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D
isclosure of Investment Advisory Agreements and
Sub-Advisory Agreements
|
The Board of Directors (each,
a Board and, collectively, the Boards, and the members of which are
referred to as Board Members) of each of BlackRock Apex Municipal Fund, Inc.
(APX), BlackRock Muni Intermediate Duration Fund, Inc. (MUI), BlackRock
MuniAssets Fund, Inc. (MUA), BlackRock MuniEnhanced Fund, Inc. (MEN),
BlackRock MuniHoldings Fund, Inc. (MHD), BlackRock MuniHoldings Fund II, Inc.
(MUH), BlackRock Muni-Holdings Insured Fund, Inc. (MUS) and BlackRock
MuniVest Fund II, Inc. (MVT, and together with APX, MUI, MUA, MEN, MHD, MUH,
and MUS, each a Fund and, collectively, the Funds) met on April 14, 2009
and May 28 29, 2009 to consider the approval of its respective Funds
investment advisory agreement (each, an Advisory Agreement) with BlackRock
Advisors, LLC (the Manager), each Funds investment advisor. Each Board also
considered the approval of a sub-advisory agreement (each, a Sub-Advisory
Agreement) between its respective Fund, the Manager and BlackRock Investment
Management, LLC (the Sub-Advisor). The Manager and the Sub-Advisor are
referred to herein as BlackRock. The Advisory Agreements and the Sub-Advisory
Agreements are referred to herein as the Agreements. Unless otherwise
indicated, references to actions taken by the Board or the Boards shall
mean each Board acting independently with respect to its Fund.
Activities and Composition of the Boards
Each Board consists of twelve
individuals, ten of whom are not interested persons of the Funds as defined
in the Investment Company Act of 1940, as amended (the 1940 Act) (the
Independent Board Members). The Board Members of each Fund are responsible
for the oversight of the operations of such Fund and perform the various duties
imposed on the directors of investment companies by the 1940 Act. The
Independent Board Members have retained independent legal counsel to assist
them in connection with their duties. The Chairman of each Board is an
Independent Board Member. Each Board has established five standing committees:
an Audit Committee, a Governance and Nominating Committee, a Compliance
Committee, a Performance Oversight Committee and an Executive Committee, each
of which is composed of Independent Board Members (except for the Executive
Committee, which has one interested Board Member) and is chaired by an
Independent Board Member. In addition, each Board has established an Ad Hoc
Committee on Auction Market Preferred Shares.
The Agreements
Pursuant to the 1940 Act,
each Board is required to consider the continuation of the Agreements on an
annual basis. In connection with this process, each Board assessed, among other
things, the nature, scope and quality of the services provided to its
respective Fund by the personnel of BlackRock and its affiliates, including
investment management, administrative and shareholder services, oversight of
fund accounting and custody, marketing services and assistance in meeting
applicable legal and regulatory requirements.
Throughout the year, the
Boards, acting directly and through their committees, consider at each of their
meetings factors that are relevant to their annual consideration of the renewal
of the Agreements, including the services and support provided by BlackRock to
the Funds and their shareholders. Among the matters the Boards considered were:
(a) investment performance for one-, three- and five-year periods, as
applicable, against peer funds, and applicable benchmarks, if any, as well as
senior management and portfolio managers analysis of the reasons for any out
performance or underperformance against each Funds peers; (b) fees, including
advisory and other amounts paid to BlackRock and its affiliates by the Funds
for services such as call center and fund accounting; (c) the Funds operating
expenses; (d) the resources devoted to, and compliance reports relating to, the
Funds investment objectives, policies and restrictions; (e) the Funds
compliance with their Code of Ethics and compliance policies and procedures;
(f) the nature, cost and character of non-investment management services
provided by BlackRock and its affiliates; (g) BlackRocks and other service
providers internal controls; (h) BlackRocks implementation of the proxy
voting policies approved by the Board; (i) execution quality of portfolio
transactions; (j) BlackRocks implementation of the Funds valuation and
liquidity procedures; and (k) periodic updates on BlackRocks business.
Board Considerations in Approving the Agreements
The Approval Process: Prior
to the April 14, 2009 meeting, each Board requested and received materials
specifically relating to the Agreements. Each Board is engaged in an ongoing
process with BlackRock to continuously review the nature and scope of the
information provided to better assist their deliberations. The materials
provided in connection with the April meeting included: (a) information
independently compiled and prepared by Lipper, Inc. (Lipper) on Fund fees and
expenses, and the investment performance of each Fund as compared with a peer
group of funds as determined by Lipper and, where applicable, a customized peer
group selected by BlackRock (collectively, Peers); (b) information on the
profitability of the Agreements to BlackRock and a discussion of fall-out
benefits to BlackRock and its affiliates and significant shareholders; (c) a
general analysis provided by BlackRock concerning investment advisory fees
charged to other clients, such as institutional clients and open-end funds,
under similar investment mandates, as well as the performance of such other
clients; (d) the impact of economies of scale; (e) a summary of aggregate
amounts paid by each Fund to BlackRock; and (f) an internal comparison of
management fees classified by Lipper, if applicable.
At an in-person meeting held
on April 14, 2009, each Board reviewed materials relating to its consideration
of the Agreements. As a result of the discussions that occurred during the
April 14, 2009 meeting, the Boards presented BlackRock with questions and
requests for additional information and BlackRock responded to these requests
with additional written information in advance of the May 28 29, 2009 Board
meeting.
At an in-person meeting held
on May 28 29, 2009, each Funds Board, including the Independent Board
Members, unanimously approved the continuation of the Advisory Agreement
between the Manager and such Fund and the Sub-Advisory Agreement between such
Fund, the Manager and the Sub-Advisor(s), each for a one-year term ending June
30, 2010. The Boards considered all factors they believed relevant with respect
to the Funds, including, among other factors: (a) the nature, extent and
quality of the services provided by BlackRock; (b) the investment performance
of the Fund and BlackRock portfolio management; (c) the advisory fee and the
cost of the services and profits to be realized by BlackRock and certain affiliates
from their relationship with the Fund; (d) economies of scale; and (e) other
factors.
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72
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SEMI-ANNUAL REPORT
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OCTOBER 31, 2009
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|
|
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Disclosure of Investment Advisory Agreements and
Sub-Advisory Agreements (continued)
|
Each Board also considered
other matters it deemed important to the approval process, such as services
related to the valuation and pricing of its respective Funds portfolio
holdings, direct and indirect benefits to BlackRock and its affiliates and
significant shareholders from their relationship with such Fund and advice from
independent legal counsel with respect to the review process and materials
submitted for the Boards review. The Boards noted the willingness of BlackRock
personnel to engage in open, candid discussions with the Boards. The Boards did
not identify any particular information as controlling, and each Board Member
may have attributed different weights to the various items considered.
A. Nature, Extent and Quality of the Services:
Each Board, including its Independent Board
Members, reviewed the nature, extent and quality of services provided by
BlackRock, including the investment advisory services and the resulting
performance of its respective Fund. Throughout the year, each Board compared
its respective Funds performance to the performance of a comparable group of
closed-end funds, and the performance of a relevant benchmark, if any. The
Boards met with BlackRocks senior management personnel responsible for
investment operations, including the senior investment officers. Each Board
also reviewed the materials provided by its respective Funds portfolio
management team discussing such Funds performance and such Funds investment
objective, strategies and outlook.
Each Board considered, among
other factors, the number, education and experience of BlackRocks investment
personnel generally and its respective Funds portfolio management team,
investments by portfolio managers in the funds they manage, BlackRocks
portfolio trading capabilities, BlackRocks use of technology, BlackRocks
commitment to compliance and BlackRocks approach to training and retaining
portfolio managers and other research, advisory and management personnel. Each
Board also reviewed a general description of BlackRocks compensation structure
with respect to its respective Funds portfolio management team and BlackRocks
ability to attract and retain high-quality talent.
In addition to advisory
services, each Board considered the quality of the administrative and
non-investment advisory services provided to its respective Fund. BlackRock and
its affiliates and significant shareholders provide the Funds with certain
administrative and other services (in addition to any such services provided to
the Funds by third parties) and officers and other personnel as are necessary
for the operations of the Funds. In addition to investment advisory services,
BlackRock and its affiliates provide the Funds with other services, including:
(i) preparing disclosure documents, such as the prospectus and the statement of
additional information in connection with the initial public offering and
periodic shareholder reports; (ii) preparing communications with analysts to
support secondary market trading of the Funds; (iii) assisting with daily
accounting and pricing; (iv) preparing periodic filings with regulators and
stock exchanges; (v) overseeing and coordinating the activities of other
service providers; (vi) organizing Board meetings and preparing the materials
for such Board meetings; (vii) providing legal and compliance support; and
(viii) performing other administrative functions necessary for the operation of
the Funds, such as tax reporting, fulfilling regulatory filing requirements,
and call center services. The Boards reviewed the structure and duties of
BlackRocks fund administration, accounting, legal and compliance departments
and considered BlackRocks policies and procedures for assuring compliance with
applicable laws and regulations.
B. The Investment Performance of the Funds and BlackRock:
Each Board, including its Independent Board
Members, also reviewed and considered the performance history of its respective
Fund. In preparation for the April 14, 2009 meeting, the Boards were provided
with reports, independently prepared by Lipper, which included a comprehensive
analysis of each Funds performance. The Boards also reviewed a narrative and
statistical analysis of the Lipper data that was prepared by BlackRock, which
analyzed various factors that affect Lippers rankings. In connection with its
review, each Board received and reviewed information regarding the investment
performance of its respective Fund as compared to a representative group of
similar funds as determined by Lipper and to all funds in such Funds
applicable Lipper category and, where applicable, a customized peer group
selected by BlackRock. Each Board was provided with a description of the
methodology used by Lipper to select peer funds. Each Board regularly reviews
the performance of its respective Fund throughout the year.
The Board of MUI noted that,
in general, MUI performed better than its Peers in that MUIs performance was
at or above the median of its customized Lipper peer group composite in two of
the one-, three- and five-year periods reported.
The Board of each of APX and
MUA noted that, in general, APX and MUA performed better than their respective
Peers in that the performance of each of APX and MUA was at or above the median
of its respective Lipper Performance Universe composite in each of the one-,
three- and five-year periods reported.
The Board of each of MHD, MUH
and MVT noted that, in general, MHD, MUH, and MVT performed better than their
respective Peers in that the performance of each of MHD, MUH, and MVT was at or
above the median of its respective customized Lipper peer group composite in
each of the one-, three- and five-year periods reported.
The Board of MEN noted that
MEN performed below the median of its customized Lipper peer group composite in
the one-, three- and five-year periods reported. The Board and BlackRock
reviewed the reasons for MENs underperformance during these periods compared
with its Peers. The Board was informed that, among other things, over-exposure
to the long-end of the municipal curve, an overweight on insured bonds with
weaker underlying credits and the underperformance of municipal cash relative
to MENs Bond Market Association hedges all negatively impacted MENs
performance.
The Board of MUS noted that
MUS performed below the median of its customized Lipper peer group composite in
the one-, three- and five-year periods reported. The Board and BlackRock
reviewed the reasons for MUSs underperformance during these periods compared
with its Peers. The Board was informed that, among other things, overweight
positions in the hospital and housing sectors and poor performance of some
insured and AMT bonds held by MUS negatively impacted MUSs performance.
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SEMI-ANNUAL
REPORT
|
OCTOBER 31, 2009
|
73
|
|
|
|
Disclosure of Investment Advisory Agreements and
Sub-Advisory Agreements (continued)
|
For MEN and MUS the Board of
each Fund and BlackRock discussed BlackRocks commitment to providing the
resources necessary to assist the portfolio managers and to improve each such
Funds performance.
C. Consideration of the Advisory Fees and the Cost of the
Services and Profits to be Realized by BlackRock and its Affiliates from their
Relationship with the Funds:
Each Board, including its Independent Board Members, reviewed its
respective Funds contractual advisory fee rates compared with the other funds
in its respective Lipper category. Each Board also compared its respective
Funds total expenses, as well as actual management fees, to those of other
comparable funds. Each Board considered the services provided and the fees
charged by BlackRock to other types of clients with similar investment
mandates, including separately managed institutional accounts.
The Boards received and
reviewed statements relating to BlackRocks financial condition and
profitability with respect to the services it provided the Funds. The Boards
were also provided with a profitability analysis that detailed the revenues
earned and the expenses incurred by BlackRock for services provided to the
Funds. The Boards reviewed BlackRocks profitability with respect to the Funds
and other funds the Boards currently oversee for the year ended December 31,
2008 compared to available aggregate profitability data provided for the year
ended December 31, 2007. The Boards reviewed BlackRocks profitability with
respect to other fund complexes managed by the Manager and/or its affiliates.
The Boards reviewed BlackRocks assumptions and methodology of allocating
expenses in the profitability analysis, noting the inherent limitations in
allocating costs among various advisory products. The Boards recognized that
profitability may be affected by numerous factors including, among other
things, fee waivers by the Manager, the types of funds managed, expense allocations
and business mix, and therefore comparability of profitability is somewhat
limited.
The Boards noted that, in
general, individual fund or product line profitability of other advisors is not
publicly available. Nevertheless, to the extent such information is available,
the Boards considered BlackRocks overall operating margin, in general,
compared to the operating margin for leading investment management firms whose
operations include advising closed-end funds, among other product types. The
comparison indicated that operating margins for BlackRock with respect to its
registered funds are generally consistent with margins earned by similarly
situated publicly traded competitors. In addition, the Boards considered, among
other things, certain third-party data comparing BlackRocks operating margin
with that of other publicly-traded asset management firms, which concluded that
larger asset bases do not, in themselves, translate to higher profit margins.
In addition, the Boards
considered the cost of the services provided to the Funds by BlackRock, and
BlackRocks and its affiliates profits relating to the management and
distribution of the Funds and the other funds advised by BlackRock and its
affiliates. As part of their analysis, the Boards reviewed BlackRocks
methodology in allocating its costs to the management of the Funds. The Boards also
considered whether BlackRock has the financial resources necessary to attract
and retain high-quality investment management personnel to perform its
obligations under the Agreements and to continue to provide the high quality of
services that is expected by the Boards.
Each Board noted that its
respective Fund paid contractual management fees, which do not take into
account any expense reimbursement or fee waivers, lower than or equal to the
median contractual management fees paid by such Funds Peers.
D. Economies of Scale:
Each Board, including its Independent Board
Members, considered the extent to which economies of scale might be realized as
the assets of its respective Fund increase and whether there should be changes
in the advisory fee rate or structure in order to enable such Fund to
participate in these economies of scale, for example through the use of
breakpoints in the advisory fee based upon the assets of such Fund. The Boards
considered that the funds in the BlackRock fund complex share some common
resources and, as a result, an increase in the overall size of the complex
could permit each fund to incur lower expenses than it would otherwise as a stand-alone
entity. The Boards also considered BlackRocks overall operations and its
efforts to expand the scale of, and improve the quality of, its operations.
The Boards noted that most
closed-end fund complexes do not have fund level breakpoints because closed-end
funds generally do not experience substantial growth after the initial public
offering and each fund is managed independently, consistent with its own
investment objectives. The Boards noted that only one closed-end fund in the
Fund Complex has breakpoints in its fee structure. Information provided by
Lipper also revealed that only one closed-end fund complex used a complex-level
breakpoint structure.
E. Other Factors:
The Boards also took into account other ancillary or fallout benefits
that BlackRock or its affiliates and significant shareholders may derive from
their relationship with the Funds, both tangible and intangible, such as
BlackRocks ability to leverage its investment professionals who manage other
portfolios, an increase in BlackRocks profile in the investment advisory
community, and the engagement of BlackRocks affiliates and significant
shareholders as service providers to the Funds, including for administrative
and distribution services. The Boards also noted that BlackRock may use
third-party research obtained by soft dollars generated by certain mutual fund
transactions to assist itself in managing all or a number of its other client
accounts.
In connection with their
consideration of the Agreements, the Boards also received information regarding
BlackRocks brokerage and soft dollar practices. The Boards received reports
from BlackRock, which included information on brokerage commissions and trade
execution practices throughout the year.
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74
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SEMI-ANNUAL REPORT
|
OCTOBER 31, 2009
|
|
|
|
Disclosure of Investment Advisory Agreements and
Sub-Advisory Agreements (concluded)
|
Conclusion
Each Board, including its
Independent Board Members, unanimously approved the continuation of the
Advisory Agreement between its respective Fund and the Manager for a one-year
term ending June 30, 2010 and the Sub-Advisory Agreement between such Fund, the
Manager and such Funds Sub-Advisor for a one-year term ending June 30, 2010.
Based upon its evaluation of all these factors in their totality, each Board,
including its Independent Board Members, was satisfied that the terms of the
Agreements were fair and reasonable and in the best interest of its respective
Fund and its shareholders. In arriving at a decision to approve the Agreements,
each Board did not identify any single factor or group of factors as
all-important or controlling, but considered all factors together, and
different Board Members may have attributed different weights to the various
factors considered. The Independent Board Members were also assisted by the
advice of independent legal counsel in making this determination. The
contractual fee arrangements for each Fund reflects the results of several
years of review by such Funds Board Members and predecessor Board Members, and
discussions between such Board Members (and predecessor Board Members) and
BlackRock. Certain aspects of the arrangements may be the subject of more
attention in some years than in others, and the Board Members conclusions may
be based in part on their consideration of these arrangements in prior years.
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SEMI-ANNUAL
REPORT
|
OCTOBER 31, 2009
|
75
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Officers and Directors
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|
Richard E. Cavanagh,
Chairman of the Board and Director
|
Karen P. Robards, Vice
Chair of the Board, Chair of the Audit Committee and Director
|
G. Nicholas Beckwith, III,
Director
|
Richard S. Davis, Director
|
Kent Dixon, Director and
Member of the Audit Committee
|
Frank J. Fabozzi, Director
and Member of the Audit Committee
|
Kathleen F. Feldstein,
Director
|
James T. Flynn, Director
and Member of the Audit Committee
|
Henry Gabbay, Director
|
Jerold B. Harris, Director
|
R. Glenn Hubbard, Director
|
W. Carl Kester, Director
and Member of the Audit Committee
|
Anne F. Ackerley, President
and Chief Executive Officer
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Brendan Kyne, Vice
President
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Neal J. Andrews, Chief
Financial Officer
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Jay M. Fife, Treasurer
|
Brian P. Kindelan, Chief
Compliance Officer
|
Howard B. Surloff,
Secretary
|
|
Investment
Advisor
|
BlackRock Advisors, LLC
|
Wilmington, DE 19809
|
|
Sub-Advisor
|
BlackRock Investment
Management, LLC
|
Plainsboro, NJ 08536
|
|
Custodians
|
State Street Bank and Trust
Company
1
|
Boston, MA 02101
|
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The Bank of New York Mellon
2
|
New York, NY 10286
|
|
Transfer
Agent
|
Common
Shares:
|
Computershare Trust
Companies, N.A.
1
|
Providence, RI 02940
|
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BNY Mellon Shareowner
Services
2
|
Jersey City, NJ 07310
|
|
Auction
Agent
|
Preferred
Shares:
|
The Bank of New York Mellon
|
New York, NY 10289
|
|
Accounting
Agent
|
State Street Bank and Trust
Company
|
Princeton, NJ 08540
|
|
Independent
Registered Public Accounting Firm
|
Deloitte & Touche
LLP
|
Princeton, NJ 08540
|
|
Legal
Counsel
|
Skadden, Arps, Slate,
Meagher & Flom
LLP
|
New York, NY 10036
|
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Address of
the Funds
|
100 Bellevue Parkway
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Wilmington, DE 19809
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|
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1
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For MEN and MUI.
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2
|
For APX, MUA, MHD, MUH, MUS
and MVT.
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Effective July 31, 2009,
Donald C. Burke, President and Chief Executive Officer of the Funds retired.
The Funds Board wishes Mr. Burke well in his retirement.
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Effective August 1, 2009,
Anne F. Ackerley became President and Chief Executive Officer of the Funds,
and Brendan Kyne became Vice President of the Funds.
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76
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SEMI-ANNUAL REPORT
|
OCTOBER 31, 2009
|
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A
dditional Information
|
|
|
Proxy Results
|
|
The Annual Meeting of
Shareholders was held on August 26, 2009 for shareholders of record on June 29,
2009 to elect director or trustee nominees of each Fund/Trust:
Approved the Class II
Directors/Trustees as follows:
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|
|
|
|
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|
|
|
|
|
|
|
|
|
|
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Richard
S. Davis
|
|
Frank
J. Fabozzi
|
|
James
T. Flynn
|
|
Karen
P. Robards
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|
|
|
|
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|
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Votes
For
|
|
Votes
Withheld
|
|
Votes
For
|
|
Votes
Withheld
|
|
Votes
For
|
|
Votes
Withheld
|
|
Votes
For
|
|
Votes
Withheld
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APX
|
|
17,327,327
|
|
660,298
|
|
17,327,327
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|
660,298
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|
17,275,753
|
|
711,872
|
|
17,243,745
|
|
743,880
|
|
MUA
|
|
18,694,027
|
|
803,094
|
|
18,694,027
|
|
803,094
|
|
18,735,146
|
|
761,975
|
|
18,748,138
|
|
748,983
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Approved the Directors as follows:
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G.
Nicholas Beckwith, III
|
|
Richard
E. Cavanagh
|
|
Richard
S. Davis
|
|
|
|
|
|
|
|
|
|
|
|
Votes
For
|
|
Votes
Withheld
|
|
Votes
For
|
|
Votes
Withheld
|
|
Votes
For
|
|
Votes
Withheld
|
|
|
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MEN
|
|
25,824,182
|
|
1,194,086
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|
25,797,168
|
|
1,221,100
|
|
25,721,162
|
|
1,297,106
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MHD
|
|
12,176,125
|
|
634,278
|
|
12,204,329
|
|
606,074
|
|
12,126,599
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683,804
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MUH
|
|
9,598,904
|
|
413,769
|
|
9,595,244
|
|
417,429
|
|
9,506,287
|
|
506,386
|
|
MUS
|
|
10,894,261
|
|
898,833
|
|
10,848,014
|
|
945,080
|
|
10,851,219
|
|
941,875
|
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MUI
|
|
33,801,462
|
|
1,901,852
|
|
33,792,030
|
|
1,911,284
|
|
33,789,362
|
|
1,913,952
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MVT
|
|
17,862,425
|
|
724,815
|
|
17,812,708
|
|
774,532
|
|
17,871,610
|
|
715,630
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Kent
Dixon
|
|
Frank
J. Fabozzi
|
|
Kathleen
F. Feldstein
|
|
|
|
|
|
|
|
|
|
|
|
Votes
For
|
|
Votes
Withheld
|
|
Votes
For
|
|
Votes
Withheld
|
|
Votes
For
|
|
Votes
Withheld
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
MEN
|
|
25,719,934
|
|
1,298,334
|
|
4,295
|
1
|
116
|
1
|
25,785,461
|
|
1,232,807
|
|
MHD
|
|
12,153,322
|
|
657,081
|
|
1,788
|
1
|
1
|
1
|
12,169,245
|
|
641,158
|
|
MUH
|
|
9,580,309
|
|
432,364
|
|
1,086
|
1
|
17
|
1
|
9,600,617
|
|
412,056
|
|
MUS
|
|
10,795,869
|
|
997,225
|
|
2,620
|
1
|
1
|
1
|
10,834,677
|
|
958,417
|
|
MUI
|
|
33,641,737
|
|
2,061,577
|
|
6,322
|
1
|
14
|
1
|
33,770,645
|
|
1,932,669
|
|
MVT
|
|
17,840,821
|
|
746,419
|
|
4,314
|
1
|
85
|
1
|
17,746,355
|
|
840,885
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
James
T. Flynn
|
|
Henry
Gabbay
|
|
Jerrold
B. Harris
|
|
|
|
|
|
|
|
|
|
|
|
Votes
For
|
|
Votes
Withheld
|
|
Votes
For
|
|
Votes
Withheld
|
|
Votes
For
|
|
Votes
Withheld
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
MEN
|
|
25,815,081
|
|
1,203,187
|
|
25,708,966
|
|
1,309,302
|
|
25,795,266
|
|
1,223,002
|
|
MHD
|
|
12,183,455
|
|
626,948
|
|
12,129,120
|
|
681,283
|
|
12,194,406
|
|
615,997
|
|
MUH
|
|
9,592,227
|
|
420,446
|
|
9,506,287
|
|
506,386
|
|
9,598,904
|
|
413,769
|
|
MUS
|
|
10,824,058
|
|
969,036
|
|
10,851,219
|
|
941,875
|
|
10,881,015
|
|
912,079
|
|
MUI
|
|
33,678,808
|
|
2,024,506
|
|
33,772,100
|
|
1,931,214
|
|
33,743,334
|
|
1,959,980
|
|
MVT
|
|
17,842,221
|
|
745,019
|
|
17,834,055
|
|
753,185
|
|
17,851,118
|
|
736,122
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
R.
Glenn Hubbard
|
|
W. Carl
Kester
|
|
Karen
P. Robards
|
|
|
|
|
|
|
|
|
|
|
|
Votes
For
|
|
Votes
Withheld
|
|
Votes
For
|
|
Votes
Withheld
|
|
Votes
For
|
|
Votes
Withheld
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
MEN
|
|
25,807,542
|
|
1,210,726
|
|
4,274
|
1
|
137
|
1
|
25,837,049
|
|
1,181,219
|
|
MHD
|
|
12,204,978
|
|
605,425
|
|
1,788
|
1
|
1
|
1
|
12,213,546
|
|
596,857
|
|
MUH
|
|
9,594,404
|
|
418,269
|
|
1,086
|
1
|
17
|
1
|
9,604,467
|
|
408,206
|
|
MUS
|
|
10,843,190
|
|
949,904
|
|
2,620
|
1
|
1
|
1
|
10,839,511
|
|
953,583
|
|
MUI
|
|
33,760,864
|
|
1,942,450
|
|
6,322
|
1
|
14
|
1
|
33,797,096
|
|
1,906,218
|
|
MVT
|
|
17,807,533
|
|
779,707
|
|
4,314
|
1
|
85
|
1
|
17,767,856
|
|
819,384
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1
Voted on
by holders of Preferred Shares only.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SEMI-ANNUAL
REPORT
|
OCTOBER 31, 2009
|
77
|
|
|
|
Additional Information (continued)
|
|
|
Dividend Policy
|
|
The Funds dividend policy is
to distribute all or a portion of their net investment income to their
shareholders on a monthly basis. In order to provide shareholders with a more
stable level of dividend distributions, the Funds may at times pay out less
than the entire amount of net investment income earned in any particular month
and may at times in any particular month pay out such accumulated but
undistributed income in addition to net investment income earned in that month.
As a result, the dividends paid by the Funds for any particular month may be
more or less than the amount of net investment income earned by the Funds
during such month. The Funds current accumulated but undistributed net investment
income, if any, is disclosed in the Statements of Assets and Liabilities, which
comprises part of the financial information included in this report.
Electronic Delivery
Electronic copies of most
financial reports are available on the Funds websites or shareholders can
sign up for e-mail notifications of quarterly statements, annual and
semi-annual reports by enrolling in the Funds electronic delivery program.
Shareholders Who Hold Accounts with Investment Advisors,
Banks or Brokerages:
Please contact your financial
advisor to enroll. Please note that not all investment advisors, banks or
brokerages may offer this service.
Householding
The Funds will mail only one
copy of shareholder documents, including annual and semi-annual reports and
proxy statements, to shareholders with multiple accounts at the same address.
This practice is commonly called householding and it is intended to reduce
expenses and eliminate duplicate mailings of shareholder documents. Mailings of
your shareholder documents may be householded indefinitely unless you instruct
us otherwise. If you do not want the mailing of these documents to be combined
with those for other members of your household, please contact the Funds at
(800) 441-7762.
Availability of Quarterly Schedule of Investments
The Funds file their complete
schedule of portfolio holdings with the Securities and Exchange Commission (the
SEC) for the first and third quarters of each fiscal year on Form N-Q. The
Funds Forms N-Q are available on the Commissions website at
http://www.sec.gov and may also be reviewed and copied at the SECs Public
Reference Room in Washington, DC. Information on the operation of the Public
Reference Room may be obtained by calling (202) 551-8090. The Funds Forms N-Q
may also be obtained upon request and without charge by calling (800) 441-7762.
Availability of Proxy Voting Policies and Procedures
A description of the policies
and procedures that the Funds use to determine how to vote proxies relating to portfolio
securities is available (1) without charge, upon request, by calling toll-free
(800) 441-7762; (2) at www.blackrock.com; and (3) on the SECs website at
http://www.sec.gov.
Availability of Proxy Voting Record
Information about how the
Funds voted proxies relating to securities held in the Funds portfolios during
the most recent 12-month period ended June 30 is available upon request and
without charge (1) at www.blackrock.com or by calling (800) 441-7762 and (2) on
the SECs website at http://www.sec.gov.
|
|
|
|
|
|
|
|
|
|
|
78
|
SEMI-ANNUAL REPORT
|
OCTOBER 31, 2009
|
|
|
|
Additional Information (concluded)
|
|
|
BlackRock Privacy Principles
|
|
BlackRock is committed to
maintaining the privacy of its current and former fund investors and individual
clients (collectively, Clients) and to safeguarding their non-public personal
information. The following information is provided to help you understand what
personal information BlackRock collects, how we protect that information and
why in certain cases we share such information with select parties.
If you are located in a
jurisdiction where specific laws, rules or regulations require BlackRock to
provide you with additional or different privacy-related rights beyond what is
set forth below, then BlackRock will comply with those specific laws, rules or
regulations.
BlackRock obtains or verifies
personal non-public information from and about you from different sources,
including the following: (i) information we receive from you or, if applicable,
your financial intermediary, on applications, forms or other documents; (ii)
information about your transactions with us, our affiliates, or others; (iii)
information we receive from a consumer reporting agency; and (iv) from visits
to our websites.
BlackRock does not sell or
disclose to non-affiliated third parties any non-public personal information
about its Clients, except as permitted by law or as is necessary to respond to
regulatory requests or to service Client accounts. These non-affiliated third
parties are required to protect the confidentiality and security of this
information and to use it only for its intended purpose.
We may share information with
our affiliates to service your account or to provide you with information about
other BlackRock products or services that may be of interest to you. In
addition, BlackRock restricts access to non-public personal information about
its Clients to those BlackRock employees with a legitimate business need for
the information. BlackRock maintains physical, electronic and procedural safeguards
that are designed to protect the non-public personal information of its
Clients, including procedures relating to the proper storage and disposal of
such information.
|
|
|
|
|
|
SEMI-ANNUAL
REPORT
|
OCTOBER 31, 2009
|
79
|
This report is transmitted to
shareholders only. It is not a prospectus. Past performance results shown in
this report should not be considered a representation of future performance.
Certain of the Funds have leveraged their Common Shares, which creates risks
for Common Shareholders, including the likelihood of greater volatility of net
asset value and market price of the Common Shares, and the risk that
fluctuations in the short-term dividend rates of the Preferred Shares,
currently set at the maximum reset rate as a result of failed auctions, may
affect the yield to Common Shareholders. Statements and other information
herein are as dated and are subject to change.
|
|
|
|
|
|
Item 2
|
Code of Ethics Not Applicable to this semi-annual
report
|
|
|
Item 3
|
Audit Committee Financial Expert Not Applicable to
this semi-annual report
|
|
|
Item 4
|
Principal Accountant Fees and Services Not
Applicable to this semi-annual report
|
|
|
Item 5
|
Audit Committee of Listed Registrants Not
Applicable to this semi-annual report
|
|
|
Item 6
|
Investments
|
|
(a) The registrants Schedule of Investments is
included as part of the Report to Stockholders filed under Item 1 of this
form.
|
|
(b) Not Applicable due to no such divestments during
the semi-annual period covered since the previous Form N-CSR filing.
|
|
|
Item 7
|
Disclosure of Proxy Voting Policies and Procedures
for Closed-End Management Investment Companies Not Applicable to this
semi-annual report
|
|
|
Item 8
|
Portfolio Managers of Closed-End Management
Investment Companies Not Applicable to this semi-annual report
|
|
|
Item 9
|
Purchases of Equity Securities by Closed-End
Management Investment Company and Affiliated Purchasers Not Applicable
|
|
|
Item 10
|
Submission of Matters to a Vote of Security Holders
The registrants Nominating and Governance Committee will consider nominees
to the board of directors recommended by shareholders when a vacancy becomes
available. Shareholders who wish to recommend a nominee should send
nominations that include biographical information and set forth the qualifications
of the proposed nominee to the registrants Secretary. There have been no
material changes to these procedures.
|
|
|
Item 11
|
Controls and Procedures
|
|
|
11(a)
|
The registrants principal executive and principal
financial officers or persons performing similar functions have concluded
that the registrants disclosure controls and procedures (as defined in Rule
30a-3(c) under the Investment Company Act of 1940, as amended (the 1940
Act)) are effective as of a date within 90 days of the filing of this report
based on the evaluation of these controls and procedures required by Rule
30a-3(b) under the 1940 Act and Rule 13(a)-15(b) under the Securities
Exchange Act of 1934, as amended.
|
|
|
11(b)
|
There were no changes in the registrants internal
control over financial reporting (as defined in Rule 30a-3(d) under the 1940
Act) that occurred during the second fiscal quarter of the period covered by
this report that have materially affected, or are reasonably likely to
materially affect, the registrants internal control over financial
reporting.
|
|
|
Item 12
|
Exhibits attached hereto
|
|
|
12(a)(1)
|
Code of Ethics Not Applicable to this semi-annual
report
|
|
|
12(a)(2)
|
Certifications Attached hereto
|
|
|
12(a)(3)
|
Not Applicable
|
|
|
12(b)
|
Certifications Attached hereto
|
|
|
|
Pursuant to the requirements of the Securities
Exchange Act of 1934 and the Investment Company Act of 1940, the registrant
has duly caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
|
|
|
|
BlackRock MuniHoldings Fund, Inc.
|
|
|
By:
|
/s/ Anne F. Ackerley
|
|
|
|
|
|
Anne F. Ackerley
|
|
|
Chief Executive Officer of
|
|
|
BlackRock MuniHoldings Fund, Inc.
|
|
|
|
Date: December 21, 2009
|
|
|
|
|
Pursuant to the requirements of the Securities
Exchange Act of 1934 and the Investment Company Act of 1940, this report has
been signed below by the following persons on behalf of the registrant and in
the capacities and on the dates indicated.
|
|
|
|
By:
|
/s/ Anne F. Ackerley
|
|
|
|
|
|
Anne F. Ackerley
|
|
|
Chief Executive Officer (principal executive officer)
of
|
|
BlackRock MuniHoldings Fund, Inc.
|
|
|
|
Date: December 21, 2009
|
|
|
|
|
By:
|
/s/ Neal J. Andrews
|
|
|
|
|
|
Neal J. Andrews
|
|
|
Chief Financial Officer (principal financial
officer) of
|
|
BlackRock MuniHoldings Fund, Inc.
|
|
|
|
Date: December 21, 2009
|
|
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