pasadena, California 91101 </FONT></P>
<P align=center><B><FONT face="Times New Roman" size=2>QUESTIONS AND ANSWERS </FONT></B></P>
<P align=center><B><FONT face="Times New Roman" size=2>Important Information to Help You
Understand and Vote on the Proposals at the Annual Meetings and Special
Meetings. </FONT></B></P>
<P align=justify><FONT face="Times New Roman" size=2><FONT size=3 face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><STRONG>While we strongly encourage
you to read the full text of the enclosed combined joint proxy statement, we are
also providing you with a brief overview of the proposals on which shareholders
are requested to vote. Your vote is important. </STRONG></FONT></P>
<P align=center><B><FONT face="Times New Roman" size=2>QUESTIONS AND ANSWERS </FONT></B></P>
<P align=justify><B><FONT face="Times New Roman" size=2>What are the proposals being
considered at the Annual Meetings of Shareholders (&#147;Annual Meetings&#148;) and
Special Meetings of Shareholders for PFD, PFO, FFC and FLC (&#147;Special Meetings,&#148;
together with the Annual Meetings, the &#147;Meetings&#148;)? </FONT></B></P>
<P align=justify><FONT face="Times New Roman" size=2>At the Annual Meetings, shareholders
are being asked to vote on the following proposals:</FONT></P>
<TABLE cellSpacing=0 cellPadding=0 border=0>

  <TR>
    <TD vAlign=top noWrap>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD vAlign=top noWrap><FONT face="Times New Roman" size=2>(1)</FONT></TD>
    <TD vAlign=top noWrap></TD>
    <TD width="100%"><FONT face="Times New Roman" size=2>To elect Directors of each Fund
      (Proposal 1).</FONT></TD></TR>
  <TR>
    <TD noWrap></TD>
    <TD width="100%" colSpan=3>&nbsp;</TD></TR>
  <TR>
    <TD vAlign=top noWrap></TD>
    <TD vAlign=top noWrap><FONT face="Times New Roman" size=2>(2)</FONT></TD>
    <TD vAlign=top noWrap>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD width="100%"><FONT face="Times New Roman" size=2>To transact such other business
      as may properly come before the Annual Meeting or any adjournments or
      postponements thereof.</FONT></TD></TR></TABLE>
<P align=justify><FONT face="Times New Roman" size=2>At the Special Meetings for PFD, PFO,
FFC and FLC, shareholders are being asked to vote on the following
proposals:</FONT></P>
<TABLE cellSpacing=0 cellPadding=0 border=0>

  <TR>
    <TD vAlign=top noWrap><FONT face="Times New Roman" size=2>(1)</FONT></TD>
    <TD vAlign=top noWrap>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD width="100%"><FONT face="Times New Roman" size=2>To approve a change to each Fund&#146;s fundamental
      investment policy regarding investments in commodities (Proposal
    1).</FONT></TD></TR>
  <TR>
    <TD width="100%" colSpan=3>&nbsp;</TD></TR>
  <TR>
    <TD vAlign=top noWrap><FONT face="Times New Roman" size=2>(2)</FONT></TD>
    <TD vAlign=top noWrap></TD>
    <TD width="100%"><FONT face="Times New Roman" size=2>To transact such other business as may properly come
      before the Special Meeting or any adjournments or postponements
      thereof.</FONT></TD></TR></TABLE>
<P align=justify><B><FONT face="Times New Roman" size=2>How does the Board recommend I vote?
</FONT></B></P>
<P align=justify><FONT face="Times New Roman" size=2>The Board has unanimously approved, and
recommends that you vote &#147;FOR&#148; Proposal 1 at the Annual Meetings. </FONT></P>
<P align=justify><FONT face="Times New Roman" size=2>The Board has unanimously approved, and
recommends that you vote &#147;FOR&#148; Proposal 1 at the Special Meetings for PFD, PFO,
FFC and FLC. </FONT></P>
<P align=justify><B><FONT face="Times New Roman" size=2>Who is eligible to vote at the
Meetings?</FONT></B></P>
<P align=justify><FONT face="Times New Roman" size=2>Shareholders of record as of the close
of business on January 17, 2014 are eligible to vote at the relevant Meetings.
</FONT></P>
<P align=justify><B><FONT face="Times New Roman" size=2></FONT></B><B><FONT face="Times New Roman" size=2>I only have a few shares. Why should I bother to vote?</FONT></B></P>
<P align=justify><FONT face="Times New Roman" size=2>Each vote makes a difference. Your vote
is needed to help ensure that the proposals can be acted upon. Voting promptly
is also important. If we do not receive enough votes, we may have to re-solicit
shareholders, which can be costly, time consuming and may delay the Meetings. We
encourage all shareholders to participate in the governance of their Fund and to
avoid unnecessary communications with you as a shareholder.</FONT></P>
<P align=center><FONT face="Times New Roman" size=2>- 3 -</FONT></P>
<HR align=center width="100%" noShade SIZE=2>

<DIV style="PAGE-BREAK-BEFORE: always"></DIV><BR>
<P align=justify><B><FONT face="Times New Roman" size=2>What if I have additional questions?
</FONT></B></P>
<P align=justify><FONT face="Times New Roman" size=2>If you are a shareholder of FFC, FLC or
DFP, please call 1-877-855-3434 with any additional questions. If you are a
shareholder of PFD or PFO, please call 1-626-795-7300. </FONT></P>
<P align=justify><B><U><FONT face="Times New Roman" size=2>ANNUAL MEETINGS OF
SHAREHOLDERS</FONT></U></B></P>
<P align=justify><B><FONT face="Times New Roman" size=2>Who are the nominees for election to
the Board of Directors?</FONT></B></P>
<P align=justify><FONT face="Times New Roman" size=2>The nominee(s) for election to the
relevant Fund&#146;s Board of Directors are as follows:</FONT></P>
<DIV align=center>
<TABLE style="PADDING-RIGHT: 4pt; PADDING-LEFT: 4pt; LINE-HEIGHT: 14pt; BORDER-COLLAPSE: collapse" cellSpacing=0 cellPadding=0 width="95%" border=0>

  <TR vAlign=bottom>
    <TD style="BORDER-RIGHT: #000000 1pt solid; BORDER-TOP: #000000 1pt solid; BORDER-LEFT: #000000 1pt solid; BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="49%"><B><FONT face="Times New Roman" size=2>Fund</FONT></B></TD>
    <TD style="BORDER-RIGHT: #000000 1pt solid; BORDER-TOP: #000000 1pt solid; BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="50%"><B><FONT face="Times New Roman" size=2>Nominees For
    Election</FONT></B></TD></TR>
  <TR vAlign=bottom>
    <TD NOWRAP STYLE="border-right: Black 1pt solid; border-left: #000000 1pt solid; text-align: left; width: 49%"><FONT face="Times New Roman" size=2>PFD</FONT></TD>
    <TD NOWRAP STYLE="border-right: Black 1pt solid; text-align: left; width: 50%"><FONT face="Times New Roman" size=2>David Gale</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD style="BORDER-RIGHT: #000000 1pt solid; BORDER-LEFT: #000000 1pt solid; BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="49%"></TD>
    <TD style="BORDER-RIGHT: #000000 1pt solid; BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="50%"><FONT face="Times New Roman" size=2>Karen H. Hogan</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD NOWRAP STYLE="border-right: Black 1pt solid; border-left: #000000 1pt solid; text-align: left; width: 49%"><FONT face="Times New Roman" size=2>PFO</FONT></TD>
    <TD NOWRAP STYLE="border-right: Black 1pt solid; text-align: left; width: 50%"><FONT face="Times New Roman" size=2>Morgan Gust</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD style="BORDER-RIGHT: #000000 1pt solid; BORDER-LEFT: #000000 1pt solid; BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="49%"></TD>
    <TD style="BORDER-RIGHT: #000000 1pt solid; BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="50%"><FONT face="Times New Roman" size=2>Karen H. Hogan</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD style="BORDER-RIGHT: #000000 1pt solid; BORDER-LEFT: #000000 1pt solid" noWrap align=left width="49%"><FONT face="Times New Roman" size=2>FFC</FONT></TD>
    <TD style="BORDER-RIGHT: #000000 1pt solid" noWrap align=left width="50%"><FONT face="Times New Roman" size=2>David Gale</FONT></TD></TR>
  <TR>
    <TD style="BORDER-RIGHT: #000000 1pt solid; BORDER-LEFT: #000000 1pt solid; BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="49%"></TD>
    <TD style="BORDER-RIGHT: #000000 1pt solid; BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="50%">&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD style="BORDER-RIGHT: #000000 1pt solid; BORDER-LEFT: #000000 1pt solid" noWrap align=left width="49%"><FONT face="Times New Roman" size=2>FLC</FONT></TD>
    <TD style="BORDER-RIGHT: #000000 1pt solid" noWrap align=left width="50%"><FONT face="Times New Roman" size=2>David Gale</FONT></TD></TR>
  <TR>
    <TD style="BORDER-RIGHT: #000000 1pt solid; BORDER-LEFT: #000000 1pt solid; BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="49%"></TD>
    <TD style="BORDER-RIGHT: #000000 1pt solid; BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="50%">&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD style="BORDER-RIGHT: #000000 1pt solid; BORDER-LEFT: #000000 1pt solid" noWrap align=left width="49%"><FONT face="Times New Roman" size=2>DFP</FONT></TD>
    <TD style="BORDER-RIGHT: #000000 1pt solid" noWrap align=left width="50%"><FONT face="Times New Roman" size=2>Donald F. Crumrine</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD style="BORDER-RIGHT: #000000 1pt solid; BORDER-LEFT: #000000 1pt solid; BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="49%"></TD>
    <TD style="BORDER-RIGHT: #000000 1pt solid; BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="50%"><FONT face="Times New Roman" size=2>Robert F.
Wulf</FONT></TD></TR></TABLE></DIV>
<P align=justify><FONT face="Times New Roman" size=2>Biographical information for each
nominee is included in the enclosed combined joint proxy statement under
Proposal 1 of the Annual Meeting. </FONT></P>
<P align=justify><B><U><FONT face="Times New Roman" size=2>SPECIAL MEETINGS OF SHAREHOLDERS
FOR PFD, PFO, FFC AND FLC</FONT></U></B></P>
<P align=justify><B><FONT face="Times New Roman" size=2>What is the purpose of the Special
Meetings?</FONT></B></P>
<P align=justify><FONT face="Times New Roman" size=2>Each Fund&#146;s Board of Directors called
the Special Meeting to present a proposal to shareholders for their approval
with respect to each Fund&#146;s fundamental investment policy relating to
investments in commodities. The Board has proposed a clarification to its
existing policy in order to avoid confusion in light of recent changes to
applicable law. The proposed revised fundamental investment policy makes clear
that the Funds have the flexibility to use swaps on financial instruments in
order to achieve their investment goals, consistent with each Fund&#146;s original
intent.</FONT></P>
<P align=justify><FONT face="Times New Roman" size=2>You can find greater detail in the
enclosed combined joint proxy statement under Proposal 1 of the Special
Meetings. </FONT></P>
<P align=justify><B><FONT face="Times New Roman" size=2>Why is the Fund&#146;s Board of Directors
recommending revising each Fund&#146;s fundamental investment policy with respect to
commodities?</FONT></B></P>
<P align=justify><FONT face="Times New Roman" size=2>Each Fund has adopted certain
investment policies that cannot be changed without shareholder approval. The
Board has proposed that the existing fundamental investment policy with respect
to the purchase and sale of commodities be revised in order to avoid confusion
in light of recent changes to applicable law. The change to the fundamental
policy is not expected to materially affect the manner in which each Fund&#146;s
investment program is being conducted at this time.</FONT></P>
<P align=center><FONT face="Times New Roman" size=2>- 4 -</FONT></P>
<HR align=center width="100%" noShade SIZE=2>

<DIV style="PAGE-BREAK-BEFORE: always"></DIV><BR>
<P align=justify><B><FONT face="Times New Roman" size=2>What will happen if shareholders do
not approve the change to a Fund&#146;s fundamental investment policy with respect to
commodities?</FONT></B></P>
<P align=justify><FONT face="Times New Roman" size=2>If the revised fundamental investment
policy with respect to commodities is not approved by shareholders of a Fund,
the fundamental investment policy will remain as is and the manner in which the
Fund&#146;s investment program is being conducted at this time will remain
substantially the same. Since the change is a clarification, the Funds would be
able to use swaps on financial instruments even if the required vote was not
obtained. </FONT></P>
<P align=center><B><FONT face="Times New Roman" size=2>INSTRUCTIONS FOR SIGNING PROXY CARDS
</FONT></B></P>
<P align=justify><B><FONT face="Times New Roman" size=2></FONT></B><FONT face="Times New Roman" size=2>The following general rules for signing proxy cards may be of assistance
to you and may minimize the time and expense to the Fund(s) involved in
validating your vote if you fail to sign your proxy card(s) properly.</FONT></P>
<TABLE cellSpacing=0 cellPadding=0 border=0>

  <TR>
    <TD vAlign=top noWrap><FONT face="Times New Roman" size=2>1.</FONT></TD>
    <TD vAlign=top noWrap></TD>
    <TD width="100%"><I><FONT face="Times New Roman" size=2>Individual Accounts: </FONT></I><FONT face="Times New Roman" size=2>Sign your name exactly as it appears in the registration on the
      proxy card(s).</FONT></TD></TR>
  <TR>
    <TD width="100%" colSpan=3>&nbsp;</TD></TR>
  <TR>
    <TD vAlign=top noWrap><FONT face="Times New Roman" size=2>2.</FONT></TD>
    <TD vAlign=top noWrap></TD>
    <TD width="100%"><I><FONT face="Times New Roman" size=2>Joint Accounts: </FONT></I><FONT face="Times New Roman" size=2>Either party may sign, but the name of the party signing should
      conform exactly to a name shown in the registration.</FONT></TD></TR>
  <TR>
    <TD width="100%" colSpan=3>&nbsp;</TD></TR>
  <TR>
    <TD vAlign=top noWrap><FONT face="Times New Roman" size=2>3.</FONT></TD>
    <TD vAlign=top noWrap>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD width="100%"><I><FONT face="Times New Roman" size=2>All Other Accounts: </FONT></I><FONT face="Times New Roman" size=2>The capacity of the individual signing the proxy card should be
      indicated unless it is reflected in the form registration. For
      example:</FONT></TD></TR></TABLE><BR>
<TABLE style="LINE-HEIGHT: 14pt; BORDER-COLLAPSE: collapse" cellSpacing=0 cellPadding=0 width="98%" border=0>

  <TR vAlign=bottom>
    <TD noWrap align=left width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD noWrap align=left width="49%" colSpan=3><U><FONT face="Times New Roman" size=2>Registration</FONT></U></TD>
    <TD noWrap align=left width="50%"><U><FONT face="Times New Roman" size=2>Valid Signature</FONT></U></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="49%" bgColor=#c0c0c0 colSpan=3><FONT face="Times New Roman" size=2>Corporate Accounts</FONT></TD>
    <TD noWrap align=left width="50%" bgColor=#c0c0c0></TD></TR>
  <TR>
    <TD width="1%"></TD>
    <TD width="99%" colSpan=4>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=right width="1%"></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>(1)</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD noWrap align=left width="47%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>ABC Corp.</FONT></TD>
    <TD noWrap align=left width="50%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>ABC Corp.</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=right width="1%"></TD>
    <TD noWrap align=right width="1%"><FONT face="Times New Roman" size=2>(2)</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="47%"><FONT face="Times New Roman" size=2>ABC
      Corp.</FONT></TD>
    <TD noWrap align=left width="50%"><FONT face="Times New Roman" size=2>John
      Doe, Treasurer</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=right width="1%"></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>(3)</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="47%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>ABC Corp. c/o John Doe, Treasurer</FONT></TD>
    <TD noWrap align=left width="50%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>John Doe</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=right width="1%"></TD>
    <TD noWrap align=right width="1%"><FONT face="Times New Roman" size=2>(4)</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="47%"><FONT face="Times New Roman" size=2>ABC
      Corp. Profit Sharing Plan</FONT></TD>
    <TD noWrap align=left width="50%"><FONT face="Times New Roman" size=2>John
      Doe, Trustee</FONT></TD></TR>
  <TR>
    <TD width="1%"></TD>
    <TD width="99%" colSpan=4>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="49%" bgColor=#c0c0c0 colSpan=3><FONT face="Times New Roman" size=2>Trust Accounts</FONT></TD>
    <TD noWrap align=left width="50%" bgColor=#c0c0c0></TD></TR>
  <TR>
    <TD width="1%"></TD>
    <TD width="99%" colSpan=4>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=right width="1%"></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>(1)</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="47%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>ABC Trust</FONT></TD>
    <TD noWrap align=left width="50%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>Jane B. Doe, Trustee</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=right width="1%"></TD>
    <TD noWrap align=right width="1%"><FONT face="Times New Roman" size=2>(2)</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="47%"><FONT face="Times New Roman" size=2>Jane
      B. Doe, Trustee</FONT></TD>
    <TD noWrap align=left width="50%"><FONT face="Times New Roman" size=2>Jane
      B. Doe</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="47%"><FONT face="Times New Roman" size=2>u/t/d 12/28/78</FONT></TD>
    <TD noWrap align=left width="50%"></TD></TR>
  <TR>
    <TD width="1%"></TD>
    <TD width="99%" colSpan=4>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="49%" bgColor=#c0c0c0 colSpan=3><FONT face="Times New Roman" size=2>Custodian or Estate Accounts</FONT></TD>
    <TD noWrap align=left width="50%" bgColor=#c0c0c0></TD></TR>
  <TR>
    <TD width="1%"></TD>
    <TD width="99%" colSpan=4>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=right width="1%"></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>(1)</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="47%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>John B. Smith, Cust.,</FONT></TD>
    <TD noWrap align=left width="50%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>John B. Smith</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="47%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>f/b/o John B. Smith, Jr. UGMA</FONT></TD>
    <TD noWrap align=left width="50%" bgColor=#c0c0c0></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=right width="1%"></TD>
    <TD noWrap align=right width="1%"><FONT face="Times New Roman" size=2>(2)</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="47%"><FONT face="Times New Roman" size=2>John
      B. Smith, Executor,</FONT></TD>
    <TD noWrap align=left width="50%"><FONT face="Times New Roman" size=2>John
      B. Smith, Executor</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="47%"><FONT face="Times New Roman" size=2>Estate of Jane Smith</FONT></TD>
    <TD noWrap align=left width="50%"></TD></TR></TABLE>
<P align=center><FONT face="Times New Roman" size=2>- 5 -</FONT></P>
<HR align=center width="100%" noShade SIZE=2>

<DIV style="PAGE-BREAK-BEFORE: always"></DIV><BR>
<P align=center><B><FONT face="Times New Roman" size=2>FLAHERTY &amp; CRUMRINE PREFERRED
INCOME FUND INCORPORATED (NYSE: PFD)<BR>FLAHERTY &amp; CRUMRINE PREFERRED INCOME
OPPORTUNITY FUND INCORPORATED (NYSE: PFO)<BR>FLAHERTY &amp; CRUMRINE PREFERRED
SECURITIES INCOME FUND INCORPORATED (NYSE: FFC)<BR>FLAHERTY &amp; CRUMRINE TOTAL
RETURN FUND INCORPORATED (NYSE: FLC)<BR>FLAHERTY &amp; CRUMRINE DYNAMIC
PREFERRED AND INCOME FUND INCORPORATED (NYSE: DFP)</FONT></B></P>
<P align=center><FONT face="Times New Roman" size=2>301 E. Colorado Boulevard, Suite
720<BR>Pasadena, California 91101 </FONT></P>
<P align=center><B><FONT face="Times New Roman" size=2>ANNUAL MEETINGS OF SHAREHOLDERS
</FONT></B></P>
<P align=center><B><FONT face="Times New Roman" size=2>SPECIAL MEETINGS OF SHAREHOLDERS
</FONT></B></P>
<P align=center><B><FONT face="Times New Roman" size=2>April 17, 2014 </FONT></B></P>
<P align=center><B><FONT face="Times New Roman" size=2>COMBINED JOINT PROXY STATEMENT
</FONT></B></P>
<P align=justify><B><FONT face="Times New Roman" size=2></FONT></B><FONT face="Times New Roman" size=2><FONT size=3 face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>This document is a
combined joint proxy statement (&#147;Joint Proxy Statement&#148;) for Flaherty &amp;
Crumrine Preferred Income Fund Incorporated (&#147;Preferred Income Fund&#148; or &#147;PFD&#148;),
Flaherty &amp; Crumrine Preferred Income Opportunity Fund Incorporated
(&#147;Preferred Income Opportunity Fund&#148; or &#147;PFO&#148;), Flaherty &amp; Crumrine
Preferred Securities Income Fund Incorporated (&#147;Preferred Securities Income
Fund&#148; or &#147;FFC&#148;), Flaherty &amp; Crumrine Total Return Fund Incorporated (&#147;Total
Return Fund&#148; or &#147;FLC&#148;) and Flaherty &amp; Crumrine Dynamic Preferred and Income
Fund Incorporated (&#147;Dynamic Preferred Income Fund&#148; or &#147;DFP&#148;) (each, a &#147;Fund&#148; and
collectively, the &#147;Funds&#148;). This Joint Proxy Statement is furnished in
connection with the solicitation of proxies by each Fund&#146;s Board of Directors
(each, a &#147;Board&#148; and collectively, the &#147;Boards&#148;) to be voted at the Annual
Meetings of Shareholders for PFD, PFO, FFC, FLC and DFP (the &#147;Annual Meetings&#148;)
and the Special Meetings of Shareholders for PFD, PFO, FFC and FLC (the &#147;Special
Meetings,&#148; together with the Annual Meetings, the &#147;Meetings&#148;) to be held on
April 17, 2014, at the offices of Flaherty &amp; Crumrine Incorporated, 301 E.
Colorado Boulevard, Suite 720, Pasadena, California 91101 and at any
adjournments or postponements thereof. The Annual Meetings will be held at 9:00
a.m. PT and the Special Meetings will be held at 9:30 a.m. PST.</FONT></P>
<P align=justify><FONT face="Times New Roman" size=2><FONT size=3 face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>This Joint Proxy Statement and the
accompanying Notice of Annual Meetings, Notice of Special Meetings and proxy
card for each Fund in which you own shares were mailed on or about March __,
2014 to shareholders of record as of the close of business on January 17, 2014.
Proxy solicitations will be made, beginning on or about March __, 2014,
primarily by mail, but proxy solicitations may also be made by telephone,
telefax or personal interviews conducted by officers of each Fund, Flaherty
&amp; Crumrine Incorporated (&#147;Flaherty &amp; Crumrine&#148;), the investment adviser
of each Fund, and BNY Mellon Investment Servicing (US) Inc. (&#147;BNY Mellon&#148;), the
transfer agent and administrator of each Fund. With respect to FFC, FLC and DFP,
proxy solicitations may also be made by Destra Capital Investments LLC, the
servicing agent for FFC, FLC and DFP. Costs of proxy solicitation and expenses
incurred in connection with the preparation of this Joint Proxy Statement and
its enclosures will be shared proportionally by the Funds. Each Fund also will
reimburse brokerage firms and others for their expenses in forwarding
solicitation material to the beneficial owners of its shares.</FONT></P>
<P align=justify><FONT face="Times New Roman" size=2></FONT><FONT face="Times New Roman" size=2><FONT size=3 face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><STRONG>THE ANNUAL REPORT OF EACH
FUND, INCLUDING AUDITED FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED NOVEMBER
30, 2013, IS AVAILABLE UPON REQUEST, WITHOUT CHARGE, BY WRITING TO BNY MELLON
C/O COMPUTERSHARE, P.O. BOX 30170, COLLEGE STATION, TEXAS 77842-3170, OR BY
CALLING 1-866-351-7446. EACH FUND&#146;S ANNUAL REPORT IS ALSO AVAILABLE ON THE
FUNDS&#146; WEBSITE - WWW.PREFERREDINCOME.COM - THE SECURITIES AND EXCHANGE
COMMISSION&#146;S (&#147;SEC&#148;) WEBSITE (WWW.SEC.GOV) OR, FOR FFC, FLC AND DFP ONLY, BY
CALLING DESTRA CAPITAL INVESTMENTS LLC AT 1-877-855-3434.</STRONG></FONT></P>

<DIV style="BORDER-RIGHT: 1pt solid; PADDING-RIGHT: 4pt; BORDER-TOP: 1pt solid; PADDING-LEFT: 4pt; PADDING-BOTTOM: 4pt; BORDER-LEFT: 1pt solid; WIDTH: 100%; PADDING-TOP: 4pt; BORDER-BOTTOM: 1pt solid">
<P align=center><B><FONT face="Times New Roman" size=2>Important Notice Regarding the
Availability of Proxy Materials for the Shareholder Meetings to Be<BR>Held on
April 17, 2014 </FONT></B></P>
<P align=justify><B><FONT face="Times New Roman" size=2>The notices of Annual Meetings and
Special Meetings, as applicable, Joint Proxy Statement, proxy cards and each
Fund&#146;s annual report for the fiscal year ended November 30, 2013 are available
to you on the Funds&#146; website - www.preferredincome.com. You are encouraged to
review all of the information contained in the proxy materials before voting. To
obtain directions to attend the Annual Meetings and Special Meetings, and vote
in person, please call 1-626-795-7300. </FONT></B></P>
<P align=justify><B><FONT face="Times New Roman" size=2>SEPARATE PROXY CARDS ARE ENCLOSED
FOR EACH FUND IN WHICH YOU OWN SHARES. YOUR VOTE IS IMPORTANT REGARDLESS OF
THE SIZE OF YOUR HOLDINGS IN THE FUND. WHETHER OR NOT YOU PLAN TO ATTEND THE
MEETING, WE ASK THAT YOU PLEASE VOTE PROMPTLY. INSTRUCTIONS FOR THE PROPER
VOTING AND/OR EXECUTION OF PROXIES ARE SET FORTH ON THE INSIDE COVER.
SHAREHOLDERS MAY SUBMIT VOTING INSTRUCTIONS BY SIGNING AND DATING THE PROXY CARD
OR VOTING INSTRUCTION FORM AND RETURNING IT IN THE ACCOMPANYING POSTAGE-PAID
ENVELOPE. </FONT></B></P></DIV><BR>


<P align=center><FONT face="Times New Roman" size=2>1</FONT></P>
<HR align=center width="100%" noShade SIZE=2>

<DIV style="PAGE-BREAK-BEFORE: always"></DIV><BR>
<P align=center><FONT face="Times New Roman" size=2></FONT><B><FONT face="Times New Roman" size=2>SUMMARY OF PROPOSALS AND FUNDS AFFECTED </FONT></B></P>
<P align=justify><FONT face="Times New Roman" size=2><FONT size=3 face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>The following chart specifies the
Funds whose shareholders will be entitled to vote at the relevant Meetings on
each of the proposals being presented for shareholder consideration. The
proposals are set forth in the Notice of Annual Meetings and Notice of Special
Meetings, respectively, and are discussed in more detail below. </FONT></P>
<DIV align=center>
<TABLE style="PADDING-RIGHT: 4pt; PADDING-LEFT: 4pt; LINE-HEIGHT: 14pt; BORDER-COLLAPSE: collapse" cellSpacing=0 cellPadding=0 width="95%" border=0>

  <TR vAlign=bottom>
    <TD style="BORDER-RIGHT: #000000 1pt solid; BORDER-TOP: #000000 1pt solid; BORDER-LEFT: #000000 1pt solid; BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="100%" colSpan=3><B><FONT face="Times New Roman" size=2>ANNUAL
      MEETING OF SHAREHOLDERS</FONT></B></TD></TR>
  <TR vAlign=bottom>
    <TD style="BORDER-RIGHT: #000000 1pt solid; BORDER-LEFT: #000000 1pt solid; BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="33%"><B><U><FONT face="Times New Roman" size=2>Proposal</FONT></U></B></TD>
    <TD style="BORDER-RIGHT: #000000 1pt solid; BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="34%"><B><U><FONT face="Times New Roman" size=2>Affected Funds</FONT></U></B></TD>
    <TD style="BORDER-RIGHT: #000000 1pt solid; BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="33%"><B><U><FONT face="Times New Roman" size=2>Page
      Number</FONT></U></B></TD></TR>
  <TR vAlign=bottom>
    <TD style="BORDER-RIGHT: #000000 1pt solid; BORDER-LEFT: #000000 1pt solid" noWrap align=left width="33%"><FONT face="Times New Roman" size=2>Proposal 1 &#151; To elect</FONT></TD>
    <TD style="BORDER-RIGHT: #000000 1pt solid" noWrap align=left width="34%"><FONT face="Times New Roman" size=2>PFD</FONT></TD>
    <TD style="BORDER-RIGHT: #000000 1pt solid" noWrap align=left width="33%"><FONT face="Times New Roman" size=2>[6]</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD style="BORDER-RIGHT: #000000 1pt solid; BORDER-LEFT: #000000 1pt solid" noWrap align=left width="33%"><FONT face="Times New Roman" size=2>Directors of each Fund</FONT></TD>
    <TD style="BORDER-RIGHT: #000000 1pt solid" noWrap align=left width="34%"><FONT face="Times New Roman" size=2>PFO</FONT></TD>
    <TD style="BORDER-RIGHT: #000000 1pt solid" noWrap align=left width="33%"></TD></TR>
  <TR vAlign=bottom>
    <TD style="BORDER-RIGHT: #000000 1pt solid; BORDER-LEFT: #000000 1pt solid" noWrap align=left width="33%"></TD>
    <TD style="BORDER-RIGHT: #000000 1pt solid" noWrap align=left width="34%"><FONT face="Times New Roman" size=2>FFC</FONT></TD>
    <TD style="BORDER-RIGHT: #000000 1pt solid" noWrap align=left width="33%"></TD></TR>
  <TR vAlign=bottom>
    <TD style="BORDER-RIGHT: #000000 1pt solid; BORDER-LEFT: #000000 1pt solid" noWrap align=left width="33%"></TD>
    <TD style="BORDER-RIGHT: #000000 1pt solid" noWrap align=left width="34%"><FONT face="Times New Roman" size=2>FLC</FONT></TD>
    <TD style="BORDER-RIGHT: #000000 1pt solid" noWrap align=left width="33%"></TD></TR>
  <TR vAlign=bottom>
    <TD style="BORDER-RIGHT: #000000 1pt solid; BORDER-LEFT: #000000 1pt solid; BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="33%"></TD>
    <TD style="BORDER-RIGHT: #000000 1pt solid; BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="34%"><FONT face="Times New Roman" size=2>DFP</FONT></TD>
    <TD style="BORDER-RIGHT: #000000 1pt solid; BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="33%"></TD></TR>
  <TR>
    <TD style="BORDER-RIGHT: #000000 1pt solid; BORDER-LEFT: #000000 1pt solid" width="100%" colSpan=3>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD style="BORDER-RIGHT: #000000 1pt solid; BORDER-LEFT: #000000 1pt solid; BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="100%" colSpan=3><B><FONT face="Times New Roman" size=2>SPECIAL
      MEETING OF SHAREHOLDERS</FONT></B></TD></TR>
  <TR vAlign=bottom>
    <TD style="BORDER-RIGHT: #000000 1pt solid; BORDER-LEFT: #000000 1pt solid; BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="33%"><B><U><FONT face="Times New Roman" size=2>Proposal</FONT></U></B></TD>
    <TD style="BORDER-RIGHT: #000000 1pt solid; BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="34%"><B><U><FONT face="Times New Roman" size=2>Affected Funds</FONT></U></B></TD>
    <TD style="BORDER-RIGHT: #000000 1pt solid; BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="33%"><B><U><FONT face="Times New Roman" size=2>Page
      Number</FONT></U></B></TD></TR>
  <TR vAlign=bottom>
    <TD style="BORDER-RIGHT: #000000 1pt solid; BORDER-LEFT: #000000 1pt solid" noWrap align=left width="33%"><FONT face="Times New Roman" size=2>Proposal 1 &#151; To approve a</FONT></TD>
    <TD style="BORDER-RIGHT: #000000 1pt solid" noWrap align=left width="34%"><FONT face="Times New Roman" size=2>PFD</FONT></TD>
    <TD style="BORDER-RIGHT: #000000 1pt solid" noWrap align=left width="33%"><FONT face="Times New Roman" size=2>[16]</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD style="BORDER-RIGHT: #000000 1pt solid; BORDER-LEFT: #000000 1pt solid" noWrap align=left width="33%"><FONT face="Times New Roman" size=2>change to the fundamental</FONT></TD>
    <TD style="BORDER-RIGHT: #000000 1pt solid" noWrap align=left width="34%"><FONT face="Times New Roman" size=2>PFO</FONT></TD>
    <TD style="BORDER-RIGHT: #000000 1pt solid" noWrap align=left width="33%">&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD style="BORDER-RIGHT: #000000 1pt solid; BORDER-LEFT: #000000 1pt solid" noWrap align=left width="33%"><FONT face="Times New Roman" size=2>investment policy regarding</FONT></TD>
    <TD style="BORDER-RIGHT: #000000 1pt solid" noWrap align=left width="34%"><FONT face="Times New Roman" size=2>FFC</FONT></TD>
    <TD style="BORDER-RIGHT: #000000 1pt solid" noWrap align=left width="33%">&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD style="BORDER-RIGHT: #000000 1pt solid; BORDER-LEFT: #000000 1pt solid; BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="33%"><FONT face="Times New Roman" size=2>investments in commodities</FONT></TD>
    <TD style="BORDER-RIGHT: #000000 1pt solid; BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="34%"><FONT face="Times New Roman" size=2>FLC</FONT></TD>
    <TD style="BORDER-RIGHT: #000000 1pt solid; BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="33%"></TD></TR></TABLE></DIV>
<P align=justify><FONT face="Times New Roman" size=2><FONT size=3 face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>If the enclosed proxy cards are
properly executed and returned in time to be voted at the relevant Meetings, the
Shares (as defined below) represented thereby will be voted in accordance with
the instructions marked thereon. Unless instructions to the contrary are marked
thereon, a proxy will be voted &#147;FOR&#148; Proposal 1 at the Annual Meeting and &#147;FOR&#148;
Proposal 1 at the Special Meeting, as applicable. Any shareholder who has given a
proxy has the right to revoke it at any time prior to its exercise either by
attending the relevant Meetings and voting his or her Shares in person or by
submitting a letter of revocation or a later-dated proxy to the appropriate Fund
delivered at the above address prior to the date of the Meetings.</FONT></P>
<P align=justify><FONT face="Times New Roman" size=2><FONT size=3 face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>Under the Bylaws of each Fund, the
presence in person or by proxy of the holders of a majority of the outstanding
shares of the Fund entitled to vote shall be necessary and sufficient to
constitute a quorum for the transaction of business (a &#147;Quorum&#148;) at that Fund&#146;s
Meeting(s). In the event that a Quorum is not present at the relevant Meeting,
or in the event that a Quorum is present but sufficient votes to approve any of
the proposals are not received, the Chairman of the Meeting may adjourn the
meeting </FONT><I><FONT face="Times New Roman" size=2>sine die </FONT></I><FONT face="Times New Roman" size=2>or from time to time to a date not more than 120 days after the original
record date without notice other than announcement at the Meeting. At such
adjourned meeting at which a Quorum shall be present, any business may be
transacted which might have been transacted at the meeting as originally
notified. A shareholder vote may be taken on a proposal in the Joint Proxy
Statement relating to the applicable Meeting prior to any such adjournment if
sufficient votes have been received for approval of that proposal. Once a Quorum
has been established at the relevant Meeting, shareholders may continue to
transact business, notwithstanding the withdrawal of shareholders and the loss
of a Quorum.</FONT></P>
<P align=justify><FONT face="Times New Roman" size=2><FONT size=3 face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>Each Fund has one class of capital
stock outstanding: common stock, par value $0.01 per share (the &#147;Common Stock&#148;
or the &#147;Shares&#148;). Each Share is entitled to one vote at the relevant Meetings
with respect to matters to be voted on, with pro rata voting rights for any
fractional Shares. On the record date, January 17, 2014, the following number of
Shares of each Fund were issued and outstanding:</FONT></P>
<DIV align=center>
<TABLE style="LINE-HEIGHT: 14pt; BORDER-COLLAPSE: collapse" cellSpacing=0 cellPadding=0 width="95%" border=0>

  <TR vAlign=bottom>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="3%"><FONT size=+0><FONT face="Times New Roman" size=2>Name of
      Fund</FONT></FONT></TD>
    <TD noWrap align=left width="46%"></TD>
    <TD noWrap align=left width="2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="5%"><FONT size=+0><FONT face="Times New Roman" size=2>Shares
      Outstanding</FONT></FONT></TD>
    <TD noWrap align=left width="44%"></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="49%" bgColor=#c0c0c0 colSpan=2><FONT face="Times New Roman" size=2>Preferred Income Fund (PFD)</FONT></TD>
    <TD noWrap align=left width="2%" bgColor=#c0c0c0>&nbsp;</TD>
    <TD noWrap align=left width="49%" bgColor=#c0c0c0 colSpan=2><FONT face="Times New Roman" size=2>10,985,567</FONT></TD></TR>
  <TR>
    <TD noWrap align=left width="49%" colSpan=2>&nbsp;</TD>
    <TD noWrap align=left width="2%">&nbsp;</TD>
    <TD noWrap align=left width="49%" colSpan=2></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="49%" bgColor=#c0c0c0 colSpan=2><FONT face="Times New Roman" size=2>Preferred Income Opportunity Fund
      (PFO)</FONT></TD>
    <TD noWrap align=left width="2%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="49%" bgColor=#c0c0c0 colSpan=2><FONT face="Times New Roman" size=2>12,298,870</FONT></TD></TR>
  <TR>
    <TD noWrap align=left width="49%" colSpan=2>&nbsp;</TD>
    <TD noWrap align=left width="2%"></TD>
    <TD noWrap align=left width="49%" colSpan=2></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="49%" bgColor=#c0c0c0 colSpan=2><FONT face="Times New Roman" size=2>Preferred Securities Income Fund
    (FFC)</FONT></TD>
    <TD noWrap align=left width="2%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="49%" bgColor=#c0c0c0 colSpan=2><FONT face="Times New Roman" size=2>43,474,105</FONT></TD></TR>
  <TR>
    <TD noWrap align=left width="49%" colSpan=2>&nbsp;</TD>
    <TD noWrap align=left width="2%"></TD>
    <TD noWrap align=left width="49%" colSpan=2></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="49%" bgColor=#c0c0c0 colSpan=2><FONT face="Times New Roman" size=2>Total Return Fund (FLC)</FONT></TD>
    <TD noWrap align=left width="2%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="49%" bgColor=#c0c0c0 colSpan=2><FONT face="Times New Roman" size=2>&nbsp;&nbsp;9,897,817</FONT></TD></TR>
  <TR>
    <TD noWrap align=left width="49%" colSpan=2>&nbsp;</TD>
    <TD noWrap align=left width="2%"></TD>
    <TD noWrap align=left width="49%" colSpan=2></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="49%" bgColor=#c0c0c0 colSpan=2><FONT face="Times New Roman" size=2>Dynamic Preferred Income Fund
(DFP)</FONT></TD>
    <TD noWrap align=left width="2%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="49%" bgColor=#c0c0c0 colSpan=2><FONT face="Times New Roman" size=2>&nbsp;&nbsp;9,156,782</FONT></TD></TR></TABLE></DIV>
<P align=center><FONT face="Times New Roman" size=2>2</FONT></P>
<HR align=center width="100%" noShade SIZE=2>

<DIV style="PAGE-BREAK-BEFORE: always"></DIV><BR>
<P align=justify><FONT face="Times New Roman" size=2><FONT size=3 face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>To the knowledge of each Fund and
its Board, the following shareholder(s), or &#147;group&#148; as that term is defined in
Section 13(d) of the Securities Exchange Act of 1934, as amended (the &#147;1934
Act&#148;), is the beneficial owner or owner of record of more than 5% of the
relevant Fund&#146;s outstanding Shares as of January 17,
2014<SUP>*</SUP>:</FONT></P>
<TABLE style="LINE-HEIGHT: 14pt; BORDER-COLLAPSE: collapse" cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=bottom>
    <TD noWrap align=left width="94%"><FONT face="Times New Roman" size=2>Name and Address of</FONT></TD>
    <TD noWrap align=left width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD noWrap align=left width="1%"><FONT face="Times New Roman" size=2>Amount and Nature</FONT></TD>
    <TD noWrap align=left width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD noWrap align=left width="1%"></TD></TR>
  <TR vAlign=bottom>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="94%"><FONT size=+0><FONT face="Times New Roman" size=2>Beneficial/Record Owner</FONT></FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"><FONT size=+0><FONT face="Times New Roman" size=2>Title of Class</FONT></FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"><FONT size=+0><FONT face="Times New Roman" size=2>of Ownership</FONT></FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"><FONT size=+0><FONT face="Times New Roman" size=2>Percent of Class</FONT></FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="94%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>Cede &amp;
      Co.<SUP>**</SUP></FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>Common Stock</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>PFD &#150; 10,606,357
      (record)</FONT></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>96.5%</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="94%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>Depository Trust
      Company</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>PFO &#150; 11,845,881
      (record)</FONT></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>96.3%</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="94%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>55 Water Street, 25<SUP>th
      </SUP>Floor</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>FLC &#150; 9,888,806
      (record)</FONT></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>99.9%</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="94%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>New York, NY
    10041</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>FFC &#150; 43,393,928
      (record)</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>99.8%</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="94%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>DFP &#150; 19,152,577
      (record)</FONT></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>99.9%</FONT></TD></TR>
  <TR>
    <TD width="100%" colSpan=7>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="94%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>First Trust Portfolios
      L.P.,</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>Common Stock</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="2%" bgColor=#c0c0c0 colSpan=2><FONT face="Times New Roman" size=2>FLC
      &#150; 918,712<SUP>1 </SUP>(beneficial)</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>9.29%</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="94%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>First Trust Advisors
      L.P.</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="94%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>The Charger
      Corporation</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="94%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>120 East Liberty Drive,
      Suite 400</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="94%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>Wheaton, Illinois
      60187</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD></TR>
  <TR>
    <TD width="100%" colSpan=7>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="94%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>Guggenheim Capital, LLC,
      Guggenheim</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>Common Stock</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="2%" bgColor=#c0c0c0 colSpan=2><FONT face="Times New Roman" size=2>FLC
      &#150; 604,237<SUP>2 </SUP>(beneficial)</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>5.89%</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="94%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>Partners, LLC, GI Holdco
      II, LLC,</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="94%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>Guggenheim Partners
      Investment</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="94%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>Management Holdings, LLC,
      Guggenheim</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="94%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>Funds Services Holdings,
      LLC,</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="94%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>Guggenheim Funds Services,
      LLC and</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="94%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>Guggenheim Funds
      Distributors, LLC</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="94%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>(collectively, the &#147;Filing
      Entities&#148;).</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD></TR></TABLE>____________________<BR><BR>
<TABLE style="BORDER-COLLAPSE: collapse" cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=bottom>
    <TD vAlign=top noWrap align=left width="1%"><FONT face="Times New Roman" size=1>*</FONT></TD>
    <TD vAlign=top noWrap align=left width="1%"><FONT size=2 face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD vAlign=top noWrap align=left width="98%"><FONT face="Times New Roman" size=2>As of January 17, 2014,
      the Directors and officers, as a group, owned less than 1% of the Shares
      of each Fund.</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD vAlign=top noWrap align=left width="1%"><FONT face="Times New Roman" size=1>**</FONT></TD>
    <TD vAlign=top noWrap align=left width="1%"></TD>
    <TD vAlign=top noWrap align=left width="98%"><FONT face="Times New Roman" size=2>A nominee partnership of
      The Depository Trust Company.</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD vAlign=top noWrap align=left width="1%"><FONT face="Times New Roman" size=1>1</FONT></TD>
    <TD vAlign=top noWrap align=left width="1%"></TD>
    <TD vAlign=top align=left width="98%"><FONT face="Times New Roman" size=2>Information obtained from a Schedule
      13G filed by First Trust Portfolios L.P. (&#147;FTP&#148;), First Trust Advisors L.P
      (&#147;FTA&#148;) and The Charger Corporation (&#147;Charger&#148;) with the SEC reporting
      share ownership as of December 31, 2013. Based on that filing, FTP, FTA
      and Charger do not have sole or shared voting power, but do have the
      shared power to dispose or direct the disposition of 918,712
    Shares.</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD vAlign=top noWrap align=left width="1%"><FONT face="Times New Roman" size=1>2</FONT></TD>
    <TD vAlign=top noWrap align=left width="1%"></TD>
    <TD vAlign=top align=left width="98%"><FONT face="Times New Roman" size=2>Information obtained from a Schedule
      13G/A filed by the Filing Entities with the SEC reporting share ownership
      as of December 31, 2013. Based on that filing, the Filing Entities have
      the shared power to vote or direct the vote or dispose or direct the
      disposition of 604,237 Shares.</FONT></TD></TR></TABLE>
<P align=justify><FONT face="Times New Roman" size=2><FONT size=3 face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>This Joint Proxy Statement is being
used in order to reduce the preparation, printing, handling and postage expenses
that would result from the use of a separate proxy statement for each Fund. At
each of the relevant Meetings, Shareholders of each Fund will vote as a single
class. Shareholders of each Fund will vote separately for each of PFD, PFO, FFC,
FLC and DFP on each proposal on which shareholders of that Fund are entitled to
vote at a Meeting. Separate proxy cards are enclosed for each Fund in which a
shareholder owns Shares. Thus, if a proposal at the relevant Meeting is approved
by shareholders of one or more Funds and not approved by shareholders of one or
more other Funds, the proposal will be implemented for the Fund or Funds that
approved the proposal and will not be implemented for any Fund that did not approve the proposal. It is therefore
essential that shareholders complete, date and sign each enclosed proxy card.
Shareholders of each Fund are entitled to vote on the proposal pertaining to
that Fund.</FONT></P>
<P align=center><FONT face="Times New Roman" size=2>3</FONT></P>
<HR align=center width="100%" noShade SIZE=2>

<DIV style="PAGE-BREAK-BEFORE: always"></DIV><BR>
<P align=center><B><FONT face="Times New Roman" size=2>ANNUAL MEETINGS<BR>(ALL FUNDS)
</FONT></B></P>
<P align=center><B><FONT face="Times New Roman" size=2>PROPOSAL 1: ELECTION OF DIRECTORS
</FONT></B></P>
<P align=justify><B><FONT face="Times New Roman" size=2></FONT></B><FONT face="Times New Roman" size=2><FONT size=3 face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>At the Annual Meetings,
shareholders are being asked to consider the election of Directors of each Fund.
The Board of each Fund is divided into three classes, each class having a term
of three years. Each year the term of office of one class expires and the
successor or successors elected to such class serve for a three-year term and
until their successors are duly elected and qualified.</FONT></P>
<P align=justify><B><FONT face="Times New Roman" size=2>Nominees for the Boards of
Directors</FONT></B></P>
<P align=justify><FONT face="Times New Roman" size=2><FONT size=3 face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>Each nominee named below is
currently a Director of each Fund and has consented to continue to serve as a
Director for the Fund(s) for which he or she is nominated if elected at the
relevant Annual Meeting. If a designated nominee declines or otherwise becomes
unavailable for election, however, the proxy confers discretionary power on the
persons named therein to vote in favor of a substitute nominee or nominees. Each
nominee has been nominated for a three-year term to expire at each Fund&#146;s 2017
Annual Meeting of Shareholders and until his or her successor is duly elected
and qualified. Shareholders of each Fund&#146;s Common Stock are entitled to elect
the nominees for election to the Board of the relevant Fund. </FONT></P>
<DIV align=center>
<TABLE style="PADDING-RIGHT: 4pt; PADDING-LEFT: 4pt; LINE-HEIGHT: 14pt; BORDER-COLLAPSE: collapse" cellSpacing=0 cellPadding=0 width="95%" border=0>

  <TR vAlign=bottom>
    <TD style="BORDER-RIGHT: #000000 1pt solid; BORDER-TOP: #000000 1pt solid; BORDER-LEFT: #000000 1pt solid; BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="49%"><B><FONT face="Times New Roman" size=2>Fund</FONT></B></TD>
    <TD style="BORDER-RIGHT: #000000 1pt solid; BORDER-TOP: #000000 1pt solid; BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="50%"><B><FONT face="Times New Roman" size=2>Nominees For
    Election</FONT></B></TD></TR>
  <TR vAlign=bottom>
    <TD NOWRAP STYLE="border-right: Black 1pt solid; border-left: #000000 1pt solid; text-align: left; width: 49%"><FONT face="Times New Roman" size=2>PFD</FONT></TD>
    <TD NOWRAP STYLE="border-right: Black 1pt solid; text-align: left; width: 50%"><FONT face="Times New Roman" size=2>David Gale</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD style="BORDER-RIGHT: #000000 1pt solid; BORDER-LEFT: #000000 1pt solid; BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="49%"></TD>
    <TD style="BORDER-RIGHT: #000000 1pt solid; BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="50%"><FONT face="Times New Roman" size=2>Karen H. Hogan</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD NOWRAP STYLE="border-right: Black 1pt solid; border-left: #000000 1pt solid; text-align: left; width: 49%"><FONT face="Times New Roman" size=2>PFO</FONT></TD>
    <TD NOWRAP STYLE="border-right: Black 1pt solid; text-align: left; width: 50%"><FONT face="Times New Roman" size=2>Morgan Gust</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD style="BORDER-RIGHT: #000000 1pt solid; BORDER-LEFT: #000000 1pt solid; BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="49%"></TD>
    <TD style="BORDER-RIGHT: #000000 1pt solid; BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="50%"><FONT face="Times New Roman" size=2>Karen H. Hogan</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD style="BORDER-RIGHT: #000000 1pt solid; BORDER-LEFT: #000000 1pt solid" noWrap align=left width="49%"><FONT face="Times New Roman" size=2>FFC</FONT></TD>
    <TD style="BORDER-RIGHT: #000000 1pt solid" noWrap align=left width="50%"><FONT face="Times New Roman" size=2>David Gale</FONT></TD></TR>
  <TR>
    <TD style="BORDER-RIGHT: #000000 1pt solid; BORDER-LEFT: #000000 1pt solid; BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="49%"></TD>
    <TD style="BORDER-RIGHT: #000000 1pt solid; BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="50%">&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD style="BORDER-RIGHT: #000000 1pt solid; BORDER-LEFT: #000000 1pt solid" noWrap align=left width="49%"><FONT face="Times New Roman" size=2>FLC</FONT></TD>
    <TD style="BORDER-RIGHT: #000000 1pt solid" noWrap align=left width="50%"><FONT face="Times New Roman" size=2>David Gale</FONT></TD></TR>
  <TR>
    <TD style="BORDER-RIGHT: #000000 1pt solid; BORDER-LEFT: #000000 1pt solid; BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="49%"></TD>
    <TD style="BORDER-RIGHT: #000000 1pt solid; BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="50%">&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD style="BORDER-RIGHT: #000000 1pt solid; BORDER-LEFT: #000000 1pt solid" noWrap align=left width="49%"><FONT face="Times New Roman" size=2>DFP</FONT></TD>
    <TD style="BORDER-RIGHT: #000000 1pt solid" noWrap align=left width="50%"><FONT face="Times New Roman" size=2>Donald F. Crumrine</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD style="BORDER-RIGHT: #000000 1pt solid; BORDER-LEFT: #000000 1pt solid; BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="49%"></TD>
    <TD style="BORDER-RIGHT: #000000 1pt solid; BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="50%"><FONT face="Times New Roman" size=2>Robert F.
Wulf</FONT></TD></TR></TABLE></DIV><BR>
<P align=center><FONT face="Times New Roman" size=2>4</FONT></P>
<HR align=center width="100%" noShade SIZE=2>

<DIV style="PAGE-BREAK-BEFORE: always"></DIV><BR>
<P align=justify><U><FONT face="Times New Roman" size=2>Information About Each Director's or
Nominee for Election as Director's Experience, Qualifications, Attributes
or Skills</FONT></U></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="Times New Roman" size=2>Directors
or Nominees for Election as Directors of the Funds, together with information as
to their positions with the Funds, principal occupations and other board
memberships for the past five years, are shown below.</FONT></P>
<TABLE style="LINE-HEIGHT: 14pt; BORDER-COLLAPSE: collapse" cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=bottom>
    <TD noWrap style="text-align: center" width="90%"></TD>
    <TD noWrap style="text-align: center" width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD noWrap style="text-align: center" width="1%"></TD>
    <TD noWrap style="text-align: center" width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD noWrap style="text-align: center" width="1%"></TD>
    <TD noWrap style="text-align: center" width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD noWrap style="text-align: center" width="1%"></TD>
    <TD noWrap style="text-align: center" width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD noWrap style="text-align: center" width="1%"><FONT face="Times New Roman" size=2>Number of</FONT></TD>
    <TD noWrap style="text-align: center" width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD noWrap style="text-align: center" width="1%"></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap style="text-align: center" width="90%"></TD>
    <TD noWrap style="text-align: center" width="1%"></TD>
    <TD noWrap style="text-align: center" width="1%"></TD>
    <TD noWrap style="text-align: center" width="1%"></TD>
    <TD noWrap style="text-align: center" width="1%"></TD>
    <TD noWrap style="text-align: center" width="1%"></TD>
    <TD noWrap style="text-align: center" width="1%"></TD>
    <TD noWrap style="text-align: center" width="1%"></TD>
    <TD noWrap style="text-align: center" width="1%"><FONT face="Times New Roman" size=2>Funds in</FONT></TD>
    <TD noWrap style="text-align: center" width="1%"></TD>
    <TD noWrap style="text-align: center" width="1%"><FONT face="Times New Roman" size=2>Other Public</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap style="text-align: center" width="90%"></TD>
    <TD noWrap style="text-align: center" width="1%"></TD>
    <TD noWrap style="text-align: center" width="1%"><FONT face="Times New Roman" size=2>Current</FONT></TD>
    <TD noWrap style="text-align: center" width="1%"></TD>
    <TD noWrap style="text-align: center" width="1%"></TD>
    <TD noWrap style="text-align: center" width="1%"></TD>
    <TD noWrap style="text-align: center" width="1%"></TD>
    <TD noWrap style="text-align: center" width="1%"></TD>
    <TD noWrap style="text-align: center" width="1%"><FONT face="Times New Roman" size=2>Fund</FONT></TD>
    <TD noWrap style="text-align: center" width="1%"></TD>
    <TD noWrap style="text-align: center" width="1%"><FONT face="Times New Roman" size=2>Company Board</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap style="text-align: center" width="90%"></TD>
    <TD noWrap style="text-align: center" width="1%"></TD>
    <TD noWrap style="text-align: center" width="1%"><FONT face="Times New Roman" size=2>Position(s)</FONT></TD>
    <TD noWrap style="text-align: center" width="1%"></TD>
    <TD noWrap style="text-align: center" width="1%"><FONT face="Times New Roman" size=2>Term of Office and</FONT></TD>
    <TD noWrap style="text-align: center" width="1%"></TD>
    <TD noWrap style="text-align: center" width="1%"><FONT face="Times New Roman" size=2>Principal Occupation</FONT></TD>
    <TD noWrap style="text-align: center" width="1%"></TD>
    <TD noWrap style="text-align: center" width="1%"><FONT face="Times New Roman" size=2>Complex</FONT></TD>
    <TD noWrap style="text-align: center" width="1%"></TD>
    <TD noWrap style="text-align: center" width="1%"><FONT face="Times New Roman" size=2>Memberships</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap style="text-align: center" width="90%"></TD>
    <TD noWrap style="text-align: center" width="1%"></TD>
    <TD noWrap style="text-align: center" width="1%"><FONT face="Times New Roman" size=2>Held with</FONT></TD>
    <TD noWrap style="text-align: center" width="1%"></TD>
    <TD noWrap style="text-align: center" width="1%"><FONT face="Times New Roman" size=2>Length of Time</FONT></TD>
    <TD noWrap style="text-align: center" width="1%"></TD>
    <TD noWrap style="text-align: center" width="1%"><FONT face="Times New Roman" size=2>During Past Five</FONT></TD>
    <TD noWrap style="text-align: center" width="1%"></TD>
    <TD noWrap style="text-align: center" width="1%"><FONT face="Times New Roman" size=2>Overseen by</FONT></TD>
    <TD noWrap style="text-align: center" width="1%"></TD>
    <TD noWrap style="text-align: center" width="1%"><FONT face="Times New Roman" size=2>During Past Five</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="90%"><FONT face="Times New Roman" size=2>Name, Address and Age</FONT></TD>
    <TD noWrap style="text-align: center" width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="1%"><FONT face="Times New Roman" size=2>Funds</FONT></TD>
    <TD noWrap style="text-align: center" width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="1%"><FONT face="Times New Roman" size=2>Served*</FONT></TD>
    <TD noWrap style="text-align: center" width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="1%"><FONT face="Times New Roman" size=2>Years</FONT></TD>
    <TD noWrap style="text-align: center" width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="1%"><FONT face="Times New Roman" size=2>Director**</FONT></TD>
    <TD noWrap style="text-align: center" width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="1%"><FONT face="Times New Roman" size=2>Years</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="90%" bgColor=#c0c0c0><B><U><FONT face="Times New Roman" size=2>Non-Interested</FONT></U></B></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="90%" bgColor=#c0c0c0><B><U><FONT face="Times New Roman" size=2>Directors/Nominees:</FONT></U></B></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD></TR>
  <TR>
    <TD width="100%" colSpan=11>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="90%" bgColor=#c0c0c0><B><FONT face="Times New Roman" size=2>David Gale</FONT></B></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>Director</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><B><FONT face="Times New Roman" size=2>Class I
      Director</FONT></B></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>President of
    Delta</FONT></TD>
    <TD noWrap style="text-align: center" width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap style="text-align: center" width="1%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>5</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>Emmis</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="90%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>Delta Dividend Group,
      Inc.</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>PFD &#151; since 1997</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>Dividend Group,
    Inc.</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>Communications</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="90%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>220 Montgomery
      Street</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>PFO &#151; since 1997</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>(investments)</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="90%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>Suite 426</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>FFC &#151; since
      inception</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="90%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>San Francisco, CA
      94104</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>FLC &#151; since
      inception</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="90%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>Age: 64</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="90%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><B><FONT face="Times New Roman" size=2>Class II
      Director</FONT></B></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="90%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>DFP &#151; since
      inception</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD></TR>
  <TR>
    <TD noWrap align=left width="90%">&nbsp;</TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap style="text-align: center" width="1%"></TD>
    <TD noWrap style="text-align: center" width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="90%" bgColor=#c0c0c0><B><FONT face="Times New Roman" size=2>Morgan Gust</FONT></B></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>Director and</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><B><FONT face="Times New Roman" size=2>Class II
      Director</FONT></B></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>Owner and
    operator</FONT></TD>
    <TD noWrap style="text-align: center" width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap style="text-align: center" width="1%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>5</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>CoBiz
  Financial,</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="90%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>301 E. Colorado
      Boulevard</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>Nominating</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>FFC &#151; since
      inception</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>of various
    entities</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>Inc.
  (financial</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="90%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>Suite 720</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>and</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>FLC &#151; since
      inception</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>engaged in</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>services)</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="90%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>Pasadena, CA
    91101</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>Governance</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>agriculture and
    real</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="90%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>Age: 66</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>Committee</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><B><FONT face="Times New Roman" size=2>Class III
      Director</FONT></B></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>estate</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="90%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>Chairman</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>PFD &#151; since
      inception</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="90%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>PFO &#151; since
      inception</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="90%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>DFP &#151; since
      inception</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD></TR>
  <TR>
    <TD width="100%" colSpan=11>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="90%" bgColor=#c0c0c0><B><FONT face="Times New Roman" size=2>Karen H. Hogan</FONT></B></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>Director</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><B><FONT face="Times New Roman" size=2>Class I
      Director</FONT></B></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>Board Co-Chair
    and</FONT></TD>
    <TD noWrap style="text-align: center" width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap style="text-align: center" width="1%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>5</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="90%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>301 E. Colorado
      Boulevard</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>PFD &#151; since 2005</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>Member, IKAR, a</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="90%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>Suite 720</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>non-profit</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="90%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>Pasadena, CA
    91101</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><B><FONT face="Times New Roman" size=2>Class II
      Director</FONT></B></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>organization;
    Active</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="90%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>Age: 52</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>FFC &#151; since 2005</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>Member,
Volunteer</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="90%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>FLC &#151; since 2005</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>to several
      non-profit</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="90%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>DFP &#151; since
      inception</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>organizations.</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD></TR>
  <TR>
    <TD width="100%" bgColor=#c0c0c0 colSpan=11>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="90%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><B><FONT face="Times New Roman" size=2>Class III
      Director</FONT></B></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="90%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>PFO &#151; since 2005</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD></TR>
  <TR>
    <TD width="100%" colSpan=11>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="90%" bgColor=#c0c0c0><B><FONT face="Times New Roman" size=2>Robert F. Wulf</FONT></B></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>Director</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><B><FONT face="Times New Roman" size=2>Class I
      Director</FONT></B></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>Financial
      Consultant;</FONT></TD>
    <TD noWrap style="text-align: center" width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap style="text-align: center" width="1%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>5</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="90%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>301 E. Colorado
      Boulevard</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>and Audit</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>DFP &#151; since
      inception</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>Former Trustee,</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="90%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>Suite 720</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>Committee</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>University of
    Oregon</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="90%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>Pasadena, CA
    91101</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>Chairman</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><B><FONT face="Times New Roman" size=2>Class II
      Director</FONT></B></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>Foundation;
    Trustee,</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="90%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>Age: 76</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>PFD &#151; since
      inception</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>San Francisco</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="90%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>PFO &#151; since
      inception</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>Theological</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="90%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>Seminary</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="90%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><B><FONT face="Times New Roman" size=2>Class III
      Director</FONT></B></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="90%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>FFC &#151; since
      inception</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="90%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>FLC &#151; since
      inception</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD></TR>
  <TR>
    <TD width="100%" colSpan=11>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="90%" bgColor=#c0c0c0><B><U><FONT face="Times New Roman" size=2>Interested</FONT></U></B></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="90%" bgColor=#c0c0c0><B><U><FONT face="Times New Roman" size=2>Director/Nominee:</FONT></U></B></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD></TR>
  <TR>
    <TD width="100%" colSpan=11>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="90%" bgColor=#c0c0c0><B><FONT face="Times New Roman" size=2>Donald F. Crumrine </FONT></B><FONT face="Times New Roman" size=2><SUP>(1)</SUP></FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>Director,</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><B><FONT face="Times New Roman" size=2>Class I
      Director</FONT></B></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>Chairman of the</FONT></TD>
    <TD noWrap style="text-align: center" width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap style="text-align: center" width="1%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>5</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="90%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>301 E. Colorado
      Boulevard</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>Chairman of</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>DFP &#151; since
      inception</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>Board and
    Director</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="90%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>Suite 720</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>the Board</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>of Flaherty
&amp;</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="90%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>Pasadena, CA
    91101</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>and Chief</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><B><FONT face="Times New Roman" size=2>Class II
      Director</FONT></B></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>Crumrine</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="90%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>Age: 66</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>Executive</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>PFD &#151; since
      inception</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>Incorporated</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="90%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>Officer</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>PFO &#151; since
      inception</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD></TR>
  <TR>
    <TD width="100%" bgColor=#c0c0c0 colSpan=11>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="90%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><B><FONT face="Times New Roman" size=2>Class III
      Director</FONT></B></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="90%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>FFC &#151; since
      inception</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="90%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>FLC &#151; since
      inception</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD></TR></TABLE>____________________<BR><BR>
<TABLE style="BORDER-COLLAPSE: collapse" cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=bottom>
    <TD vAlign=top noWrap align=left width="1%"><FONT face="Times New Roman" size=2>*</FONT></TD>
    <TD vAlign=top noWrap align=left width="1%"><FONT size=2 face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD vAlign=top align=left width="98%"><FONT face="Times New Roman" size=2>The Class I Director of PFO and the
      Class II Directors of PFD, FFC, FLC and DFP will serve until each Fund&#146;s
      Annual Meeting of Shareholders in 2015 and until their successors are duly
      elected and qualified. The Class II Directors of PFO and the Class III
      Directors of PFD, FFC, FLC and DFP will serve until each Fund&#146;s 2016
      Annual Meeting of Shareholders and until their successors are duly elected
      and qualified. The Class I Nominees of PFD, FFC, FLC and DFP and the Class
      III Nominees of PFO, if elected, will serve until each Fund&#146;s 2017 Annual
      Meeting of Shareholders and until their successors are duly elected and
      qualified.</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD vAlign=top noWrap align=left width="1%"><FONT face="Times New Roman" size=2>**</FONT></TD>
    <TD vAlign=top noWrap align=left width="1%"></TD>
    <TD vAlign=top align=left width="98%"><FONT face="Times New Roman" size=2>The Flaherty &amp; Crumrine fund
      complex consists solely of the Funds.</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD vAlign=top noWrap align=left width="1%"><FONT face="Times New Roman" size=1>(1)</FONT></TD>
    <TD vAlign=top noWrap align=left width="1%"></TD>
    <TD vAlign=top align=left width="98%"><FONT face="Times New Roman" size=2>&#147;Interested person&#148; (as defined in
      the Investment Company Act of 1940, as amended (the &#147;1940 Act&#148;)) of the
      Funds. Mr. Crumrine is considered an "interested person" because of his
      affiliation with Flaherty &amp; Crumrine.</FONT></TD></TR></TABLE>
<P align=center><FONT face="Times New Roman" size=2>5</FONT></P>
<HR align=center width="100%" noShade SIZE=2>

<DIV style="PAGE-BREAK-BEFORE: always"></DIV><BR>
<P align=justify><FONT face="Times New Roman" size=2></FONT><FONT face="Times New Roman" size=2><FONT size=3 face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>With the exception of DFP, each
Director has been a Director of the Funds for at least five years. Additional
information about each Director follows (supplementing the information provided
in the table above) that describes some of the specific experiences,
qualifications, attributes or skills that each Director possesses which the
Boards believe have prepared them to be effective Directors. The Boards believe
that Directors need to have the ability to critically review, evaluate, question
and discuss information provided to them, and to interact effectively with Fund
management, service providers and counsel, in order to exercise effective
business judgment in the performance of their duties; the Boards believe that
their members satisfy this standard. Experience relevant to having this ability
may be achieved through a Director's educational background; business,
professional training or practice (</FONT><I><FONT face="Times New Roman" size=2>e.g</FONT></I><FONT face="Times New Roman" size=2>., accounting or law); public
service or academic positions; experience from service as a board member
(including the Boards of the Funds) or as an executive of investment funds,
public companies or significant private or not-for-profit entities or other
organizations; and/or other life experiences. The charters for the Boards'
Nominating and Governance Committees contain certain other factors considered by
the Committees in identifying and evaluating potential Director nominees. To
assist them in evaluating matters under federal and state law, the Independent
Directors (defined below) are counseled by their own independent legal counsel,
who participates in Board meetings and interacts with Flaherty &amp; Crumrine,
and also may benefit from information provided by the Funds' and Flaherty &amp;
Crumrine's counsel; both counsel to the Independent Directors and counsel to the
Funds and Flaherty &amp; Crumrine have significant experience advising funds and
fund directors. The Boards and their Committees have the ability to engage other
experts as appropriate. The Boards evaluate their performance on an annual
basis. </FONT></P>
<UL><LI>
  <P align=justify><FONT face="Times New Roman" size=2></FONT><U><FONT face="Times New Roman" size=2>Donald F. Crumrine</FONT></U><FONT face="Times New Roman" size=2> &#150; Mr. Crumrine
  has been the Chairman of the Boards of PFD and PFO since 2002 and Chairman of
  the Boards of FFC, FLC and DFP since each Fund&#146;s inception. Mr. Crumrine has
  over 36 years of experience managing portfolios of preferred securities. He
  co-founded Flaherty &amp; Crumrine in 1983, after spending twelve years at
  Scudder, Stevens &amp; Clark, to focus on managing preferred securities
  portfolios and associated hedges. Mr. Crumrine is actively involved in the
  day-to-day management of all Flaherty &amp; Crumrine client portfolios,
  including those of the Funds, and directs client service and marketing efforts
  at Flaherty &amp; Crumrine.</FONT></P>
  </LI><LI>
  <P align=justify><U><FONT face="Times New Roman" size=2>David Gale</FONT></U><FONT face="Times New Roman" size=2> &#150; In addition to his tenure as a Director of the Funds, Mr.
  Gale has been President and Chief Executive Officer of Delta Dividend Group,
  Inc., a San Francisco-based investment management firm, since 1992. Prior to
  joining Delta Dividend Group, Inc., Mr. Gale was a Principal with Morgan
  Stanley from 1983 to </FONT><FONT face="Times New Roman" size=2>1990, and a Managing
  Director of Lehman Brothers Holdings Inc. from 1990 to 1992. Mr. Gale
  previously served as a director of Emmis Communications.</FONT></P>
  </LI><LI>
  <P align=justify><U><FONT face="Times New Roman" size=2>Morgan Gust</FONT></U><FONT face="Times New Roman" size=2> &#150; In addition to his tenure as a Director of the Funds, Mr.
  Gust is the owner and operator of various entities engaged in agriculture and
  real estate. From 1990 to 2007, Mr. Gust served in various capacities,
  including President, Executive Vice President, General Counsel and Corporate
  Secretary of Giant Industries, Inc., a petroleum refining and marketing
  company listed on the New York Stock Exchange (the &#147;NYSE&#148;). Mr. Gust currently
  serves as lead Director of CoBiz Financial, Inc., a publicly traded bank
  holding company. He is also a member of the Arizona State Bar.</FONT></P>
  </LI><LI>
  <P align=justify><U><FONT face="Times New Roman" size=2>Karen H. Hogan</FONT></U><FONT face="Times New Roman" size=2> &#150; In addition to her tenure as a Director of the Funds, Ms.
  Hogan serves as a board member and committee member of several charitable and
  non-profit organizations. From 1985 to 1997, Ms. Hogan served as Senior Vice
  President of Preferred Stock Origination, and previously Vice President of New
  Product Development, at Lehman Brothers Holdings Inc.</FONT></P>
  </LI><LI>
  <P align=justify><U><FONT face="Times New Roman" size=2>Robert F. Wulf</FONT></U><FONT face="Times New Roman" size=2> &#150; In addition to his tenure as a Director of the Funds, Mr.
  Wulf has worked as a financial consultant for over 30 years. Mr. Wulf also
  served as a board member of two non-profit organizations.</FONT></P></LI></UL>
<P align=justify><U><FONT face="Times New Roman" size=2>Board Composition and Leadership
Structure</FONT></U></P>
<P align=justify><FONT face="Times New Roman" size=2><FONT size=3 face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>The 1940 Act requires that at least
40% of the Funds' Directors not be "interested persons" (as defined in the 1940
Act) of the Funds, and therefore not affiliated with Flaherty &amp; Crumrine
("Independent Directors"). To rely on certain exemptive rules under the 1940
Act, a majority of the Funds' Directors must be Independent Directors and, for
certain important matters, such as the approval of investment advisory
agreements or transactions with affiliates, the 1940 Act or the rules thereunder
require the approval of a majority of the Independent Directors. Currently, four
of the Funds' five Directors are Independent Directors. The Chairman of the
Boards is an interested person of the Funds. The four Independent Directors
interact directly with the Chairman and other senior management of Flaherty
&amp; Crumrine at scheduled meetings and between meetings as appropriate.
Independent Directors have been designated to chair the Audit Committees and the
Nominating and Governance Committees, and the Independent Directors rotate the
responsibility for chairing meetings of Independent Directors. In addition, from
time to time, one or more Independent Directors may be designated, formally or
informally, to take the lead in addressing with
management or their independent legal counsel matters or issues of concern to
the Boards. As a result, the Boards have determined that their leadership
structures and composition, in which no individual Independent Director has been
designated to lead all the Independent Directors, are appropriate in light of
the Boards' size and the cooperative and dynamic working relationship among the
Independent Directors and the Independent Directors&#146; open lines of communication
with Fund management. The Boards have determined that their leadership
structures and composition, in which the Chairman of the Boards is an
"interested person" of the Funds and 80% of the Directors are Independent
Directors, are appropriate in light of the services that Flaherty &amp; Crumrine
provides to the Funds.</FONT></P>
<P align=center><FONT face="Times New Roman" size=2>6</FONT></P>
<HR align=center width="100%" noShade SIZE=2>

<DIV style="PAGE-BREAK-BEFORE: always"></DIV><BR>

<P align=justify><U><FONT face="Times New Roman" size=2>Boards' Oversight Role in
Management</FONT></U></P>
<P align=justify><FONT face="Times New Roman" size=2><FONT size=3 face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>The Boards' role in management of
the Funds is oversight. As is the case with virtually all investment companies
(as distinguished from operating companies), service providers to the Funds,
primarily Flaherty &amp; Crumrine, have responsibility for the day-to-day
management of the Funds, which includes responsibility for risk management
(including management of investment performance and investment risk, valuation
risk, issuer and counterparty credit risk, compliance risk and operational
risk). As part of their oversight, the Boards, acting at their scheduled
meetings, or the Chairman, acting between Board meetings, regularly interacts
with and receives reports from senior personnel of service providers, including
the Funds' and Flaherty &amp; Crumrine's Chief Compliance Officer and portfolio
management personnel. The Boards' Audit Committees (which consist of all the
Independent Directors) meet during their scheduled meetings, and between
meetings the Audit Committee chairs maintain contact, with the Funds'
independent registered public accounting firm and the Funds' Chief Financial
Officer. The Boards also receive periodic presentations from senior personnel of
Flaherty &amp; Crumrine regarding risk management generally, as well as periodic
presentations regarding specific operational, compliance or investment areas,
such as business continuity, personal trading, valuation and credit. The Boards
have adopted policies and procedures designed to address certain risks to the
Funds. In addition, Flaherty &amp; Crumrine and other service providers to the
Funds have adopted a variety of policies, procedures and controls designed to
address particular risks to the Funds. Different processes, procedures and
controls are employed with respect to different types of risks. However, it is
not possible to eliminate all of the risks applicable to the Funds. The Boards
also receive reports from counsel to the Funds and Flaherty &amp; Crumrine and
the Independent Directors' own independent legal counsel regarding regulatory,
compliance and governance matters. The Boards' oversight role does not make the
Boards guarantors of the Funds' investments or activities. </FONT></P>
<P align=justify><B><FONT face="Times New Roman" size=2>Beneficial Ownership of Shares in
Funds and Fund Complex for each Director and Nominee for Election as
Director</FONT></B></P>
<P align=justify><B><FONT face="Times New Roman" size=2></FONT></B><FONT face="Times New Roman" size=2><FONT size=3 face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>Set forth in the table
below is the dollar range of equity securities in each Fund and the aggregate
dollar range of equity securities in the Flaherty &amp; Crumrine Fund Family
beneficially owned by each Director and Nominee for Election as
Director.</FONT></P>
<TABLE style="LINE-HEIGHT: 14pt; BORDER-COLLAPSE: collapse" cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=bottom>
    <TD noWrap align=left width="88%"></TD>
    <TD noWrap align=left width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD noWrap align=left width="1%"><FONT face="Times New Roman" size=2>Aggregate Dollar Range of Equity</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="88%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"><FONT face="Times New Roman" size=2>Securities in All Registered Investment</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="88%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="9%" colSpan=9><FONT face="Times New Roman" size=2>Dollar Range of Equity</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"><FONT face="Times New Roman" size=2>Companies Overseen by Director in Family</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="88%"><FONT size=+0><FONT face="Times New Roman" size=2>Name of
      Director or Nominee</FONT></FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="9%" colSpan=9><FONT size=+0><FONT face="Times New Roman" size=2>Securities
      Held in a Fund*</FONT><FONT face="Times New Roman" size=2><SUP>(1)</SUP></FONT></FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"><FONT face="Times New Roman" size=2>of Investment
      Companies*</FONT><FONT face="Times New Roman" size=2><SUP>(2)</SUP></FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="88%"></TD>
    <TD style="TEXT-ALIGN: center" noWrap width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="1%"><FONT size=+0><FONT face="Times New Roman" size=2>PFD</FONT></FONT></TD>
    <TD style="TEXT-ALIGN: center" noWrap width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="1%"><FONT size=+0><FONT face="Times New Roman" size=2>PFO</FONT></FONT></TD>
    <TD style="TEXT-ALIGN: center" noWrap width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="1%"><FONT size=+0><FONT face="Times New Roman" size=2>FFC</FONT></FONT></TD>
    <TD style="TEXT-ALIGN: center" noWrap width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="1%"><FONT size=+0><FONT face="Times New Roman" size=2>FLC</FONT></FONT></TD>
    <TD style="TEXT-ALIGN: center" noWrap width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="1%"><FONT size=+0><FONT face="Times New Roman" size=2>DFP</FONT></FONT></TD>
    <TD style="TEXT-ALIGN: center" noWrap width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="1%"><FONT size=+0><FONT face="Times New Roman" size=2>Total</FONT></FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="88%" bgColor=#c0c0c0><B><FONT face="Times New Roman" size=2>NON-INTERESTED</FONT></B></TD>
    <TD style="TEXT-ALIGN: center" noWrap width="1%" bgColor=#c0c0c0></TD>
    <TD style="TEXT-ALIGN: center" noWrap width="1%" bgColor=#c0c0c0></TD>
    <TD style="TEXT-ALIGN: center" noWrap width="1%" bgColor=#c0c0c0></TD>
    <TD style="TEXT-ALIGN: center" noWrap width="1%" bgColor=#c0c0c0></TD>
    <TD style="TEXT-ALIGN: center" noWrap width="1%" bgColor=#c0c0c0></TD>
    <TD style="TEXT-ALIGN: center" noWrap width="1%" bgColor=#c0c0c0></TD>
    <TD style="TEXT-ALIGN: center" noWrap width="1%" bgColor=#c0c0c0></TD>
    <TD style="TEXT-ALIGN: center" noWrap width="1%" bgColor=#c0c0c0></TD>
    <TD style="TEXT-ALIGN: center" noWrap width="1%" bgColor=#c0c0c0></TD>
    <TD style="TEXT-ALIGN: center" noWrap width="1%" bgColor=#c0c0c0></TD>
    <TD style="TEXT-ALIGN: center" noWrap width="1%" bgColor=#c0c0c0></TD>
    <TD style="TEXT-ALIGN: center" noWrap width="1%" bgColor=#c0c0c0></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="88%" bgColor=#c0c0c0><B><FONT face="Times New Roman" size=2>DIRECTORS/NOMINEES:</FONT></B></TD>
    <TD style="TEXT-ALIGN: center" noWrap width="1%" bgColor=#c0c0c0></TD>
    <TD style="TEXT-ALIGN: center" noWrap width="1%" bgColor=#c0c0c0></TD>
    <TD style="TEXT-ALIGN: center" noWrap width="1%" bgColor=#c0c0c0></TD>
    <TD style="TEXT-ALIGN: center" noWrap width="1%" bgColor=#c0c0c0></TD>
    <TD style="TEXT-ALIGN: center" noWrap width="1%" bgColor=#c0c0c0></TD>
    <TD style="TEXT-ALIGN: center" noWrap width="1%" bgColor=#c0c0c0></TD>
    <TD style="TEXT-ALIGN: center" noWrap width="1%" bgColor=#c0c0c0></TD>
    <TD style="TEXT-ALIGN: center" noWrap width="1%" bgColor=#c0c0c0></TD>
    <TD style="TEXT-ALIGN: center" noWrap width="1%" bgColor=#c0c0c0></TD>
    <TD style="TEXT-ALIGN: center" noWrap width="1%" bgColor=#c0c0c0></TD>
    <TD style="TEXT-ALIGN: center" noWrap width="1%" bgColor=#c0c0c0></TD>
    <TD style="TEXT-ALIGN: center" noWrap width="1%" bgColor=#c0c0c0></TD></TR>
  <TR>
    <TD width="100%" colSpan=13>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="88%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>David Gale</FONT></TD>
    <TD style="TEXT-ALIGN: center" noWrap width="1%" bgColor=#c0c0c0></TD>
    <TD style="TEXT-ALIGN: center" noWrap width="1%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>D</FONT></TD>
    <TD style="TEXT-ALIGN: center" noWrap width="1%" bgColor=#c0c0c0></TD>
    <TD style="TEXT-ALIGN: center" noWrap width="1%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>D</FONT></TD>
    <TD style="TEXT-ALIGN: center" noWrap width="1%" bgColor=#c0c0c0></TD>
    <TD style="TEXT-ALIGN: center" noWrap width="1%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>D</FONT></TD>
    <TD style="TEXT-ALIGN: center" noWrap width="1%" bgColor=#c0c0c0></TD>
    <TD style="TEXT-ALIGN: center" noWrap width="1%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>D</FONT></TD>
    <TD style="TEXT-ALIGN: center" noWrap width="1%" bgColor=#c0c0c0></TD>
    <TD style="TEXT-ALIGN: center" noWrap width="1%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>C</FONT></TD>
    <TD style="TEXT-ALIGN: center" noWrap width="1%" bgColor=#c0c0c0></TD>
    <TD style="TEXT-ALIGN: center" noWrap width="1%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>E</FONT></TD></TR>
  <TR>
    <TD width="100%" colSpan=13>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="88%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>Morgan Gust</FONT></TD>
    <TD style="TEXT-ALIGN: center" noWrap width="1%" bgColor=#c0c0c0></TD>
    <TD style="TEXT-ALIGN: center" noWrap width="1%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>D</FONT></TD>
    <TD style="TEXT-ALIGN: center" noWrap width="1%" bgColor=#c0c0c0></TD>
    <TD style="TEXT-ALIGN: center" noWrap width="1%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>D</FONT></TD>
    <TD style="TEXT-ALIGN: center" noWrap width="1%" bgColor=#c0c0c0></TD>
    <TD style="TEXT-ALIGN: center" noWrap width="1%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>C</FONT></TD>
    <TD style="TEXT-ALIGN: center" noWrap width="1%" bgColor=#c0c0c0></TD>
    <TD style="TEXT-ALIGN: center" noWrap width="1%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>C</FONT></TD>
    <TD style="TEXT-ALIGN: center" noWrap width="1%" bgColor=#c0c0c0></TD>
    <TD style="TEXT-ALIGN: center" noWrap width="1%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>C</FONT></TD>
    <TD style="TEXT-ALIGN: center" noWrap width="1%" bgColor=#c0c0c0></TD>
    <TD style="TEXT-ALIGN: center" noWrap width="1%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>E</FONT></TD></TR>
  <TR>
    <TD width="100%" colSpan=13>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="88%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>Karen H. Hogan</FONT></TD>
    <TD style="TEXT-ALIGN: center" noWrap width="1%" bgColor=#c0c0c0></TD>
    <TD style="TEXT-ALIGN: center" noWrap width="1%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>C</FONT></TD>
    <TD style="TEXT-ALIGN: center" noWrap width="1%" bgColor=#c0c0c0></TD>
    <TD style="TEXT-ALIGN: center" noWrap width="1%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>C</FONT></TD>
    <TD style="TEXT-ALIGN: center" noWrap width="1%" bgColor=#c0c0c0></TD>
    <TD style="TEXT-ALIGN: center" noWrap width="1%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>C</FONT></TD>
    <TD style="TEXT-ALIGN: center" noWrap width="1%" bgColor=#c0c0c0></TD>
    <TD style="TEXT-ALIGN: center" noWrap width="1%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>C</FONT></TD>
    <TD style="TEXT-ALIGN: center" noWrap width="1%" bgColor=#c0c0c0></TD>
    <TD style="TEXT-ALIGN: center" noWrap width="1%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>A</FONT></TD>
    <TD style="TEXT-ALIGN: center" noWrap width="1%" bgColor=#c0c0c0></TD>
    <TD style="TEXT-ALIGN: center" noWrap width="1%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>D</FONT></TD></TR>
  <TR>
    <TD width="100%" colSpan=13>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="88%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>Robert F. Wulf</FONT></TD>
    <TD style="TEXT-ALIGN: center" noWrap width="1%" bgColor=#c0c0c0></TD>
    <TD style="TEXT-ALIGN: center" noWrap width="1%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>C</FONT></TD>
    <TD style="TEXT-ALIGN: center" noWrap width="1%" bgColor=#c0c0c0></TD>
    <TD style="TEXT-ALIGN: center" noWrap width="1%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>C</FONT></TD>
    <TD style="TEXT-ALIGN: center" noWrap width="1%" bgColor=#c0c0c0></TD>
    <TD style="TEXT-ALIGN: center" noWrap width="1%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>E</FONT></TD>
    <TD style="TEXT-ALIGN: center" noWrap width="1%" bgColor=#c0c0c0></TD>
    <TD style="TEXT-ALIGN: center" noWrap width="1%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>E</FONT></TD>
    <TD style="TEXT-ALIGN: center" noWrap width="1%" bgColor=#c0c0c0></TD>
    <TD style="TEXT-ALIGN: center" noWrap width="1%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>C</FONT></TD>
    <TD style="TEXT-ALIGN: center" noWrap width="1%" bgColor=#c0c0c0></TD>
    <TD style="TEXT-ALIGN: center" noWrap width="1%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>E</FONT></TD></TR>
  <TR>
    <TD noWrap align=left width="88%"  bgColor=#ffffff>&nbsp;</TD>
    <TD noWrap width="1%"  bgColor=#ffffff></TD>
    <TD noWrap width="1%"  bgColor=#ffffff></TD>
    <TD noWrap width="1%"  bgColor=#ffffff></TD>
    <TD noWrap width="1%"  bgColor=#ffffff></TD>
    <TD noWrap width="1%"  bgColor=#ffffff></TD>
    <TD noWrap width="1%"  bgColor=#ffffff></TD>
    <TD noWrap width="1%"  bgColor=#ffffff></TD>
    <TD noWrap width="1%"  bgColor=#ffffff></TD>
    <TD noWrap width="1%"  bgColor=#ffffff></TD>
    <TD noWrap width="1%"  bgColor=#ffffff></TD>
    <TD noWrap width="1%"  bgColor=#ffffff></TD>
    <TD noWrap width="1%"  bgColor=#ffffff></TD></TR>
  <TR>
    <TD noWrap align=left width="88%"  bgColor=#c0c0c0><STRONG><FONT size=2>INTERESTED
      DIRECTOR/NOMINEE:</FONT></STRONG></TD>
    <TD noWrap width="1%"  bgColor=#c0c0c0></TD>
    <TD noWrap width="1%"  bgColor=#c0c0c0></TD>
    <TD noWrap width="1%"  bgColor=#c0c0c0></TD>
    <TD noWrap width="1%"  bgColor=#c0c0c0></TD>
    <TD noWrap width="1%"  bgColor=#c0c0c0></TD>
    <TD noWrap width="1%"  bgColor=#c0c0c0></TD>
    <TD noWrap width="1%"  bgColor=#c0c0c0></TD>
    <TD noWrap width="1%"  bgColor=#c0c0c0></TD>
    <TD noWrap width="1%"  bgColor=#c0c0c0></TD>
    <TD noWrap width="1%"  bgColor=#c0c0c0></TD>
    <TD noWrap width="1%"  bgColor=#c0c0c0></TD>
    <TD noWrap width="1%"  bgColor=#c0c0c0></TD></TR>
  <TR>
    <TD noWrap align=left width="88%" bgColor=#ffffff>&nbsp;</TD>
    <TD style="TEXT-ALIGN: center" noWrap width="1%" bgColor=#ffffff></TD>
    <TD style="TEXT-ALIGN: center" noWrap width="1%" bgColor=#ffffff></TD>
    <TD style="TEXT-ALIGN: center" noWrap width="1%" bgColor=#ffffff></TD>
    <TD style="TEXT-ALIGN: center" noWrap width="1%" bgColor=#ffffff></TD>
    <TD style="TEXT-ALIGN: center" noWrap width="1%" bgColor=#ffffff></TD>
    <TD style="TEXT-ALIGN: center" noWrap width="1%" bgColor=#ffffff></TD>
    <TD style="TEXT-ALIGN: center" noWrap width="1%" bgColor=#ffffff></TD>
    <TD style="TEXT-ALIGN: center" noWrap width="1%" bgColor=#ffffff></TD>
    <TD style="TEXT-ALIGN: center" noWrap width="1%" bgColor=#ffffff></TD>
    <TD style="TEXT-ALIGN: center" noWrap width="1%" bgColor=#ffffff></TD>
    <TD style="TEXT-ALIGN: center" noWrap width="1%" bgColor=#ffffff></TD>
    <TD style="TEXT-ALIGN: center" noWrap width="1%" bgColor=#ffffff></TD></TR>
  <TR>
    <TD noWrap align=left width="88%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>Donald F. Crumrine</FONT></TD>
    <TD style="TEXT-ALIGN: center" noWrap width="1%" bgColor=#c0c0c0></TD>
    <TD style="TEXT-ALIGN: center" noWrap width="1%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>E<SUP>(3)</SUP></FONT></TD>
    <TD style="TEXT-ALIGN: center" noWrap width="1%" bgColor=#c0c0c0></TD>
    <TD style="TEXT-ALIGN: center" noWrap width="1%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>E<SUP>(3)</SUP></FONT></TD>
    <TD style="TEXT-ALIGN: center" noWrap width="1%" bgColor=#c0c0c0></TD>
    <TD style="TEXT-ALIGN: center" noWrap width="1%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>E<SUP>(3)</SUP></FONT></TD>
    <TD style="TEXT-ALIGN: center" noWrap width="1%" bgColor=#c0c0c0></TD>
    <TD style="TEXT-ALIGN: center" noWrap width="1%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>E<SUP>(3)</SUP></FONT></TD>
    <TD style="TEXT-ALIGN: center" noWrap width="1%" bgColor=#c0c0c0></TD>
    <TD style="TEXT-ALIGN: center" noWrap width="1%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>E<SUP>(3)</SUP></FONT></TD>
    <TD style="TEXT-ALIGN: center" noWrap width="1%" bgColor=#c0c0c0></TD>
    <TD style="TEXT-ALIGN: center" noWrap width="1%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>E<SUP>(3)</SUP></FONT></TD></TR></TABLE>____________________<BR><BR>
<TABLE style="BORDER-COLLAPSE: collapse" cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=bottom>
    <TD noWrap align=right width="1%"><FONT face="Times New Roman" size=2>*</FONT></TD>
    <TD noWrap align=left width="1%"><FONT size=2 face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD noWrap align=left width="98%" colSpan=3><FONT face="Times New Roman" size=2>Key to Dollar
    Ranges</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"><FONT face="Times New Roman" size=2>A.</FONT></TD>
    <TD noWrap align=left width="1%"><FONT size=2 face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD noWrap align=left width="96%"><FONT face="Times New Roman" size=2>None</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"><FONT face="Times New Roman" size=2>B.</FONT></TD>
    <TD noWrap align=right width="1%"></TD>
    <TD noWrap align=left width="96%"><FONT face="Times New Roman" size=2>$1 - $10,000</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"><FONT face="Times New Roman" size=2>C.</FONT></TD>
    <TD noWrap align=right width="1%"><FONT face="Times New Roman" size=2></FONT></TD>
    <TD noWrap align=left width="96%"><FONT face="Times New Roman" size=2>$10,001 -$50,000</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"><FONT face="Times New Roman" size=2>D.</FONT></TD>
    <TD noWrap align=right width="1%"></TD>
    <TD noWrap align=left width="96%"><FONT face="Times New Roman" size=2>$50,001 - $100,000</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"><FONT face="Times New Roman" size=2>E.</FONT></TD>
    <TD noWrap align=right width="1%"></TD>
    <TD noWrap align=left width="96%"><FONT face="Times New Roman" size=2>over $100,000</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="98%" colSpan=3><FONT face="Times New Roman" size=2>All shares were valued as
      of January 17, 2014.</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD vAlign=top noWrap align=right width="1%"><FONT face="Times New Roman" size=1>(1)</FONT></TD>
    <TD vAlign=top noWrap align=left width="1%"></TD>
    <TD vAlign=top align=left width="98%" colSpan=3><FONT face="Times New Roman" size=2>This information has been
      furnished by each Director/Nominee as of January 17, 2014. &#147;Beneficial
      ownership&#148; is determined in accordance with Rule 16a-1(a)(2) under the
      1934 Act.</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD vAlign=top noWrap align=right width="1%"><FONT face="Times New Roman" size=1>(2)</FONT></TD>
    <TD vAlign=top noWrap align=left width="1%"></TD>
    <TD vAlign=top noWrap align=left width="98%" colSpan=3><FONT face="Times New Roman" size=2>The
      Directors, Nominees and executive officers of each Fund, as a group, own
      less than 1% of each Fund.</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD vAlign=top noWrap align=right width="1%"><FONT face="Times New Roman" size=1>(3)</FONT></TD>
    <TD vAlign=top noWrap align=left width="1%"></TD>
    <TD vAlign=top noWrap align=left width="98%" colSpan=3><FONT face="Times New Roman" size=2>Includes shares of the Fund held by Flaherty &amp; Crumrine,
      of which Mr. Crumrine is a shareholder and
director.</FONT></TD></TR></TABLE>
<P align=center><FONT face="Times New Roman" size=2>7</FONT></P>
<HR align=center width="100%" noShade SIZE=2>

<DIV style="PAGE-BREAK-BEFORE: always"></DIV><BR>
<P align=justify><B><FONT face="Times New Roman" size=2>Officers of the Funds
</FONT></B></P>
<P align=justify><FONT face="Times New Roman" size=2><FONT size=3 face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>The following table provides
information concerning each of the officers of the Funds.</FONT></P>
<TABLE style="LINE-HEIGHT: 14pt; BORDER-COLLAPSE: collapse" cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=bottom>
    <TD noWrap align=left width="94%"></TD>
    <TD noWrap align=left width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD noWrap align=left width="1%"><FONT face="Times New Roman" size=2>Current Position(s)</FONT></TD>
    <TD noWrap align=left width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD noWrap align=left width="1%"><FONT face="Times New Roman" size=2>Term of Office and Length of</FONT></TD>
    <TD noWrap align=left width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD noWrap align=left width="1%"><FONT face="Times New Roman" size=2>Principal Occupation During</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="94%"><FONT size=+0><FONT face="Times New Roman" size=2>Name, Address and Age</FONT></FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"><FONT size=+0><FONT face="Times New Roman" size=2>Held with Funds</FONT></FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"><FONT size=+0><FONT face="Times New Roman" size=2>Time Served</FONT><FONT face="Times New Roman" size=2><SUP>*</SUP></FONT></FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"><FONT size=+0><FONT face="Times New Roman" size=2>Past Five Years</FONT></FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="94%" bgColor=#c0c0c0><B><FONT face="Times New Roman" size=2>Robert M. Ettinger</FONT></B></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>President</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>PFD &#150; since 2002</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>President and
      Director</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="94%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>301 E. Colorado
      Boulevard</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>PFO &#150; since 2002</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>of Flaherty &amp; Crumrine
      Incorporated</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="94%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>Suite 720</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>FFC &#150; since
      inception</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="94%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>Pasadena, CA
    91101</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>FLC &#150; since
      inception</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="94%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>Age: 55</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>DFP &#150; since
      inception</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD></TR>
  <TR>
    <TD width="100%" colSpan=7>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="94%" bgColor=#c0c0c0><B><FONT face="Times New Roman" size=2>R. Eric Chadwick</FONT></B></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>Chief Financial</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>PFD &#150; since 2004</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>Vice President and
      Director of Flaherty &amp;</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="94%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>301 E. Colorado
      Boulevard</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>Officer, Vice</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>PFO &#150; since 2004</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>Crumrine Incorporated;
      Chief Financial Officer</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="94%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>Suite 720</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>President and</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>FFC &#150; since 2004</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="94%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>Pasadena, CA
    91101</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>Treasurer</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>FLC &#150; since 2004</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="94%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>Age: 38</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>DFP &#150; since
      inception</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD></TR>
  <TR>
    <TD width="100%" bgColor=#ffffff colSpan=7>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="94%" bgColor=#c0c0c0><B><FONT face="Times New Roman" size=2>Chad C. Conwell</FONT></B></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>Chief Compliance</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>PFD &#150; since 2005</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>Chief Compliance Officer
      and Vice President</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="94%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>301 E. Colorado
      Boulevard</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>Officer, Vice</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>PFO &#150; since 2005</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>of Flaherty &amp; Crumrine
      Incorporated; Director</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="94%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>Suite 720</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>President and</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>FFC &#150; since 2005</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>of Flaherty &amp; Crumrine
      since January 2011</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="94%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>Pasadena, CA
    91101</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>Secretary</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>FLC &#150; since 2005</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="94%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>Age: 41</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>DFP &#150; since
      inception</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD></TR>
  <TR>
    <TD width="100%" colSpan=7>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="94%" bgColor=#c0c0c0><B><FONT face="Times New Roman" size=2>Bradford S. Stone</FONT></B></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>Vice President
    and</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>PFD &#150; since 2003</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>Vice President and
      Director of Flaherty &amp;</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="94%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>47 Maple Street</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>Assistant</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>PFO &#150; since 2003</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>Crumrine
      Incorporated</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="94%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>Suite 403</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>Treasurer</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>FFC &#150; since 2003</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="94%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>Summit, NJ 07901</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>FLC &#150; since
      inception</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="94%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>Age: 54</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>DFP &#150; since
      inception</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD></TR>
  <TR>
    <TD noWrap align=left width="94%">&nbsp;</TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="94%" bgColor=#c0c0c0><B><FONT face="Times New Roman" size=2>Laurie C. Lodolo</FONT></B></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>Assistant</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>PFD &#150; since 2004</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>Assistant Compliance
      Officer and Secretary</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="94%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>301 E. Colorado
      Boulevard</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>Compliance</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>PFO &#150; since 2004</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>of Flaherty &amp; Crumrine
      Incorporated</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="94%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>Suite 720</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>Officer,
    Assistant</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>FFC &#150; since 2004</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="94%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>Pasadena, CA
    91101</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>Treasurer and</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>FLC &#150; since 2004</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="94%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>Age: 50</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>Assistant
    Secretary</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>DFP &#150; since
      inception</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD></TR>
  <TR>
    <TD width="100%" colSpan=7>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="94%" bgColor=#c0c0c0><B><FONT face="Times New Roman" size=2>Linda M. Puchalski</FONT></B></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>Assistant
    Treasurer</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>PFD &#150; since 2010</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>Administrator of Flaherty
      &amp; Crumrine</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="94%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>301 E. Colorado
      Boulevard</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>PFO &#150; since 2010</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>Incorporated</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="94%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>Suite 720</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>FFC &#150; since 2010</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="94%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>Pasadena, CA
    91101</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>FLC &#150; since 2010</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="94%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>Age: 57</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>DFP &#150; since
      inception</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD></TR></TABLE>____________________<BR><BR>
<TABLE style="BORDER-COLLAPSE: collapse" cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=bottom>
    <TD vAlign=top noWrap align=left width="1%"><FONT size=2 face="Times New Roman">*</FONT></TD>
    <TD vAlign=top noWrap align=left width="1%"><FONT size=2 face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD vAlign=top align=left width="98%"><FONT face="Times New Roman" size=2>Each officer serves until his or her
      successor is elected and qualified or until his or her earlier resignation
      or removal.</FONT></TD></TR></TABLE>
<P align=center><FONT face="Times New Roman" size=2>8</FONT></P>
<HR align=center width="100%" noShade SIZE=2>

<DIV style="PAGE-BREAK-BEFORE: always"></DIV><BR>
<P align=justify><B><FONT face="Times New Roman" size=2>Audit Committee </FONT></B></P>
<P align=justify><B><FONT face="Times New Roman" size=2></FONT></B><FONT face="Times New Roman" size=2><FONT size=3 face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>The role of each Fund&#146;s
Audit Committee is to assist the Board of Directors in its oversight of: (i) the
integrity of the Fund&#146;s financial statements and the independent audit thereof;
(ii) the Fund&#146;s accounting and financial reporting policies and practices, its
internal controls and, as appropriate, the internal controls of certain service
providers; (iii) the Fund&#146;s compliance with legal and regulatory requirements;
and (iv) the independent auditor&#146;s qualifications, independence and performance.
Each Fund&#146;s Audit Committee is also required to prepare an audit committee
report pursuant to applicable laws and regulations for inclusion in the Fund&#146;s
annual proxy statement. Each Audit Committee operates pursuant to a charter (the
&#147;Audit Committee Charter&#148; or &#147;Charter&#148;) that was most recently reviewed and
approved by the Board of Directors of each Fund on January 21, 2014 and which is
available at www.preferredincome.com. As set forth in the Charter, management is
responsible for the (i) preparation, presentation and integrity of each Fund&#146;s
financial statements, (ii) maintenance of appropriate accounting and financial
reporting principles and policies and (iii) maintenance of internal controls and
procedures designed to assure compliance with accounting standards and
applicable laws and regulations. The Funds&#146; independent registered public
accounting firm, KPMG LLP (the &#147;independent accountants&#148; or &#147;KPMG&#148;), is
responsible for planning and carrying out proper audits and reviews of each
Fund&#146;s financial statements and expressing an opinion as to their conformity
with accounting principles generally accepted in the United States of
America.</FONT></P>
<P align=justify><B><FONT face="Times New Roman" size=2>Audit Committee Report
</FONT></B></P>
<P align=justify><FONT face="Times New Roman" size=2><FONT size=3 face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>In performing its oversight
function, at a meeting held on January 21, 2014, each Audit Committee reviewed
and discussed with management of the Fund and the independent accountants, the
audited financial statements of the Fund as of and for the fiscal year ended
November 30, 2013, and discussed the audit of such financial statements with the
independent accountants.</FONT></P>
<P align=justify><FONT face="Times New Roman" size=2><FONT size=3 face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>In addition, each Audit Committee
discussed with the independent accountants the accounting principles applied by
the Fund and such other matters brought to the attention of the Audit Committee
by the independent accountants required by Statement of Auditing Standards No.
61, as amended (AICPA, </FONT><I><FONT face="Times New Roman" size=2>Professional
Standards</FONT></I><FONT face="Times New Roman" size=2>, Vol. 1 AU Section 380), as adopted
by the Public Company Accounting Oversight Board in Rule 3200T. Each Audit
Committee also received from the independent accountants the written disclosures
and statements required by the SEC&#146;s independence rules</FONT><I><FONT face="Times New Roman" size=2>, </FONT></I><FONT face="Times New Roman" size=2>delineating relationships
between the independent accountants and the Funds and discussed the impact that
any such relationships might have on the objectivity and independence of the
independent accountants.</FONT></P>
<P align=justify><FONT face="Times New Roman" size=2><FONT size=3 face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>As set forth above, and as more
fully set forth in each Fund&#146;s Audit Committee Charter, the Audit Committee has
significant duties and powers in its oversight role with respect to the Fund&#146;s
financial reporting procedures, internal control systems, and the independent
audit process.</FONT></P>
<P align=justify><FONT face="Times New Roman" size=2><FONT size=3 face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>The members of each Audit Committee
are not, and do not represent themselves to be, professionally engaged in the
practice of auditing or accounting and are not employed by the Fund for
accounting, financial management or internal control. Moreover, the Audit
Committee relies on and makes no independent verification of the facts presented
to it or representations made by management or the independent accountants.
Accordingly, the Audit Committee&#146;s oversight does not provide an independent
basis to determine that management has maintained appropriate accounting and
financial reporting principles and policies, or
internal controls and procedures, designed to assure compliance with accounting
standards and applicable laws and regulations. Furthermore, the Audit
Committee&#146;s considerations and discussions referred to above do not provide
assurance that the audit of each Fund&#146;s financial statements has been carried
out in accordance with generally accepted accounting standards or that the
financial statements are presented in accordance with generally accepted
accounting principles.</FONT></P>
<P align=center><FONT face="Times New Roman" size=2>9</FONT></P>
<HR align=center width="100%" noShade SIZE=2>

<DIV style="PAGE-BREAK-BEFORE: always"></DIV><BR>

<P align=justify><FONT face="Times New Roman" size=2><FONT size=3 face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>Based on its consideration of the
audited financial statements and the discussions referred to above with
management and the independent accountants, and subject to the limitations on
the responsibilities and role of the Audit Committee set forth in the Charter
and those discussed above, the Audit Committee of each Fund recommended to that
Fund's Board that the audited financial statements be included in the Fund&#146;s
Annual Report for the fiscal year ended November 30, 2013.</FONT></P>
<P align=justify><B><FONT face="Times New Roman" size=2>This report was submitted by the
Audit Committee of each Fund&#146;s Board of Directors<BR></FONT></B><FONT face="Times New Roman" size=2>David Gale<BR>Morgan Gust<BR>Karen H. Hogan<BR></FONT><FONT face="Times New Roman" size=2>Robert F. Wulf (Chairman)</FONT></P>
<P align=justify><FONT face="Times New Roman" size=2>January 22, 2014 </FONT></P>
<P align=justify><FONT face="Times New Roman" size=2><FONT size=3 face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>Each Audit Committee was established
in accordance with Section 3(a)(58)(A) of the 1934 Act. Each Audit Committee met
four times in connection with its Board of Directors&#146; regularly scheduled
meetings during the fiscal year ended November 30, 2013. Each Audit Committee is
composed entirely of each Fund&#146;s Independent Directors who are also
&#147;independent&#148; (as such term is defined by the NYSE under the listing standards
applicable to closed-end funds, as may be modified or supplemented (the &#147;NYSE
Listing Standards&#148;)), namely Ms. Hogan and Messrs. Gale, Gust and
Wulf.</FONT></P>
<P align=justify><B><FONT face="Times New Roman" size=2>Nominating and Governance
Committee</FONT></B></P>
<P align=justify><B><FONT face="Times New Roman" size=2></FONT></B><FONT face="Times New Roman" size=2><FONT size=3 face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>Each Board of Directors
has a Nominating and Governance Committee composed entirely of each Fund&#146;s
Independent Directors who are also &#147;independent&#148; (as such term is defined by the
NYSE Listing Standards), namely Ms. Hogan and Messrs. Gale, Gust and Wulf. The
Nominating and Governance Committee of each Fund, except DFP, met twice during
the fiscal year ended November 30, 2013 and the Nominating and Governance
Committee of DFP met once during the period ended November 30, 2013. </FONT></P>
<P align=justify><FONT face="Times New Roman" size=2><FONT size=3 face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>The Nominating and Governance
Committee is responsible for identifying individuals believed to be qualified to
become Board members; for recommending to the Board such nominees to stand for
election as directors at each Fund&#146;s annual meeting of shareholders and to fill
any vacancies on the Board; and for overseeing the Boards&#146; governance practices.
Each Fund&#146;s Nominating and Governance Committee has a charter which is available
on its website, www.preferredincome.com.</FONT></P>
<P align=justify><FONT face="Times New Roman" size=2><FONT size=3 face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>Each Fund&#146;s Nominating and
Governance Committee believes that it is in the best interest of the Fund and
its shareholders to obtain highly qualified candidates to serve as members of
the Board. The Nominating and Governance Committees have not established a
formal process for identifying candidates where a vacancy exists on the Board.
In nominating candidates, each Nominating and Governance Committee shall take
into consideration such factors as it deems appropriate, including educational
background; business, professional training or practice (e.g., accounting or
law); public service or academic positions; experience from service as a board
member (including the Boards of the Funds) or as an executive of investment
funds, public companies or significant private or not-for-profit entities or
other organizations; and/or other life experiences. Each Fund&#146;s Nominating and
Governance Committee may consider whether a potential nominee&#146;s professional
experience, education, skills, and other individual qualities and attributes,
including gender, race or national origin, would provide beneficial diversity of
skills, experience or perspective to the Board&#146;s membership and collective
attributes. Each Fund&#146;s Nominating and Governance Committee will consider
Director candidates recommended by shareholders and submitted in accordance with
applicable law and procedures as described in this Joint Proxy Statement. (See
&#147;Submission of Shareholder Proposals &#150; Annual Meetings 2015&#148; below.)</FONT></P>
<P align=justify><B><FONT face="Times New Roman" size=2>Other Board-Related
Matters</FONT></B></P>
<P align=justify><B><FONT face="Times New Roman" size=2></FONT></B><FONT face="Times New Roman" size=2><FONT size=3 face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>Shareholders who wish
to send communications to the Board should send them to the address of their
Fund(s) and to the attention of the Board. All such communications will be
directed to the Board&#146;s attention.</FONT></P>
<P align=center><FONT face="Times New Roman" size=2>10</FONT></P>
<HR align=center width="100%" noShade SIZE=2>

<DIV style="PAGE-BREAK-BEFORE: always"></DIV><BR>
<P align=justify><FONT face="Times New Roman" size=2><FONT size=3 face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>The Funds do not have a formal
policy regarding Board member attendance at the Annual Meeting of Shareholders.
However, all of the Directors of each Fund attended the April 18, 2013 Annual
Meetings of Shareholders. </FONT></P>
<P align=justify><B><FONT face="Times New Roman" size=2>Board Compensation </FONT></B></P>
<P align=justify><FONT face="Times New Roman" size=2><FONT size=3 face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>Each Director of each Fund who is
not a director, officer or employee of Flaherty &amp; Crumrine or any of its
affiliates receives from each Fund a fee of $9,000 per annum plus $750 for each
in-person Board of Directors or Audit Committee meeting attended, $500 for each
in-person Nominating and Governance Committee meeting attended, and $250 for
each telephone meeting attended. In addition, the Audit Committee Chairman
receives from each Fund an annual fee of $3,000. Each Director of each Fund is
reimbursed for travel and out-of-pocket expenses associated with attending Board
and committee meetings. During the fiscal year ended November 30, 2013, the
Board of Directors for each of PFD and PFO held six meetings (two of which were
held by telephone conference call), the Board of Directors of each of FFC and
FLC held seven meetings (three of which were telephone meetings), and the Board
of Directors DFP held seven meetings (four of which were telephone meetings).
Each Director of each Fund attended at least 75% of the meetings of Directors
and of any Committee of which he or she is a member. The aggregate remuneration
paid to the Directors of each Fund for the fiscal year/period ended November 30,
2013 is set forth below:</FONT></P>
<TABLE style="LINE-HEIGHT: 14pt; BORDER-COLLAPSE: collapse" cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=bottom>
    <TD noWrap align=left width="94%"></TD>
    <TD noWrap align=left width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD noWrap align=left width="1%"><FONT face="Times New Roman" size=2>Board Meeting and</FONT></TD>
    <TD noWrap align=left width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD noWrap align=left width="1%"></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="94%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"><FONT face="Times New Roman" size=2>Committee Meeting</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"><FONT face="Times New Roman" size=2>Travel and Out-of-Pocket</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="94%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"><FONT face="Times New Roman" size=2>Annual Director Fees</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"><FONT face="Times New Roman" size=2>Fees</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"><FONT face="Times New Roman" size=2>Expenses*</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="94%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>PFD</FONT></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>$36,000</FONT></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>$33,000</FONT></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>$2,632</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="94%"><FONT face="Times New Roman" size=2>PFO</FONT></TD>
    <TD noWrap align=right width="1%"></TD>
    <TD noWrap align=left width="1%"><FONT face="Times New Roman" size=2>$36,000</FONT></TD>
    <TD noWrap align=right width="1%"></TD>
    <TD noWrap align=left width="1%"><FONT face="Times New Roman" size=2>$33,000</FONT></TD>
    <TD noWrap align=right width="1%"></TD>
    <TD noWrap align=left width="1%"><FONT face="Times New Roman" size=2>$2,632</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="94%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>FFC</FONT></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>$36,000</FONT></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>$34,000</FONT></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>$2,632</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="94%"><FONT face="Times New Roman" size=2>FLC</FONT></TD>
    <TD noWrap align=right width="1%"><FONT size=2 face="Times New Roman"></FONT></TD>
    <TD noWrap align=left width="1%"><FONT face="Times New Roman" size=2>$36,000</FONT></TD>
    <TD noWrap align=right width="1%"></TD>
    <TD noWrap align=left width="1%"><FONT face="Times New Roman" size=2>$34,000</FONT></TD>
    <TD noWrap align=right width="1%"></TD>
    <TD noWrap align=left width="1%"><FONT face="Times New Roman" size=2>$2,632</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="94%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>DFP**</FONT></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>$22,402</FONT></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>$22,868</FONT></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>$1,178</FONT></TD></TR></TABLE>____________________<BR><BR>
<TABLE cellSpacing=0 cellPadding=0 border=0>

  <TR>
    <TD vAlign=top noWrap><FONT face="Times New Roman" size=2>*</FONT></TD>
    <TD vAlign=top noWrap><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD width="100%"><FONT face="Times New Roman" size=2>Includes reimbursement for travel and
      out-of-pocket expenses for both &#147;interested&#148; and Independent
      Directors.</FONT></TD></TR>
  <TR>
    <TD vAlign=top noWrap><FONT face="Times New Roman" size=2>**</FONT></TD>
    <TD vAlign=top noWrap><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD width="100%"><FONT face="Times New Roman" size=2>DFP commenced operations on May 29,
      2013.</FONT></TD></TR></TABLE>
<P align=justify><FONT face="Times New Roman" size=2><FONT size=3 face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>The following table sets forth
additional information regarding the compensation of each Fund&#146;s Directors for
the fiscal year/period ended November 30, 2013. No executive officer or person
affiliated with a Fund received compensation from a Fund during the fiscal
year/period ended November 30, 2013 in excess of $60,000. Directors and
executive officers of the Funds do not receive pension or retirement benefits
from the Funds.</FONT></P>
<P STYLE="text-align: center"><B><FONT face="Times New Roman" size=2>COMPENSATION TABLE</FONT></B></P>
<TABLE style="LINE-HEIGHT: 14pt; BORDER-COLLAPSE: collapse" cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=bottom>
    <TD noWrap style="text-align: center" width="95%"><FONT face="Times New Roman" size=2>Name of</FONT></TD>
    <TD noWrap align=left width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD noWrap align=left width="2%" colSpan=2><FONT face="Times New Roman" size=2>Aggregate</FONT></TD>
    <TD noWrap align=left width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD noWrap align=left width="1%"><FONT face="Times New Roman" size=2>Total Compensation from</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap style="text-align: center" width="95%"><FONT face="Times New Roman" size=2>Person and</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="2%" colSpan=2><FONT face="Times New Roman" size=2>Compensation</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"><FONT face="Times New Roman" size=2>the Funds and Fund</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="95%"><FONT size=+0><FONT face="Times New Roman" size=2>Position</FONT></FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="2%" colSpan=2><FONT size=+0><FONT face="Times New Roman" size=2>from each
      Fund</FONT></FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"><FONT size=+0><FONT face="Times New Roman" size=2>Complex Paid to Directors</FONT><FONT face="Times New Roman" size=2>*</FONT></FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="95%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>Donald F.
    Crumrine</FONT></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>$0</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>$0 (5)</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="95%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>Director, Chairman of the
      Board and Chief Executive Officer</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD></TR>
  <TR>
    <TD width="100%" colSpan=6>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="95%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>David Gale</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>$ 16,500&nbsp;</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>&#150; PFD</FONT></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>$77,351 (5)</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="95%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>Director</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>$ 16,500</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>&#150; PFO</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="95%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>$ 16,750</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>&#150; FFC</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="95%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>$ 16,750</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>&#150; FLC</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="95%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>$ 10,851</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>&#150; DFP</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD></TR>
  <TR>
    <TD width="100%" colSpan=6>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="95%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>Morgan Gust</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>$ 16,500</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>&#150; PFD</FONT></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>$77,351 (5)</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="95%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>Director, Nominating and
      Governance Committee Chairman</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>$ 16,500</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>&#150; PFO</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="95%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>$ 16,750</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>&#150; FFC</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="95%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>$ 16,750</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>&#150; FLC</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="95%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>$ 10,851</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>&#150; DFP</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD></TR>
  <TR>
    <TD noWrap align=left width="95%">&nbsp;</TD>
    <TD noWrap align=right width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="1%"></TD>
    <TD noWrap align=left width="1%"></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="95%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>Karen H. Hogan</FONT></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>$ 16,500</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>&#150; PFD</FONT></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>$77,351 (5)</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="95%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>Director</FONT></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>$ 16,500</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>&#150; PFO</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="95%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>$ 16,750</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>&#150; FFC</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="95%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>$ 16,750</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>&#150; FLC</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="95%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>$ 10,851</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>&#150; DFP</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD></TR>
  <TR>
    <TD width="100%" colSpan=6>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="95%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>Robert F. Wulf</FONT></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>$ 19,500</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>&#150; PFD</FONT></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>$91,217 (5)</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="95%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>Director, Audit Committee
      Chairman</FONT></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>$ 19,500</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>&#150; PFO</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="95%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>$ 19,750</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>&#150; FFC</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="95%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>$ 19,750</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>&#150; FLC</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="95%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>$ 12,717</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>&#150; DFP</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD></TR></TABLE>____________________<BR><BR>
<TABLE cellSpacing=0 cellPadding=0 border=0>

  <TR>
    <TD vAlign=top noWrap><FONT face="Times New Roman" size=2>*</FONT></TD>
    <TD vAlign=top noWrap><FONT size=2 face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD width="100%"><FONT face="Times New Roman" size=2>Represents the total compensation
      paid for the fiscal year/period ended November 30, 2013 to such persons by
      the Funds, which are considered part of the same &#147;fund complex&#148; because
      they have a common adviser. The parenthetical number represents the total
      number of investment company directorships held by the Director or Nominee
      in the fund complex as of November 30, 2013.</FONT></TD></TR></TABLE>
<P align=center><FONT face="Times New Roman" size=2>11</FONT></P>
<HR align=center width="100%" noShade SIZE=2>

<DIV style="PAGE-BREAK-BEFORE: always"></DIV><BR>
<P align=justify><B><FONT face="Times New Roman" size=2>Required Vote</FONT></B></P>
<P align=justify><B><FONT face="Times New Roman" size=2></FONT></B><FONT face="Times New Roman" size=2><FONT size=3 face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>The election of Mr.
Gale and Ms. Hogan as Directors of PFD, the election of Mr. Gust and Ms. Hogan
as Directors of PFO, the election of Mr. Gale as a Director of FFC and FLC, and
the election of Mr. Crumrine and Mr. Wulf as Directors of DFP, will require the
affirmative vote of a plurality of the votes cast by holders of the Shares of
Common Stock of each such Fund at the Annual Meeting in person or by
proxy.</FONT></P>
<P align=justify><B><FONT face="Times New Roman" size=2>Independent Registered Public
Accounting Firm</FONT></B></P>
<P align=justify><B><FONT face="Times New Roman" size=2></FONT></B><FONT face="Times New Roman" size=2><FONT size=3 face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>KPMG, Two Financial
Center, 60 South Street, Boston, Massachusetts 02111, has been selected to serve
as each Fund&#146;s independent registered public accounting firm for each Fund&#146;s
fiscal year ending November 30, 2014. KPMG acted as the independent registered
public accounting firm for each Fund for the fiscal year ended November 30,
2013. The Funds know of no direct financial or material indirect financial
interest of KPMG in the Funds. A representative of KPMG will not be present at
the Meetings, but will be available by telephone to respond to appropriate
questions and will have an opportunity to make a statement, if asked.</FONT></P>
<P align=justify><FONT face="Times New Roman" size=2><FONT size=3 face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>Set forth in the table below are
audit fees and non-audit related fees billed to each Fund by KPMG for
professional services for the fiscal year ended November 30, 2012 and fiscal
year/period ended November 30, 2013, as applicable.</FONT></P>
<TABLE style="LINE-HEIGHT: 14pt; BORDER-COLLAPSE: collapse" cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=bottom>
    <TD noWrap align=left width="90%" colSpan=2></TD>
    <TD noWrap align=left width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD noWrap align=left width="1%"><FONT face="Times New Roman" size=2>Fiscal Year/Period</FONT></TD>
    <TD noWrap align=left width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD noWrap align=left width="1%"></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="90%" colSpan=2></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"><FONT face="Times New Roman" size=2>Ended</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"><FONT face="Times New Roman" size=2>Audit-Related</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD></TR>
  <TR vAlign=bottom>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"><FONT size=+0><FONT face="Times New Roman" size=2>Fund</FONT></FONT></TD>
    <TD noWrap align=left width="89%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"><FONT size=+0><FONT face="Times New Roman" size=2>November 30</FONT></FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="1%"><FONT size=+0><FONT face="Times New Roman" size=2>Audit Fees</FONT></FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="1%"><FONT size=+0><FONT face="Times New Roman" size=2>Fees</FONT></FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"><FONT size=+0><FONT face="Times New Roman" size=2>Tax Fees*</FONT></FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"><FONT size=+0><FONT face="Times New Roman" size=2>All Other Fees</FONT></FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="90%" bgColor=#c0c0c0 colSpan=2><FONT face="Times New Roman" size=2>PFD</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>2012</FONT></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>$45,000</FONT></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>$0</FONT></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>$8,650</FONT></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>$0</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="90%" bgColor=#c0c0c0 colSpan=2></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>2013</FONT></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>$46,350</FONT></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>$0</FONT></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>$8,910</FONT></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>$0</FONT></TD></TR>
  <TR>
    <TD width="100%" colSpan=12>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="90%" bgColor=#c0c0c0 colSpan=2><FONT face="Times New Roman" size=2>PFO</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>2012</FONT></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>$45,000</FONT></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>$0</FONT></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>$8,650</FONT></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>$0</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="90%" bgColor=#c0c0c0 colSpan=2></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>2013</FONT></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>$46,350</FONT></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>$0</FONT></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>$8,910</FONT></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>$0</FONT></TD></TR>
  <TR>
    <TD width="100%" colSpan=12>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="90%" bgColor=#c0c0c0 colSpan=2><FONT face="Times New Roman" size=2>FFC</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>2012</FONT></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>$47,500</FONT></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>$0</FONT></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>$8,650</FONT></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>$0</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="90%" bgColor=#c0c0c0 colSpan=2></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>2013</FONT></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>$46,350</FONT></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>$0</FONT></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>$8,910</FONT></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>$0</FONT></TD></TR>
  <TR>
    <TD noWrap align=left width="90%" colSpan=2>&nbsp;</TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="1%"></TD>
    <TD noWrap align=left width="1%"></TD></TR>
  <TR>
    <TD noWrap align=left width="90%" bgColor=#c0c0c0 colSpan=2><FONT size=2 face="Times New Roman">FLC</FONT><FONT size=3 face="Times New Roman"></FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT size=2 face="Times New Roman">2012</FONT></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT size=2 face="Times New Roman">$47,500</FONT></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT size=2 face="Times New Roman">$0</FONT></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT size=2 face="Times New Roman">$8,650</FONT></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT size=2 face="Times New Roman">$0</FONT></TD></TR>
  <TR>
    <TD noWrap align=left width="90%" bgColor=#c0c0c0 colSpan=2></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT size=2 face="Times New Roman">2013</FONT></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT size=2 face="Times New Roman">$46,350</FONT></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT size=2 face="Times New Roman">$0</FONT></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT size=2 face="Times New Roman">$8,910</FONT></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT size=2 face="Times New Roman">$0</FONT></TD></TR>
  <TR>
    <TD noWrap align=left width="90%" colSpan=2>&nbsp;</TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="1%"></TD>
    <TD noWrap align=left width="1%"></TD></TR>
  <TR>
    <TD noWrap align=left width="90%" bgColor=#c0c0c0 colSpan=2><FONT size=2 face="Times New Roman">DFP</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT size=2 face="Times New Roman">2013</FONT></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT size=2 face="Times New Roman">$46,350</FONT></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT size=2 face="Times New Roman">$0</FONT></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT size=2 face="Times New Roman">$8,910</FONT></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT size=2 face="Times New Roman">$54,500**</FONT></TD></TR></TABLE>____________________<BR><BR>
<TABLE cellSpacing=0 cellPadding=0 border=0>

  <TR>
    <TD vAlign=top noWrap><FONT face="Times New Roman" size=2>*</FONT></TD>
    <TD vAlign=top noWrap><FONT size=2 face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD width="100%"><FONT face="Times New Roman" size=2>&#147;Tax Fees&#148; are those fees billed
      to each Fund by KPMG in connection with tax consulting services, including
      primarily the review of each Fund&#146;s income tax returns.</FONT></TD></TR>
  <TR>
    <TD vAlign=top noWrap><FONT face="Times New Roman" size=2>**</FONT></TD>
    <TD vAlign=top noWrap></TD>
    <TD width="100%"><FONT face="Times New Roman" size=2>&#147;All Other Fees&#148; are those fees
      billed to DFP by KPMG in connection with the Seed Audit of the
    Fund.</FONT></TD></TR></TABLE>
<P align=center><FONT face="Times New Roman" size=2>12</FONT></P>
<HR align=center width="100%" noShade SIZE=2>

<DIV style="PAGE-BREAK-BEFORE: always"></DIV><BR>
<P align=justify><FONT face="Times New Roman" size=2><FONT size=3 face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>Each Fund&#146;s Audit Committee Charter
requires that the Audit Committee pre-approve all audit and non-audit services
to be provided by the independent accountants to the Fund, and all non-audit
services to be provided by the independent accountants to the Fund&#146;s investment
adviser and any entity controlling, controlled by or under common control with
the Funds&#146; investment adviser (&#147;affiliates&#148;) that provide on-going services to
each Fund, if the engagement relates directly to the operations and financial
reporting of each Fund, or to establish detailed pre-approval policies and
procedures for such services in accordance with applicable laws. All of the
audit and non-audit services described above for which KPMG LLP billed each Fund
fees for the fiscal year ended November 30, 2012 and the fiscal year/period
ended November 30, 2013, as applicable, were pre-approved by the Audit
Committee.</FONT></P>
<P align=justify><FONT face="Times New Roman" size=2><FONT size=3 face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>For each Fund&#146;s fiscal year ended
November 30, 2012 and fiscal year/period ended November 30, 2013, KPMG did not
provide any non-audit services (or bill any fees for such services) to the
Funds&#146; investment adviser or any affiliates. </FONT></P>
<P align=center><FONT face="Times New Roman" size=2>13</FONT></P>
<HR align=center width="100%" noShade SIZE=2>

<DIV style="PAGE-BREAK-BEFORE: always"></DIV><BR>
<P align=center><B><FONT face="Times New Roman" size=2>SPECIAL MEETINGS<BR>(PFD, PFO, FFC
and FLC ONLY) </FONT></B></P>
<P align=center><B><FONT face="Times New Roman" size=2>PROPOSAL 1: TO APPROVE A CHANGE TO
EACH FUND&#146;S FUNDAMENTAL INVESTMENT POLICY<BR>REGARDING INVESTMENTS IN
COMMODITIES </FONT></B></P>
<P align=justify><FONT face="Times New Roman" size=2><FONT size=3 face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><EM>Background</EM></FONT><FONT face="Times New Roman" size=2>. The preferred and debt securities typically held by each
Fund generally are longer duration instruments. As a result, the Fund can be
more sensitive to interest rate changes than funds that invest in shorter
duration instruments. However, each Fund historically has mitigated, and in the
future may mitigate, some or all of this exposure to long-term U.S. Treasury
interest rates through purchasing futures or options, entering into swap
transactions or utilizing other types of instruments. If a Fund did make such
investments, they normally would be expected to appreciate in value when
long-term interest rates rise significantly. If long-term interest rates did
rise, and the instruments employed by the Fund increased in value, the Fund
could use those realized gains to purchase additional preferred securities. This
could potentially increase dividends to common shareholders. </FONT></P>
<P align=justify><FONT face="Times New Roman" size=2><FONT size=3 face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><EM>1940 Act Requirements:
</EM></FONT><FONT face="Times New Roman" size=2>PFD, PFO, FFC and FLC, like all registered
investment companies, are required by the 1940 Act to have certain specific
investment policies that can be changed only with the prior approval of the
holders of a majority of its outstanding voting securities. These policies are
often referred to as &#147;fundamental&#148; policies or restrictions. Under Section
8(b)(1)(F) of the 1940 Act, a fund is required to include in its registration
statement a recital of its policy regarding the purchase or sale of commodities,
and such policy must be a fundamental policy. The 1940 Act does not prohibit a
fund from owning commodities, whether physical commodities or contracts related
to physical commodities (such as oil or grains and related futures contracts),
or financial commodities and contracts related to financial commodities (such as
currencies). </FONT></P>
<P align=justify><FONT face="Times New Roman" size=2><FONT size=3 face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>PFD, PFO, FFC and FLC currently have
a fundamental investment policy with respect to commodities, as detailed below,
which restrict their use of certain commodities. </FONT></P>
<P align=justify><FONT face="Times New Roman" size=2><FONT size=3 face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>Title VII of The Dodd-Frank Wall
Street Reform and Consumer Protection Act (the &#147;Dodd-Frank Act&#148;) expanded the
scope of &#147;commodity interests&#148; subject to regulation under the Commodity
Exchange Act to include most swaps, including the types of interest rate swaps
that could be employed in the execution of each Fund&#146;s interest-rate hedging
strategy. These instruments were not previously included within the legal
definition of &#147;commodities,&#148; but were permissible investments for each
Fund.</FONT></P>
<P align=justify><FONT face="Times New Roman" size=2><FONT size=3 face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>In connection with such changes, and
to avoid confusion, it is proposed that the below referenced fundamental
investment restriction of each Fund be changed so that the Fund may purchase and
sell commodities or commodity contracts, including futures contracts, to the
extent permitted by law. This change will clarify that the Fund continues to
have the same ability to utilize derivative instruments as it did prior to the
change in definition of &#147;commodity interest&#148; under the Dodd-Frank
Act.</FONT></P>
<P align=justify><FONT face="Times New Roman" size=2><FONT size=3 face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>In addition, the proposed revised
fundamental investment policy is intended to provide each Fund with flexibility
to respond to changing markets, new investment opportunities and future changes
in applicable law.</FONT></P>
<P align=justify><FONT face="Times New Roman" size=2><FONT size=3 face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>Flaherty &amp; Crumrine has advised
the Board that the proposed revision to the fundamental policy on investment in
commodities and commodity contracts is not expected to materially affect the
manner in which a Fund&#146;s investment program is being conducted at this time. In
addition, Flaherty &amp; Crumrine has advised the Board that it does not expect
to purchase any physical commodities or contracts related to physical
commodities, such as swaps on precious metals or agricultural products. Instead,
it expects that it could use financial commodity contracts, such as interest
rate swaps, to mitigate risk of loss or otherwise increase return for each Fund.
</FONT></P>
<P align=center><FONT face="Times New Roman" size=2>14</FONT></P>
<HR align=center width="100%" noShade SIZE=2>

<DIV style="PAGE-BREAK-BEFORE: always"></DIV><BR>
<P align=justify><FONT face="Times New Roman" size=2><FONT size=3 face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><EM>Proposal: </EM></FONT><FONT face="Times New Roman" size=2>Each Fund&#146;s current fundamental investment policy regarding
investments in commodities is set forth below.</FONT></P>
<DIV align=center>
<TABLE style="PADDING-RIGHT: 4pt; PADDING-LEFT: 4pt; PADDING-BOTTOM: 4pt; PADDING-TOP: 4pt; BORDER-COLLAPSE: collapse" cellSpacing=0 cellPadding=0 width="95%" border=0>

  <TR vAlign=bottom>
    <TD style="BORDER-RIGHT: #000000 1pt solid; BORDER-TOP: #000000 1pt solid; BORDER-LEFT: #000000 1pt solid; BORDER-BOTTOM: #000000 1pt solid" vAlign=top noWrap align=left width="5%"><B><FONT face="Times New Roman" size=2>PFD</FONT></B></TD>
    <TD VALIGN="TOP" ALIGN="LEFT" WIDTH="95%" STYLE="border-right: #000000 1pt solid; border-bottom: #000000 1pt solid; border-top: #000000 1pt solid; text-align: justify"><B><FONT face="Times New Roman" size=2>&#147;[The Fund may not] [i]nvest in commodities, except that
      the Fund may enter into futures contracts, including interest rate and
      stock index futures, and may purchase options and write covered options on
      such futures contracts and securities, as described in this Prospectus.&#148;
      </FONT></B></TD></TR>
  <TR vAlign=bottom>
    <TD style="BORDER-RIGHT: #000000 1pt solid; BORDER-LEFT: #000000 1pt solid; BORDER-BOTTOM: #000000 1pt solid" vAlign=top noWrap align=left width="5%"><B><FONT face="Times New Roman" size=2>PFO</FONT></B></TD>
    <TD style="BORDER-RIGHT: #000000 1pt solid; BORDER-BOTTOM: #000000 1pt solid" vAlign=top align=left width="95%">
      <P align=justify><B><FONT face="Times New Roman" size=2>&#147;[The Fund may not] [i]nvest
      in commodities, except that the Fund may enter into futures contracts,
      including interest rate and stock index futures contracts, and may
      purchase options and write covered options on futures contracts,
      securities and stock indices, as described in this Prospectus.&#148;
      </FONT></B></P></TD></TR>
  <TR vAlign=bottom>
    <TD style="BORDER-RIGHT: #000000 1pt solid; BORDER-LEFT: #000000 1pt solid; BORDER-BOTTOM: #000000 1pt solid" vAlign=top noWrap align=left width="5%"><B><FONT face="Times New Roman" size=2>FFC</FONT></B></TD>
    <TD style="BORDER-RIGHT: #000000 1pt solid; BORDER-BOTTOM: #000000 1pt solid" vAlign=top align=left width="95%">
      <P align=justify><B><FONT face="Times New Roman" size=2>&#147;[The Fund may not] [i]nvest
      in commodities, except that the Fund may enter into futures contracts,
      including interest rate and stock index futures, and may purchase options
      and write covered options on futures contracts and securities, as
      described in the Prospectus.&#148; </FONT></B></P></TD></TR>
  <TR vAlign=bottom>
    <TD style="BORDER-RIGHT: #000000 1pt solid; BORDER-LEFT: #000000 1pt solid; BORDER-BOTTOM: #000000 1pt solid" vAlign=top noWrap align=left width="5%"><B><FONT face="Times New Roman" size=2>FLC</FONT></B></TD>
    <TD style="BORDER-RIGHT: #000000 1pt solid; BORDER-BOTTOM: #000000 1pt solid" vAlign=top align=left width="95%">
      <P align=justify><B><FONT face="Times New Roman" size=2>&#147;[The Fund may not] [i]nvest
      in commodities, except that the Fund may enter into futures contracts,
      including interest rate and stock index futures, and may purchase options
      and write covered options on futures contracts and securities, as
      described in the Prospectus.&#148; </FONT></B></P></TD></TR></TABLE></DIV>
<P align=justify><FONT face="Times New Roman" size=2><FONT size=3 face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>If shareholders of each Fund approve
the proposal, each Fund&#146;s current fundamental investment policy relating to
investments in commodities will be revised as follows: </FONT></P>
<P style="PADDING-LEFT: 15pt" align=justify><B><FONT face="Times New Roman" size=2>&#147;The Fund
may purchase and sell commodities or commodity contracts, including futures
contracts, to the extent permitted by law.&#148;</FONT></B></P>
<P align=justify><FONT face="Times New Roman" size=2><FONT size=3 face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>Shareholders of each Fund will vote
separately from shareholders of the other Funds with respect to their Fund's
investment policy.</FONT></P>
<P align=justify><B><FONT face="Times New Roman" size=2>THE BOARD OF DIRECTORS OF PFD, PFO,
FFC AND FLC, INCLUDING ALL OF THE INDEPENDENT DIRECTORS, UNANIMOUSLY RECOMMENDS
THAT SHAREHOLDERS VOTE &#147;FOR&#148; PROPOSAL 1. </FONT></B></P>
<P align=justify><B><FONT face="Times New Roman" size=2>Required Vote</FONT></B></P>
<P align=justify><B><FONT face="Times New Roman" size=2></FONT></B><FONT face="Times New Roman" size=2><FONT size=3 face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>Approval of the change
in each Fund&#146;s fundamental investment policy, with respect to Proposal 1, will
require the approval of the holders of a majority of the relevant Fund&#146;s
outstanding voting securities. A &#147;majority of the Fund&#146;s outstanding voting
securities&#148; for this purpose means the lesser of (1) 67% or more of the Shares
of Common Stock, present at a meeting of shareholders, if the holders of more
than 50% of such Shares are present or represented by proxy at the meeting, or
(2) more than 50% of the outstanding Shares. </FONT></P>
<P align=center><B><FONT face="Times New Roman" size=2>OTHER MATTERS TO COME BEFORE THE
MEETINGS </FONT></B></P>
<P align=justify><FONT face="Times New Roman" size=2><FONT size=3 face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><STRONG>Annual Meetings.
</STRONG></FONT><FONT face="Times New Roman" size=2>Each Fund does not intend to present any
other business at the relevant Meeting, nor is any Fund aware that any
shareholder intends to do so. If, however, any other matters are properly
brought before the Meeting, the persons named in the accompanying form of proxy
will vote thereon in accordance with their judgment.</FONT></P>
<P align=justify><FONT face="Times New Roman" size=2></FONT><FONT face="Times New Roman" size=2><FONT size=3 face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><STRONG>Special
Meetings.</STRONG></FONT><FONT face="Times New Roman" size=2> Under Maryland law and each
applicable Fund&#146;s Bylaws, the only matters that may be acted on at a special
meeting of shareholders are those matters stated in the notice of the special
meeting. Accordingly, no other business may properly come before the Special
Meetings. </FONT></P>
<P align=center><B><FONT face="Times New Roman" size=2>ADDITIONAL INFORMATION
</FONT></B></P>
<P align=justify><FONT face="Times New Roman" size=2></FONT><B><FONT face="Times New Roman" size=2>Investment Adviser, Administrator and Servicing Agent</FONT></B></P>
<P align=justify><FONT face="Times New Roman" size=2><FONT size=3 face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>Flaherty &amp; Crumrine
serves as the investment adviser to each Fund, and its business address is 301
E. Colorado Boulevard, Suite 720, Pasadena, California 91101. BNY Mellon acts as
the administrator to each Fund and is located at 4400 Computer Drive,
Westborough, Massachusetts 01581. Destra Capital Investments LLC acts as the
servicing agent to FFC, FLC and DFP and is located at 901
Warrenville Road, Suite 15, Lisle, Illinois 60532.</FONT></P>
<P align=center><FONT face="Times New Roman" size=2>15</FONT></P>
<HR align=center width="100%" noShade SIZE=2>

<DIV style="PAGE-BREAK-BEFORE: always"></DIV><BR>

<P align=justify><B><FONT face="Times New Roman" size=2>Compliance with the Securities
Exchange Act of 1934</FONT></B></P>
<P align=justify><B><FONT face="Times New Roman" size=2></FONT></B><FONT face="Times New Roman" size=2><FONT size=3 face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>Section 16(a) of the
1934 Act and Section 30(h) of the 1940 Act require each Fund&#146;s Directors and
executive officers, certain persons affiliated with Flaherty &amp; Crumrine and
persons who beneficially own more than 10% of a registered class of each Fund&#146;s
securities to file reports of ownership and changes of ownership with the SEC
and the NYSE and to furnish each Fund with copies of such forms they file. Based
solely upon its review of the copies of such forms received by it and written
representations from certain of such persons, each Fund believes that during
2013 all such filing requirements applicable to such persons were met in a
timely manner, except for one late Form 5 filing on behalf of Mr. Robert
Ettinger for PFD, PFO, FFC and FLC that related to a gift. </FONT></P>
<P align=justify><B><FONT face="Times New Roman" size=2>Submission of Shareholder Proposals
2015 Annual Meetings </FONT></B></P>
<P align=justify><B><FONT face="Times New Roman" size=2></FONT></B><FONT face="Times New Roman" size=2><FONT size=3 face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>All proposals by
shareholders of each Fund that are intended to be presented at each Fund&#146;s next
Annual Meeting of Shareholders to be held in 2015 must be received by the
relevant Fund for consideration for inclusion in the relevant Fund&#146;s proxy
statement relating to the meeting no later than November __, 2014, and must
satisfy the requirements of federal securities laws.</FONT></P>
<P align=justify><FONT face="Times New Roman" size=2><FONT size=3 face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>Each Fund&#146;s Bylaws require
shareholders wishing to nominate Directors or make proposals to be voted on at
the Fund&#146;s Annual Meeting to provide timely advance notice of the proposal in
writing. To be considered timely, any such advance notice must be in writing
delivered to or mailed and received at the principal executive offices of the
Fund at the address set forth on the first page of this Joint Proxy Statement
not earlier than the 150<SUP>th</SUP> day nor later than 5:00 p.m., Eastern
Time, on the 120<SUP>th</SUP> day prior to the first anniversary of the date of
the proxy statement for the preceding year&#146;s annual meeting; provided, however,
that in the event that the date of the annual meeting is advanced or delayed by
more than 30 days from the first anniversary of the date of the preceding year&#146;s
annual meeting, notice by the shareholder to be timely must be so delivered not
earlier than the 150<SUP>th</SUP> day prior to the date of such annual meeting
and not later than 5:00 p.m., Eastern Time, on the later of the 120<SUP>th</SUP>
day prior to the date of such annual meeting, as originally convened, or the
tenth day following the day on which public announcement of the date of such
meeting is first made. </FONT></P>
<P align=justify><FONT face="Times New Roman" size=2><FONT size=3 face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>Any such notice by a shareholder
shall set forth the information required by the Fund&#146;s Bylaws with respect to
each matter the shareholder proposes to bring before the annual
meeting.</FONT></P>
<P align=justify><B><FONT face="Times New Roman" size=2>&#147;Householding&#148;</FONT></B></P>
<P align=justify><FONT face="Times New Roman" size=2><FONT size=3 face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>Please note that only one annual or
semi-annual report or Joint Proxy Statement may be delivered to two or more
shareholders of a Fund who share an address, unless the Fund has received
instructions to the contrary. To request a separate copy of an annual report or
semi-annual report or this Joint Proxy Statement, or for instructions regarding
how to request a separate copy of these documents or regarding how to request a
single copy if multiple copies of these documents are received, shareholders
should contact BNY Mellon C/O Computershare, P.O. Box 30170, College Station,
Texas 77842-3170 or by phone at 1-866-351-7446.</FONT></P>
<P align=justify><B><FONT face="Times New Roman" size=2>Voting Results </FONT></B></P>
<P align=justify><B><FONT face="Times New Roman" size=2></FONT></B><FONT face="Times New Roman" size=2><FONT size=3 face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>Each Fund will advise
its shareholders of the voting results of the matters voted upon at its Meetings
in its next Semi-Annual Report to Shareholders.</FONT></P>
<P align=justify><B><FONT face="Times New Roman" size=2>Broker Non-Votes and
Abstentions</FONT></B></P>
<P align=justify><B><FONT face="Times New Roman" size=2></FONT></B><FONT face="Times New Roman" size=2><FONT size=3 face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>A proxy which is
properly executed and returned accompanied by instructions to withhold authority
to vote represents a broker &#147;non-vote&#148; (i.e., shares held by brokers or nominees
as to which (i) instructions have not been received from the beneficial owners
or the persons entitled to vote and (ii) the broker or nominee does not have
discretionary voting power on a particular matter). Proxies that reflect
abstentions or broker non-votes (collectively, &#147;abstentions&#148;) will be counted as
Shares that are present and entitled to vote at the meeting for purposes of
determining the presence of a Quorum.</FONT></P>
<P align=justify><FONT face="Times New Roman" size=2><FONT size=3 face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>With respect to Proposal 1 for the
Annual Meetings, abstentions do not constitute a vote &#147;for&#148; directors. With respect to Proposal 1 for the Special Meetings, abstentions do
not constitute a vote &#147;for&#148; the proposal and instead will count as a vote
&#147;against&#148; the proposal. </FONT></P>
<P align=center><FONT face="Times New Roman" size=2>16</FONT></P>
<HR align=center width="100%" noShade SIZE=2>

<DIV style="PAGE-BREAK-BEFORE: always"></DIV><BR>
<P align=center><B><FONT face="Times New Roman" size=2>NOTICE TO BANKS, BROKER/DEALERS AND
VOTING TRUSTEES AND THEIR NOMINEES </FONT></B></P>
<P align=justify><B><FONT face="Times New Roman" size=2></FONT></B><FONT face="Times New Roman" size=2><FONT size=3 face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>Please advise the Funds
whether other persons are the beneficial owners of Fund Shares for which proxies
are being solicited from you, and, if so, the number of copies of the Joint
Proxy Statement and other soliciting material you wish to receive in order to
supply copies to the beneficial owners of Fund Shares.</FONT></P>
<P align=justify><B><FONT face="Times New Roman" size=2>IT IS IMPORTANT THAT PROXIES BE
RETURNED PROMPTLY. SHAREHOLDERS WHO DO NOT EXPECT TO ATTEND THE RELEVANT
MEETINGS ARE THEREFORE URGED TO COMPLETE, SIGN, DATE AND RETURN ALL PROXY CARDS
AS SOON AS POSSIBLE IN THE ENCLOSED POSTAGE-PAID ENVELOPE.</FONT></B></P>
<P align=center><FONT face="Times New Roman" size=2>17</FONT></P>
<HR align=center width="100%" noShade SIZE=2>


<DIV style="PAGE-BREAK-BEFORE: always"></DIV><BR>






<P align=justify><B><FONT face="Times New Roman">FLAHERTY &amp;
CRUMRINE<BR></FONT></B><B><FONT face="Times New Roman">TOTAL RETURN FUND INCORPORATED
</FONT></B></P>
<P align=justify><B><I><FONT face="Times New Roman" size=2>Important Information Regarding
Annual Meeting of <BR></FONT></I></B><B><I><FONT face="Times New Roman" size=2>Shareholders
and Special Meeting of Shareholders </FONT></I></B></P>
<P align=justify><STRONG><EM><FONT size=2 face="Times New Roman"></FONT></EM></STRONG>&nbsp;</P>
<P align=justify><STRONG><EM><FONT size=2 face="Times New Roman"></FONT></EM></STRONG>&nbsp;</P>
<P align=justify><STRONG><EM><FONT size=2 face="Times New Roman"></FONT></EM></STRONG>&nbsp;</P>
<TABLE style="BORDER-COLLAPSE: collapse" cellSpacing=0 cellPadding=0 width="30%" border=0>

  <TR>
    <TD noWrap align=left width="98%"><FONT face="Times New Roman" size=1>Using a </FONT><B><U><FONT face="Times New Roman" size=1>black
      ink</FONT></U> </B><FONT face="Times New Roman" size=1>pen, mark your
      votes with an X as shown in<BR>this example. Please do not write outside
      the designated areas.</FONT></TD>
    <TD noWrap align=left width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD style="BORDER-RIGHT: #000000 1pt solid; BORDER-TOP: #000000 1pt solid; BORDER-LEFT: #000000 1pt solid; BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%"><FONT face=Arial size=5><B>&nbsp;X&nbsp;</B></FONT></TD></TR></TABLE><BR>
<P align=justify><FONT face="Times New Roman">Proxy Card for Annual Meeting and Special
Meeting </FONT></P>
<TABLE style="PADDING-BOTTOM: 6pt; LINE-HEIGHT: 14pt; BORDER-COLLAPSE: collapse" cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=bottom>
    <TD style="BORDER-BOTTOM: #000000 1pt dashed; TEXT-ALIGN: center" noWrap width="100%"><FONT face="Times New Roman" size=1>PLEASE FOLD ALONG THE
      PERFORATION, DETACH AND RETURN THE BOTTOM PORTION IN THE ENCLOSED
      ENVELOPE.</FONT></TD></TR></TABLE><BR>
<P align=justify><B><U><FONT face="Times New Roman" size=2>Annual
Meeting</FONT></U></B><B><FONT face="Times New Roman" size=2> </FONT></B></P>
<P align=justify><B><FONT face="Times New Roman" size=2>A. Proposal - The Board of Directors
recommends a vote </FONT></B><B><U><FONT face="Times New Roman" size=2>FOR</FONT></U></B><B><FONT face="Times New Roman" size=2> the nominee
listed.</FONT></B></P>
<P align=justify><FONT face="Times New Roman" size=1>1. Election of
Director:&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 01 &#150; David Gale
</FONT></P>
<TABLE cellSpacing=0 cellPadding=0 width="10%" border=0>

  <TR>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" vAlign=bottom noWrap align=left width="1%">&nbsp;</TD>
    <TD vAlign=bottom noWrap align=left width="18%"><FONT size=1 face="Times New Roman">&nbsp;Mark here to vote <B><U><FONT face="Times New Roman">FOR </FONT></U></B><FONT face="Times New Roman">the nominee</FONT></FONT></TD>
    <TD vAlign=bottom noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" vAlign=bottom noWrap align=left width="19%">&nbsp;</TD>
    <TD vAlign=bottom noWrap align=left width="38%"><FONT size=1 face="Times New Roman">&nbsp;Mark here to <B><U><FONT face="Times New Roman">WITHHOLD
      </FONT></U></B><FONT face="Times New Roman">vote
      from the nominee</FONT></FONT></TD>
    <TD vAlign=bottom noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" vAlign=bottom noWrap align=left width="1%">&nbsp;</TD>
    <TD vAlign=bottom noWrap align=left width="20%"><FONT size=1 face="Times New Roman">&nbsp;For All <B><FONT face="Times New Roman"><U>EXCEPT</U> </FONT></B></FONT><FONT face="Times New Roman" size=1>-
    To withhold authority to vote for        any</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD vAlign=top noWrap align=left width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD vAlign=top noWrap align=left width="18%"></TD>
    <TD vAlign=top noWrap align=left width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD vAlign=top noWrap align=left width="19%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD vAlign=top noWrap align=left width="38%"></TD>
    <TD vAlign=top noWrap align=left width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD vAlign=top noWrap align=left width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD vAlign=top noWrap align=left width="20%"><FONT face="Times New Roman" size=1>&nbsp;nominee(s),
      write the name(s) of such nominee(s) below</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD vAlign=top noWrap align=left width="19%" colSpan=2></TD>
    <TD vAlign=top noWrap align=left width="1%"></TD>
    <TD vAlign=top noWrap align=left width="19%"></TD>
    <TD vAlign=top noWrap align=left width="38%"></TD>
    <TD vAlign=top noWrap align=left width="1%"></TD>
    <TD vAlign=top noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" vAlign=top noWrap align=left width="20%">&nbsp;</TD></TR></TABLE><BR>
<P align=justify><B><U><FONT face="Times New Roman" size=2>Special
Meeting</FONT></U></B><B><FONT face="Times New Roman" size=2> </FONT></B></P>
<P align=justify><B><FONT face="Times New Roman" size=2>B.</FONT></B><FONT face="Times New Roman" size=2> </FONT><B><FONT face="Times New Roman" size=2>Proposal &#150; The Board of Directors
recommends a vote </FONT></B><B><U><FONT face="Times New Roman" size=2>FOR</FONT></U></B><B><FONT face="Times New Roman" size=2> Proposal 1.</FONT></B><FONT face="Times New Roman" size=2> </FONT></P>
<TABLE style="LINE-HEIGHT: 14pt; BORDER-COLLAPSE: collapse" cellSpacing=0 cellPadding=0 width="10%" border=0>

  <TR vAlign=bottom>
    <TD noWrap align=left width="51%"><FONT face="Times New Roman" size=1>1. Approve a change to the fundamental
      investment policy regarding investments in
      commodities.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      </FONT></TD>
    <TD noWrap align=left width="8%"><FONT face="Times New Roman" size=1>&nbsp;&nbsp;&nbsp;&nbsp;FOR&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD noWrap align=left width="9%"><FONT size=1 face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      </FONT></TD>
    <TD noWrap align=left width="12%"><FONT face="Times New Roman" size=1>AGAINST</FONT></TD>
    <TD noWrap align=left width="11%"><FONT size=1 face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      </FONT></TD>
    <TD noWrap align=left width="8%"><FONT face="Times New Roman" size=1>ABSTAIN</FONT></TD></TR>
  <TR>
    <TD noWrap align=left width="51%"></TD>
    <TD noWrap align=left width="8%">&nbsp;</TD>
    <TD noWrap align=left width="9%"></TD>
    <TD noWrap align=left width="12%"></TD>
    <TD noWrap align=left width="11%"></TD>
    <TD noWrap align=left width="8%"></TD></TR>
  <TR>
    <TD noWrap align=left width="51%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="8%"></TD>
    <TD noWrap align=left width="9%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="12%"></TD>
    <TD noWrap align=left width="11%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="8%"></TD></TR></TABLE><BR>
<TABLE style="LINE-HEIGHT: 14pt; BORDER-COLLAPSE: collapse" cellSpacing=0 cellPadding=0 width="10%" border=0>

  <TR vAlign=bottom>
    <TD noWrap align=left width="51%"><B><FONT face="Times New Roman" size=2>C. Non-Voting
      Items</FONT></B></TD>
    <TD noWrap align=left width="48%"></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="51%"><B><FONT face="Times New Roman" size=1>Change of Address
      </FONT></B><FONT face="Times New Roman" size=1>-
      Please print new address
      below.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      </FONT></TD>
    <TD noWrap align=left width="48%"><B><FONT face="Times New Roman" size=1>Comments
      </FONT></B><FONT face="Times New Roman" size=1>&#150;
      Please print your comments below.</FONT></TD></TR></TABLE><BR>
<P align=justify><B><FONT face="Times New Roman" size=2></FONT></B>&nbsp;</P>
<P align=justify><B><FONT face="Times New Roman" size=2>D.</FONT></B><FONT face="Times New Roman" size=2> </FONT><B><FONT face="Times New Roman" size=2>Authorized Signatures &#150; This Section
must be completed for your vote to be counted. &#150; Date and Sign
Below</FONT></B><FONT face="Times New Roman" size=2> </FONT></P>
<P align=justify><FONT face="Times New Roman" size=1>NOTE: Please sign this proxy exactly as
your name(s) appear(s) on the books of the Fund. Joint owners should each sign
personally. Trustees and other fiduciaries should indicate the capacity in which
they sign, and where more than one name appears, a majority must sign. If a
corporation, the signature should be that of an authorized officer who should
state his or her title. </FONT></P>
<TABLE style="LINE-HEIGHT: 14pt; BORDER-COLLAPSE: collapse" cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=bottom>
    <TD noWrap align=left width="32%"><FONT face="Times New Roman" size=1>Date (mm/dd/yyyy) &#150; Please print date
      below.</FONT></TD>
    <TD noWrap align=left width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD noWrap align=left width="34%"><FONT face="Times New Roman" size=1>Signature 1 &#150; Please keep signature
      within the box.</FONT></TD>
    <TD noWrap align=left width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD noWrap align=left width="32%"><FONT face="Times New Roman" size=1>Signature 2 &#150; Please keep signature
      within the box.</FONT></TD></TR>
  <TR>
    <TD noWrap align=left width="32%">&nbsp;</TD>
    <TD noWrap align=left width="1%">&nbsp;</TD>
    <TD noWrap align=left width="34%"></TD>
    <TD noWrap align=left width="1%">&nbsp;</TD>
    <TD noWrap align=left width="32%">&nbsp;</TD></TR>
  <TR>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="32%">/&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      /</TD>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="34%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="32%"></TD></TR></TABLE><BR>
<HR align=center width="100%" noShade SIZE=2>

<P align=justify>&nbsp;</P><BR><BR>
<DIV style="PAGE-BREAK-BEFORE: always"></DIV><BR>
<P align=center><B><FONT face="Times New Roman" size=2>The Notices of Annual Meeting and
Special Meeting of Shareholders, Joint Proxy Statement <BR>and proxy card for
the Fund are available on the Fund&#146;s website at </FONT></B><B><FONT face="Times New Roman" size=2>www.preferredincome.com</FONT></B><B><FONT face="Times New Roman" size=2>.</FONT></B></P>
<P align=center>&nbsp;</P>
<P align=center>&nbsp;</P>
<P align=center>&nbsp;</P>
<P align=center>&nbsp;</P>
<P align=center>&nbsp;</P>
<TABLE style="PADDING-BOTTOM: 6pt; LINE-HEIGHT: 14pt; BORDER-COLLAPSE: collapse" cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=bottom>
    <TD style="BORDER-BOTTOM: #000000 1pt dashed; TEXT-ALIGN: center" noWrap width="100%"><FONT face="Times New Roman" size=1>PLEASE FOLD ALONG THE
      PERFORATION, DETACH AND RETURN THE BOTTOM PORTION IN THE ENCLOSED
      ENVELOPE.</FONT></TD></TR></TABLE><BR>
<P align=justify><B><FONT face="Times New Roman"></FONT></B>&nbsp;</P>
<P align=justify><B><FONT face="Times New Roman">Proxy - FLAHERTY &amp; CRUMRINE TOTAL
RETURN FUND INCORPORATED </FONT></B></P>
<P align=justify><B><FONT face="Times New Roman" size=2>PROXY IN CONNECTION WITH EACH OF THE
ANNUAL MEETING AND SPECIAL MEETING OF SHAREHOLDERS TO BE HELD ON APRIL 17, 2014
</FONT></B></P>
<P align=justify><B><FONT face="Times New Roman" size=2><BR>Important Notice Regarding the
Availability of Proxy Materials for the Shareholder Meetings to be held on April
17, 2014. </FONT></B></P>
<P align=justify><B><FONT face="Times New Roman" size=2>The Notices of Annual Meeting and
Special Meeting of Shareholders, Joint Proxy Statement and proxy card for the
Fund are available on the Fund&#146;s website at www.preferredincome.com.
</FONT></B></P>
<P align=justify><FONT face="Times New Roman" size=2>PROXY SOLICITED BY BOARD OF
DIRECTORS</FONT></P>
<P align=justify><FONT face="Times New Roman" size=2>The undersigned holder of shares of
Common Stock of Flaherty &amp; Crumrine Total Return Fund Incorporated, a
Maryland corporation (the &#147;Fund&#148;), hereby appoints Donald F. Crumrine, Robert M.
Ettinger and Chad C. Conwell, proxies for the undersigned, each with full powers
of substitution and revocation, to represent the undersigned and to vote on
behalf of the undersigned all shares of Common Stock which the undersigned is
entitled to vote at each of the Annual Meeting and Special Meeting of
Shareholders of the Fund to be held at the offices of Flaherty &amp; Crumrine
Incorporated, 301 East Colorado Boulevard, Suite 720, Pasadena, California 91101
at 9:00 a.m. PT, and 9:30 a.m. PT, respectively, on April 17, 2014, and any
adjournments or postponements thereof. The undersigned hereby acknowledges
receipt of the Notices of Annual Meeting and Special Meeting and Joint Proxy
Statement and hereby instructs said proxies to vote said shares as indicated
hereon. In their discretion, the proxies are authorized to vote upon such other
business as may properly come before each Meeting. A majority of the proxies
present and acting at each Meeting in person or by substitute (or, if only one
shall be so present, then that one) shall have and may exercise all of the power
and authority of said proxies hereunder. The undersigned hereby revokes any
proxy previously given.</FONT></P>
<HR align=center width="100%" noShade SIZE=2>

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`
end
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>CORRESP
<SEQUENCE>4
<FILENAME>filename4.htm
<TEXT>

<HTML>
<HEAD>
   <TITLE></TITLE>
</HEAD>

<BODY bgcolor=#ffffff>
<BR>
<TABLE cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR>
    <TD vAlign=top width="88%"><IMG src="transmittal_letterx1x1.jpg" border=0></TD>
    <TD nowrap width="12%">
      <P align=justify><FONT face="Times New Roman" size=1><BR><BR>787 Seventh Avenue<BR>

New York, NY 10019-6099
<BR>
<BR>
Tel: 212 728 8000
<BR>
Fax: 212 728 8111</FONT></P></TD></TR></TABLE><BR>
<P align=justify><U><FONT face="Times New Roman" size=2>VIA EDGAR</FONT></U><FONT face="Times New Roman" size=2> </FONT></P>
<P align=justify><FONT face="Times New Roman" size=2>March 5, 2014 </FONT></P>
<P align=justify><FONT face="Times New Roman" size=2>Securities and Exchange Commission
<BR>100 F Street, NE <BR></FONT><FONT face="Times New Roman" size=2>Washington, DC
20549-4720 </FONT></P>

<TABLE style="LINE-HEIGHT: 14pt; BORDER-COLLAPSE: collapse" cellSpacing=0 cellPadding=0 width="50%" border=0>

  <TR vAlign=bottom>
    <TD noWrap align=left width="2%"><FONT face="Times New Roman" size=2>Re:&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD noWrap align=left width="98%">
      <P align=justify><U><FONT face="Times New Roman" size=2>Flaherty &amp; Crumrine
      Preferred Income Fund Incorporated (&#147;PFD&#148;)</FONT></U><FONT face="Times New Roman" size=2> </FONT></P></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="2%"></TD>
    <TD noWrap align=left width="98%">
      <P align=justify><U><FONT face="Times New Roman" size=2>Investment Company Act File
      Number 811-06179</FONT></U><FONT face="Times New Roman" size=2>
      </FONT></P></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="2%"></TD>
    <TD noWrap align=left width="98%">
      <P align=justify><U><FONT face="Times New Roman" size=2>Flaherty &amp; Crumrine
      Preferred Income Opportunity Fund Incorporated (&#147;PFO&#148;)</FONT></U><FONT face="Times New Roman" size=2> </FONT></P></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="2%"><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD>
    <TD noWrap align=left width="98%">
      <P align=justify><U><FONT face="Times New Roman" size=2>Investment Company Act File
      Number 811-06495</FONT></U></P></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="2%"></TD>
    <TD noWrap align=left width="98%">
      <P align=justify><FONT face="Times New Roman" size=2></FONT><U><FONT face="Times New Roman" size=2>Flaherty &amp; Crumrine Preferred Securities Income Fund
      Incorporated (&#147;FFC&#148;)</FONT></U><FONT face="Times New Roman" size=2>
      </FONT></P></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="2%"></TD>
    <TD noWrap align=left width="98%">
      <P align=justify><U><FONT face="Times New Roman" size=2>Investment Company Act File
      Number 811-21129</FONT></U><FONT face="Times New Roman" size=2>
      </FONT></P></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="2%"></TD>
    <TD noWrap align=left width="98%">
      <P align=justify><U><FONT face="Times New Roman" size=2>Flaherty &amp; Crumrine Total
      Return Fund Incorporated (&#147;FLC&#148;)</FONT></U><FONT face="Times New Roman" size=2>
      </FONT></P></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="2%"></TD>
    <TD noWrap align=left width="98%">
      <P align=justify><U><FONT face="Times New Roman" size=2>Investment Company Act File
      Number 811-21380</FONT></U><FONT face="Times New Roman" size=2>
      </FONT></P></TD></TR>
  <TR>
    <TD noWrap align=left width="2%"></TD>
    <TD noWrap align=left width="98%">
      <P align=justify><U><FONT face="Times New Roman" size=2>Flaherty &amp; Crumrine
      Dynamic Preferred and Income Fund Incorporated (&#147;DFP&#148;)</FONT></U><FONT face="Times New Roman" size=2> </FONT></P></TD></TR>
  <TR>
    <TD noWrap align=left width="2%"></TD>
    <TD noWrap align=left width="98%">
      <P align=justify><U><FONT face="Times New Roman" size=2>Investment Company Act File
      Number 811-22762</FONT></U><FONT face="Times New Roman" size=2>
  </FONT></P></TD></TR></TABLE>
<P align=justify><FONT face="Times New Roman" size=2>Ladies and Gentlemen: </FONT></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp; <FONT face="Times New Roman" size=2>On behalf of
the above referenced investment companies, each a Maryland corporation
(together, the &#147;Funds&#148;), pursuant to Rule 14a-6(a) under the Securities Exchange
Act of 1934, as amended, filed herewith are the preliminary proxy materials to
be used in connection with the Annual Meetings of Shareholders of the Funds (the
&#147;Annual Meetings&#148;) and the Special Meetings of Shareholders of PFD, PFO, FLC and
FFC (the &#147;Special Meetings&#148; and together with the Annual Meetings, the
&#147;Meetings&#148;). </FONT></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp; <FONT face="Times New Roman" size=2>As set forth in more detail in the
accompanying preliminary proxy materials, the Annual Meetings are being held to
elect directors to the board of directors of the Funds and the Special Meetings
are being held to approve changes to PFD, PFO, FLC and FFC&#146;s fundamental
investment policy regarding investments in commodities. Please note that certain
information in the preliminary proxy materials is in the process of being
compiled and will be included in the Funds&#146; definitive proxy statement filing.
</FONT></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp; <FONT face="Times New Roman" size=2>Should members of the staff have any
questions or comments regarding the enclosed preliminary proxy materials, they
should call the undersigned at (212) 728-8294.</FONT></P>
<TABLE style="LINE-HEIGHT: 14pt; BORDER-COLLAPSE: collapse" cellSpacing=0 cellPadding=0 width="5%" border=0>

  <TR vAlign=bottom>
    <TD noWrap align=left width="50%"></TD>
    <TD noWrap align=left width="50%"><FONT face="Times New Roman" size=2>Very truly yours,</FONT></TD></TR>
  <TR>
    <TD width="50%">&nbsp;&nbsp;&nbsp;&nbsp; </TD>
    <TD width="50%"></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="50%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="50%"><FONT face="Times New Roman" size=2>/s/
      Maria Gattuso</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="50%"></TD>
    <TD noWrap align=left width="50%"><FONT face="Times New Roman" size=2>Maria
Gattuso</FONT></TD></TR></TABLE><BR>
<P align=justify><FONT face="Times New Roman" size=2>Enclosures </FONT></P>
<TABLE style="LINE-HEIGHT: 14pt; BORDER-COLLAPSE: collapse" cellSpacing=0 cellPadding=0 width="5%" border=0>

  <TR vAlign=bottom>
    <TD noWrap align=left width="18%"><FONT face="Times New Roman" size=2>cc:&nbsp;&nbsp;&nbsp; </FONT></TD>
    <TD noWrap align=left width="81%"><FONT face="Times New Roman" size=2>Donald F. Crumrine</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="18%"></TD>
    <TD noWrap align=left width="81%"><FONT face="Times New Roman" size=2>Rose F. DiMartino</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="18%"></TD>
    <TD noWrap align=left width="81%"><FONT face="Times New Roman" size=2>Chad C. Conwell</FONT></TD></TR></TABLE><BR>
<TABLE style="LINE-HEIGHT: 14pt; BORDER-COLLAPSE: collapse" cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=bottom>
    <TD noWrap align=left width="14%"><FONT face="Times New Roman" size=1></FONT></TD>
    <TD style="TEXT-ALIGN: center" noWrap width="73%">
      <P align=center><FONT style="FONT-VARIANT: small-caps" face="Times New Roman" size=1>New York&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      Washington&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      Paris&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      London&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      Milan&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      Rome&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      Frankfurt&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Brussels</FONT></P></TD>
    <TD noWrap align=left width="12%"><FONT face="Times New Roman" size=1></FONT></TD></TR>
  <TR vAlign=bottom>
    <TD style="TEXT-ALIGN: center" width="99%" colSpan=3><FONT face="Times New Roman" size=1>in alliance with Dickson Minto W.S., London
      and Edinburgh</FONT></TD></TR></TABLE><BR>
<HR align=center width="100%" noShade size="2">

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</HTML>

</TEXT>
</DOCUMENT>
</SEC-DOCUMENT>
