SCHEDULE 14A INFORMATION

Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934

Filed by Registrant [ X ]
Filed by a Party other than the Registrant [ ]

Check the appropriate box:

[X] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by
    Rule 14a-6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Sec. 240.14a-11(c) or Sec. 240.14a-12

                          FIRST OPPORTUNITY FUND, INC.
                (Name of Registrant as Specified In Its Charter)


                               Stephen C. Miller
                          2344 Spruce Street, Suite A
                            Boulder, Colorado 80302
                                 (303) 442-2156
                   (Name of Person(s) Filing Proxy Statement)

Payment of Filing Fee (Check the appropriate box):

[X]  No fee required.

[  ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.

     1)   Title of each class of securities to which transactions applies:

     2)   Aggregate number of securities to which transaction applies:

     3)   Per unit  price  or other  underlying  value of  transaction  computed
          pursuant to Exchange  Act Rule 0-11 (Set forth the amount on which the
          filing fee is calculated and state how it was determined):

     4)   Proposed maximum aggregate value of transaction:

     5)   Total fee paid:

[  ] Fee paid previously with preliminary materials.

[  ] Check box if any part of the fee is offset as provided  by  Exchange  Act
     Rule  0-11(a)(2)  and identity 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.

          1) Amount Previously Paid:

          2) Form, Schedule or Registration Statement No.:

          3) Filing Party:

          4) Date Filed:



[GRAPHIC OMITTED]                                             2344 Spruce Street
FIRST OPPORTUNITY FUND, INC.                                             Suite A
                                                        Boulder, Colorado  80302
                                                    www.firstopportunityfund.com

June ____, 2009

Dear Fellow Stockholder,

You are  invited to attend the 2009  Annual  Meeting  of  Stockholders  of First
Opportunity Fund, Inc. (the "Fund"),  which will be held on _____ , 2009 at 9:00
a.m.  _________  Daylight Time (local time),  at  _____________________________.
Details of the  business  to be  presented  at the  meeting  can be found in the
accompanying  Notice  of Annual  Meeting  and  Proxy  Statement.  This is a very
important meeting at which the Fund's board of directors (the "Board") is asking
you to approve significant, and we believe, positive changes to the Fund.

Since  the  Fund's  inception  in  1986,   Wellington  Management  Company,  LLP
("Wellington  Management") has served as the Fund's investment  adviser.  During
this time,  the Board believes that the Fund has delivered a strong track record
of  performance  relative to its peer groups and the relevant  indices.  At past
meetings,  members of the Board have  discussed  various ways of increasing  the
potential  future returns of the Fund including  investing in hedge funds.  As a
consequence  of  these   discussions,   ultimately  the  Board   concluded  that
stockholder  value could be enhanced by investing a  significant  portion of the
Fund's assets in hedge funds, including some hedge funds sponsored by Wellington
Hedge Management, LLC ("WHM") (an indirect wholly owned subsidiary of Wellington
Management)  and advised by Wellington  Management  (the "WHM Hedge Funds").  In
order to  accommodate  investing in any WHM Hedge Fund, the Fund must change its
investment  adviser to an entity or entities  that are not  affiliated  with the
current investment adviser, Wellington Management.

Accordingly,  you are being asked to approve new investment  advisory agreements
for the Fund. The Proxy Statement contains proposals for new advisory agreements
whereby Rocky Mountain Advisers,  L.L.C. ("RMA") and Stewart Investment Advisers
("SIA")  (together,  the "New Advisers") would serve as the Fund's  co-advisers,
and a new sub-advisory  agreement proposal for Wellington Management to serve as
a temporary investment  sub-adviser.  Under the new structure,  the New Advisers
would be  permitted  to invest  significant  assets of the Fund in hedge  funds,
including WHM Hedge Funds. Under the Fund's present advisory structure,  because
of  affiliate  prohibitions  under the  Investment  Company Act, the Fund cannot
invest in a hedge fund managed by Wellington  Management or its  affiliates.  We
believe this new structure,  if approved by you, will provide greater advantages
in terms of enhancing  investment  opportunity  and  flexibility  by  permitting
investments in hedge funds, including WHM Hedge Funds, and leveraging the talent
pools of the New Advisers and Wellington Management.

As part of the restructuring,  and to provide additional  flexibility to the New
Advisers,   the  Board  also   recommends   removing   the  Fund's   fundamental
concentration  policy  of  investing  at least 65% of its  assets  in  financial
services companies.

You are also  being  asked to  consider  a  proposal  which  would  classify  or
"stagger" the Board.  And finally,  the Proxy Statement  includes a proposal for
the election of the members of the Board.  The enclosed  Proxy  Statement  gives
details about each proposal which requires your approval and should be carefully
read and considered before you vote.

As Chairman of the Board, I encourage you to support all of the proposals. After
careful  and  extensive  review,  the  members  of  the  Board,   including  the
independent directors, unanimously approved and recommended to stockholders that
they approve all of the  proposals as detailed in the Proxy  Statement.  We hope
you plan to attend the Annual  Meeting.  Your vote is important.  Whether or not
you are able to attend,  it is important  that your shares be represented at the
Annual Meeting.  Accordingly,  we ask that you please sign, date, and return the
enclosed  Proxy Card or vote via  telephone  or the  Internet  at your  earliest
convenience.

On behalf of the Board and the  management of First  Opportunity  Fund,  Inc., I
extend our appreciation for your continued support.

Sincerely,

/s/ Joel W. Looney

Joel W. Looney

Chairman of the Board





[GRAPHIC OMITTED]                                             2344 Spruce Street
FIRST OPPORTUNITY FUND, INC.                                             Suite A
                                                        Boulder, Colorado  80302
                                                    www.firstopportunityfund.com


                    NOTICE OF ANNUAL MEETING OF STOCKHOLDERS

                         To Be Held on __________, 2009




To the Stockholders:

The Annual Meeting of Stockholders  (the "Meeting") of First  Opportunity  Fund,
Inc., a Maryland  corporation  (the "Fund"),  will be held on _________  2009 at
9:00     a.m.      ________      Daylight     Time     (local     time),      at
_______________________________,   to  consider   and  vote  on  the   following
proposals,  all of which are more  fully  described  in the  accompanying  Proxy
Statement:

1.   To approve or disapprove the proposed  investment  advisory  agreement with
     Rocky Mountain Advisers, L.L.C. ("RMA") (Proposal 1);

2.   To approve or disapprove the proposed  investment  advisory  agreement with
     Stewart Investment Advisers ("SIA") (Proposal 2);

3.   To approve or disapprove  the proposed  investment  sub-advisory  agreement
     with Wellington Management Company, LLP ("Wellington") (Proposal 3);

4.   To approve or  disapprove  eliminating  the  Fund's  fundamental  policy of
     investing at least 65% of its assets in financial  services  companies (the
     "Concentration Policy") (Proposal 4);

5.   To approve or disapprove  amending the  Concentration  Policy to reduce the
     Fund's minimum threshold for investing in financial  services  companies to
     25% (Proposal 5);

6.   To approve or disapprove an amendment to the Fund's charter classifying the
     board of directors of the Fund (the  "Board") into three  separate  classes
     and making related changes to the charter (Proposal 6);

7.   The election of directors of the Fund (Proposal 7); and

8.   To transact such other  business as may properly come before the Meeting or
     any adjournments and postponements thereof.

The Board of  Directors of the Fund has fixed the close of business on ________,
2009 as the  record  date  for the  determination  of  stockholders  of the Fund
entitled  to  notice  of and to vote at the  Meeting  and any  postponements  or
adjournments  thereof. The Proxy Statement,  Notice of Annual Meeting, and proxy
card are first being mailed to stockholders on or about _____________, 2009.

                                           By Order of the Board of Directors,

                                           /s/ Stephanie Kelley

                                           STEPHANIE KELLEY

                                           Secretary

 _____, 2009





--------------------------------------------------------------------------------
EVEN IF YOU PLAN TO  ATTEND  THE  MEETING,  STOCKHOLDERS  ARE  URGED TO SIGN THE
ENCLOSED PROXY CARD (UNLESS AUTHORIZING THEIR PROXY VIA TOUCH-TONE  TELEPHONE OR
THROUGH THE  INTERNET)  AND MAIL IT IN THE  ENCLOSED  ENVELOPE SO AS TO ENSURE A
QUORUM AT THE MEETING. THIS IS IMPORTANT WHETHER YOU OWN FEW OR MANY SHARES.
--------------------------------------------------------------------------------


                      INSTRUCTIONS FOR SIGNING PROXY CARDS



     The following general rules for signing proxy cards may be of assistance to
you and may avoid the time and expense to the Fund involved in  validating  your
vote if you fail to sign your proxy card properly.

     1.  Individual  Accounts:  Sign  your name  exactly  as it  appears  in the
registration on the proxy card.

     2. Joint Accounts: Either party may sign, but the name of the party signing
should conform exactly to a name shown in the registration.

     3. All Other  Accounts:  The capacity of the  individual  signing the proxy
card should be indicated unless it is reflected in the form of registration. For
example:




            Registration                                               Valid Signature
            ------------                                               ---------------
                                                                    
            Corporate Accounts
            (1)  ABC Corp.                                             ABC Corp.
            (2)  ABC Corp.                                             John Doe, Treasurer
            (3)  ABC Corp., c/o John Doe Treasurer                     John Doe
            (4)  ABC Corp. Profit Sharing Plan                         John Doe, Trustee


            Trust Accounts
            (1)  ABC Trust                                             Jane B. Doe, Trustee
            (2)  Jane B. Doe, Trustee, u/t/d 12/28/78                  Jane B. Doe


            Custodian or Estate Accounts
            (1)  John B. Smith, Cust.,                                 John B. Smith
                  f/b/o John B. Smith, Jr. UGMA
            (2)  John B. Smith                                         John B. Smith, Jr., Executor







[GRAPHIC OMITTED]                                             2344 Spruce Street
FIRST OPPORTUNITY FUND, INC.                                             Suite A
                                                        Boulder, Colorado  80302
                                                    www.firstopportunityfund.com


             QUESTIONS & ANSWERS REGARDING THE MEETING AND PROPOSALS


Question 1:   What changes are being proposed?

Answer:       In  addition  to  electing  the  Fund's  board of  directors  (the
"Board"),  stockholders are being asked to vote on other significant  proposals:
approving new  investment  co-advisory  agreements,  approving a new  investment
sub-advisory   agreement  and  eliminating  the  Fund's  fundamental  policy  of
investing at least 65% of its assets in financial services companies  (together,
the "Restructuring").  In addition,  the Board is asking stockholders to approve
an  amendment  to the  Fund's  charter  (the  "Charter")  so as to  classify  or
"stagger" the Board into three separate classes.

Question 2:   How does the Board recommend I vote on the Proposals?

Answer:       The Board,  including all of the directors who are not "interested
persons"  of the Fund (as  defined in the  Investment  Company  Act of 1940,  as
amended  (the  "1940  Act"))  (the  "Independent  Directors"),  has  unanimously
recommended that stockholders vote FOR all of the Proposals.  If no instructions
are indicated on your proxy,  the  representatives  holding proxies will vote in
accordance with the recommendations of the Board.

Question 3:   Who are the Fund's proposed new investment co-advisers?

Answer:       The  Board,  including  all  of  the  Independent  Directors,  has
unanimously   approved  and  recommends  that  stockholders  approve  investment
advisory  agreements (the "Advisory  Agreements") with Rocky Mountain  Advisers,
L.L.C.  ("RMA") and  Stewart  Investment  Advisers  ("SIA")  (together  the "New
Advisers").  If the Advisory  Agreements are approved by  stockholders,  the New
Advisers will act as co-advisers  to the Fund.  Both New Advisers are controlled
by trusts  and  entities  affiliated  with the  family  of  Stewart  R.  Horejsi
(together, the "Horejsi Affiliates"). The Horejsi Affiliates own [35.51]% of the
Fund's  outstanding  common  stock.  SIA and Boulder  Investment  Advisers,  LLC
("BIA") currently provide investment advisory services to three other closed-end
investment companies: Boulder Total Return Fund, Inc. (NYSE:BTF), Boulder Growth
& Income Fund, Inc. (NYSE:BIF),  and The Denali Fund Inc. (NYSE:DNY).  BIA is an
affiliate  of the  New  Advisers  and  the  management  and  staffing  of RMA is
substantially the same as that of BIA.

Question 4:   Who is the Fund's proposed investment sub-adviser?

Answer:       The  Board,  including  all  of  the  Independent  Directors,  has
unanimously  approved and recommends that  stockholders  approve a temporary and
limited investment  sub-advisory  agreement with Wellington  Management Company,
LLP  ("Wellington  Management")  (the  "Sub-Advisory   Agreement").   Wellington
Management  presently acts as the Fund's sole investment adviser and has done so
since  the  Fund's  inception.  Under  the  Sub-advisory  Agreement,  Wellington
Management  will be  responsible  for managing a discrete  portion of the Fund's
current  assets with respect to which it has  experience  and  familiarity  (the
"Legacy Holdings").  Wellington  Management will act in a sub-advisory  capacity
for a period of two years after the effective date of the  Restructuring  (i.e.,
the date on which stockholders  approve the Advisory Agreements and Sub-Advisory
Agreement)  (the  "Effective  Date").   Under  the  terms  of  the  Sub-Advisory
Agreement,  Wellington  Management  would be responsible for managing the Legacy
Holdings with a view towards continuing to hold the securities,  selling them in
its  discretion and assisting the New Advisers in gaining  familiarity  with the
Legacy Holdings.

Question 5:  Why does the Board think it is necessary to restructure the Fund?

Answer:  Currently, the Fund is subject to regulatory constraints that limit its
investment  flexibility as compared with hedge funds,  including  limitations on
leverage  (which  impacts the level of short sales and  derivatives  that can be
utilized),  and other  regulatory  requirements  that can  impede the use of new
instruments, including derivatives. Compared to registered investment companies,
hedge funds have greater  flexibility to engage in a broader array of investment
strategies,  such as the use of short sales, leverage and derivatives.  Over the
last several years, the Board has reviewed a number of options which would allow
the Fund to take greater advantage of the broader array of investment strategies
of  Wellington  Management  and its  investment  personnel.  The  Board  and New
Advisers believe that  investments in hedge funds,  including those sponsored by
Wellington Hedge Management LLC ("WHM"),  an indirect wholly owned subsidiary of
Wellington  Management  ("WHM Hedge  Funds"),  offer the Fund the  potential for
superior  risk-adjusted returns arising from the fewer regulatory constraints on
hedge funds, and their resulting broader  investment  options.  Under the Fund's
current  structure with Wellington  Management as the sole adviser,  the Fund is
prohibited by regulations under the 1940 Act from investing any of its assets in
a hedge fund managed by an affiliate of Wellington  Management.  Appointing  the
New Advisers as the Fund's primary  investment  advisers,  and  segregating  the
Fund's  assets  temporarily  into two portions - one managed by the New Advisers
and  the  other,  the  Legacy  Holdings,   temporarily   managed  by  Wellington
Management-   would  permit  the  New   Advisers,   independent   of  Wellington
Management's  influence  or control,  to invest  significantly  in hedge  funds,
including  WHM Hedge Funds.  The New Advisers  anticipate,  in the near term and
based on the WHM Hedge Funds currently  available and current market conditions,
that they would invest as much as 50% of the Fund's  assets in certain WHM Hedge
Funds which  emphasize  investments  in the  financial  services  sector and are
managed  in  whole  or  part  by the  Fund's  current  portfolio  manager.  This
percentage could increase or decrease over time.


Question 6:   Why is there a need  for Wellington  Management to  continue  in a
              sub-advisory capacity?

Answer:  The Fund is  presently  invested  primarily  in  securities  which were
analyzed,  purchased,  and are overseen by Wellington  Management in its current
capacity  as the  Fund's  sole  adviser.  The  New  Advisers  may  have  limited
familiarity with these securities.  It is anticipated that under the guidance of
the New  Advisers,  the  Fund  will  contribute  a number  of  these  securities
"in-kind"  in exchange for  interests  in several WHM Hedge Funds,  although the
extent to which an "in-kind"  contribution will occur cannot be determined until
after the Effective  Date. In addition,  on the Effective Date, the New Advisers
will assume responsibility for all of the cash or cash equivalent assets as well
as certain of the Fund's large cap equity  holdings  familiar and  acceptable to
the New Advisers.  All of the Fund's remaining assets for which the New Advisers
do  not  assume  responsibility  -  anticipated  to  be  fair-valued  and  other
securities with less market  liquidity  described above as the Legacy Holdings -
will  be  managed  by  Wellington  Management  in  accordance  with  the  Fund's
investment  objective but with a view solely towards  holding,  liquidating  the
assets to generate cash for the New Advisers to invest, and/or familiarizing the
New Advisers  with the Legacy  Holdings.  After the Effective  Date,  Wellington
Management  will not be responsible  for purchasing any new securities  directly
for the  Fund.  Although  there  is no set  time  frame  for  accomplishing  its
objectives,  by its terms, the proposed  sub-advisory  agreement with Wellington
Management  would  terminate  in two years,  and the New  Advisers  would assume
responsibility for managing any remaining Legacy Holdings at that time.

Question 7:  How will the co-adviser and sub-adviser arrangement work? Will they
             work together?

Answer:      Under the terms of the Advisory Agreements, RMA and SIA would serve
as  co-advisers to the Fund and would be jointly and severally  responsible  for
making  investment  decisions with respect to the Fund's holdings other than the
Legacy  Holdings,  including  any  decision  to invest  in the WHM Hedge  Funds,
supplying  investment  research  and  portfolio  management  services,   placing
purchase and sale orders for  portfolio  transactions,  making asset  allocation
decisions for the Fund and determining the extent, nature and application of the
Fund's  leverage,  if  any.  Under  the  terms  of the  Sub-Advisory  Agreement,
Wellington  Management  would serve as sub-adviser and be responsible for making
investment  decisions solely with respect to the Legacy Holdings,  although once
liquidated, the proceeds from selling the Legacy Holdings will be transferred to
the New Advisers for investment.

Because the New Advisers could decide to invest assets in WHM Hedge Funds at any
time,  the New  Advisers and  Wellington  Management  will not work  together or
collaborate on their respective portfolios. Wellington Management will have sole
investment  discretion  with  respect  only to  whether to  continue  to hold or
liquidate  the Legacy  Holdings and the New Advisers  will have sole  investment
discretion  with respect to the remaining  assets,  including the WHM Hedge Fund
investments  and any proceeds from the sale of Legacy  Holdings.  However,  as a
sub-adviser  to the Fund,  Wellington  Management  will be  subject  to  general
oversight and monitoring by RMA and SIA as the Fund's co-advisers.

Question 8:  Will the Fund's expenses be affected by the Advisory Agreements and
             the Sub-Advisory Agreement?

Answer:      Yes. The Fund currently pays Wellington  Management an advisory fee
of 1.125% on the Fund's net assets up to and including  $150  million;  1.00% on
net assets  between  $150  million  and $300  million;  and 0.875% on net assets
exceeding $300 million (the "Current Fee"). As proposed, the Advisory Agreements
contemplate  the New Advisers being paid an investment  advisory fee of 1.25% on
the Fund's net assets,  including  leverage,  although the Fund currently has no
leverage.  However, under the Advisory Agreements,  the New Advisers would waive
(i) up to 1.00% on the  "look-through"  advisory  fees (but not the  performance
fees) paid to WHM with respect to any investment by the Fund in a WHM Hedge Fund
and  (ii)  all  fees  paid by the  Fund to  Wellington  under  the  Sub-Advisory
Agreement. Under the Sub-Advisory Agreement, Wellington Management would receive
fees from the Fund based on the  Current  Fee  schedule,  as  applied  only with
respect to the assets represented by the Legacy Holdings.


Based on current  assets under  management,  and the New  Advisers'  anticipated
investment of  approximately  50% of the Fund's  assets in WHM Hedge Funds,  the
advisory  fees  paid  directly  by the  Fund  would  decrease  by  approximately
$_________  annually  versus  the  Current  Fee ($  ______  for the  year  ended
________),  and the Fund's expense ratio would decrease from its current rate of
______ % to ______%.  However,  on a  "look-through"  basis  (i.e.,  taking into
consideration  the  fees  charged  by the  WHM  Hedge  Funds),  advisory-related
expenses  will increase  slightly - by  approximately  $______________  annually
(excluding  performance  fees). On a  "look-through"  basis, the overall expense
ratio would increase from its current level of ______% to approximately  _____%,
not including the impact of any  performance fee paid to WHM. This expense ratio
may or may not fluctuate  depending on fixed expenses as well as the size of the
Fund. Hedge fund managers,  including WHM,  typically are paid a 20% performance
fee with respect to annual gains generated in their hedge funds. Thus, under the
Restructuring,  the  increase in  advisory-related  fees could be  significantly
higher when there are net gains in the hedge fund.  Since  performance fees will
necessarily  vary  from  year to year,  they  have not  been  factored  into the
foregoing  estimated  fee increase or expense ratio  estimates.  For the sake of
comparison,  if the Fund  invests 50% of its current  assets in WHM Hedge Funds,
and during the first year after the Effective  Date the value of WHM Hedge Funds
increase  by  10%,  and all the  Fund's  other  assets  remain  unchanged,  on a
"look-through" basis, the Fund would pay an additional  $___________ in advisory
related  fees.  The Board  believes  that because the WHM Hedge Funds offer more
investment  flexibility and the  possibility of superior risk adjusted  returns,
the likelihood that the Fund will pay higher look-through  advisory-related fees
is an acceptable tradeoff.

Question 9: Will the Restructuring affect the Fund's investment objective or any
            fundamental policies?

Answer:     The  Restructuring  will not affect the Fund's investment  objective
of "total return". However, as part of the Restructuring, stockholders are asked
to remove the Fund's  fundamental policy of investing at least 65% of its assets
in financial services companies (the "Concentration Policy"). The Board believes
that the 65% minimum  investment  requirement  in financial  services  companies
places a  disproportionate  industry risk on the Fund and  stockholders.  If the
Restructuring  is approved  and the  Concentration  Policy  eliminated,  the New
Advisers  will be  required  to reduce  the  Fund's  exposure  to the  financial
services industry to comply with this change.

The Fund will  continue  to have the  flexibility  to invest in a wide  range of
investments, which could include, among others, common stocks, debt instruments,
preferred stocks,  securities convertible into common stocks,  interest rate and
credit  default  swaps,  and  cash  and  cash  equivalents.   In  addition,  the
Restructuring  is  intended  to provide  the Fund with the  ability to invest in
hedge  funds,  including  the  WHM  Hedge  Funds,  which  carry  a set of  risks
particular  to  investing  in hedge  funds and which are  discussed  below.  The
Restructuring  and,  in  particular,  removal of the  Concentration  Policy,  is
intended to give the Fund and New Advisers  additional  flexibility in investing
the Fund's assets.

Question 10:  Why are there two  proposals (Proposals  4 and 5) dealing with the
              Concentration Policy?

Answer:  As  discussed  above,  Proposal  4  contemplates  the  removal  of  the
Concentration  Policy in its entirety as part of the  Restructuring  so that the
New Advisers will have additional  flexibility when investing the Fund's assets.
Proposal 5 is a  precautionary  proposal  which would become  effective  only if
stockholders do not approved the  Restructuring  (i.e.,  Proposals 1 through 4).
Proposal 5 would  amend the  Concentration  Policy to reduce the Fund's  minimum
holdings in financial  services companies from 65% to 25% (subject to the Fund's
ability to take  defensive  measures to preserve  value).  Regardless of whether
Wellington  Management or the New Advisers are the primary advisers to the Fund,
the Board  believes that the 65% investment  requirement  in financial  services
companies places a  disproportionate  industry risk on the Fund and stockholders
and needs to be eliminated or at the very least significantly reduced.

Question 11:  Are the separate  proposals  of the Restructuring  conditioned  on
              stockholder approval of the other proposals (e.g., approval of the
              Advisory Agreements and Sub-Advisory Agreement)?

Answer:  Passage of Proposals 1 and 2 (approval of the Advisory  Agreements) and
Proposal 3 (approval of the Sub-Advisory  Agreement) are conditioned on all such
Proposals  being  approved  by  stockholders  (i.e.,  if one  fails  to  achieve
stockholder  approval,  all  three  fail).  However,  the  Board  believes  that
eliminating  or  amending  the  Concentration  Policy is a change that should be
implemented  regardless  of whether  Proposals 1 through 3 are  approved.  Thus,
stockholders  are  presented  with  two  alternative   proposals  regarding  the
Concentration  Policy,  and passage of Proposal 4 (eliminating the Concentration
Policy) will be conditioned on stockholder approval of Proposals 1 through 4. In
other words, if stockholders  approve  Proposal 4 but not Proposals 1 through 3,
Proposal 4 will not become  effective.  Proposal 5 (amending  the  Concentration
Policy) will be conditioned  upon  stockholder  approval of Proposal 5 and their
failure to approve  Proposals 1 through 3. Thus,  if  stockholders  approve both
Proposals  4 and 5 and  Proposals  1  through  3 pass,  Proposal  4 will  become
effective  and  Proposal  5 will not.  However,  if  stockholders  approve  both
Proposals 4 and 5, but Proposals 1 through 3 do not pass, Proposal 5 will become
effective  and  Proposal  4  will  not.  Ultimately,  the  Board  believes  that
eliminating or significantly reducing the minimum threshold of the Concentration
Policy  will  mitigate  industry  risk and provide  the Fund's  adviser(s)  with
additional  flexibility and ease the Fund's future administrative  burdens going
forward.  If  the  Restructuring   Proposals  are  not  adopted  and  Wellington
Management  stays on as investment  adviser to the Fund , Wellington  Management
intends to retain its primary focus on  investments  in the  financial  services
industry.  Proposal 5 would give Wellington Management additional flexibility to
invest outside of the financial  services  sector,  including  during periods of
market turmoil.


Question 12:  Describe  any other  anticipated  change to the Fund's  investment
              strategies or operations and explain the  anticipated  benefits to
              the Fund and its stockholders of any such change.

Answer:  The primary impetus for the  Restructuring  is to provide the Fund with
more  flexibility  and  increased  access  to hedge  funds,  including  the less
constrained and broader  investment tools of Wellington  Management,  the Fund's
current portfolio manager, by making investments in certain WHM Hedge Funds that
emphasize  investments in the financial  services  sector.  The New Advisers are
considering making a significant  allocation  (approximately  50%) of the Fund's
assets to WHM Hedge Funds,  once the  Restructuring is fully  implemented.  This
would  represent  an obvious  change in  investment  approach as compared to the
Fund's  historical  universe of investments.  The Board believes that giving the
Fund the ability to invest  significantly  in hedge funds,  including  WHM Hedge
Funds,  ultimately  offers more  investment  flexibility  and the  potential for
superior risk adjusted returns.

Question 13: Will  the  risk  profile  of the Fund  change  as a  result  of the
             Restructuring and, in particular, as a result of investing
             significantly in hedge funds?

Answer:      Yes. Because the New Advisers anticipate investing substantially in
hedge  funds,  including  initially  in the WHM Hedge  Funds,  the Fund could be
exposed to, among other things,  the  increased  leverage and  consequent  risks
(with  potential  for  increased  returns)  resulting  from hedge  funds' use of
certain  investment  strategies  not  currently  used  by the  Fund.  Therefore,
stockholders  should be aware of the general risks  associated with investing in
hedge funds.

Hedge funds are unregistered  private  investment funds or pools that invest and
trade  in  many  different  markets,   investment   strategies  and  instruments
(including  securities,  non-securities  and derivatives) and are NOT subject to
the  same  regulatory  and  oversight   requirements  as  registered  investment
companies,  including  requirements to provide investors with periodic reporting
and certain standardized pricing and valuation information.  Hedge fund offering
documents  are not  reviewed or approved by federal or state  regulators.  Hedge
funds may be leveraged  and their  performance  may be volatile.  A hedge fund's
manager generally has absolute trading authority over the hedge fund. Some hedge
funds may involve  structures or strategies that may cause delays in the receipt
by their investors of important tax information. Hedge funds may provide limited
transparency  regarding  underlying  investments.  Hedge  funds  may  execute  a
substantial  portion of trades on foreign exchanges which could mean higher risk
because they are subject to less regulation than U.S.  exchanges and are subject
to adverse political or economic events in their respective markets.  The Fund's
investment  in a  hedge  fund  may be  illiquid  and  there  may be  significant
restrictions on liquidating or transferring interests in a hedge fund. There are
no secondary  markets for the Fund's  investment  in any hedge fund and none are
expected to develop.  A hedge fund's ongoing  advisory and performance  fees and
expenses may be substantial  regardless of positive trading profits. Hedge funds
may invest in startup companies,  small cap companies and distressed situations.
Hedge  funds may  engage in  investment  techniques  such as short  selling  and
investing  in futures  contracts  and may invest in certain  securities  such as
options, warrants,  convertible securities and non-U.S.  securities. Hedge funds
may  invest in  interest  rate and  credit  default  swaps and other  derivative
instruments.  Hedge  funds  may  invest in  securities  denominated  in  foreign
currencies thus exposing their investors to foreign  currency risk. This summary
is not a complete list of the risks involved in investing in a hedge fund.



Question 14:  Describe the manner in which the current  investment  portfolio of
              the Fund would be modified in connection with the Restructuring
              and whether there will be any associated adverse costs or tax
              consequences.

Answer:       Initially the New Advisers are considering  investing up to 50% of
the Fund's assets in two WHM Hedge Funds (up to 25% of the Fund's assets in each
WHM Hedge Fund).  In addition,  the New  Advisers may in their  discretion  make
additional  investments  of up to 5% of  the  Fund's  assets  (at  the  time  of
investment) in other hedge funds,  including WHM Hedge Funds.  Also as discussed
above,  removing  the  Concentration  Policy  will allow the New  Advisers  more
flexibility  in  investing  in hedge  funds and  managing  the Fund's  remaining
portfolio,  allowing  the New  Advisers  to invest the  Fund's  assets in a more
diversified array of industries and investments,  both domestic and abroad.  Due
to the recent  market  volatility  and the credit  crisis,  it is  difficult  to
predict where or in what industries the New Advisers will focus.

As discussed  above,  Wellington  Management,  in its capacity as a  sub-adviser
after  the  Restructuring,  will be  charged  with  the task of  holding  and/or
liquidating the Legacy Holdings in a timely and prudent manner,  generating cash
for the New  Advisers to invest  opportunistically.  With  respect to the Legacy
Holdings,  an adviser  normally would be concerned  about the tax consequence of
aggressively  liquidating  a large  portion  of the Fund's  portfolio.  However,
because the Fund has significant  unrealized  capital losses (i.e., $121 million
as of 3/31/09)  and  capital  loss carry  forwards  (i.e.,  $25.8  million as of
3/31/09),  the sale of existing portfolio  securities is not expected to trigger
net capital  gains.  Also, it is anticipated  that a significant  portion of the
Fund's current  portfolio may be able to be exchanged  "in-kind" for an interest
in the WHM Hedge Funds without the expectation of immediate tax consequences. In
these  circumstances,  the Fund would  retain  its cost  basis in the  "in-kind"
securities  and would  realize a gain or loss only when the hedge fund sells the
respective in-kind securities. The extent of any in-kind contribution,  however,
cannot be determined until after the Effective Date.

Question 15:  What are the  characteristics  of the hedge funds in which the New
              Advisers anticipate investing?

Answer:       Presently,  the New Advisers are considering  investing in two WHM
Hedge Funds:

     -    The first takes aggressive, long positions in undervalued companies in
          the  financial  services and related  sectors that the fund's  manager
          believes offer attractive investment opportunities. Such opportunities
          may be created by market fragmentation, the trend toward consolidation
          in the financial  services sector,  the relative  obscurity of smaller
          companies,  or  investor  misunderstanding  of  fundamental  financial
          characteristics.  The fund may also take short  positions in financial
          services  companies and related  sectors as a hedge  against  specific
          long positions and to take advantage of specific opportunities created
          by market  disequilibrium.  Securities  for the portfolio are selected
          primarily  on the  basis of  fundamental  value.  The  fund's  manager
          focuses on companies with strong fundamental  characteristics that are
          undervalued  relative  to  their  long-term  potential,   specifically
          analyzing the  relationship  between a company's  underlying  earnings
          power and the market  price of the stock.  Attractive  valuations  are
          often found in securities  issued by institutions  that are not widely
          followed by institutional  research analysts. The key objective of the
          fund is to achieve  superior  total returns on an absolute  basis.  In
          order to achieve this goal, the fund makes investments  throughout the
          capital  structure  (e.g.,  preferred stock,  convertible  securities,
          fixed  income   securities)   and  invests  in  companies  with  solid
          fundamentals and attractive  valuations,  while shorting securities in
          those  companies  with  unsustainable  valuations.  The  fund may also
          utilize leverage and derivatives,  including listed and unlisted index
          and stock options, to hedge positions and enhance returns.

     -    The second seeks capital appreciation through investments in both long
          and  short  positions  in the  financial  services  sector  as well as
          through the use of leverage.  The fund is managed by four  experienced
          investment  managers  as a team.  The  investment  team  takes a broad
          approach  to the  global  finance  sector  and  invests  in  insurance
          companies,    securities   brokers,    asset   management   companies,
          thrifts/building  societies,  banks,  and  companies  that  serve  the
          finance sector. Portfolio concentration in a sub-sector or sub-sectors
          is  determined  by the number and  risk/reward  profiles of  available
          opportunities  as well as  general  market  conditions.  The  managers
          employ a strict bottom-up approach and make investment decisions based
          upon market valuations relative to company fundamentals. The objective
          of the fund is to seek capital  appreciation  over the long-term.  The
          fund's manager uses allocation of capital,  leverage,  and the ability
          to  short  sell  securities  as  its  primary  tools  in  implementing
          investment conclusions as to the relative attractiveness of individual
          securities.  The fund may also utilize  derivatives,  including listed
          and unlisted index and stock options,  to hedge  positions and enhance
          returns.  It is expected that the fund's  portfolio  will generally be
          net long.


Question 16: What will be the investment approach of the New Advisers?

Answer:      In the near term, in addition to the anticipated investments in the
WHM Hedge Funds,  the New Advisers expect to invest  primarily in common stocks,
including dividend paying common stocks such as those issued by utilities,  real
estate investment trusts ("REITs") and regulated  investment companies under the
Code (as  defined  below)  ("RICs").  The Fund may also  invest in fixed  income
securities  such as U.S.  government  securities,  preferred  stocks  and bonds.
Although  the Fund  expects to invest  primarily  in  securities  of  U.S.-based
companies,  it may invest without  limitation in foreign  equity  securities and
sovereign debt, in each case denominated in foreign currency.

The New Advisers  intend to focus on  securities  issued by  companies  across a
broad  range of  industries.  The Fund will not  necessarily  be a  "large-cap",
"mid-cap" or "anything-cap"  fund since the New Advisers believe it is unwise to
restrict  investments  to any  particular  size company.  When the Fund makes an
investment in a common stock,  it may take large  positions  consistent with its
status as a  "non-diversified"  investment company. It is also likely to hold on
to its investments for a long time, allowing the investments to do what they are
expected to do - earn money and grow. The New Advisers  believe such an approach
is in the long-term best interest of  stockholders  as, the longer  stockholders
hold their investment without selling, the longer they defer paying taxes on any
gains.  Since the Horejsi Affiliates own such a large stake in the Fund, the New
Advisers are not likely to invest in anything the Horejsi  Affiliates  would not
buy for themselves. In the long run, the New Advisers think that flexibility and
value-type investing will produce the best overall total return.

Question 17:  What is a  "classified  board"  and why is the Board  recommending
              stockholders approve a classified structure to the Board?

Answer:       A "classified  board",  also  referred to as a "staggered  board",
consists  of members who are  elected to  separate  classes,  with each class of
directors  serving a  staggered  three-year  term.  Each class of  directors  is
elected in successive terms (i.e., one class is elected in 2009 to serve through
2012,  one class is elected in 2010 to serve until 2013,  and so on).  The Board
recognizes  that the  overall  effect of  Proposal 6 will be to make any hostile
attempt to take control of the Fund through a proxy contest more  difficult.  In
order to change the  membership  of a majority  of the  Directors,  at least two
years will be required.  The Board  believes  that this will  encourage  persons
seeking to acquire  control  of the Fund to engage in  good-faith,  arm's-length
negotiations with the Board. The Board also believes that ensuring continuity of
service among the Board members and three-year  commitments for Board service is
desirable  and that the  Proposal  will  facilitate  the Fund's  attracting  and
retaining   qualified  Board  candidates  and  hiring  and  retaining  competent
management  personnel  by  increasing  the  likelihood  of a  stable  employment
environment.

The Board  understands  that the Fund's  largest  stockholders  have a long-term
investment horizon and its remaining  stockholder base generally is comprised of
many  stockholders  holding  smaller  positions who  similarly  have a long-term
investment  horizon.  A primary reason that these  stockholders  invest with the
Fund  is  the  potential  for  long-term  capital   appreciation   coupled  with
responsible and deliberative asset management.  Neither the Board nor the Fund's
stockholders  contemplate or desire sudden, drastic changes in the makeup of the
Fund's investment portfolios.

Question 18:  How do the  Fund's  largest  stockholders  intend to vote on these
              Proposals?

Answer:       The Fund's largest  stockholders  (described above as the "Horejsi
Affiliates")  intend  to vote in  favor  of the  Restructuring  and  each of the
Proposals.





[GRAPHIC OMITTED]                                             2344 Spruce Street
FIRST OPPORTUNITY FUND, INC.                                             Suite A
                                                        Boulder, Colorado  80302
                                                    www.firstopportunityfund.com


                         ANNUAL MEETING OF STOCKHOLDERS


                                 ________, 2009


                                 PROXY STATEMENT


This proxy statement  ("Proxy  Statement") for First  Opportunity  Fund, Inc., a
Maryland   corporation  (the  "Fund"),  is  furnished  in  connection  with  the
solicitation  of proxies by the Fund's  board of  directors  (collectively,  the
"Board" and  individually,  the  "Directors")  for use at the Annual  Meeting of
Stockholders  of the  Fund to be  held on  ____________  at  9:00  a.m.  Pacific
Daylight Time (local time), at  ___________________  and at any adjournments and
postponements   thereof  (the   "Meeting").   A  Notice  of  Annual  Meeting  of
Stockholders and proxy card for the Fund accompany this Proxy  Statement.  Proxy
solicitations will be made, beginning on or about June _____, 2009, primarily by
mail, but proxy solicitations may also be made by telephone,  by Internet on the
Fund's  website,  or through email  communications  with  stockholders  who have
enrolled in the Fund's electronic duplicate communications  service(see Footnote
+/- below),  telegraph or personal interviews conducted by officers of the Fund,
_______________________,  the Fund's proxy  solicitor  and  Computershare  Trust
Company,  N.A., the transfer agent of the Fund. The costs of proxy  solicitation
are expected to be approximately $________.  Proxy solicitation expenses as well
as expenses  incurred in connection with the preparation of this Proxy Statement
and its  enclosures  will be paid by the  Fund.  The Fund  also  will  reimburse
brokerage  firms  and  others  for their  expenses  in  forwarding  solicitation
material to the beneficial  owners of its shares.  The Board has fixed the close
of  business on June___,  2009 as the record  date (the  "Record  Date") for the
determination  of stockholders  entitled to notice of and to vote at the Meeting
and any postponements or adjournments thereof.

The Annual Report of the Fund,  including audited  financial  statements for the
fiscal year ended March 31, 2009,  has been mailed to  stockholders.  Additional
copies of the Fund's most  recent  Annual  Report are  available  upon  request,
without charge,  by writing to First Opportunity Fund, Inc., 2344 Spruce Street,
Suite A, Boulder,  Colorado  80302 or by calling (877)  561-7914.  The report is
also viewable online at the Fund's website at www.firstopportunityfund.com.  The
Annual Report is not to be regarded as proxy solicitation material.

One Proxy  Statement  is being  delivered  to multiple  stockholders  sharing an
address,  unless the Fund has received contrary instructions from one or more of
the stockholders.  The Fund will undertake to deliver promptly,  upon written or
oral request,  a separate  copy of the proxy  statement to any  stockholder  who
contacts  the  Fund  in  writing,  or by  phone,  as  stated  above.  Similarly,
stockholders  sharing an address can  request  single  copies of a future  proxy
statement or annual  report by  contacting  the Fund in writing or by contacting
the Fund's transfer agent.

An electronic  copy of the Notice of Annual Meeting of  Stockholders,  the Proxy
Statement,  and a proxy  card  for the  Fund for  your  vote at the  Meeting  is
available online at www.firstopportunityfund.com.


-------------------------------
Footnote:

+/-  Stockholders  can receive  TIMELY  information  about the Fund  quickly and
conveniently!  The Fund offers the option for  electronic  delivery of DUPLICATE
copies of all  stockholder  communications.  You can choose the  timeliness  and
convenience  of receiving  and  reviewing  stockholder  communications,  such as
annual  reports and proxy  statements,  online in addition  to, but more quickly
than, the hard copies you currently  receive in the mail. If you sign up for the
option, you will receive an e-mail notification when stockholder  communications
are  available,  containing  a link to  those  communications  on the  Internet.
HOWEVER,  presently  you will not be able to vote your shares  using these links
and will have to wait to vote using the hard  copies you  receive in the mail or
electronically  from your broker, the transfer agent or proxyvote.com.  For more
information, please visit the Fund's website at www.firstopportunityfund.com.



Wellington  Management Company, LLP ("Wellington Management")at 75 State Street,
Boston,  Massachusetts 02109,  currently serves as the investment adviser to the
Fund. Fund Administrative Services, L.L.C. ("FAS"), 2344 Spruce Street, Suite A,
Boulder,  Colorado 80302,  and ALPS Fund Services,  Inc.,  1290 Broadway,  Suite
1100,  Denver,   Colorado  80203,  serve  as   co-administrators  to  the  Fund.
Computershare Trust Company,  N.A. acts as the transfer agent to the Fund and is
located at 250 Royall Street, Canton, Massachusetts 02021.

If the enclosed proxy is properly executed and returned by ______________, 2009,
in time to be voted at the Meeting,  the Shares (as defined  below)  represented
thereby will be voted in accordance with the instructions marked thereon. Unless
instructions to the contrary are marked thereon,  a proxy will be voted FOR each
of the  Proposals  and, in the  discretion  of the proxy  holders,  on any other
matters that may properly come before the Meeting. Any stockholder who has given
a proxy has the right to revoke it at any time prior to its  exercise  either by
attending  the Meeting and casting his or her votes in person or by submitting a
letter of revocation or a later-dated proxy to the Fund's secretary at the above
address prior to the date of the Meeting.

A quorum of the Fund's  stockholders  is required for the conduct of business at
the  Meeting.  Under  the  bylaws  of the  Fund  (the  "Bylaws"),  a  quorum  is
constituted  by the  presence in person or by proxy of the holders of a majority
of the outstanding shares of the Fund as of the Record Date. In the event that a
quorum is not present at the Meeting,  the persons  named as proxies may propose
and vote for one or more adjournments of the Meeting. An adjournment for lack of
a quorum  requires  the  affirmative  vote of the  holders of a majority  of the
shares entitled to vote at the Meeting and present in person or by proxy. In the
event  that a quorum is present  but  sufficient  votes to  approve  one or more
Proposals  are not  received,  the persons named as proxies may propose and vote
for one or more  adjournments  of the Meeting to permit further  solicitation of
proxies with respect to any  Proposal  that did not receive the votes  necessary
for its passage.  With respect to those Proposals for which there is represented
a  sufficient  number of votes in favor,  actions  taken at the Meeting  will be
approved and implemented  irrespective of any  adjournments  with respect to any
other  Proposals.  Any such  adjournment  will require the affirmative vote of a
majority of votes cast on the matter at the Meeting. If a quorum is present, the
persons named as proxies will vote those proxies which they are entitled to vote
FOR any  Proposal in favor of such an  adjournment  and will vote those  proxies
required to be voted AGAINST any Proposal against any such adjournment.

The Fund has one class of stock:  common stock,  par value $0.001 per share (the
"Common  Stock" or the  "Shares").  On the Record  Date,  there were  28,739,389
Shares issued and outstanding. Each Share is entitled to one vote at the Meeting
and fractional Shares are entitled to proportionate shares of one vote.

SECURITY  OWNERSHIP OF CERTAIN BENEFICIAL OWNERS. The following table sets forth
certain information  regarding the beneficial  ownership of the Shares as of the
Record  Date by each person who is known by the Fund to  beneficially  own 5% or
more of the Common Stock.




                                              Number of Shares          Number of Shares            Percentage
              Name of Owner                  Directly Owned (1)        Beneficially Owned       Beneficially Owned
------------------------------------------ ----------------------- --------------------------- ----------------------
                                                                                               
Stewart R. Horejsi Trust No. 2 (1)*                 2,169,602              2,169,602                    7.55%
Ernest Horejsi Trust  No. 1B (1)*                   1,271,427              1,271,427                    4.42%
Lola Brown Trust No. 1B (1)*                        3,000,693              3,000,693                   10.44%
Mildred B. Horejsi Trust (1)*                       2,025,122              2,025,122                    7.05%
Susan L. Ciciora Trust (1)*                         1,737,573              1,737,573                    6.05%
                                           ----------------------- --------------------------- ----------------------
                                           ----------------------- --------------------------- ----------------------
Aggregate Shares Owned by Horejsi                  10,204,417             10,204,417                   35.51%
Affiliates (defined below)
------------------------------------------ ----------------------- --------------------------- ----------------------
------------------------------------------ ----------------------- --------------------------- ----------------------
T. Rowe Price Associates, Inc.**                    2,171,631              2,171,631                    7.56%


*    The address of each listed owner is c/o The Alaska Trust Company, LLC, 1029
     West Third Avenue, Ste 400 Anchorage, AK 99501.

**   These  securities  are  owned  by  various   individual  and  institutional
     investors for which T. Rowe Price  Associates,  Inc.  ("Price  Associates")
     serves as investment  adviser with power to direct  investments and/or sole
     power to vote the securities. For purposes of the reporting requirements of
     the Securities and Exchange Act of 1934, Price Associates is deemed to be a
     beneficial owner of such securities;  however,  Price Associates  expressly
     disclaims  that it is, in fact, the  beneficial  owner of such  securities.
     Shares  stated are as reported in a Schedule 13G Amendment No. 5 filed with
     the Securities and Exchange Commission on February 12, 2009.



(1)  Direct Ownership.  The Susan L. Ciciora Trust (the "Susan Trust"),  Mildred
     B. Horejsi Trust (the "Mildred Trust"), Lola Brown Trust No. 1B (the "Brown
     Trust"),  Ernest  Horejsi  Trust No. 1B (the "EH  Trust"),  and  Stewart R.
     Horejsi  Trust No. 2 ("SRH  Trust")  directly own the shares  indicated for
     such entity in the table above, totaling 10,204,417 (35.51%).  These trusts
     (the  "Trusts")  along with  Alaska  Trust  Company  ("ATC") and Stewart R.
     Horejsi are, as a group,  considered  to be a "control  person" of the Fund
     (as that term is defined in Section  2(a)(9) of the Investment  Company Act
     of 1940,  as amended).  These  entities and other trusts or companies  with
     interlocking trusteeship,  management and/or common ownership may be deemed
     to indirectly own additional  Fund shares,  which are included in the table
     above.  ATC is (i) the sole trustee of the Susan Trust;  (ii) together with
     Brian  Sippy and  Susan  Ciciora  (Mr.  Horejsi's  daughter),  one of three
     trustees of the Mildred Trust; and (iii) together with Larry Dunlap and Ms.
     Ciciora,  one of three  trustees  of both the Brown Trust and the EH Trust.
     ATC is a commercial  trust company  organized under the laws of Alaska,  of
     which 98% of the outstanding and voting securities are owned by the Stewart
     West Indies Trust ("West Indies Trust").  Douglas J. Blattmachr,  President
     of ATC,  owns  2% of the  outstanding  shares  of ATC.  The  Directors  and
     officers of ATC are Larry L.  Dunlap  (Director),  Stephen C. Miller  (Vice
     President and Director),  Mr. Blattmachr (President and Director),  Brandon
     Cintula   (Vice   President   and   Director),    and   Richard    Thwaites
     (Secretary/Treasurer  and  Director).  ATC, its officers and its  directors
     disclaim beneficial ownership of shares owned directly by the Trusts.



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

Solely for ease of reference,  the Susan Trust,  Mildred Trust,  Brown Trust, EH
Trust, ATC, SRH Trust, as well as other trusts and entities  associated with the
Horejsi family are collectively  referred to herein as the "Horejsi Affiliates".
Information  as  to  beneficial   ownership  above  has  been  obtained  from  a
representative of the beneficial  owners; all other information as to beneficial
ownership is based on reports filed with the Securities and Exchange  Commission
(the "SEC") by such beneficial owners.

As of the Record Date, Cede & Co., a nominee partnership of the Depository Trust
Company, held of record, but not beneficially,_______________  shares or ______%
of Common Stock outstanding of the Fund.

As of the Record Date, the Trusts, executive officers and directors of the Fund,
as a group,  owned  10,254,743  shares of Common Stock (this amount includes the
aggregate  shares of Common  Stock  owned by the  Horejsi  Affiliates  set forth
above), representing [35.68%] of Common Stock.


                              OVERVIEW OF PROPOSALS

This Proxy Statement  describes six proposals  (together the  "Proposals").  The
first four Proposals (the "Restructuring  Proposals"), if approved, will provide
enhanced  investment  flexibility to the New Advisers (defined below) and expand
the universe of investments in which the Fund may invest.  Proposals 1 and 2 ask
stockholders  to approve new  advisory  agreements  between the Fund and the New
Advisers (the "Advisory Agreements") and Proposal 3 asks stockholders to approve
a new sub-advisory agreement between Wellington Management, the New Advisers and
the Fund (the "Sub-Advisory Agreement").  Proposal 4 asks stockholders to remove
the  Fund's  fundamental  policy  of  investing  at least  65% of its  assets in
financial  services  companies  (the  "Concentration  Policy").  Proposal 5 is a
precautionary proposal which, if the Restructuring  Proposals fail to pass, will
amend  the  Concentration  Policy  such  that the  threshold  for  investing  in
financial  services  companies will be reduced to 25% from its current threshold
of 65%.  Proposal 6 recommends  amending the Fund's charter in order to classify
the Board  into  three  separate  classes.  And  finally,  Proposal 7 is for the
election  of  Directors.   The  Board,  including  the  Directors  who  are  not
"interested  persons" of the Fund within the meaning of Section  2(a)(19) of the
Investment  Company Act of 1940,  as amended (the "1940 Act") (the  "Independent
Directors"),  unanimously recommends that you vote "FOR" all the Proposals . The
Horejsi Affiliates,  which hold approximately [35.51]% of the Fund's outstanding
Common  Stock,  have informed the Board that they will vote their Shares FOR all
the Proposals.

                                PROPOSALS 1 AND 2


    TO APPROVE OR DISAPPROVE THE PROPOSED INVESTMENT ADVISORY AGREEMENTS WITH
                                  RMA AND SIA

Background of the Proposals.  Wellington Management,  has managed the Fund since
its inception in 1986. Over this term of management,  the Fund has significantly
outperformed its peer groups and the relevant  indices.  During the past several
years, in response to material changes in the financial  services industry since
the Fund was initially  launched,  the Board has reviewed a number of options to
seek to  improve  the  risk-adjusted  return of the Fund by  initially  removing
certain  investment  restrictions.  In 2008, the Board encouraged  management to
identify unnecessary investment  restrictions and streamline the Fund to provide
Wellington Management with additional  investment  flexibility to take advantage
of investment opportunities. In April 2008, Fund management, in conjunction with
Wellington  Management,  conducted  a  comprehensive  survey  of the  investment
restrictions  imposed on the Fund, and Fund management  recommended  fundamental
changes to the Fund's  diversification  status and investment  policies.  In May
2008,  the Board  held a special  meeting  to  consider  a set of  proposals  to
eliminate or revise the Fund's  investment  restrictions  and policies,  some of
which would be submitted to stockholders for consideration at the annual meeting
in July 2008. In  particular,  management  recommended  changing the name of the
Fund to eliminate the term  "Financial",  changing the  investment  objective to
"total return" and changing the Fund from a "diversified" to a "non-diversified"
investment company,  the latter two requiring a vote of a majority of the Fund's
outstanding  shares.  In July 2008,  stockholders  approved  changing the Fund's
investment   objective  to  "total  return"  and  reclassifying  the  investment
objective as non-fundamental.  In addition,  stockholders  approved changing the
Fund's  classification  and  related  fundamental   investment   restriction  to
"non-diversified" and approved elimination of the Fund's fundamental  investment
restriction  regarding  the ability to hold greater than 5% in a single  issuer.
Although  these  changes  provided  Wellington  Management   significantly  more
investment latitude, they still fell short of providing the flexibility utilized
by the WHM Hedge Funds.


In the past,  at the Board's  request in  conjunction  with the  Board's  annual
consideration  of  Wellington   Management's   investment   advisory   contract,
Wellington Management has provided the investment returns of certain hedge funds
sponsored by an affiliate of Wellington Management,  Wellington Hedge Management
LLC ("WHM") (the "WHM Hedge Funds") and managed by Wellington Management and the
Fund's current  portfolio  manager.  Even with the changes  described above, the
Fund is subject to regulatory  constraints that limit its investment flexibility
compared with hedge funds, and other regulatory requirements that can impede the
Fund's  swift  implementation  of new  strategies  and  use of new  instruments,
including derivatives.  Compared to registered investment companies, hedge funds
have less regulatory  constraints that permit them greater flexibility to engage
in a broader array of, and less constrained,  investment strategies, such as the
use of short sales, leverage and derivatives. The Board then asked management to
review  options  that  would  allow the Fund to take  greater  advantage  of the
talents of Wellington Management and its investment  personnel,  and the broader
array of, and less  constrained,  investment  strategies  that  hedge  funds may
offer, to seek to improve the  risk-adjusted  return of the Fund for the benefit
of shareholders.

In October 2008,  representatives  of the Fund and Wellington  Management met to
discuss  the  feasibility,  and  technical,  operational  and  legal  issues  in
connection  with a direct  investment by the Fund in the WHM Hedge Funds. It was
quickly  determined that,  because of the affiliate  restrictions under the 1940
Act,  the Fund could not invest in any  Wellington  Management-affiliated  hedge
funds while  Wellington  Management  was the primary  adviser to the Fund. As an
alternative,  the parties  discussed the  possibility  of Wellington  Management
being  replaced by the Board with the New Advisers as  investment  adviser,  and
then the New Advisers making the investment  decision to invest in the WHM Hedge
Funds. The Board believed this structure would indirectly  provide  stockholders
with better access to the unrestricted investment tools of Wellington Management
and  its  investment  personnel.  A set of  issues  arose  out  of  the  October
discussions  that Fund  management  and counsel for the Fund had to research and
consider and, if feasible, present to the Board their recommendation at the next
regular meeting in February 2009.

At  the  February  2009  meeting,  the  Board  reviewed  memoranda  prepared  by
management  and counsel  addressing a number of technical,  legal and tax issues
identified during the preceding months. In particular, these memoranda addressed
the threshold question of whether the Fund could make meaningful  investments in
WHM Hedge Funds. It was determined that, under the proposed restructuring (i.e.,
the Board replacing  Wellington  Management with the New Advisers as the primary
advisers), the Fund  would be able to make  significant  investments  in the WHM
Hedge Funds. Over the next three months,  management and counsel continued their
analysis of a potential  restructuring  and, at the Board's next regular meeting
in April  2009,  management  presented  a  formal  proposal  which  contemplated
Wellington  Management being replaced as the Fund's primary adviser, and the New
Advisers  being  appointed  to  that  role,  Wellington  Management  becoming  a
sub-adviser to the Fund,  and removing the  Concentration  Policy  (together the
"Restructuring").  The Board also considered a memorandum prepared by Wellington
Management  regarding issues to consider  regarding the proposed  Restructuring.
The Board  considered  the  Restructuring  at a special  meeting of the Board on
April 16, 2009, and again at its regularly  scheduled meeting on April 24, 2009.
At the meeting held on April 24, 2009, the Board, by unanimous vote (including a
separate vote of the Independent  Directors),  approved the Advisory Agreements,
Sub-Advisory  Agreement and removing the  Concentration  Policy and  recommended
they be submitted to stockholders for approval.

Summary of the Restructuring Proposals.

The Restructuring Proposals include three distinct proposals:

     1.   Approval of new co-advisory agreements (i.e., the Advisory Agreements)
          between  the Fund and Rocky  Mountain  Advisers,  L.L.C.  ("RMA")  and
          Stewart Investment Advisers ("SIA") (together, the "New Advisers");



     2.   Approval  of a new  sub-advisory  agreement  (i.e.,  the  Sub-Advisory
          Agreement)  between  the  Fund  and  Wellington  Management,   whereby
          Wellington  Management will manage a discrete  portfolio of securities
          (defined  below as the  "Legacy  Holdings")  for a period of two years
          after the effective date of the Restructuring (i.e., the date on which
          stockholders  approve the  Restructuring  Proposals)  (the  "Effective
          Date"); and

     3.   Removing the Concentration Policy.

The Restructuring was conceived primarily to give the Fund significant access to
the WHM Hedge  Funds.  In order to  accomplish  this and to comply with  federal
securities laws, the  Restructuring  contemplates  segregating the Fund's assets
into two discrete portfolios:

     1.   The first  portfolio,  which would  include any  investment in a hedge
          fund,  including a WHM Hedge Fund,  would be determined and managed by
          the New Advisers in their sole discretion. Because the WHM Hedge Funds
          and the  Fund  hold  many of the  same or  similar  securities,  it is
          anticipated   that  the  Fund  will  make  a   significant   "in-kind"
          contribution  of its  current  holdings  to the  WHM  Hedge  Funds  in
          exchange for an equity  interest in the WHM Hedge Funds,  although the
          extent of any in-kind  contribution  cannot be determined  until after
          the  Effective  Date.  In  addition,  the New  Advisers  would  assume
          responsibility  for all  cash or cash  equivalent  assets,  as well as
          certain of the Fund's  large cap equity  holdings  familiar to the New
          Advisers.  Finally, as Legacy Holdings (defined below) are liquidated,
          proceeds  will be turned  over to the New  Advisers  to be invested in
          accordance with the Fund's investment objective.

     2.   The second  portfolio,  which would  include all the Fund's  remaining
          assets not assumed by the New Advisers,  anticipated to be fair-valued
          and other  liquidity-challenged  securities  (the "Legacy  Holdings"),
          would be managed  by  Wellington  Management  in  accordance  with the
          Fund's  investment  objective but with a view toward  liquidating  the
          assets to generate  cash for the New  Advisers  to invest.  Wellington
          Management's  role would be limited  solely to  continuing  to hold or
          selling the Legacy  Holdings,  and/or  familiarizing  the New Advisers
          with the  Legacy  Holdings.  Any  proceeds  realized  from the sale of
          Legacy  Holdings  would be turned over to the New  Advisers to manage.
          After  the  Effective  Date,   Wellington  Management  would  have  no
          authority  to directly  purchase any  security or  investment  for the
          Fund. The Restructuring  contemplates  Wellington  Management managing
          the Legacy  Holdings  for a period  not to exceed two years  after the
          Effective  Date, at which time any Legacy  Holdings  still held by the
          Fund would be turned  over to the New  Advisers  and the  Sub-Advisory
          Agreement would terminate.

The  Board  believes  it is  important  to  engage  Wellington  Management  as a
temporary  sub-adviser  because  the Fund is  presently  invested  primarily  in
securities issued by smaller financial  services companies which were chosen and
are overseen by Wellington Management in its current capacity as the Fund's sole
adviser and with respect to which the New Advisers have limited familiarity. The
two-year time limit is designed to give the New Advisers a chance to familiarize
themselves with the remaining Legacy Holdings.

Reasons  for the  Restructuring  Proposals.  The Board and New  Advisers  firmly
believe  that  increasing  investment   flexibility  is  crucial  to  maximizing
stockholder  value and that giving the Fund the  capabilities to invest in hedge
funds, including the WHM Hedge Funds gives stockholders maximum flexibility. The
Board and New Advisers also believe that  restructuring  the Fund so that it can
invest  significantly  in the WHM Hedge Funds will provide the  opportunity  for
superior risk-adjusted returns.  Finally, the Board and the New Advisers believe
that recent market events including the sub-prime fiasco and the banking, credit
and  liquidity  crisis,  have  disproportionately  impacted  the Fund  under its
Concentration  Policy,  and that the  continuation of the  Concentration  Policy
could expose the Fund to considerable  risk and volatility  should the financial
services industry take a farther downturn.

Risks and Special  Considerations  Associated with the Restructuring  Proposals.
The Restructuring Proposals will necessarily change the risk profile of the Fund
and stockholders should consider the following risks and special  considerations
in  determining  whether  to vote in favor  of the  Restructuring  Proposals  or
whether their investment in the Fund is suitable.

     Risks Related to Types of Investments and Investment Strategies. Hedge fund
     investments selected by the New Advisers (collectively,  "Hedge Funds") may
     invest and trade in a wide range of instruments and markets and may digress
     from their expected  investment  strategies.  Hedge Funds may invest in all
     types of securities and financial instruments, including but not limited to
     equities,  fixed  income  investments,  options,  futures,  swaps and other
     derivatives or derivative  transactions  ("Derivatives").  Such investments
     may be illiquid and highly leveraged, or subject to extreme volatility.  In
     addition, Hedge Funds may use a wide range of investment techniques.  Hedge
     Funds are  generally  not limited in the markets in which they are expected
     to invest,  or the  investment  discipline  that their managers may employ,
     such as value or growth or bottom-up or top-down analysis.  Hedge Funds may
     use various investment  techniques for hedging and non-hedging  purposes. A
     Hedge Fund may, for example,  sell  securities  short and purchase and sell
     options  contracts  and  enter  into  other  Derivatives.  The use of these
     techniques  may be an integral part of a Hedge Fund's  investment  strategy
     and may involve certain risks and result in significant losses. Hedge Funds
     may use leverage, which also entails risk.


     Hedge Fund Strategy  Risk.  The Fund will be subject to Hedge Fund strategy
     risk. Strategy risk refers to the failure or deterioration of investment or
     trading techniques employed within or across strategies,  such that some or
     all managers  employing  such  techniques  may suffer  significant  losses.
     Losses   associated   with   strategy   risk  may  result  from   excessive
     concentration  by  multiple   managers  in  the  same  or  similar  trading
     positions.  Likewise,  broad  events or market  dislocations,  particularly
     those  accompanied  by  illiquidity,  may adversely  affect a wide range of
     Hedge  Funds in  certain  strategies.  Many of the  trading  or  investment
     strategies  employed by Hedge Funds are speculative and involve substantial
     risks.  Specific strategy risks relating to Hedge Fund strategies  include,
     for example,  strategies utilized by managers in the general hedged equity,
     event driven, distressed securities, short-selling, opportunistic/macro and
     international/emerging  markets trading sectors.  There can be no assurance
     that WHM or other managers of Hedge Funds selected by the New Advisers will
     succeed in any of these strategies.

     Non-Diversified  Status. As a non-diversified  investment company, the Fund
     is not  subject to  percentage  limitations  imposed by the 1940 Act on the
     portion of its assets  that may be invested  in the  securities  of any one
     issuer.  Also,  there  are no  requirements  under  the  1940  Act that the
     investments of the Hedge Funds be  diversified  and the Hedge Funds may, in
     some cases,  concentrate their investments in a single industry or group of
     related  industries.  As a result,  the Fund's investment  portfolio may be
     subject  to  greater  risk and  volatility  than if it were  subject to the
     diversification  requirements  under the 1940 Act. Presently under the 1940
     Act, there are no percentage  limitations regarding the level of investment
     the Fund can make in Hedge  Funds,  although  new laws or  regulations  may
     change this at any time.

     The Fund is, however, subject to certain asset diversification requirements
     relating  to its tax  status as a  regulated  investment  company (a "RIC")
     under the Internal  Revenue Code (the "Code").  Management of the Fund will
     seek  to  satisfy  these  asset  diversification  requirements  on a  "look
     through" basis with respect to the Fund's  investments in Hedge Funds, such
     that the Fund  considers  the  underlying  holdings of those Hedge Funds in
     measuring the Fund's  diversification for this purpose. Hedge funds are not
     generally  required  to  provide  current  complete  holdings   information
     regarding their investments to their investors  (including the Fund). Thus,
     the  Fund  may  not be  able  to  determine  whether  such  diversification
     requirements have been met on a "look-through" basis.

     Lack of Liquidity.  The Fund's  interests in the Hedge Funds will generally
     be illiquid.  The Fund may make  investments  in, or withdrawals  from, the
     Hedge Funds only at certain times  specified in the governing  documents of
     the Hedge Funds.  The Fund will  typically be able to dispose of Hedge Fund
     interests  that it has  purchased  only on a  periodic  basis,  subject  to
     advance notice  requirements.  In addition,  Hedge Funds may impose certain
     restrictions  on  withdrawals,  such as lock-ups,  gates, or suspensions of
     withdrawal rights under certain  circumstances,  during which time the Fund
     may not  withdraw  all or part of its  interest in the Hedge  Fund,  or may
     withdraw only by paying a penalty. There may be times when the New Advisers
     intend to  withdraw  all or a portion of the Fund's  investment  in a Hedge
     Fund but cannot  immediately  do so even when other  investors in the Hedge
     Fund are able to withdraw.

     Fluctuations  in  Value.  Since  the  New  Advisers  anticipate   initially
     investing 50% of the Fund's assets in Hedge Funds,  the value of the Fund's
     net assets will  fluctuate  significantly  based on the  fluctuation in the
     value  of the  Hedge  Funds in which it  invests.  To the  extent  that the
     portfolio of a Hedge Fund is  concentrated in securities of a single issuer
     or  issuers  in a  single  industry  or  market,  the  risk  of the  Fund's
     investment  in that Hedge Fund will be  increased.  Hedge Funds may be more
     likely  than other types of funds to engage in the use of  leverage,  short
     sales and Derivatives. A Hedge Fund's use of such transactions is likely to
     cause the value of the Fund's  portfolio to  appreciate  or depreciate at a
     greater  rate  than  if such  techniques  were  not  used.  The  investment
     environment  in which the Hedge Funds  invest may be  influenced  by, among
     other things, interest rates, inflation,  politics,  fiscal policy, current
     events, competition, productivity, technological and regulatory change.

     Multiple Fees and Expenses. As discussed below under "Advisory Agreements",
     the New Advisers will be paid an  asset-based  fee (i.e.,  the Proposed Fee
     (described  below)) on the Managed Assets  (described  below) including any
     investments in Hedge Funds. In addition,  Hedge Fund managers typically are
     paid an  asset-based  fee in the  range of 1.00% to 2.00% of total  assets.
     Moreover,  Hedge Fund managers typically are paid performance-based fees in
     the range of 20% of profits with respect to annual gains generated in their
     Hedge Funds.  Thus,  under the  Restructuring,  there is the  potential for
     multiple  advisory fees to be paid and consequently  advisory-related  fees
     could be significantly  higher,  especially when there are net gains in the
     Hedge Fund.  However,  as described  below, the New Advisers have agreed to
     waive  their fees in an amount  equal to up to 1.00% of the  Fund's  assets
     invested  in a WHM  Fund  to  offset  any  asset-based  fees  (but  not any
     performance-based  fees) paid to WHM with respect to the Fund's assets.  In
     any event,  an  investor  in the Fund may be  subject  to higher  operating
     expenses  than  otherwise  if  invested in another  closed-end  fund with a
     different investment focus.


     The receipt of a  performance-based  fee by a Hedge Fund manager may create
     an incentive for the manager to make  investments  that are riskier or more
     speculative  than those  that  might have been made in the  absence of such
     fees. Further, because a performance-based fee will generally be calculated
     on a basis that includes unrealized appreciation of the Fund's assets, such
     fee may be  greater  than if it were based  solely on  realized  gains.  In
     addition,  a Hedge Fund manager will receive any  performance-based  fee to
     which it is entitled,  irrespective  of the  performance of the other Hedge
     Funds in the Fund  generally.  Thus,  a Hedge Fund  manager  with  positive
     performance  may  receive  compensation  from the Fund  even if the  Fund's
     overall returns are negative.

     Concentration.  If the  shareholders of the Fund approve  Proposal 4, which
     would  remove  the  Concentration  Policy,  the Fund  would  intend  not to
     concentrate,  or invest 25% or more of the value of its total assets in the
     securities (other than U.S. Government  securities) of issuers engaged in a
     single  industry  or  group  of  related  industries  (but the Fund may and
     intends  to invest  25% or more of the  value of its total  assets in Hedge
     Funds).   Hedge  Funds  generally  are  not  subject  to  similar  industry
     concentration  restrictions on their  investments  and, in some cases,  may
     invest 25% or more of the value of their total assets in a single  industry
     or group of related industries. It is possible that, at any given time, the
     assets of Hedge Funds in which the Fund has invested will have  investments
     in a single industry or group of related industries that when combined with
     the direct holdings of the Fund in the same industry or group of industries
     might  constitute  25% or more of the  value of the  Fund's  total  assets.
     Because  these  circumstances  may  arise,  the Fund is  subject to greater
     investment risk to the extent that a significant  portion of its assets may
     at some times be invested,  directly or  indirectly  through Hedge Funds in
     which  it  invests,  in  the  securities  of  issuers  engaged  in  similar
     businesses that are likely to be affected by the same market conditions and
     other  industry-specific  risk  factors.  Hedge  Funds  are  not  generally
     required to provide  current  information  regarding  their  investments to
     their investors  (including the Fund).  Thus, the Fund and the New Advisers
     may not be able to  determine  at any given  time  whether or the extent to
     which Hedge Funds,  in the  aggregate,  have  invested 25% or more of their
     combined assets in any particular industry or group of related industries.

     If the  shareholders  of the  Fund  approve  the  Restructuring,  including
     Proposal 4, the Fund would  likely be  concentrated  in the  securities  of
     financial services companies immediately following the Effective Date, as a
     result of the current effectiveness of the Concentration  Policy.  However,
     the New  Advisers  would seek to reduce the Fund's  holdings  in  financial
     services  companies  to below  25% of the  Fund's  assets  in a prompt  and
     prudent manner possible.

     Duplicative  Transaction  Costs.  Hedge Fund managers  make the  investment
     decisions of their Hedge Funds  independently of each other.  Consequently,
     at any particular  time,  one Hedge Fund may be purchasing  interests in an
     issuer  that at the  same  time  are  being  sold by  another  Hedge  Fund.
     Investing  by the  Hedge  Funds  in this  manner  will  cause  the  Fund to
     indirectly incur certain  transaction  costs without  accomplishing any net
     investment result. Similarly,  Wellington Management , in its management of
     the  Legacy  Holding  or  the  New  Advisers  in  managing  non-Hedge  Fund
     investments,  may be selling  interests  in an issuer that at the same time
     are being  purchased  by another  Hedge  Fund,  again  causing  the Fund to
     indirectly incur certain  transaction  costs without  accomplishing any net
     investment results.

     Hedge  Funds  Not  Registered.  The  Hedge  Funds  generally  will  not  be
     registered as investment  companies  under the 1940 Act and the Fund, as an
     investor in these Hedge Funds, will not have the benefit of the protections
     afforded by the 1940 Act to investors in registered  investment  companies.
     Although the New Advisers will periodically  receive  information from each
     Hedge Fund regarding its investment  performance  and investment  strategy,
     the New  Advisers  may have little or no means of  independently  verifying
     this information.  Hedge Funds are not contractually or otherwise obligated
     to inform  their  investors,  including  the Fund,  of details  surrounding
     proprietary  investment  strategies.  In  addition,  the  Fund  and the New
     Advisers will have no control over the Hedge Funds' investment  management,
     brokerage,  custodial  arrangements  or  operations  and  must  rely on the
     experience and competency of each Hedge Fund manager in these areas.



     Special  Tax  Risks.  The Fund has  elected  to,  and  intends  to meet the
     requirements  necessary to, qualify as a "regulated  investment company" or
     "RIC" under Subchapter M of the Code. As such, the Fund must satisfy, among
     other requirements, certain ongoing asset diversification, source-of-income
     and annual distribution  requirements.  Each of these ongoing  requirements
     for  qualification  for  the  favorable  tax  treatment  available  to RICs
     requires that the Fund obtain information from the Hedge Funds in which the
     Fund is  invested.  Management  of the Fund will seek to satisfy  the asset
     diversification  requirements on a "look through" basis with respect to the
     Fund's  investments  in Hedge  Funds,  such  that the  Fund  considers  the
     underlying   holdings  of  those  Hedge  Funds  in  measuring   the  Fund's
     diversification for this purpose.

     If before the end of any quarter of its  taxable  year,  the Fund  believes
     that it may fail the asset diversification  requirement,  the Fund may seek
     to take  certain  actions  to  avert  such a  failure.  The Fund may try to
     acquire additional interests in Hedge Funds to bring itself into compliance
     with the asset  diversification  test. However, the action frequently taken
     by RICs to avert such a failure, the disposition of non-diversified assets,
     may be  difficult  for the Fund to pursue  because  the Fund may redeem its
     interest in a Hedge Fund only at certain  times  specified by the governing
     documents of each  respective  Hedge Fund.  While relevant  provisions also
     afford the Fund a 30-day  period after the end of the  relevant  quarter in
     which to cure a  diversification  failure by disposing  of  non-diversified
     assets, the constraints on the Fund's ability to effect a redemption from a
     Hedge Fund referred to above may limit utilization of this cure period.

     If the  Fund  fails to  satisfy  the  asset  diversification  or other  RIC
     requirements, it may lose its status as a RIC under the Code. In that case,
     all of its taxable  income would be subject to U.S.  federal  income tax at
     regular  corporate  rates without any deduction  for  distributions  to the
     Fund's   stockholders.    In   addition,   all   distributions   (including
     distributions  of net capital  gain) would be taxed to their  recipients as
     dividend  income  to the  extent  of the  Fund's  current  and  accumulated
     earnings and profits.  Accordingly,  disqualification as a RIC would have a
     material adverse effect on the value of the Fund's shares and the amount of
     the Fund's distributions.

     Investments by Hedge Funds.

          Equity  Securities.  Hedge Funds may hold long and short  positions in
          common stocks, preferred stocks and convertible securities of U.S. and
          non-U.S.  issuers.  Hedge Funds also may invest in depositary receipts
          or shares relating to non-U.S. securities. Equity securities fluctuate
          in value, often based on factors unrelated to the fundamental economic
          condition of the issuer of the securities,  including general economic
          and market conditions, and these fluctuations can be pronounced. Hedge
          Funds may purchase  securities  in all  available  securities  trading
          markets and may invest in equity securities without  restriction as to
          market capitalization.

          Leverage.  Some or all of the Hedge Funds may make margin purchases of
          securities and, in connection with these purchases,  borrow money from
          brokers and banks for investment  purposes.  This  practice,  which is
          known as  "leverage,"  is  speculative  and  involves  certain  risks.
          Although the New Advisers do not  currently  anticipate  that the Fund
          will engage  directly in  leveraging,  the Fund is permitted to deploy
          leverage  and other  investment  companies  managed by BIA and SIA are
          leveraged.  So, it is likely  that,  eventually,  the Fund will deploy
          leverage, but only to the extent permitted by the 1940 Act.

          Trading  equity   securities  on  margin   involves  an  initial  cash
          requirement  representing  at  least a  percentage  of the  underlying
          security's  value.   Borrowings  to  purchase  equity  securities  are
          typically secured by the pledge of those  securities.  Hedge Funds may
          also  finance   securities   purchases  through  the  use  of  reverse
          repurchase   agreements  with  banks,   brokers  and  other  financial
          institutions.  Although leverage will increase investment returns if a
          Hedge Fund earns a greater  return on the  investments  purchased with
          borrowed  funds  than it pays for the use of those  funds,  the use of
          leverage  will  decrease the return on an Hedge Fund if the Hedge Fund
          fails to earn as much on investments  purchased with borrowed funds as
          it pays for the use of those funds.  The use of leverage  will in this
          way magnify the volatility of changes in the value of an investment in
          the Hedge  Funds.  In the  event  that a Hedge  Fund's  equity or debt
          instruments  decline  in value,  the Hedge  Fund could be subject to a
          "margin  call" or  "collateral  call," under which the Hedge Fund must
          either  deposit  additional  collateral  with  the  lender  or  suffer
          mandatory  liquidation of the pledged securities to compensate for the
          decline in value. In the event of a sudden,  precipitous drop in value
          of a  Hedge  Fund's  assets,  the  Hedge  Fund  might  not be  able to
          liquidate  assets  quickly  enough  to pay  off its  borrowing.  Money
          borrowed for leveraging  will be subject to interest costs that may or
          may not be  recovered  by return on the  securities  purchased.  Hedge
          Funds  may  be  required  to  maintain  minimum  average  balances  in
          connection  with its borrowings or to pay a commitment or other fee to
          maintain a line of credit; either of these requirements would increase
          the cost of borrowing over the stated interest rate.



          Section 18 of the 1940 Act  requires a registered  investment  company
          such as the  Fund  to  satisfy  certain  asset  coverage  requirements
          relative to its  indebtedness.  This limit is not expected to apply to
          any of the  Hedge  Funds in which  the Fund  intends  to invest so the
          Fund's  portfolio  may be  exposed  to the  risk of  highly  leveraged
          investment  programs  of certain  Hedge  Funds and thus  increase  the
          volatility of the Fund's  investment.  In seeking  "leveraged"  market
          exposure in certain  investments and in attempting to increase overall
          returns,  a Hedge  Fund  may  purchase  options  and  other  synthetic
          instruments that do not constitute  "indebtedness" for purposes of the
          1940 Act but may nevertheless  involve  significant  economic leverage
          and may, in some cases, involve significant risks of loss.

          Short  Sales.  A Hedge  Fund may  attempt to limit its  exposure  to a
          possible  market  decline  in the  value of its  portfolio  securities
          through short sales of securities  that its manager  believes  possess
          volatility characteristics similar to those being hedged. A Hedge Fund
          may also use  short  sales for  non-hedging  purposes  to  pursue  its
          investment  objectives  if, in the  manager's  view,  the  security is
          over-valued in relation to the issuer's prospects for earnings growth.
          Short selling is speculative in nature and, in certain  circumstances,
          can substantially  increase the effect of adverse price movements on a
          Hedge Fund's  portfolio.  A short sale of a security involves the risk
          of an unlimited  increase in the market price of the security that can
          in turn  result in an  inability  to cover the  short  position  and a
          theoretically   unlimited  loss.   There  can  be  no  assurance  that
          securities  necessary to cover a Hedge Fund's short  position  will be
          available for purchase.

          A Hedge Fund may make "short sales  against-the-box," in which it will
          sell  short  securities  it owns or has the  right to  obtain  without
          payment  of  additional  consideration.  If a Hedge Fund makes a short
          sale  against-the-box,  it will be  required  to set aside  securities
          equivalent  in kind  and  amount  to the  securities  sold  short  (or
          securities convertible or exchangeable into those securities) and will
          be  required  to  hold  those  securities  while  the  short  sale  is
          outstanding.  A Hedge Fund will  incur  transaction  costs,  including
          interest  expenses,  in connection  with  initiating,  maintaining and
          closing out short sales against-the-box.

          Special Investment Instruments and Techniques. Hedge Funds may utilize
          a variety of special investment  instruments and techniques  described
          below to hedge the  portfolios  of the  Hedge  Funds  against  various
          risks,  such as changes in interest rates or other factors that affect
          security values,  or for non-hedging  purposes in seeking to achieve a
          Hedge Fund's investment objective.  The New Advisers, on behalf of the
          Fund, may also use these special investment instruments and techniques
          for either hedging or non-hedging  purposes.  These  strategies may be
          executed through Derivatives.  The instruments used and the particular
          manner in which they are used may change over time as new  instruments
          and techniques are developed or regulatory  changes occur.  Certain of
          these special  investment  instruments  and techniques are speculative
          and  involve a high  degree of risk,  particularly  in the  context of
          non-hedging transactions.

     o    Derivatives.  Hedge Funds may invest in, or enter  into,  Derivatives.
          Derivatives are financial  instruments that derive their  performance,
          at least in part, from the performance of an underlying  asset,  index
          or  interest  rate.  Derivatives  entered  into by a Hedge Fund can be
          volatile and involve various types and degrees of risk, depending upon
          the  characteristics  of a particular  Derivative and the portfolio of
          the Hedge Fund as a whole. Derivatives permit a manager to increase or
          decrease the level of risk of an investment  portfolio,  or change the
          character of the risk, to which an investment  portfolio is exposed in
          much the same way as the manager can increase or decrease the level of
          risk, or change the character of the risk, of an investment  portfolio
          by making investments in specific  securities.  Derivatives may entail
          investment  exposures  that are greater than their cost would suggest,
          meaning  that a small  investment  in  Derivatives  could have a large
          potential  effect on  performance  of a Hedge  Fund.  The  Hedge  Fund
          manager's use of Derivatives  may include total return swaps,  options
          and futures  designed to  replicate  the  performance  of a particular
          Hedge  Fund or to adjust  market  or risk  exposure.  If a Hedge  Fund
          invests in  Derivatives at  inopportune  times or  incorrectly  judges
          market  conditions,  the investments may lower the return of the Hedge
          Fund or result in a loss. A Hedge Fund also could experience losses if
          Derivatives are poorly  correlated with its other  investments,  or if
          the Hedge  Fund is unable to  liquidate  the  position  because  of an
          illiquid  secondary  market.  The market for many  Derivatives  is, or
          suddenly  can become,  illiquid.  Changes in  liquidity  may result in
          significant,  rapid  and  unpredictable  changes  in  the  prices  for
          Derivatives.

     o    Options  and  Futures.  Hedge  Funds may  utilize  options and futures
          contracts  and  so-called  "synthetic"  options  or other  Derivatives
          written   by   broker-dealers    or   other   permissible    financial
          intermediaries.  Options  transactions  may be effected on  securities
          exchanges  or  in  the  over-the-counter   market.  When  options  are
          purchased over-the-counter,  the Hedge Fund's portfolio bears the risk
          that  the  counterparty  that  wrote  the  option  will be  unable  or
          unwilling  to  perform  its  obligations  under the  option  contract.
          Options  may also be illiquid  and, in such cases,  the Hedge Fund may
          have  difficulty  closing out its position.  Over-the-counter  options
          also may  include  options on baskets of  specific  securities.  Hedge
          Funds may purchase  call and put options on specific  securities,  and
          may write and sell  covered  or  uncovered  call and put  options  for
          hedging  purposes in pursuing the  investment  objectives of the Hedge
          Funds.  A put option  gives the  purchaser  of the option the right to
          sell,  and obligates the writer to buy, the  underlying  security at a
          stated exercise  price,  typically at any time prior to the expiration
          of the option.  A call option  gives the  purchaser  of the option the
          right  to buy,  and  obligates  the  writer  to sell,  the  underlying
          security at a stated  exercise  price,  typically at any time prior to
          the  expiration of the option.  A covered call option is a call option
          with  respect to which the seller of the  option  owns the  underlying
          security.  The sale of such an option  exposes  the seller  during the
          term  of the  option  to  possible  loss  of  opportunity  to  realize
          appreciation  in the market  price of the  underlying  security  or to
          possible  continued  holding of a security that might  otherwise  have
          been sold to protect  against  depreciation in the market price of the
          security.  A covered put option is a put option with  respect to which
          cash or liquid securities have been placed in a segregated  account on
          the books of or with a custodian to fulfill the obligation undertaken.
          The sale of such an option  exposes the seller  during the term of the
          option  to a  decline  in  price  of  the  underlying  security  while
          depriving  the  seller of the  opportunity  to invest  the  segregated
          assets.


          A Hedge  Fund may  close  out a  position  when  writing  an option by
          purchasing an option on the same security with the same exercise price
          and expiration  date as the option that it has  previously  written on
          the security.  In such a case, the Hedge Fund will realize a profit or
          loss if the amount paid to purchase an option is less or more than the
          amount received from the sale of the option.

          Hedge Funds may enter into  futures  contracts  in U.S.  markets or on
          exchanges  located  outside the United  States.  Non-U.S.  markets may
          offer   advantages   such  as  trading   opportunities   or  arbitrage
          possibilities  not available in the United States.  Non-U.S.  markets,
          however,  may have  greater  risk  potential  than U.S.  markets.  For
          example,  some non-U.S.  exchanges  are principal  markets in which no
          common  clearing  facility exists and an investor may look only to the
          broker for  performance  of the  contract.  In  addition,  any profits
          realized could be eliminated by adverse  changes in the exchange rate,
          and the Fund or a Hedge Fund could  incur  losses as a result of those
          changes.   Transactions   on  non-U.S.   exchanges  may  include  both
          commodities that are traded on U.S.  exchanges and those that are not.
          Unlike  trading  on U.S.  commodity  exchanges,  trading  on  non-U.S.
          commodity  exchanges is not  regulated by the U.S.  Commodity  Futures
          Trading Commission.

          Engaging in transactions in futures contracts involves risk of loss to
          the Fund or the Hedge  Fund that could  adversely  affect the value of
          the Hedge Fund's and the Fund's net assets.  There can be no assurance
          that a liquid market will exist for any particular futures contract at
          any particular time. Many futures  exchanges and boards of trade limit
          the amount of fluctuation  permitted in futures contract prices during
          a single  trading  day.  Once the daily  limit has been  reached  in a
          particular contract,  no trades may be made that day at a price beyond
          that limit or trading may be suspended  for specified  periods  during
          the trading day.  Futures  contract prices could move to the limit for
          several consecutive trading days with little or no trading, preventing
          prompt liquidation of futures positions and potentially subjecting the
          Fund or the  Hedge  Funds to  substantial  losses.  Successful  use of
          futures also is subject to the New Advisers' or a Hedge Fund manager's
          ability  to  predict  correctly  movements  in  the  direction  of the
          relevant  market,  and, to the extent the  transaction is entered into
          for hedging purposes, to determine the appropriate correlation between
          the  transaction  being hedged and the price  movements of the futures
          contract.

          Positions of the SEC and its staff may require the Hedge Fund managers
          to  segregate  permissible  liquid  assets in  connection  with  their
          options and commodities transactions in amounts generally equal to the
          value of the underlying option or commodity.  The segregation of these
          assets  will  have  the  effect  of  limiting  the  manager's  ability
          otherwise to invest those assets.  While the Hedge Funds may engage in
          transactions  involving  options  and  commodities,  the Fund will not
          directly engage in, nor will it segregate  assets in connection  with,
          such transactions.

     o    Call and Put Options on Securities  Indices.  Hedge Funds may purchase
          and sell call and put  options  on stock  indices  listed on  national
          securities  exchanges  or traded in the  over-the-counter  market  for
          hedging  purposes and  non-hedging  purposes in seeking to achieve the
          investment  objectives  of the Hedge Funds.  A stock index  fluctuates
          with changes in the market values of the stocks included in the index.
          Successful  use of  options  on stock  indexes  will be subject to the
          Hedge Fund  manager's  ability to predict  correctly  movements in the
          direction of the stock market generally or of a particular industry or
          market segment,  which requires  different  skills and techniques from
          those  involved  in  predicting  changes  in the  price of  individual
          stocks.



     o    Warrants  and Rights.  Hedge Funds may invest in warrants  and rights.
          Warrants and rights may be purchased  separately or may be received as
          part of a unit or  attached  to  securities  purchased.  Warrants  are
          Derivatives  that  permit,  but  do not  obligate,  their  holders  to
          subscribe for other  securities or commodities.  Rights are similar to
          warrants,  but  normally  have  shorter  durations  and are offered or
          distributed to shareholders  of a company.  Warrants and rights do not
          carry with them the right to dividends  or voting  rights with respect
          to the securities  that they entitle the holder to purchase,  and they
          do not  represent  any  interest  in the  assets of the  issuer.  As a
          result, warrants and rights may be more speculative than certain other
          types of equity-like  securities.  In addition, the values of warrants
          and rights do not necessarily change with the values of the underlying
          securities or commodities and these instruments cease to have value if
          they are not exercised prior to their expiration dates.

     o    Swap  Agreements.  Hedge Funds may enter into equity,  interest  rate,
          index  and  currency  rate  swap  agreements  in  order  to  obtain  a
          particular  return when it is desirable to do so,  possibly at a lower
          cost than if the Hedge Fund had  invested  directly  in the asset that
          yielded the desired return.  Swap  agreements are two-party  contracts
          entered into primarily by institutional  investors for periods ranging
          from a few weeks to more than a year. In a standard swap  transaction,
          two parties agree to exchange the returns (or  differentials  in rates
          of return) earned or realized on particular predetermined  investments
          or  instruments,  which may be adjusted  for an interest  factor.  The
          gross  returns to be exchanged  or  "swapped"  between the parties are
          generally calculated with respect to a "notional amount," that is, the
          return on or increase in value of a particular  dollar amount invested
          at a particular interest rate, in a particular non-U.S.  currency,  or
          in a "basket" of securities representing a particular index. Most swap
          agreements  entered into by a Hedge Fund would require the calculation
          of the  obligations of the parties to the agreements on a "net basis."
          Consequently,  current  obligations (or rights) under a swap agreement
          generally  will be equal only to the net amount to be paid or received
          under the agreement based on the relative values of the positions held
          by each party to the agreement  (the "net  amount").  The risk of loss
          with  respect  to swaps  is  limited  to the net  amount  of  interest
          payments  that the Hedge Fund is  contractually  obligated to make. If
          the other  party to a swap  defaults,  the Hedge  Fund's  risk of loss
          consists  of  the  net  amount  of   payments   that  the  Hedge  Fund
          contractually is entitled to receive.

     o    Lending Portfolio Securities. Hedge Funds may lend their securities to
          brokers,  dealers and other financial  institutions  seeking to borrow
          securities to complete  certain  transactions.  The lending Hedge Fund
          remains  entitled  to  payments  in  amounts  equal  to the  interest,
          dividends  or other  distributions  payable  in  respect of the loaned
          securities,  which  affords  the  Hedge  Fund an  opportunity  to earn
          interest  on the  amount  of the  loan and on the  loaned  securities'
          collateral.  In connection with any such  transaction,  the Hedge Fund
          will receive collateral consisting of cash, U.S. Government securities
          or irrevocable  letters of credit that will be maintained at all times
          in an amount equal to at least 100% of the current market value of the
          loaned securities. A Hedge Fund may experience loss if the institution
          with which the Hedge Fund has engaged in a portfolio loan  transaction
          breaches its agreement with the Hedge Fund.

     o    When-Issued  and  Forward  Commitment  Securities.   Hedge  Funds  may
          purchase  securities on a "when-issued" basis and may purchase or sell
          securities on a "forward  commitment"  basis in order to hedge against
          anticipated  changes in interest rates and prices.  These transactions
          involve a commitment by a Hedge Fund to purchase or sell securities at
          a future date  (ordinarily one or two months later).  The price of the
          underlying securities, which is generally expressed in terms of yield,
          is fixed at the time the  commitment is made, but delivery and payment
          for the  securities  takes place at a later date. No income accrues on
          securities that have been purchased  pursuant to a forward  commitment
          or on a  when-issued  basis  prior  to  delivery  to the  Hedge  Fund.
          When-issued  securities and forward  commitments  may be sold prior to
          the settlement  date. If a Hedge Fund disposes of the right to acquire
          a when-issued  security  prior to its  acquisition  or disposes of its
          right to deliver or receive against a forward commitment, it may incur
          a gain or  loss.  The  risk  exists  that  securities  purchased  on a
          when-issued  basis  may not be  delivered  and that the  purchaser  of
          securities  sold by a Hedge Fund on a forward basis will not honor its
          purchase obligation. In such cases, a Hedge Fund may incur a loss.

               Restricted  and Illiquid  Investments.  A Hedge Fund may invest a
               portion of the value of its total assets in restricted securities
               and other  investments that are illiquid.  The Fund may likewise,
               without  limitation,  invest in such securities and  investments.
               The  Hedge  Funds  in  which  the Fund  invests  will  themselves
               generally be illiquid.  Restricted securities are securities that
               may not be sold to the public  without an effective  registration
               statement under the Securities Act of 1933 (the "Securities Act")
               or that may be sold only in a privately negotiated transaction or
               pursuant to an exemption from registration.  When registration is
               required to sell a security, a Hedge Fund may be obligated to pay
               all or  part of the  registration  expenses,  and a  considerable
               period may elapse  between the  decision to sell and the time the
               Hedge Fund may be permitted to sell a security under an effective
               registration  statement.  If adverse  market  conditions  were to
               develop  during  this  period,  a Hedge Fund might  obtain a less
               favorable price than the price that prevailed when the Hedge Fund
               decided to sell. Hedge Funds may be unable to sell restricted and
               other  illiquid  securities  at the  most  opportune  times or at
               prices  approximating  the  value at  which  they  purchased  the
               securities.


     o    Counterparty  Credit Risk. The markets in which the Hedge Funds effect
          their transactions may be "over-the-counter" or "interdealer" markets.
          The  participants in these markets are typically not subject to credit
          evaluation and regulatory oversight as are members of "exchange based"
          markets.  To the extent a Hedge Fund invests in swaps,  Derivatives or
          synthetic instruments, or other over-the-counter transactions in these
          markets,  the Hedge Fund may take a credit risk with regard to parties
          with which it trades and also may bear the risk of settlement default.
          These   risks  may   differ   materially   from  those   involved   in
          exchange-traded  transactions,  which generally are  characterized  by
          clearing   organization   guarantees,   daily   marking-to-market  and
          settlement,   and  segregation   and  minimum   capital   requirements
          applicable  to  intermediaries.  Transactions  entered  into  directly
          between  two  counterparties  generally  do  not  benefit  from  these
          protections, which in turn may subject the Hedge Fund to the risk that
          a counterparty  will not settle a transaction  in accordance  with its
          terms  and  conditions  because  of a  dispute  over the  terms of the
          contract  or  because  of  a  credit  or   liquidity   problem.   Such
          "counterparty  risk" is increased for contracts with longer maturities
          when events may  intervene to prevent  settlement.  The ability of the
          Hedge  Funds  to  transact  business  with  any one or any  number  of
          counterparties,   the  lack  of  any  independent  evaluation  of  the
          counterparties or their financial  capabilities,  and the absence of a
          regulated market to facilitate settlement,  may increase the potential
          for losses by the Fund.

     o    Control   Positions.   Hedge  Funds  may  take  control  positions  in
          companies.  The exercise of control over a company imposes  additional
          risks of liability for environmental damage, product defects,  failure
          to  supervise  and  other  types  of  liability  related  to  business
          operations.  In  addition,  the act of taking a control  position,  or
          seeking to take such a  position,  may itself  subject a Hedge Fund to
          litigation  by parties  interested  in  blocking  it from  taking that
          position.  If those liabilities were to arise, or such litigation were
          to be resolved  adverse to the Hedge Funds,  the investing Hedge Funds
          likely would suffer losses on their investments.

     Risks of Fund of Hedge Funds Structure.  Since, under the Restructuring,  a
     substantial   portion  of  the  Fund  will  be  invested  in  Hedge  Funds,
     stockholders  should be aware of the  principal  risks  that  relate to the
     "fund of hedge funds" investment approach:

     o    Hedge  Funds Not  Registered.  The Hedge Funds  generally  will not be
          registered as investment companies under the 1940 Act. The Fund, as an
          investor  in these  Hedge  Funds,  will not  have the  benefit  of the
          protections  afforded  by the  1940  Act to  investors  in  registered
          investment   companies.   Although  the  New  Advisers   will  receive
          information from each Hedge Fund regarding its investment  performance
          and  investment  strategy,  they  may  have  little  or  no  means  of
          independently  verifying  this  information.  A  Hedge  Fund  may  use
          proprietary  investment strategies that are not fully disclosed to the
          New  Advisers,  which may involve  risks under some market  conditions
          that are not  anticipated by the New Advisers.  The performance of the
          Fund  depends on the success of the New  Advisers in  selecting  Hedge
          Funds for investment by the Fund and the  allocation and  reallocation
          of Fund assets among those funds.

     o    Availability  of  Information.  For  the  Fund  to  complete  its  tax
          reporting  requirements  and for the Fund to provide an audited annual
          report to its  stockholders,  it must receive timely  information from
          the Hedge Funds.  A Hedge Fund's delay in providing  this  information
          could delay the Fund's  preparation of tax  information for investors.
          The  lack of  available  information  also  could  impact  the  Fund's
          compliance  monitoring  abilities with respect to, among other things,
          industry  concentration,  valuation of Hedge  Fund's  interest and tax
          diversification requirements.

     o    Multiple Levels of Fees and Expenses;  Duplicative  Transaction Costs.
          An investor in the Fund meeting the eligibility  conditions imposed by
          the Hedge Funds may be able to invest  directly in the Hedge Funds. By
          investing in the Hedge Funds indirectly  through the Fund, an investor
          bears a portion of the Proposed Fee, administration and other expenses
          at the Fund level. This layering of fees often occurs in fund-of-funds
          or fund-of-hedge-funds structures.



          Each Hedge Fund  manager will  receive any  performance-based  fees to
          which it is  entitled  irrespective  of the  performance  of the other
          Hedge Fund  managers and the Fund  generally.  As a result,  a manager
          with  positive  performance  may receive  compensation  from the Hedge
          Fund, and thus indirectly from the Fund and its stockholders,  even if
          the Fund's overall returns are negative.  Generally,  asset-based fees
          payable  to  Hedge  Fund  managers  will  range  from  1.00%  to 2.00%
          (annualized)  of the net asset value of the Fund's  investment  in the
          Hedge Fund, and  performance-based  fees will generally range from 10%
          to 25% of the  Fund's  share of the net  profits  earned  by the Hedge
          Fund. In addition,  Hedge Fund managers make  investment  decisions of
          the Hedge Funds independently of each other so that, at any particular
          time,  one Hedge  Fund may be  purchasing  shares  of an issuer  whose
          shares  are  being  sold at the  same  time  by  another  Hedge  Fund.
          Investing  by  Hedge  Funds  in this  manner  will  cause  the Fund to
          indirectly incur certain  transaction costs without  accomplishing any
          net investment result.

     o    Hedge Fund Interests Generally Illiquid. The Fund may make investments
          in,  or  withdrawals  from,  the Hedge  Funds  only at  certain  times
          specified in the governing documents of the Hedge Funds. The Fund will
          typically  be able to  dispose  of Hedge  Fund  interests  that it has
          purchased  only  on a  periodic  basis  such  as  monthly,  quarterly,
          semi-annually  or over longer  periods with  specified  advance notice
          requirements  and, if adverse market conditions were to develop during
          any period in which the Fund is unable to sell  Hedge Fund  interests,
          the Fund might obtain a less favorable price than that which prevailed
          when it decided to buy or sell.  In  addition,  Hedge Funds may impose
          certain  restrictions  on  withdrawals,  such as lock-ups,  gates,  or
          suspensions of withdrawal rights under certain  circumstances,  during
          which time the Fund may not  withdraw  all or part of its  interest in
          the Hedge Fund, or may withdraw only by paying a penalty.

          Some of the Hedge  Funds may hold  portions of their  investments,  in
          particular  investments  that are  illiquid,  in so-called  designated
          investments  or side pockets.  Side pockets are  sub-funds  within the
          Hedge Funds that create a structure  to invest in illiquid  securities
          and are valued  independently from the general portfolio with distinct
          allocation,  distribution  and  redemption  terms.  Their  liquidation
          generally occurs over a much longer period than that applicable to the
          Hedge Funds' general portfolio. Were the Fund to seek to liquidate its
          investment in a Hedge Fund which  maintains some of its investments in
          a side  pocket,  the Fund  might  not be able to fully  liquidate  its
          investment  without  delay,  which could be  considerable.  During the
          period until the Fund fully liquidated its interest in the Hedge Fund,
          the value of its investment would fluctuate.

          There may be times when the New  Advisers  intend to withdraw all or a
          portion  of  the  Fund's   investment  in  a  Hedge  Fund  but  cannot
          immediately do so even when other investors in the Hedge Fund are able
          to withdraw.

     o    In-Kind  Distributions by Hedge Funds. Hedge Funds may be permitted by
          their  governing  documents  to  distribute   securities  in  kind  to
          investors,  including the Fund.  The Fund expects that in the event of
          an in-kind distribution, it will typically receive securities that are
          illiquid  or  difficult  to  value.  In  such  circumstances,  the New
          Advisers would seek to dispose of these securities in a manner that is
          in the best interest of the Fund. However, the New Advisers may not be
          able to dispose of these  securities  at  favorable  prices or at all,
          which would have an adverse  effect on the Fund's  performance,  or at
          favorable times, which may adversely affect the Fund's ability to make
          other investments.

     o    Involuntary  Redemptions  by Hedge  Funds.  Hedge Funds are  generally
          permitted  by  their  governing  documents  to force a  redemption  by
          investors  for  different  reasons,  including to maintain a statutory
          exemption  or comply  with  regulatory  requirements.  If a Hedge Fund
          forces a  redemption  of all or a part of the  Fund's  investment,  it
          could trigger  adverse tax  consequences,  and additional  transaction
          costs to reposition the Fund's portfolio.

     o    Valuation.  Certain securities in which the Hedge Funds invest may not
          have  readily  ascertainable  market  prices and will be valued by the
          Hedge Fund  managers.  Although  the New  Advisers  will conduct a due
          diligence  review of the valuation  methodology  utilized by the Hedge
          Funds and will  monitor  all Hedge  Funds and  compare  their  monthly
          results  with  those  of peer  hedge  fund  managers,  the  valuations
          provided  generally will be conclusive with respect to the Fund unless
          the Fund has a clearly discernible reason not to trust the accuracy of
          such valuations.  Reliance upon such valuations will occur even though
          a Hedge Fund  manager  may face a conflict  of interest in valuing the
          securities, as their value will affect the manager's compensation. The
          New  Advisers  are  required  to  consider  all  relevant  information
          available at the time the Fund values its portfolio.  However, in most
          cases,   the  New  Advisers  will  have  limited  ability  to  confirm
          independently  the accuracy of the  valuations  received  from a Hedge
          Fund  because  the  advisers  do  not  generally  have  access  to all
          necessary  financial,  underlying  portfolio holdings and valuation of
          the underlying  holdings,  and other information relating to the Hedge
          Funds to determine independently the Hedge Funds' net asset values. In
          addition,  Hedge Fund  performance  and  valuation  data are available
          typically  only on a monthly basis.  Thus, a significant  component of
          the Fund's  portfolio  will not be valued on a weekly  basis as it has
          been historically. This could result in potentially volatile swings in
          the Fund's month-to-month calculation of NAV.


     o    Securities   Believed  to  Be  Undervalued   or  Incorrectly   Valued.
          Securities  that a  Hedge  Fund  manager  believes  are  fundamentally
          undervalued or incorrectly  valued may not ultimately be valued in the
          capital  markets at prices  and/or  within the time frame the  manager
          anticipates.

     o    Dilution.  If a Hedge Fund  manager  limits the amount of capital that
          may be  contributed  to a Hedge  Fund  from the  Fund,  or if the Fund
          declines to purchase additional  interests in a Hedge Fund,  continued
          sales of  interests in the Hedge Fund to others may dilute the returns
          for the Fund from the Hedge Fund.

     o    Investments  in  Non-Voting  Stock.  The  Fund  may  elect to hold its
          interest in a Hedge Fund in non-voting  form.  Additionally,  the Fund
          may  choose to limit the amount of voting  securities  it holds in any
          particular Hedge Fund and may, as a result,  hold substantial  amounts
          of non-voting securities in a particular Hedge Fund. To the extent the
          Fund holds non-voting  securities of a Hedge Fund, it will not be able
          to vote on matters that  require the approval of the  investors in the
          Hedge Fund. This restriction  could diminish the influence of the Fund
          in a Hedge Fund and adversely affect its investment in the Hedge Fund,
          which could result in unpredictable and potentially adverse effects on
          the Fund and stockholders.

     o    Hedge Funds' Turnover  Rates.  The Hedge Funds may invest on the basis
          of  short-term  market  considerations.  The turnover  rate within the
          Hedge  Funds may be  significant,  potentially  involving  substantial
          brokerage  commissions  and fees.  The Fund has no  control  over this
          turnover. As a result, it is anticipated that a significant portion of
          the Fund's  income and gains,  if any,  may be derived  from  ordinary
          income and short-term  capital gains.  In addition,  the redemption by
          the Fund of its interest in a Hedge Fund could involve expenses to the
          Fund under the terms of the Fund's investment with that Hedge Fund.

     o    Misconduct  by Managers.  There is a risk of  misconduct by Hedge Fund
          managers.  When the New Advisers invest the Fund's assets with a Hedge
          Fund manager,  the Fund does not have custody of the assets or control
          over their  investment.  Therefore,  there is always the risk that the
          manager  could  divert or abscond  with the  assets,  inaccurately  or
          fraudulently report the Hedge Fund's value, fail to follow agreed upon
          investment strategies,  provide false reports of operations, or engage
          in  other  misconduct.  The  Hedge  Fund  managers  with  whom the New
          Advisers  invest the Fund's assets are generally  private and have not
          registered  their  securities  under federal or state securities laws.
          This  lack of  registration,  with the  attendant  lack of  regulatory
          oversight,  may enhance the risk of misconduct by Hedge Fund managers.
          There also is a risk that  governmental or other  authorities may take
          regulatory  actions  against  Hedge  Fund  managers,  which may expose
          investors  such as the  Fund,  which  have  placed  assets  with  such
          managers, to losses.

     o    Custody Risk.  Custody of the Fund's assets will be held in accordance
          with the  requirements  of Section 17(f) of the 1940 Act and the rules
          thereunder,  which  require,  among other things,  that such assets be
          held by certain  qualified  banks or companies and in compliance  with
          certain  specified  conditions.  However,  the  Hedge  Funds  are  not
          required to, and may not,  hold custody of their assets in  accordance
          with  those  requirements.   As  a  result,  bankruptcy  or  fraud  at
          institutions, such as brokerage firms, banks, or administrators,  into
          whose  custody those Hedge Funds have placed their assets could impair
          the  operational  capabilities  or the  capital  position of the Hedge
          Funds and may, in turn, have an adverse impact on the Fund.

     o    Litigation and Enforcement  Risk. Hedge Fund managers might accumulate
          substantial  positions  in the  securities  of a specific  company and
          engage in a proxy fight,  become  involved in litigation or attempt to
          gain  control  of  a  company.  Under  such  circumstances,  the  Fund
          conceivably  could be named as a defendant in a lawsuit or  regulatory
          action.  There  have  been a number of widely  reported  instances  of
          violations  of  securities  laws  through  the misuse of  confidential
          information,  diverting or absconding with Hedge Fund assets,  falsely
          reporting Hedge Fund values and  performance,  and other violations of
          the  securities  laws.  Such  violations  may  result  in  substantial
          liabilities  for damages  caused to others,  for the  disgorgement  of
          profits  realized and for penalties.  Investigations  and  enforcement
          proceedings  are  ongoing,  and it is  possible  that the  hedge  fund
          managers may be charged with involvement in such  violations.  If that
          were the case with respect to the Hedge Fund managers, the performance
          records  of the  managers  would be  misleading.  Furthermore,  if the
          entity in which the Fund invested engaged in such violations, the Fund
          could be exposed to losses.


     o    Regulatory Change. The regulation of the U.S. and non-U.S.  securities
          and futures markets and Hedge Funds and investment  companies like the
          Fund has undergone  substantial  change in the recent years,  and such
          change  is  expected  to  continue  for the  foreseeable  future.  For
          example,  the regulatory and tax  environment for Derivatives in which
          Hedge Funds may participate is evolving, and changes in the regulation
          or taxation of Derivatives may materially  adversely  affect the value
          of the  Derivatives  held by the Hedge  Funds and the  ability  of the
          Hedge  Funds  to  pursue  their  trading  strategies.  Similarly,  the
          regulatory  environment  for  leveraged  investors and for hedge funds
          generally is evolving,  and potential regulatory  constraints on short
          selling may occur. The effect of regulatory  change on the Fund, while
          impossible to predict, could be substantial and adverse.

     o    Lack of Transparency. Hedge Funds may, consistent with applicable law,
          not  disclose  the  contents  of  their   portfolios.   This  lack  of
          transparency  may cause the Fund to be unable to determine  the levels
          of ownership in certain asset classes in the Hedge Funds.

The New Advisers.

Rocky Mountain  Advisers,  LLC. RMA was formed on September 5, 2008 as an Alaska
single-member  limited  liability company owned by the Susan L. Ciciora Trust (a
Horejsi  Affiliate  and  private  family  trust  domiciled  in  Alaska).  RMA is
registered as an investment  adviser under the  Investment  Advisers Act of 1940
(the  "Advisers  Act").  Although  RMA is a newly  formed LLC with no  operating
history, it has identical principals, officers, staff, and portfolio managers as
Boulder Investment  Advisers,  LLC ("BIA").  BIA currently  provides  investment
advisory services to three other closed-end investment companies:  Boulder Total
Return Fund, Inc. (NYSE:BTF), Boulder Growth & Income Fund, Inc. (NYSE:BIF), and
The Denali Fund Inc. (NYSE:DNY) (together, the "Boulder Funds"). RMA's principal
offices are located at 2344 Spruce Street, Suite A, Boulder, Colorado 80302. The
Susan L. Ciciora  Trust is an  "affiliated  person" of the Fund (as that term is
defined  in the 1940  Act).  The  executive  officers  of RMA and the  principal
occupation of each are set forth in the table below:




------------------------------------------------- ---------------------------------------------------------
           Name and Position with RMA                               Principal Occupation

================================================= =========================================================
                                               
Stephen C. Miller - President,  General  Counsel  Manager  (since  1999),   FAS;  Vice  President   (since
and Chief Executive Officer                       1996),  SIA;  President  (since  2002),  BIF;  President
                                                  (since 1999), BTF; President (since 2003), the Fund;
                                                  President (since 2007), DNY; Chief Compliance Officer
                                                  (2004-2007), BTF, BIF, the Fund, FAS, BIA, and SIA;
                                                  President and General Counsel, Horejsi, Inc. (liquidated
                                                  in 1999); General Counsel, Brown Welding Supply, LLC
                                                  (sold in 1999); Of Counsel (since 1991) to Krassa &
                                                  Miller, LLC; Manager and President, Badlands Trust
                                                  Company, LLC (dissolved in 2008); Vice President and
                                                  Director (since 2008), Alaska Trust Company.

Carl  D.  Johns  -  Investment   Manager,   Vice  Vice   President  and  Treasurer   (since  1999),   BIA;
President and Treasurer                           Assistant  Manager (since 1999),  FAS;  Chief  Financial
                                                  Officer,  Chief Accounting  Officer,  Vice President and
                                                  Treasurer, BTF, BIF, FF and DNY.

Laura Rhodenbaugh - Secretary                     Secretary/Treasurer (since 1999), FAS; Treasurer (since
                                                  1996), SIA; Secretary and Treasurer, various Horejsi
                                                  Affiliates.

Stewart R. Horejsi - Senior Investment Manager    Senior investment manager, RMA, BIA and SIA.
------------------------------------------------- ---------------------------------------------------------


Carl D. Johns,  the Vice  President and Treasurer of RMA, is also  presently the
Fund's Chief Financial  Officer,  Chief Accounting  Officer,  Vice President and
Treasurer.  Together with Stewart R. Horejsi,  Mr. Johns will be responsible for
the  Fund's  portfolio  and RMA's  day-to-day  advisory  activities.  Mr.  Johns
received a Bachelor's  degree in mechanical  engineering  from the University of
Colorado  in 1985,  and a Master's  degree in  finance  from the  University  of
Colorado in 1991.  He was  employed by Flaherty & Crumrine,  Incorporated,  from
1992 to 1998. During that period he was an Assistant Treasurer for the Preferred
Income Fund  Incorporated,  the Preferred Income  Opportunity Fund Incorporated,
and the  Preferred  Income  Management  Fund.  Since  1999,  he has  been  Chief
Financial  Officer,  Chief Accounting  Officer,  Vice President and Treasurer of
BTF, of BIF since 2002, of DNY since 2007, and of the Fund since 2003.


Stewart Investment  Advisers.  SIA or Stewart Investment Advisers (also known as
Stewart West Indies Trading Company,  Ltd.) is a Barbados international business
company,  incorporated  on November  12,  1996,  and is wholly owned by the West
Indies  Trust,.  Stewart R. Horejsi is not a  beneficiary  under the West Indies
Trust.  However,  Susan L.  Ciciora  (Stewart  Horejsi's  daughter)  and John S.
Horejsi (Stewart Horejsi's son), who are the Fund's only "interested" directors,
are discretionary  beneficiaries  under the West Indies Trust. As a result,  Ms.
Ciciora and Mr. John Horejsi may directly or indirectly benefit from the outcome
of  Proposals 1 and 2. SIA is  registered  as an  investment  adviser  under the
Advisers Act.

SIA is not  domiciled in the United States and  substantially  all of its assets
are located  outside the United  States.  As a result,  it may be  difficult  to
realize  judgments  of  courts  of  the  United  States  predicated  upon  civil
liabilities  under federal  securities  laws of the United States.  The Fund has
been  advised  that  there  is  substantial  doubt as to the  enforceability  in
Barbados of such civil  remedies and  criminal  penalties as are afforded by the
federal  securities  laws  of  the  United  States.  Pursuant  to  the  Advisory
Agreement,  SIA has appointed the Fund's Secretary at its offices at 2344 Spruce
Street,  Suite A, Boulder Colorado 80302, as its agent for service of process in
any legal action in the United States, thus subjecting it to the jurisdiction of
the United States courts.

Stewart  R.  Horejsi  is an  employee  of both  BIA and SIA.  He is the  primary
investment  manager and,  together with Mr. Johns,  will be responsible  for the
day-to-day  management  of the Fund's  assets  (other  than the Legacy  Holdings
managed by  Wellington  Management)  and will be primarily  responsible  for the
Fund's asset allocation. Mr. Horejsi was a director of BTF until November, 2001;
General Manager, Brown Welding Supply, LLC (sold in 1999),  Director,  Sunflower
Bank  (resigned);  and the President or Manager of various  subsidiaries  of the
Horejsi  Affiliates  since June 1986.  Mr.  Horejsi has  managed the  investment
portfolios  of the various  Horejsi  Affiliates  since 1982.  As of December 31,
2008, the size of these trusts' common stock portfolio was approximately $546.26
million.  Mr.  Horejsi  has been  the  Director  and  President  of the  Horejsi
Charitable  Foundation,  Inc. since 1997. Mr. Horejsi received a Master's Degree
in Economics from Indiana University in 1961 and a Bachelor of Science Degree in
Industrial Management from the University of Kansas in 1959.

The executive officers of SIA and the principal occupation of each are set forth
below:




-------------------------------------------------- ---------------------------------------------------------
           Name and Position with SIA                                Principal Occupation

================================================== =========================================================
                                                
Glade   Christensen   -  President  and  Resident  Office manager (since 1998) for SIA.
Managing Director

Stephen C. Miller - Director,  Vice President and  See description in table above.
Secretary

Stewart R. Horejsi - Investment Manager            Senior investment manager (since 1999) for BIA and SIA.

Laura Rhodenbaugh - Treasurer                      Secretary(since  1999),  FAS;  Secretary  (since  1999),
                                                   BIA;   Secretary   and   Treasurer,    various   Horejsi
                                                   Affiliates.
-------------------------------------------------- ---------------------------------------------------------


The  Advisory  Agreements.  Copies of the Advisory  Agreements  are set forth as
Exhibit  A-1  and  Exhibit  A-2  to  this  Proxy   Statement.   If  approved  by
stockholders,  the Advisory Agreements will become effective on the date of such
approval  and  continue  initially  for  a  two-year  period  and  continue  for
successive annual periods  thereafter,  provided such continuance is approved at
least annually by (a) a majority of the Independent  Directors and a majority of
the full Board or (b) a majority of the  outstanding  voting  securities  of the
Fund. As used in this Proxy  Statement,  a "majority of the  outstanding  voting
securities"  of the Fund shall have the  meaning for such phrase as set forth in
the 1940 Act, that is, the affirmative  vote of the lesser of (a) 67% or more of
the Shares  present or  represented by proxy at the Meeting or (b) more than 50%
of the  outstanding  Shares.  This voting  standard is referred to in this Proxy
Statement as a "1940 Act Majority Vote". The Advisory Agreements are terminable,
without  penalty,  on 60 days'  written  notice by the Board of Directors of the
Fund or by either New Adviser,  as the case may be, upon  written  notice to the
other  party  to  the  Agreement.   The  Advisory   Agreements   will  terminate
automatically upon assignment (as defined in the 1940 Act).



Under the Advisory  Agreements,  the New Advisers  are jointly  responsible  for
making  investment  decisions,   supplying  investment  research  and  portfolio
management   services,   placing   purchase   and  sale  orders  for   portfolio
transactions, making asset allocation decisions for the Fund and determining the
extent and nature of the Fund's leverage.  The Advisory  Agreements also provide
that the  respective  New Adviser will bear all expenses in connection  with its
performance,  including fees that it might pay to  consultants,  except that the
Fund is  responsible  for  reimbursing  the New Advisers for  reasonable  travel
expenses  associated  with attending  regular and special board and  stockholder
meetings.

Under the  Advisory  Agreements,  the New  Advisers  will receive an annual fee,
payable  monthly,  in an aggregate  amount  calculated at a rate of 1.25% of the
Fund's total assets,  less  liabilities  other than the  aggregate  indebtedness
entered into for purposes of leverage  ("Managed  Assets").  However,  under the
Advisory  Agreements,  the New Advisers  would waive (i) their fees in an amount
equal to up to 1.00% of the Fund's  assets  invested in a WHM Fund to offset any
asset-based fees (but not any  performance-based  fees) paid to WHM with respect
to the Fund's assets, and (ii) all fees paid to Wellington  Management under the
Sub-Advisory Agreement (i.e., the fee currently paid to Wellington Management as
applied to the Legacy Holdings) (the foregoing fee arrangement is referred to as
the  "Proposed  Fee").  The Proposed Fee will be split between the New Advisers,
25% to RMA and 75% to SIA.  This  percentage  split may be changed  from time to
time by the Board without stockholder approval so long as the gross advisory fee
paid by the Fund is not  increased.  The New  Advisers  agreed  to a  waiver  of
advisory fees such that, in the future, the advisory fees would be calculated at
the annual rate of 1.25% on Managed Assets up to $400 million,  1.10% on Managed
Assets between  $400-$600  million;  and 1.00% on Managed Assets  exceeding $600
million.  This  fee  waiver  agreement  has a  one-year  term  and is  renewable
annually.

The Fund currently pays  Wellington  Management an advisory fee of 1.125% on the
Fund's net assets up to and including $150 million;  1.00% on net assets between
$150 million and $300 million,  and 0.875% on net assets  exceeding $300 million
(together the "Current  Fee").  Based on $____  million of current  assets under
management, and the New Advisers' anticipated investment of approximately 50% of
the Fund's  assets in WHM Hedge Funds,  the advisory fees paid by the Fund would
decrease by approximately $____________ annually versus the Current Fee ($______
for the year ended _________),  and the Fund's expense ratio would decrease from
its current rate of ________% to ______%.  However,  on a  "look-through"  basis
(i.e.,  taking into  consideration  the fees  charged by WHM in managing the WHM
Hedge  Funds),   advisory-related   expenses   will   increase   slightly  -  by
approximately  $_________ annually. On a "look-through" basis, the expense ratio
would  increase  from its current rate of _____% to  approximately  _____ %, not
including the impact of any  performance  fee paid to WHM.  Hedge fund managers,
including WHM,  typically are paid a 20%  performance fee with respect to annual
gains  generated  in their  hedge  funds.  Thus,  under the  Restructuring,  the
increase in advisory-related  fees could be significantly  higher when there are
net gains in the hedge fund.  Since  performance fees will necessarily vary from
year to year,  they have not been  factored  into the  foregoing  estimated  fee
increase or expense ratio  estimates.  For the sake of  comparison,  if the Fund
invests 50% of its current assets in WHM Hedge Funds,  and during the first year
after the Effective Date the value of the WHM Hedge Funds  increases by 10%, and
all the Fund's other assets remain  unchanged,  on a  "look-through"  basis, the
Fund would pay an additional  $___________  in advisory  related fees. The Board
believes that the WHM Hedge Funds offer more investment flexibility and superior
risk  adjusted  returns  and thus the  likelihood  that the Fund will pay higher
look-through advisory-related fees is an acceptable tradeoff.

The Advisory Agreements provide that the New Advisers will be indemnified by the
Fund for losses,  claims and  expenses not caused by the New  Advisers'  willful
misfeasance,  bad faith or negligence in the performance of their duties or from
reckless disregard by the New Advisers of their obligations and duties under the
agreement.

Fees and Expenses. The following table shows the Fund's expenses as of March 31,
2009 (as  adjusted),  and pro  forma  expenses  giving  effect  to the  Advisory
Agreements and Sub-Advisory Agreement.





                                                                    TABLE 1

                                                  Fees and Expenses - Historical and Pro Forma

                                                              as of ________, 2009

----------------------------------------------- ------------------------- ------------------------- -------------------------
                                                        [DATE]                   Pro Forma*           Increase/(Decrease)
----------------------------------------------- ------------------------- ------------------------- -------------------------
                                                                                             




                                 [insert table]







* The pro forma  information  shown  assumes that  Proposals 1 through 3 in this
Proxy have been approved by stockholders. The pro forma Other Expenses have been
estimated.






Board Considerations  Regarding the Proposed Advisory  Agreements.  The 1940 Act
requires  that the Board,  including  a majority of the  Independent  Directors,
approve the terms of the Advisory Agreements. At a special meeting held on April
16, 2009, and at their regularly  scheduled meeting on April 24, 2009, the Board
considered the Restructuring and, in particular, the Advisory Agreements and, by
a unanimous  vote  (including  a separate  vote of the  Independent  Directors),
approved  the  Advisory   Agreements  and  recommended   they  be  submitted  to
stockholders for approval.

Factors  Considered.  Generally,  the Board  considered  a number of  factors in
approving the Advisory Agreements including, among other things, (i) the nature,
extent and quality of services to be  furnished by the New Advisers to the Fund;
(ii) the  investment  performance  of the Boulder  Funds (i.e.,  the three other
closed-end  investment  companies managed by BIA and SIA),  compared to relevant
market  indices  and the  performance  of peer groups of  closed-end  investment
companies  pursuing  similar  strategies;  (iii)  the  advisory  fees and  other
expenses to be paid by the Fund compared to the Current Fee (i.e.,  the fee paid
to Wellington Management) and those of similar funds managed by other investment
advisers;  (iv)  the  profitability  to the New  Advisers  of  their  investment
advisory  relationship with the Fund; (v) the extent to which economies of scale
would be realized as the Fund grows and whether fee levels reflect any economies
of scale; (vi) support of the New Advisers by the Fund's principal stockholders;
and (vii) the relationship between the New Advisers and FAS, a Horejsi Affiliate
and the Fund's co-administrator.  The Board also reviewed the ability of the New
Advisers to provide investment  management and supervision services to the Fund,
including  the  background,  education  and  experience  of  the  key  portfolio
management   and   operational   personnel,   the   investment   philosophy  and
decision-making  process  of  those  professionals,  and the  ethical  standards
maintained by the New Advisers.

Deliberative  Process.  To assist the Board in its  evaluation of the quality of
the New Advisers' services and the reasonableness of the Proposed Fee, the Board
reviewed  a  memorandum  from  independent  legal  counsel  to the  Fund and the
Independent  Directors  discussing the factors generally regarded as appropriate
to consider in evaluating  investment  advisory  arrangements  and the duties of
directors in approving such arrangements. In connection with its evaluation, the
Board  also  requested  and  received  various  materials  relating  to the  New
Advisers'  investment  services under the Advisory  Agreements.  These materials
included reports and presentations  from the New Advisers that described,  among
other things, the New Advisers'  financial  condition,  pro forma  profitability
from their  anticipated  relationship  with the Fund, soft dollar commission and
trade allocation policies,  organizational structure and compliance policies and
procedures.  The Board also  considered  information  received  from SIA and BIA
throughout  the year with  respect  to their  oversight  of the  Boulder  Funds,
including  investment  performance  and  expense  ratio  reports for the Boulder
Funds.  The Board  held  additional  discussions  at both April  meetings  which
included  an  executive  session  among  the  Independent  Directors  and  their
independent  legal counsel at which no employees or  representatives  of the New
Advisers or Wellington Management were present. The information below summarizes
the Board's  considerations  in  connection  with its  approval of the  Advisory
Agreements.  In deciding to approve the Advisory  Agreements,  the Board did not
identify a single factor as  controlling  and this summary does not describe all
of the matters considered. However, the Board concluded that each of the various
factors referred to below favored such approval.

     Nature,  Extent and Quality of the  Services  Provided;  Ability to Provide
     Services.  The Board received and considered  various data and  information
     regarding the nature,  extent and quality of services to be provided to the
     Fund by the New Advisers under the Advisory Agreements.  Each New Adviser's
     most recent investment adviser  registration form on the SEC's Form ADV was
     provided  to the  Board,  as were  the  responses  of the New  Advisers  to
     information  requests submitted by the Independent  Directors through their
     independent  legal counsel.  The Board reviewed and analyzed the materials,
     which included  information about the background,  education and experience
     of the New Advisers' key portfolio management and operational personnel and
     the amount of  attention  to be  devoted  to the Fund by the New  Advisers'
     portfolio management  personnel.  In this regard, it was noted that BIA and
     SIA's only clients are the three Boulder Funds (presently RMA does not have
     clients).  Accordingly,  the Board  was  satisfied  that the New  Advisers'
     investment  personnel,  including  Stewart R.  Horejsi,  the New  Advisers'
     principal  portfolio manager,  would devote a significant  portion of their
     time and attention to the success of the Fund and its investment  strategy.
     The Board also  considered  the New Advisers'  policies and  procedures for
     ensuring  compliance  with applicable  laws and  regulations.  Based on the
     above factors, the Board concluded that it was generally satisfied with the
     nature,  extent  and  quality of the  investment  advisory  services  to be
     provided  to the  Fund by the  New  Advisers,  and  that  the New  Advisers
     possessed the ability to continuously provide these services to the Fund in
     the  future.  The  Board  was  satisfied  that  the New  Advisers  have the
     experience and personnel to manage the Fund's  portfolio both as it existed
     on April 24,  2009 (the date of the Board  meeting),  and as it would exist
     under the  Restructuring  (i.e.,  with substantial  investment in WHM Hedge
     Funds). In reaching this conclusion,  the Board noted that BIA and SIA have
     satisfactorily  managed the Boulder  Funds,  with  respect to which all the
     Independent Directors also act as independent board members.


     Investment Performance.  The Board considered the investment performance of
     BTF since 1999, BIF since 2002,  and DNY since 2007,  when BIA and SIA took
     over  management  of those funds.  The Board noted that the  personnel  and
     structure of BIA and RMA are  essentially  the same and thus the structure,
     personnel and  performance of BIA could be used as a proxy for that of RMA.
     The Board  observed  that the  long-term  performance  of the Boulder Funds
     (i.e.,  performance  since BIA and SIA began managing the respective funds'
     portfolios)  outperformed  the  Standard & Poor's 500  Index,  each  fund's
     primary relevant benchmark, and the Dow Jones Industrial Average and Nasdaq
     Composite,  each fund's secondary benchmarks.  In addition,  the Board took
     into   consideration   that  BIF  received  2008  Performance   Achievement
     Certificates  from  Lipper  Analytical  Services  for the 1-year and 5-year
     periods ended  December 31, 2008,  in Lipper's Core Funds  category and DNY
     received 2008 Performance  Achievement  Certificates from Lipper Analytical
     Services for the 1-year and 5-year  periods  ended  December  31, 2008,  in
     Lipper's  Real  Estate Fund  category.  Based on these  factors,  the Board
     concluded  that  the  overall  performance  results  of the  Boulder  Funds
     supported approval of the Advisory  Agreements.  In their  consideration of
     the New Advisers'  performance,  the Board noted that there are significant
     differences  between the  investment  focus of the  Boulder  Funds and that
     traditionally  held  by  the  Fund,  that  the  Boulder  Funds  have  large
     concentrations  in  Berkshire  Hathaway  (NYSE:BRK),  and that  none of the
     Boulder Funds  concentrate  on financial  services  companies to the extent
     concentrated by the Fund.

     Costs of Services  Provided and Profits  Realized by the New  Advisers.  In
     evaluating  the costs of the services to be provided to the Fund by the New
     Advisers,  the Board received  statistical and other information  regarding
     the  Fund's  total  expense  ratio and its  various  components.  The Board
     acknowledged  that the Proposed Fee is at the higher end of the spectrum of
     fees charged by similarly situated investment advisers of closed-end funds,
     although  it is the  same as  that  charged  by BIA and SIA to the  Boulder
     Funds,  who are  BIA's  and  SIA's  only  other  clients.  The  Board  also
     considered that the New Advisers have a policy of not  participating in (or
     neutralizing the indirect cost to their clients of) soft dollar or directed
     brokerage  transactions,  and that instead,  the New Advisers directly bear
     the cost of third-party  research utilized by them,  increasing the cost to
     the New Advisers of providing investment  management services to their fund
     clients and decreasing their clients' transaction expenses.  The Board also
     obtained detailed  information  regarding the overall  profitability of the
     New Advisers and the combined  profitability  of the New Advisers,  BIA and
     FAS,   which  acts  as   co-administrator   for  the  Fund.   The  combined
     profitability  information  was obtained to assist the Board in determining
     the overall  benefits to the New Advisers  from their  relationship  to the
     Fund.  In  particular,  the  Board  reviewed  the costs  anticipated  to be
     incurred by the New  Advisers  and FAS in  providing  services to the Fund.
     Based on its analysis of this  information,  the Board  determined that the
     level of profits  expected to be earned by the New Advisers  from  managing
     the Fund bear a  reasonable  relationship  to the  services  rendered,  and
     concluded  that the fee under the Advisory  Agreements  was  reasonable and
     fair in light of the nature and quality of the services provided by the New
     Advisers.  The Board  recognized that the Proposed Fee, on a "look-through"
     basis,  represents  a modest  increase  compared  to the  cost of  advisory
     services currently provided to the Fund by Wellington Management.  However,
     the Board believed that the higher fee is justified  primarily  because the
     New Advisers will have the added  responsibility  of overseeing  the Fund's
     hedge fund  investments and Wellington  Management as sub-adviser,  each of
     which will require an increased  expenditure of resources,  and determining
     the  Fund's  asset  allocation  across the entire  universe  of  investment
     possibilities.

     The Board took into consideration  that, with respect to the Boulder Funds,
     BIA and  SIA  have  advocated  removal  of  investment  restrictions  which
     ultimately benefited  stockholders,  but that the Fund will require the New
     Advisers to analyze a much broader  universe of  investments  than those of
     the Boulder Funds.  The Board  observed that in contrast,  under the Fund's
     present Concentration  Policy,  Wellington Management analyzed a relatively
     narrow  asset class  (i.e.,  financial  services  companies)  having  fewer
     investment   prospects.   Moreover,   the  Board   noted   that  under  the
     Concentration   Policy,   Wellington   Management  is  mandated  to  remain
     substantially  invested in financial  services companies whether or not the
     financial  services  industry is in or out of favor, and thus does not have
     the  burden  of  determining   when  and  whether   reducing  the  industry
     concentration is appropriate and in the best interests of the stockholders.
     The Board believed that the New Advisers will necessarily expend more time,
     energy and resources in determining the most appropriate asset class at the
     most  appropriate  time  and  thus are  entitled  to a higher  fee than the
     Current Fee.


     Economies of Scale. The Board considered  whether  economies of scale might
     occur with respect to the  management  of the Fund,  whether the Fund could
     appropriately benefit from any economies of scale, and whether the Proposed
     Fee is  reasonable  in relation to the Fund's  assets and any  economies of
     scale that may exist.  Based on the relatively  small size of the Fund, the
     Board  determined  that no meaningful  economies of scale would be realized
     until the Fund achieved  significantly  higher asset levels. The Board also
     noted  that  SIA's  and  BIA's  internal  costs  of  providing   investment
     management  services to the Boulder Funds had increased  over time, in part
     due to administrative  burdens and expenses  resulting from legislative and
     regulatory actions, and that the New Advisers might need to hire additional
     personnel as their  assets under  management  increase.  Nevertheless,  the
     Board  determined that  breakpoints  should be added to the Fund's advisory
     fee  schedule to reduce the  advisory  fees in the event the Fund's  assets
     increase  over  current  levels.  After some  discussion,  the New Advisers
     agreed to a waiver of advisory  fees such that the  advisory  fees would be
     calculated  at the annual rate of 1.25% on asset levels up to $400 million,
     1.10% on assets between  $400-$600  million;  and 1.00% on assets exceeding
     $600  million.  This fee waiver  agreement  has a  one-year  term after the
     Effective Date and is renewable  annually.  The Board  concluded that these
     breakpoint levels were acceptable and would appropriately  benefit the Fund
     from any  economies  of scale  realized  by the New  Advisers if the Fund's
     assets grow.

     Support by Significant Stockholder. The Board placed considerable weight on
     the views of the Horejsi Affiliates, the Fund's largest stockholders, which
     are affiliated  with Mr. Horejsi and the New Advisers.  As of May 31, 2009,
     the Horejsi Affiliates held  approximately  35.51% of the Shares. The Board
     understands from Mr. Horejsi that the Horejsi  Affiliates are supportive of
     the New Advisers and the approval of the Advisory Agreements.

     Approval.  The Board based its decision to approve the Advisory  Agreements
     on a careful  analysis,  in consultation  with independent  counsel for the
     Fund  and the  Independent  Directors,  of  these  and  other  factors.  In
     approving the Advisory  Agreements,  the Board  concluded that the terms of
     the Advisory  Agreements  are  reasonable and fair and that approval of the
     Advisory  Agreements  is  in  the  best  interests  of  the  Fund  and  its
     stockholders.

How the Horejsi Affiliates will Vote. Representatives of the Horejsi Affiliates,
which hold approximately  35.51% of the Shares,  who, because of their ownership
of the New  Advisers,  have an  economic  interest in approval of Proposal 1 and
Proposal 2, have informed the Board that the Horejsi  Affiliates will vote their
shares FOR both Proposal 1 and Proposal 2.

Conditional  Proposals.  Passage of  Proposals 1 and 2 (approval of the Advisory
Agreements)  and  Proposal  3  (approval  of  the  Sub-Advisory  Agreement)  are
conditioned on all such Proposals being approved by  stockholders  (i.e., if one
fails to achieve stockholder approval, all three fail).

Required  Vote.  Approval  of each of  Proposals  1 and 2  requires  a 1940  Act
Majority Vote.

       THE BOARD OF DIRECTORS, INCLUDING ALL OF THE INDEPENDENT DIRECTORS,
       UNANIMOUSLY RECOMMENDS THAT THE STOCKHOLDERS VOTE "FOR" PROPOSAL 1.

       THE BOARD OF DIRECTORS, INCLUDING ALL OF THE INDEPENDENT DIRECTORS,
       UNANIMOUSLY RECOMMENDS THAT THE STOCKHOLDERS VOTE "FOR" PROPOSAL 2.


                                   PROPOSAL 3

          TO APPROVE OR DISAAPROVE THE PROPOSED INVESTMENT SUB-ADVISORY
               AGREEMENT WITH WELLINGTON MANAGEMENT COMPANY, LLP

Background of Proposal.  See  "Background"  discussion  under  Proposals 1 and 2
above.

Wellington  Management Company,  LLP. Wellington Management is being proposed to
act as sub-adviser to the Fund with respect to the Legacy  Holdings for a period
of two years following the Effective Date.  Wellington  Management is located at
75 State Street, Boston, Massachusetts. Wellington Management is a Massachusetts
limited  liability  partnership  and a professional  investment  counseling firm
which provides  investment  services to investment  companies,  employee benefit
plans, endowments,  foundations,  and other institutions.  Wellington Management
and its predecessor organizations have provided investment advisory services for
over 70 years.  As of March  31,  2009,  Wellington  Management  had  investment
management  authority  with  respect to  approximately  $396  billion in assets.
Wellington Management has managed the Fund since its inception in 1986. Nicholas
C.  Adams,  Senior Vice  President,  Partner and Equity  Portfolio  Manager,  is
primarily  responsible  for the  day-to-day  management  of the Fund and, if the
Restructuring is approved by stockholders,  is expected to continue managing the
Legacy  Holdings for a period of two years  following  the Effective  Date.  Mr.
Adams joined  Wellington  Management as an investment  professional in 1983. The
names  and  principal   occupations  of  the  principal  executive  officers  of
Wellington  Management are set forth below.  Unless  otherwise stated below, the
business address of each such person is 75 State Street, Boston Massachusetts:





------------------------------------------------- ---------------------------------------------------------
  Name and Position with Wellington Management                      Principal Occupation

================================================= =========================================================
                                               
Karl E. Bandtel                                   Senior Vice President,  Partner and Executive  Committee
                                                  Member

Edward P. Bousa                                   Senior Vice President,  Partner and Executive  Committee
                                                  Member

Cynthia M. Clarke                                 Senior Vice President, Partner and Chief Legal Officer

Lucius T. Hill, III                               Senior Vice President,  Partner and Executive  Committee
                                                  Member

Jean M. Hynes                                     Senior Vice President, Partner and Executive Committee
                                                  Member

Selwyn J. Notelovitz                              Senior Vice President, Partner and Chief Compliance
                                                  Officer

Saul J. Pannell                                   Senior Vice President, Partner and Executive Committee
                                                  Member

Phillip H. Perelmuter                             Senior Vice President, Managing Partner and Executive
                                                  Committee Member

Edward J. Steinborn                               Senior Vice President, Partner and Chief Financial
                                                  Officer

Brendan J. Swords                                 Senior Vice President, Managing Partner and Executive
                                                  Committee Member

Perry M. Traquina                                 President,  Chief Executive  Officer,  Managing  Partner
                                                  and Executive Committee Member

James W. Valone                                   Senior Vice President,  Partner and Executive  Committee
                                                  Member
------------------------------------------------- ---------------------------------------------------------


Current  Agreement.  Wellington  Management  has  served as the sole  investment
manager to the Fund from its  inception  in 1986.  Pursuant  to the terms of the
investment  advisory agreement between  Wellington  Management and the Fund (the
"Current Advisory Agreement"), Wellington Management is responsible for managing
the Fund's investment  portfolio.  The Current Advisory Agreement was amended in
July 2006, after required  approval was obtained from the Board and stockholders
to increase the fees payable to Wellington Management.  Under the agreement,  as
amended, Wellington Management is entitled to receive an investment advisory fee
at the annual rate of 1.125% of the Fund's average net assets,  based on the net
assets on the last business day of each month, up to and including $150 million;
1.00% on net  assets in  excess of $150  million  and up to and  including  $300
million;  and 0.875% on net assets in excess of $300 million  (defined  above as
the "Current Fee").



The Sub-Advisory Agreement. A copy of the Sub-Advisory Agreement is set forth as
Exhibit B to this Proxy Statement. If approved by stockholders, the Sub-Advisory
Agreement  will  become  effective  on the  Effective  Date and  continue  for a
two-year period,  at which time it will terminate by its terms. The Sub-Advisory
Agreement is  terminable,  without  penalty,  on 60 days' written  notice by the
Board  or by  Wellington  Management  upon  written  notice  to  the  Fund.  The
Sub-Advisory Agreement will terminate  automatically upon assignment (as defined
in the 1940 Act). Under the  Sub-Advisory  Agreement,  Wellington  Management is
solely responsible for making investment decisions regarding whether to continue
to hold or to sell Legacy Holdings  (defined above)  including,  but not limited
to, supplying  investment research and portfolio management services and placing
purchase  and  sale  orders  for  portfolio  transactions.  However,  Wellington
Management  will manage the Legacy  Holdings with a view toward  liquidating the
assets to generate cash for the New Advisers to invest or familiarizing  the New
Advisers with these holdings. Wellington Management will have no authority after
the  Effective  Date to directly  purchase any new  security  for the Fund.  The
Sub-Advisory  Agreement also provides that  Wellington  Management will bear all
expenses in connection with its performance, including fees that it might pay to
consultants.  Under the Sub-Advisory  Agreement,  Wellington  Management will be
compensated  at a rate  equal to the  Current  Fee (the  "Proposed  Sub-Advisory
Fee").

Fees and Expenses.  See Table 1 above which  consolidates  the fees and expenses
associated with Proposals 1 through 3.

Board Considerations Regarding the Sub-Advisory Agreement. The 1940 Act requires
that the Board, including a majority of the Independent  Directors,  approve the
terms of the  Sub-Advisory  Agreement.  At a special  meeting  held on April 16,
2009,  and at their  regularly  scheduled  meeting on April 24, 2009,  the Board
considered the Restructuring and, in particular, the Sub-Advisory Agreement and,
by a unanimous vote  (including a separate vote of the  Independent  Directors),
approved  the  Sub-Advisory   Agreement  and  recommended  it  be  submitted  to
stockholders for approval.

Factors  Considered.  Generally,  the Board  considered  a number of  factors in
approving the  Sub-Advisory  Agreement  including,  among other things,  (i) the
nature,  extent and quality of services to be furnished by Wellington Management
to the  Fund;  (ii) the  investment  performance  of the Fund  under  Wellington
Management's  management compared to relevant market indices and the performance
of  comparable  funds;  (iii) the advisory  fees and other  expenses paid by the
Fund; (iv) the profitability to Wellington Management of its investment advisory
relationship  with the  Fund;  (v) the  extent to which  economies  of scale are
realized and whether fee levels reflect any economies of scale;  (vi) support of
Wellington  Management  by the  Fund's  principal  stockholders;  and  (vii) the
historical  relationship between the Fund and Wellington  Management.  The Board
also  reviewed the  willingness  of Wellington  Management to provide  temporary
investment  management  services to the Fund with respect to the Legacy Holdings
and its  ability to provide  supervision  services  to the Fund,  including  the
background,  education  and  experience  of the  key  portfolio  management  and
operational personnel,  the investment philosophy and decision-making process of
those  professionals,   and  the  ethical  standards  maintained  by  Wellington
Management.

Deliberative  Process.  To assist the Board in its  evaluation of the quality of
Wellington  Management's  services and the  reasonableness of the fees under the
Sub-Advisory  Agreement,  the Board received a memorandum from independent legal
counsel  to the  Fund  and the  Independent  Directors  discussing  the  factors
generally regarded as appropriate to consider in evaluating  investment advisory
arrangements  and the duties of  directors in approving  such  arrangements.  In
connection  with its evaluation,  the Board also requested and received  various
materials  relating to Wellington  Management's  investment  services  under the
Current Advisory  Agreement.  These materials included reports and presentations
from  Wellington  Management  that  described,  among other  things,  Wellington
Management's organizational structure,  financial condition,  internal controls,
policies and  procedures on brokerage  practices,  soft-dollar  commissions  and
trade  allocation,   comparative  investment  performance  results,  comparative
sub-advisory  fees,  and  compliance  policies  and  procedures.  The Board also
reviewed  a report  prepared  by  Wellington  Management  comparing  the  Fund's
performance  to a group of  closed-end  and open-end  mutual funds with similar,
though not identical,  investment strategies as the Fund (the "Peer Group"). The
Board also considered information received from Wellington Management throughout
the year,  including  investment  performance and returns as well as stock price
and net asset value.  In advance of the April 24, 2009 meeting,  the Independent
Directors  held a special  telephonic  meeting  with counsel to the Fund and the
Independent  Directors.   The  purpose  of  this  meeting  was  to  discuss  the
Restructuring  and renewal of the Current  Advisory  Agreement and to review the
materials provided to the Board by Wellington  Management in connection with the
annual review process.  The Board held  additional  discussions at the April 24,
2009 Board  meeting,  which  included a private  session  among the  Independent
Directors  and  their  independent  legal  counsel  at  which  no  employees  or
representatives of the New Advisers or Wellington  Management were present.  The
information  below summarizes the Board's  considerations in connection with its
approval of the Sub-Advisory  Agreement. In deciding to approve the Sub-Advisory
Agreement,  the Board did not identify a single factor as  controlling  and this
summary  does not  describe all of the matters  considered.  However,  the Board
concluded  that each of the  various  factors  referred  to below  favored  such
approval.


     Nature,  Extent and Quality of the  Services  Provided;  Ability to Provide
     Services.  The Board received and considered  various data and  information
     regarding the nature,  extent and quality of services currently provided to
     the Fund by Wellington  Management  under the Current  Advisory  Agreement.
     Wellington Management's most recent investment adviser registration form on
     the SEC's Form ADV was  provided  to the Board,  as were the  responses  of
     Wellington  Management  to an  information  request  submitted to it by the
     Independent  Directors through their  independent legal counsel.  The Board
     reviewed and analyzed the materials,  which included  information about the
     background,   education  and  experience  of  Wellington  Management's  key
     portfolio management and operational  personnel and the amount of attention
     currently  devoted  to  the  Fund  by  Wellington   Management's  portfolio
     management  personnel.  The Board  also  reviewed  Wellington  Management's
     policies and procedures on side-by-side management of hedge funds and other
     accounts  and any impact  these might have on the success of the Fund.  The
     Board was satisfied  that  Wellington  Management's  investment  personnel,
     including Mr. Adams, the Fund's principal  portfolio manager,  would devote
     an adequate  portion of their time and attention to the success of the Fund
     and its investment  strategy,  particularly given a reduction in the number
     of accounts  managed by Mr. Adams that occurred in 2006. Based on the above
     factors,  the Board  concluded  that it was  generally  satisfied  with the
     nature,  extent  and  quality of the  investment  advisory  services  to be
     provided  to  the  Fund  by  Wellington  Management,  and  that  Wellington
     Management  possessed the ability to continue to provide these  services to
     the Fund in the future.

     Investment Performance.  The Board considered the investment performance of
     the  Fund as  compared  to  relevant  indices,  the  performance  of  three
     comparable  closed-end  financial  services  funds  (the  "Closed-End  Peer
     Group") and the  performance  of 11 selected  open-end  financial  services
     funds (the "Open-End Peer Group") for the year-to-date, one-, three-, five-
     and  ten-year  periods and  since-inception  period (for the indices  only)
     ended February 28, 2009.  Certain  information for certain periods were not
     available, depending on the inception date of the index or comparable fund.
     The Board noted that the Fund's  returns gross of fees of were in line with
     the returns of the S&P 500 Index,  NASDAQ Composite Principal Index, NASDAQ
     Banks Index, SNL All Daily Thrift Index, and MSCI World Financials  ex-Real
     Estate Index for the one-year,  three-year and five-year periods,  and that
     the Fund  had  outperformed  all of  those  indices  for the  ten-year  and
     since-inception periods. The Board noted that the financial services sector
     of the stock market had experienced a significant  decline in late 2008 and
     early 2009, which accounted for the Fund's recent relative underperformance
     as compared to broader  market  indices.  The Board also  observed that the
     Fund had  significantly  outperformed  the  Closed-End  Peer Group over the
     year-to-date,  one-, five- and ten-year periods except for one fund for the
     one-year  period.  The Board further noted that the Fund  outperformed  the
     Lipper  Financial  Services Fund Average and the Open-End Peer Group in all
     time-period  categories except for four funds in the one-year period, three
     funds in the three-year  period,  and one fund in the five-year  period. In
     concluding that the Fund's overall investment performance supported renewal
     of  the  Current  Advisory  Agreement  and  approval  of  the  Sub-Advisory
     Agreement under the Restructuring, the Board ascribed greater weight to the
     long-term  performance  of  the  Fund  against  its  benchmarks  and  other
     financial services funds.

     Costs of Services  Provided and Profits Realized by Wellington  Management.
     In  evaluating  the costs of the  services  to be  provided  to the Fund by
     Wellington   Management,   the  Board  relied  on  statistical   and  other
     information  regarding  the  Fund's  total  expense  ratio and its  various
     components,  including the Proposed Fee and Proposed  Sub-Advisory  Fee and
     investment-related  expenses.  The  Board  also  noted  that  in  2006,  in
     connection  with a proposed  increase  in  advisory  fees under the Current
     Advisory   Agreement  that  was  ultimately   approved  by  the  Board  and
     stockholders,  it had conducted a detailed evaluation of the Fund's expense
     ratio and the advisory  fees charged by  Wellington  Management.  The Board
     noted that the the  Proposed  Sub-Advisory  Fee is in the range of advisory
     fees for funds in the  Closed-End  Peer Group and is comparable to the fees
     earned by Wellington  Management on other portfolios  managed by Mr. Adams,
     including  certain WHM Hedge Funds.  The Board also noted that the Proposed
     Fee to be charged by the New  Advisers is at the higher end of the spectrum
     of fees charged by similarly  situated  investment  advisers of  closed-end
     funds but that the  Advisory  Agreements  with the New  Advisers  contain a
     waiver of all fees paid to  Wellington  Management  under the  Sub-Advisory
     Agreement.


     The Board also obtained information  regarding the overall profitability of
     Wellington  Management  to assist  the  Board in  determining  the  overall
     benefits to Wellington  Management  from its  relationship to the Fund. The
     Board compared the overall  profitability  of Wellington  Management to the
     profitability of certain publicly traded investment management firms. Based
     on its analysis of this information,  the Board determined that the overall
     level of  profits  earned by  Wellington  Management  did not  appear to be
     unreasonable  based on the  profitability  of other  investment  management
     firms and the quality of the services  rendered by  Wellington  Management.
     Based on  these  factors,  the  Board  concluded  that  the fee  under  the
     Sub-Advisory  Agreement was  reasonable and fair in light of the nature and
     quality of the services provided by Wellington Management.

     Economies of Scale. The Board considered  whether there have been economies
     of scale with respect to the  management of the Fund,  whether the Fund has
     appropriately  benefited  from any  economies  of scale,  and  whether  the
     Proposed  Sub-Advisory  Fee is  reasonable in relation to the Fund's assets
     and any  economies  of scale that may exist.  The Board noted that that the
     Proposed Sub-Advisory Fee includes breakpoints.  In evaluating economies of
     scale,  the Board  noted that  Wellington  Management's  internal  costs of
     providing  investment  management  services  to the Fund had  continued  to
     increase,  particularly  costs  associated  with  attracting  and retaining
     talented  investment  personnel and compliance  costs.  The Board concluded
     that the  breakpoints in the fee schedule are acceptable and  appropriately
     reflect any  economies  of scale  expected  to be  realized  by  Wellington
     Management  in  managing  the  Legacy  Holdings  if the  Fund's  net assets
     increase.

     Support by Significant Stockholder. The Board placed considerable weight on
     the views of the Horejsi Affiliates, the Fund's largest stockholders, which
     are affiliated  with Mr. Horejsi and the New Advisers.  As of May 31, 2009,
     the Horejsi Affiliates held  approximately  35.51% of the Shares. The Board
     understands from Mr. Horejsi that the Horejsi  Affiliates are supportive of
     the Restructuring and engaging  Wellington  Management to manage the Legacy
     Holdings under the Sub-Advisory Agreement.

     Approval.  The  Board  based  its  decision  to  approve  the  Sub-Advisory
     Agreement on a careful analysis,  in consultation with independent  counsel
     to the Fund and the Independent  Directors,  of these and other factors. In
     approving the Sub-Advisory Agreement, the Board concluded that the terms of
     the  Sub-Advisory  are  reasonable  and  fair  and  that  approval  of  the
     Sub-Advisory  Agreement  is in the  best  interests  of the  Fund  and  its
     stockholders.

How the Horejsi Affiliates will Vote. Representatives of the Horejsi Affiliates,
which hold approximately [35.51]% of the Shares, who, because of their ownership
of the New  Advisers,  have an economic  interest  in  approval  of  Proposals 1
through 3, have informed the Board that the Horejsi  Affiliates  will vote their
Shares FOR Proposal 3.

Conditional  Proposal.  Passage of  Proposals 1 and 2 (approval  of the Advisory
Agreements)  and  Proposal  3  (approval  of  the  Sub-Advisory  Agreement)  are
conditioned on all such Proposals being approved by  stockholders  (i.e., if one
fails to achieve stockholder approval, all three fail).

Required Vote. Approval of Proposal 3 requires a 1940 Act Majority Vote.


       THE BOARD OF DIRECTORS, INCLUDING ALL OF THE INDEPENDENT DIRECTORS,
       UNANIMOUSLY RECOMMENDS THAT THE STOCKHOLDERS VOTE "FOR" PROPOSAL 3.


                                   PROPOSAL 4

           TO APPROVE OR DISAPPROVE ELIMINATING THE FUND'S FUNDAMENTAL
               POLICY OF INVESTING AT LEAST 65% OF ITS ASSETS IN
                          FINANCIAL SERVICES COMPANIES

Summary of Proposal.  The Fund has adopted a  fundamental  investment  policy of
investing at least 65% of its assets in "financial  services companies" (defined
above as the "Concentration Policy"). "Financial services companies" are broadly
defined to include,  but are not limited to,  savings and banking  institutions,
mortgage banking institutions,  real estate investment trusts,  consumer finance
companies, credit collection and related service companies, insurance companies,
security  and  commodity  brokerage  companies,   security  exchange  companies,
financial-related technology companies, investment advisory and asset management
firms,  and  financial  conglomerates,  and  holding  companies  of any of these
companies. The Concentration Policy is "fundamental",  meaning that it cannot be
changed without a 1940 Act Majority Vote. If approved, Proposal 4 will eliminate
the  Concentration  Policy in its entirety  such that the Fund will no longer be
required to invest  significantly (i.e., greater than 25%) in financial services
companies or the financial services or any other industry.



Reason for this Proposal.  Under the Concentration  Policy, the Fund is required
to invest greater than 65% of its total assets in financial services  companies.
In 2006,  in order to  provide  the Fund's  adviser  with more  flexibility  and
mitigate  industry  risk,  stockholders  approved  an  amendment  to the  Fund's
concentration  policy which broadened the scope of financial  companies in which
the Fund could invest and which would be included when  determining  whether the
Fund  has  met  its  concentration  threshold  (i.e.,  the  "financial  services
companies"  described  above).  Management  believes that, even in its broadened
form,  the  Concentration  Policy is still overly  restrictive  and could unduly
expose  the  Fund to  considerable  downside  risk  and  volatility  should  the
financial  services  industry take a further downturn.  For example,  the recent
sub-prime fiasco, the banking,  credit and liquidity crisis,  changes in the tax
laws and other  factors  have  disproportionately  impacted  the Fund  under its
Concentration Policy.  Financial services companies are also affected by general
economic  conditions.  All of these  risks  are  compounded  because,  under the
Concentration Policy, the Fund is "fundamentally bound" to invest in these types
of assets.  Management believes that eliminating the financial mandate under the
Concentration  Policy will  mitigate the inherent risk of  concentrating  in the
financial services sector.

Generally, as with all equity funds, the Fund's net asset value can fall because
of weakness in the broad market, a particular  industry,  or specific  holdings.
The market as a whole can decline for many reasons,  including adverse political
or economic developments  domestically or abroad, changes in investor psychology
or heavy  institutional  selling.  The  prospects for an industry or company may
deteriorate because of a variety of factors, including disappointing earnings or
changes in the  competitive  environment.  In  addition,  the  Fund's  adviser's
assessment  of  companies  held by the Fund may prove  incorrect,  resulting  in
losses  or poor  performance  even  in a  rising  market.  Finally,  the  Fund's
investment approach could fall out of favor with the investing public, resulting
in lagging  performance  compared to other types of stock funds.  Foreign  stock
holdings  may lose value  because of  declining  foreign  currencies  or adverse
political or economic events overseas. As with any investment company, there can
be no guarantee the Fund will achieve its objective.

If the Concentration  Policy is eliminated under Proposal 4, going forward,  the
Fund  would be  precluded  from  investing  more  than 25% of its  assets in the
financial  services or any other  industry.  However,  the Fund would  likely be
concentrated  in the  securities  of financial  services  companies  immediately
following the  Effective  Date as a result of the current  effectiveness  of the
Concentration  Policy. The New Advisers would seek to reduce the Fund's holdings
in financial  services  companies to below 25% of the Fund's assets in a prudent
manner consistent with elimination of the Concentration Policy. As discussed, if
the  Restructuring  Proposals  are  approved by  stockholders,  the New Advisers
expect to invest  significantly  in the WHM Hedge Funds,  which have significant
exposure to the  financial  services  sector.  However,  the Fund will not "look
through" its investments in the WHM Hedge Funds to underlying portfolio holdings
in financial services companies in determining  whether the Fund exceeds the 25%
maximum concentration threshold contemplated under this Proposal. The Fund could
therefore  become  indirectly  concentrated in financial  services  companies by
virtue of the  investments  by the WHM Hedge Funds in such  investments.  If the
Restructuring  Proposals are approved by stockholders,  in the near term the New
Advisers  expect to focus  primarily on a broad range of companies  which may or
may not include financial services companies.

Risks and Disadvantages of Eliminating the Concentration Policy. Eliminating the
Concentration  Policy so that the Fund may no longer invest more than 25% of its
assets in financial services companies may, for some long-term  investors,  take
away some of their ability to invest in the Fund as a means of diversifying into
the financial services industry.  However,  management does not view eliminating
the  current  policy  as  increasing  risk.  Indeed,  management  believes  that
eliminating the current 65%  requirement  will mitigate  industry  concentration
risks.

Board Considerations.  At a special meeting held on April 16, 2009, and at their
regularly scheduled meeting on April 24, 2009, the Board considered, among other
things,  amending  the  Concentration  Policy.  In view of the  disproportionate
impact that the recent market downturn has had on financial  services  companies
generally,  the Board concluded that  maintaining the 65% requirement  imposes a
disproportionate  industry  risk on the  Fund and  stockholders  and  should  be
eliminated  altogether  should  the  Restructuring   Proposals  be  approved  by
stockholders.

Conditional  Proposal. If Proposals 1 through 3 are not approved by stockholders
(i.e.,   Wellington  Management  continues  as  the  Fund's  primary  investment
manager),  Proposal 4 will not become effective  regardless of whether or not it
is approved by stockholders.

Required Vote. Approval of Proposal 4 requires a 1940 Act Majority Vote.

       THE BOARD OF DIRECTORS, INCLUDING ALL OF THE INDEPENDENT DIRECTORS,
       UNANIMOUSLY RECOMMENDS THAT THE STOCKHOLDERS VOTE "FOR" PROPOSAL 4.




                                   PROPOSAL 5

           TO APPROVE OR DISAPPROVE AMENDING THE CONCENTRATION POLICY

Summary  of  Proposal.  As  discussed  in  Proposal  4, the Fund has  adopted  a
fundamental  investment  policy  of  investing  at least  65% of its  assets  in
"financial services  companies"  (defined above as the "Concentration  Policy").
The  Concentration  Policy is  "fundamental",  meaning that it cannot be changed
without  a 1940 Act  Majority  Vote.  If  approved,  Proposal  5 will  amend the
Concentration  Policy  to  reduce  the  minimum  threshold  level of the  Fund's
investment in financial services companies to 25% of the Fund's assets. Proposal
5 will become  effective  only if the Proposal is approved by  stockholders  and
stockholders do not approve the Restructuring Proposals.

Reason  for this  Proposal.  See  discussion  under  Proposal  4  above.  If the
Restructuring Proposals are not approved by stockholders,  Wellington Management
would continue to manage the Fund and would do so with a continued  focus on the
Fund's historic industry (i.e.,  financial  services).  However, as discussed in
Proposal  4,  the  Board  determined  that,  regardless  of  whether  or not the
Restructuring  Proposals are approved,  continuing  Fund  operations  with a 65%
minimum  threshold  imposes  a  disproportionate  industry  risk on the Fund and
should be, at the very least,  reduced to the minimum level  permitted under the
1940 Act for an  investment  company which has declared a  concentration  policy
(i.e.,  25%).  In  2006,  in order to  provide  the  Fund's  adviser  with  more
flexibility and mitigate  industry risk,  stockholders  approved an amendment to
the Fund's concentration policy which broadened the scope of financial companies
in which the Fund could  invest and which  would be  included  when  determining
whether  the Fund has met its  concentration  threshold  (i.e.,  the  "financial
services  companies"  described  above).  Management  believes that, even in its
broadened form, the Concentration  Policy is still overly  restrictive and could
unduly expose the Fund to considerable  downside risk and volatility  should the
financial  services  industry take a further downturn.  For example,  the recent
sub-prime fiasco, the banking,  credit and liquidity crisis,  changes in the tax
laws and other  factors  have  disproportionately  impacted  the Fund  under its
Concentration Policy.  Financial services companies are also affected by general
economic  conditions.  All of these  risks  are  compounded  because,  under the
Concentration Policy, the Fund is "fundamentally bound" to invest in these types
of assets.  Management  believes  that, if the  Restructuring  Proposals are not
approved by stockholders, reducing the financial mandate under the Concentration
Policy  will  mitigate  the  inherent  risk of  concentrating  in the  financial
services sector.

Risks and  Disadvantages of Amending the  Concentration  Policy.  See discussion
under Proposal 4 above.

Board Considerations. See discussion under Proposal 4 above.

Conditional  Proposal.  Proposal 5 will become effective only if the Proposal is
approved  by  stockholders  and  Proposals  1  through  3 are  not  approved  by
stockholders  (i.e.,  Wellington  Management  continues  as the  Fund's  primary
investment manager).

Required Vote. Approval of Proposal 5 requires a 1940 Act Majority Vote.

      THE BOARD OF DIRECTORS, INCLUDING ALL OF THE INDEPENDENT DIRECTORS,
       UNANIMOUSLY RECOMMENDS THAT THE STOCKHOLDERS VOTE "FOR" PROPOSAL 5.


                                   PROPOSAL 6

         AMENDMENT TO THE CHARTER CLASSIFYING THE BOARD OF DIRECTORS OF
                THE FUND INTO THREE SEPARATE CLASSES AND MAKING
                         RELATED CHANGES TO THE CHARTER

The Board has considered and recommends to the Fund's stockholders  amending the
Fund's  charter  (the  "Charter")  in order to  classify  the Boards  into three
separate classes (the "Classification Proposal").

Presently the Charter  provides that each Director  serve a one-year  term.  The
Charter reads as follows:

     The directors  shall be elected at each annual meeting of the  stockholders
     commencing  in 2004,  except as necessary to fill any  vacancies,  and each
     director  elected  shall hold  office  until his or her  successor  is duly
     elected and qualifies,  or until his or her earlier resignation,  death, or
     removal.

In addition,  under Maryland General Corporation Law ("MGCL"),  Directors may be
removed with or without cause by the  affirmative  vote of a majority of all the
votes entitled to be cast generally for election of directors.  Thus,  presently
under the Charter and the MGCL, only a single meeting of  stockholders  would be
required to effect a complete change in the Board.



In 2004, stockholders of the Fund approved "de-classification" of the Board from
three  separate  classes,  each  serving a  three-year  term,  to a single class
elected on an annual basis. However, the Board now believes that a classified or
staggered  board  structure  will best serve the Fund's  longer-term  interests.
Thus, if stockholders  approve Proposal 6 and approve a new board structure with
three classes of directors,  with each class serving a staggered three-year term
(instead of the current one-year term), the Charter will be amended  accordingly
and such change will take effect immediately and with respect to the election of
Directors at the Meeting  under  Proposal 7. Class I Directors  will hold office
initially for a term expiring at the 2010 annual meeting of stockholders,  Class
II Directors  will hold office  initially for a term expiring at the 2011 annual
meeting of stockholders and Class III Directors will hold office initially for a
term expiring at the 2012 annual  meeting of  stockholders,  with the members of
each class to hold office until their successors are duly elected and qualified.
At each  annual  meeting of the  stockholders,  the  successors  to the class of
Directors whose term expires at such meeting shall be elected to hold office for
a term  expiring at the annual  meeting of  stockholders  held in the third year
following the year of their election and until their successors are duly elected
and  qualified.  In the event of a vacancy on the Board of Directors  due to the
removal or resignation of a Director during such Director's term of office,  the
remaining  Directors shall by their vote or written consent fill the vacancy for
the remainder of such Director's term.

Background on the  Classification  Proposal.  In 2004,  the Fund's  stockholders
approved a comprehensive set of corporate governance proposals, one of which was
to "de-classify"  the Boards such that Directors would serve an annual term (the
"2004  Proposal").  Prior to the 2004 Proposal,  the Fund had a "classified"  or
"staggered" board. Various industry trade groups,  activist investor groups, the
New York Stock Exchange,  and other industry  professionals  generally advocated
de-classification  as well as the other corporate  governance proposals advanced
by the Fund in 2004. It was thought at that time that having all Directors stand
for  election  every year would lead to better  stockholder  governance,  a more
responsive Board and more access to fund management.

Since that time, the Board has had the  opportunity to experience and review the
effect  of  the  adoption  of  these  corporate  governance  proposals,  and  in
particular  the effect of the 2004  Proposal.  In assessing  the 2004  Proposal,
management paid close attention to the Fund's investment objectives,  the makeup
of the Fund's stockholders and other developments within the past four years.

Board  Considerations.  At its  regular  meeting  in  February  2009,  the Board
considered the Classification  Proposal. At that meeting, the Board considered a
number of factors before  concluding that a classified  board would better serve
the long-term investment interest of the Fund and its stockholders.

The Board  recognized  that the overall  effect of the  Classification  Proposal
would be to make any hostile attempt to take control of the Fund through a proxy
contest more  difficult.  In order to change the membership of a majority of the
Directors,  at least two years would be required.  The Board  believes that this
would  encourage  persons  seeking to  acquire  control of the Fund to engage in
good-faith,  arm's-length  negotiations  with the Board. The Board also believes
that  ensuring  continuity  of service  among the Board  members and  three-year
commitments for Board service is desirable and that the Proposal will facilitate
the Fund's  attracting and retaining  qualified  members of the Board and hiring
and retaining competent  management  personnel by increasing the likelihood of a
stable employment environment.

The Board understands the Fund's  stockholder base to be generally  comprised of
many  stockholders  holding  smaller  positions who have a long-term  investment
horizon similar to that expressed by the Fund's largest  stockholders (i.e., the
Horejsi  Affiliates).  A primary reason that these stockholders  invest with the
Fund  is  the  potential  for  long-term  capital   appreciation   coupled  with
responsible  and  deliberative  asset  management  and  an  eye  toward  capital
preservation.  Neither the Board nor the Fund's stockholders contemplate sudden,
drastic changes in the makeup of the Fund's investment portfolio.

The Board noted that, in general,  closed-end  funds such as the Fund seem to be
more subject than operating companies to pressures from "hostile"  stockholders,
arbitrageurs  and  other  groups  of  investors  seeking  to take  advantage  of
short-term  market  cycles for their own  benefit.  These  activities  are often
detrimental  to  stockholders  seeking  a  particular  investment  style  and  a
long-term investment horizon. For example, twice in the past three years, one of
the  Boulder  Funds,  BIF,  was  subject  to  activist  pressure  to change  its
fundamental  operations.  In  2005,  Scott  Schultz  and Phil  Goldstein  joined
together to pressure BIF to adopt a managed distribution program and, in October
2008, Ronald Olin and Ralph Bradshaw sought to float stockholder  proposals that
called for removal of BIF's  advisers,  replacement  of the current Board and an
aggressive  level-rate  distribution policy at odds with the then-current market
and BIF's long-term rate of return. Messrs. Olin's and Bradshaw's proposals have
since been withdrawn.



The Board  ultimately  concluded that Proposal 6 achieves a fair balance between
the  corporate  governance  intent  of the  2004  Proposal  and  protecting  the
stockholders'  long-term  interests and recommends that  stockholders vote "FOR"
this proposal.

The Board noted that, because Directors will be directly affected by Proposal 6,
they may be deemed to have an interest in its outcome.

If approved by the stockholders,  the Proposal would impose the classified board
structure  effective   immediately  and  for  this  Meeting.   The  table  below
illustrates  the effect  stockholder  approval of the Proposal would have on the
terms of Directors:




                  ---------- ---------- ---------
                  Class I    Class II   Class III
                  2009-10    2009-11    2009-12
                  ---------- ---------- ---------
                                  
Richard Barr                               X
Susan Ciciora*                             X
John Horejsi*         X
Dean Jacobson         X
Joel Looney                      X


*    "Interested person" of the Fund, as that term is defined in the 1940 Act.



Accordingly,  Messrs. Horejsi and Jacobson will hold office initially for a term
expiring at the 2010 annual meeting of stockholders, Mr. Looney will hold office
initially for a term expiring at the 2011 annual meeting of stockholders and Ms.
Ciciora and Mr. Barr hold will hold office  initially for a term expiring at the
2012 annual meeting of stockholders.

If at some point in the future,  the Fund issues  preferred stock, the amendment
also  clarifies  that (1) if holders of  preferred  stock are  entitled to elect
additional  directors in connection  with dividend  arrearages,  the election of
such  additional  directors may cause the total number of Directors on the Board
to exceed five and (2) that the terms of Directors elected separately by holders
of preferred stock terminate if all such preferred stock is redeemed.

Attached at Exhibit C are Articles of Amendment  containing the amendment to the
Charter  (the  "Amendment")  which,  if  approved,  will be filed with the State
Department of  Assessments  and Taxation of Maryland.  If  stockholders  approve
Proposal  6,  the  Annual  Meeting  will be  temporarily  adjourned  so that the
Amendment may be filed immediately and effective  immediately.  Thereafter,  the
Annual Meeting will resume and Proposal 7 will be considered. If stockholders do
not approve this  Proposal 6, but do approve  Proposal 7, each of the  Directors
will be elected to serve until the annual  meeting of  stockholders  in 2010 and
until their successors are duly elected and qualified.

Vote  required.  Approval  of  Proposal 6  requires  the  affirmative  vote of a
majority of all the votes entitled to be cast by the stockholders of the Fund on
the matter.  Holders of record of Shares of the Fund at the close of business on
the  Record  Date will be  entitled  to one vote per share on each  matter as to
which  they  are  entitled  to vote at the  Meeting  and  any  postponements  or
adjournments thereof.

       THE BOARD OF DIRECTORS, INCLUDING ALL OF THE INDEPENDENT DIRECTORS,
       UNANIMOUSLY RECOMMENDS THAT THE STOCKHOLDERS VOTE "FOR" PROPOSAL 5.


                                   PROPOSAL 7

                        ELECTION OF DIRECTORS OF THE FUND

The Charter currently provides that all of the Directors stand for election each
year.  If  stockholders  approve  Proposal 6, then the Charter  will be amended,
effective  immediately  and for purposes of this  Meeting,  so that the terms of
each Director,  if elected,  would be classified in accordance  with Proposal 6.
Thus, if Proposal 6 is approved, and the Directors as nominated in this Proposal
7 are elected,  Messrs.  Horejsi and Jacobson  will hold office  initially for a
term expiring at the 2010 annual meeting of  stockholders,  Mr. Looney will hold
office  initially for a term expiring at the 2011 annual meeting of stockholders
and Mr. Barr and Ms.  Ciciora will hold office  initially for a term expiring at
the 2012 annual meeting of stockholders,  with the members of each class to hold
office until their  successors  are duly elected and  qualified.  At each annual
meeting of the stockholders, the successors to the class of Directors whose term
expires at such meeting  shall be elected to hold office for a term  expiring at
the annual meeting of stockholders  held in the third year following the year of
their election and until their successors are duly elected and qualified.


The Boards have  nominated  the following  five  Director  nominees to stand for
election and serve terms as follows:




                 --------- ---------- ----------
                 Class I   Class II   Class III
                 2009-10   2009-11    2009-12
                 --------- ---------- ----------
                                 
Richard Barr                              X
Susan Ciciora*                            X
John Horejsi*       X
Dean Jacobson       X
Joel Looney                    X


*    "Interested person" of the Fund, as that term is defined in the 1940 Act.



The above  nominees  have  consented  to serve as  Directors  if  elected at the
Meeting for the term as indicated  above. If the designated  nominees decline or
otherwise  become   unavailable  for  election,   however,   the  proxy  confers
discretionary  power  on the  persons  named  therein  to  vote  in  favor  of a
substitute nominee or nominees for the Board.

INFORMATION  ABOUT  DIRECTORS AND OFFICERS.  Set forth in the following table is
information  about the nominees for election to the Board of  Directors,  all of
whom are currently Directors of the Fund:




-------------------- ---------------------- --------------------------------------------------------- ----------------
Name, Address*, Age   Position, Length of       Principal Occupation(s) and Other Directorships          Number of
                       Term Served, and                                                                Funds in the
                        Term of Office                  Held During the Past Five Years                Fund Complex
                                                                                                        Overseen by
                                                                                                         Director+
-------------------- ---------------------- --------------------------------------------------------- ----------------
Independent
Directors
-------------------- ---------------------- --------------------------------------------------------- ----------------
                                                                                                    
Joel W. Looney       Director          and  Partner (since 1999),  Financial  Management  Group, LLC         4
                     Chairman    of    the  (investment  adviser);  Director  (since 2001),  Boulder
Chairman             Board   of  the  Fund  Total  Return  Fund,  Inc.;  Director  (since  2002) and
                     since  2003.  Current  Chairman  (since  2003),  Boulder  Growth & Income Fund,
Age:  47             Nominee  for  a  term  Inc.;  Director  and  Chairman  (since  2007) The Denali
                     to   expire   at  the  Fund Inc.
                     2011 annual meeting.

Richard I. Barr      Director  of the Fund  Retired  (since 2001);  Manager  (1963-2001),  Advantage         4
                     since  2001.  Current  Sales and Marketing, Inc. (food and beverage);  Director
Age:  71             Nominee  for  a  term  (since 1999) and Chairman  (since  2003),  Boulder Total
                     to   expire   at  the  Return  Fund,  Inc.;  Director  (since  2002),   Boulder
                     2012 annual meeting.   Growth & Income Fund,  Inc.;  Director (since 2007), The
                                            Denali Fund Inc.

Dr. Dean L.          Director of the Fund   Founder and President (since 1989), Forensic                     4
Jacobson             since 2003. Current    Engineering, Inc. (engineering investigations);
                     Nominee  for  a  term  Professor   Emeritus   (since   1997),   Arizona   State
Age: 70              to   expire   at  the  University;  Director (since 2004), Boulder Total Return
                     2010 annual meeting.   Fund,  Inc.;  Director  (since 2006),  Boulder  Growth &
                                            Income Fund,  Inc.;  Director  (since 2007),  The Denali
                                            Fund Inc.



-------------------- ---------------------- --------------------------------------------------------- ----------------
Interested
Directors**
-------------------- ---------------------- --------------------------------------------------------- ----------------

Susan L. Ciciora     Director  of the Fund  Trustee  (since 1994),  the Brown Trust;  Trustee (since         4
                     since  2003.  Current  1992),  the EH Trust;  Director  (since  1997),  Horejsi
Age: 44              Nominee  for  a  term  Charitable   Foundation,    Inc.   (private   charitable
                     to   expire   at  the  foundation);  Director  (since 2006),  Boulder  Growth &
                     2012           annual  Income Fund, Inc.; Director (since 2001),  Boulder Total
                     meeting.               Return Fund; Director (since 2007), The Denali Fund Inc.

John S. Horejsi      Director  of the Fund  Director  (since 1997),  Horejsi  Charitable  Foundation         4
                     since  2006.  Current  (private charitable foundation);  Director (since 2004),
Age:  41             nominee  for  a  term  Boulder  Growth & Income  Fund,  Inc.;  Director  (since
                     to   expire   at  the  2006),  Boulder Total Return Fund, Inc.; Director (since
                     2010 annual meeting.   2007), The Denali Fund Inc.


*    The Directors'  respective  addresses are c/o First Opportunity Fund, Inc.,
     2344 Spruce Street, Suite A, Boulder, Colorado 80302.

**   Ms.  Ciciora and Mr.  Horejsi are  siblings  and the children of Stewart R.
     Horejsi.  They each are "interested persons" of the Fund as a result of the
     extent of their beneficial  ownership of Fund shares and by virtue of their
     indirect beneficial ownership of FAS.

+    Includes the Fund, Boulder Growth & Income Fund, Inc., Boulder Total Return
     Fund, Inc. and The Denali Fund Inc.



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

From  the  late  1980s  until  January,   2001,   Mr.  Looney  served,   without
compensation, as one of three trustees of the Mildred Trust, an affiliate of the
EH Trust.

The names of the  executive  officers of the Fund are listed in the table below.
Each officer was elected to office by the Board at a meeting held on February 9,
2009. This table also shows certain additional information. Officers are elected
annually  and each  officer  will hold such office  until a  successor  has been
elected by the Board.




----------------------------- ---------------------------- -----------------------------------------------------------
                                  Position, Length of
                                                              Principal Occupation(s) and Other Directorships held
Name, Address*, Age            Term Served, and Term of
                                        Office                             During the Past Five Years
----------------------------- ---------------------------- -----------------------------------------------------------
                                                     
Stephen C. Miller             President  (since  2003) of  President and General Counsel (since 1999),  BIA;  Manager
                              the  Fund;   Director   and  (since 1999),  FAS;  Vice  President  (since  1999),  SIA;
Age:  56                      Chairman       (2003-2004);  Director  (1999-2004) and President (since 1999),  Boulder
                              Chief  Compliance   Officer  Total  Return  Fund,   Inc.;   Director   (2002-2004)  and
                              (2004-2007).      Appointed  President  (since  2002),  Boulder  Growth & Income  Fund,
                              annually.                    Inc.;  President  (since  2007),  The Denali Fund Inc.; Of
                                                           Counsel, Krassa & Miller, LLC (since 1991).

Carl D. Johns                 Chief  Financial   Officer,  Vice President and Treasurer (since 1999). BIA;  Assistant
                              Chief  Accounting  Officer,  Manager   (since  1999),   FAS;  Vice   President,   Chief
Age: 46                       Vice      President     and  Financial Officer,  Chief Accounting Officer and Treasurer
                              Treasurer   (since   2003).  (since  1999),  Boulder  Total Return Fund,  Inc.,  (since
                              Appointed annually.          2002),  Boulder  Growth & Income  Fund,  Inc.  and  (since
                                                           2007), The Denali Fund Inc.

Joel L. Terwilliger           Chief  Compliance   Officer  Associate  General  Counsel  (since 2006),  BIA, SIA, FAS,
                              (since   2007).   Appointed  Boulder Growth & Income Fund,  Inc.,  Boulder Total Return
Age: 40                       annually.                    Fund,  Inc., and the Fund,  (since 2007),  The Denali Fund
                                                           Inc.;   Senior   Associate/Legal    Counsel   (2002-2006),
                                                           Great-West   Life  &   Annuity   Insurance   Company   and
                                                           affiliated companies.

Stephanie J. Kelley           Secretary   (since   2003).  Secretary  (since 2000),  Boulder Total Return Fund, Inc.;
                              Appointed annually.          Secretary  (since  2002);  Boulder  Growth & Income  Fund,
Age:  52                                                   Inc.;  Secretary  (since  2007),  The  Denali  Fund  Inc.;
                                                           Assistant  Secretary  and  Assistant  Treasurer of various
                                                           other  entities   affiliated   with  the  Horejsi  family;
                                                           employee ( since 1999), FAS.

Nicole L. Murphey             Vice    President    (since  Vice  President  (since  2008)  and  Assistant   Secretary
                              2008);  Assistant Secretary  (since  2000)  Boulder  Total  Return  Fund,   Inc.;  Vice
Age:  32                      (since   2003).   Appointed  President  (since  2008) and  Assistant  Secretary  (since
                              annually.                    2002),  Boulder Growth & Income Fund, Inc.; Vice President
                                                           (since 2008) and Assistant  Secretary  (since  2007),  The
                                                           Denali Fund Inc.; employee  (since 1999), FAS,.


*    The address for all executive  officers of the Fund is 2344 Spruce  Street,
     Suite A, Boulder, Colorado 80302.





Set forth in the following table are the nominees for election to the Board (all
of whom are current  Directors  of the Fund)  together  with the dollar range of
equity securities beneficially owned by each Director as of the Record Date.




OWNERSHIP OF THE FUND BY DIRECTORS
-------------------------------------------------------------------------------------------------------
Independent Directors and Nominees        Dollar Range of Equity       Aggregate Dollar Range of
                                          Securities in the Fund       Equity Securities in All Funds
                                                                       in the Family of Investment
                                                                       Companies
------------------------------------ --------------------------------- --------------------------------
                                                                       
         Dean L. Jacobson                     Up to $10,001                  $10,001 to $50,000
          Richard I. Barr                   $10,001 to $50,000                  Over $100,000
          Joel W. Looney                   $50,001 to $100,000                  Over $100,000
------------------------------------ --------------------------------- --------------------------------
------------------------------------ --------------------------------- --------------------------------
 Interested Directors and Nominees
------------------------------------ --------------------------------- --------------------------------
         Susan L. Ciciora                     Over $100,000+                    Over $100,000
          John S. Horejsi                     Over $100,000+                   Over $100,000+
-------------------------------------------------------------------------------------------------------


+    10,204,417  Shares  of the  Fund  are  held  collectively  by  the  Horejsi
     Affiliates (defined above). Accordingly, Ms. Ciciora and Mr. Horejsi may be
     deemed to have indirect  beneficial  ownership of such Shares.  Ms. Ciciora
     and Mr. Horejsi disclaim all such beneficial ownership. Neither Ms. Ciciora
     nor Mr. Horejsi directly owns any shares of the Fund.



None of the Independent  Directors or their family members owned beneficially or
of record any  securities  of the New  Advisers,  Wellington  Management  or any
person  directly  or  indirectly  controlling,  controlled  by, or under  common
control with the New Advisers or Wellington Management.



DIRECTOR  AND  OFFICER  COMPENSATION.  The  following  table sets forth  certain
information  regarding the  compensation of the Fund's  Directors for the fiscal
year ended March 31, 2009. No persons (other than the Independent Directors,  as
set forth below) currently  receive  compensation  from the Fund for acting as a
Director or officer. Directors and executive officers of the Fund do not receive
pension or retirement  benefits  from the Fund.  Independent  Directors  receive
reimbursement for travel and other out of pocket expenses incurred in connection
with Board meetings.





-------------------------------------------------------------------------------------------------------
       Independent Directors              Aggregate Compensation         Total Compensation from the
                                     from the Fund Paid to Directors    Fund and Fund Complex Paid to
                                                                                 Directors+
------------------------------------ --------------------------------- --------------------------------
                                                                            
         Dean L. Jacobson                        $28,500                          $100,000
          Richard I. Barr                        $28,500                          $104,000
     Joel W. Looney (Chairman)                   $35,500                          $121,000
------------------------------------ --------------------------------- --------------------------------
------------------------------------ --------------------------------- --------------------------------
       Interested Directors
------------------------------------ --------------------------------- --------------------------------
         Susan L. Ciciora                           $0                               $0
          John S. Horejsi                           $0                               $0
-------------------------------------------------------------------------------------------------------


+    Includes the Fund, Boulder Growth & Income Fund, Inc., Boulder Total Return
     Fund, Inc. and The Denali Fund Inc.




Each Director of the Fund who is not a Director,  officer, or employee of one of
the New  Advisers,  FAS,  Wellington  Management,  or any of  their  affiliates,
receives a fee of $8,000 per annum plus $4,000 for each in person meeting of the
Board of  Directors  and  $500 for each  telephonic  meeting  of the  Board.  In
addition,  the  Chairman of the Board and the  Chairman  of the Audit  Committee
receive $1,000 per meeting and each member of the Audit Committee  receives $500
per meeting.  Each Independent Director of the Fund is reimbursed for travel and
out-of-pocket  expenses  associated with attending Board and Committee meetings.
The Board  held ten  meetings  (six of which were held by  telephone  conference
call)  during the fiscal  year ended March 31,  2009.  Each  Director  currently
serving in such capacity for the entire fiscal year attended at least 75% of the
meetings of Directors and any  Committee of which he is a member.  The aggregate
remuneration  paid to the  Directors  of the Fund for acting as such  during the
fiscal year ended March 31, 2009 amounted to $92,500.


                      COMMITTEES OF THE BOARD OF DIRECTORS

AUDIT COMMITTEE;  REPORT OF AUDIT COMMITTEE.  The purpose of the Audit Committee
is to  assist  in Board  oversight  of the  integrity  of the  Fund's  financial
statements,  the Fund's compliance with legal and regulatory  requirements,  the
independent auditor's qualifications and independence and the performance of the
Fund's independent  auditors.  The Audit Committee reviews the scope and results
of  the  Fund's  annual  audit  with  the  Fund's  independent  accountants  and
recommends  the  engagement  of  such  accountants.   Management,   however,  is
responsible  for the  preparation,  presentation  and  integrity  of the  Fund's
financial  statements,  and the  independent  accountants  are  responsible  for
planning  and carrying  out proper  audits and  reviews.  The Board of Directors
adopted a written  charter for the Audit  Committee  on August 19, 2003 and most
recently  amended the joint Audit  Committee  Charter on January 25, 2008 to add
The Denali Fund Inc.  Subsequent minor amendments to the Audit Committee Charter
were  adopted on February  2, 2009.  A copy of the Audit  Committee  Charter was
included in proxy materials delivered to stockholders on June 20, 2007.

The Audit Committee is composed  entirely of the Fund's  Independent  Directors,
consisting of Dr.  Jacobson and Messrs.  Looney and Barr. The Board of Directors
has  determined  that Joel Looney  qualifies  as an "audit  committee  financial
expert," as defined under the  Securities and Exchange  Commission's  Regulation
S-K, Item 401(h).  The Audit Committee is in compliance with applicable rules of
the listing  requirements  for closed-end fund audit  committees,  including the
requirement  that all members of the audit committee be  "financially  literate"
and that at least one member of the audit committee have  "accounting or related
financial management expertise," as determined by the Board. The Audit Committee
is required to conduct its operations in accordance with applicable requirements
of the  Sarbanes-Oxley  Act,  and the  Fund's  independent  publicly  registered
accounting firm is required to comply with the rules and regulations promulgated
under the  Sarbanes-Oxley  Act and by the Public  Company  Accounting  Oversight
Board.  The members of the Audit  Committee are subject to the fiduciary duty to
exercise  reasonable care in carrying out their duties. Each member of the Audit
Committee is independent, as that term is defined by the NYSE Listing Standards.
The Audit Committee met three times during the fiscal year ended March 31, 2009.


In  connection  with the audited  financial  statements as of and for the period
ended March 31, 2009  included in the Fund's  Annual Report for the period ended
March 31, 2009 (the "Annual  Report"),  at a meeting held on ___________,  2009,
the Audit Committee  considered and discussed the audited  financial  statements
with management and the independent accountants, and discussed the audit of such
financial statements with the independent accountants.

The Audit  Committee  has received the written  disclosures  and letter from the
independent  accountants required by Independence Standards Board Standard No. 1
(Independence   Discussions  with  Audit  Committees)  and  has  discussed  with
independent  accountants their independence.  The 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,
Communications With Audit Committees, as currently modified or supplemented.

On April 1, 2008 the Fund adopted the  Financial  Accounting  Standards  Board's
("FASB")  Statement of Financial  Accounting  Standards No. 157 ("FAS 157"). FAS
157 is  important in the context of helping the Fund define "fair value" for the
underlying  securities or  investments  it holds.  In addition,  FAS 157 expands
disclosures about fair value measurements.

The  members  of the  Audit  Committee  are not  professionally  engaged  in the
practice  of  auditing  or  accounting  and are not  employed by the Fund in any
accounting,  financial management,  or internal control capacity.  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'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's
considerations  and discussions  referred to above do not provide assurance that
the audit of the Fund's financial  statements has been carried out in accordance
with generally accepted  accounting  standards or that the financial  statements
are presented in accordance with generally accepted accounting principles.

Based  on  its  consideration  of  the  audited  financial  statements  and  the
discussions  referred to above with management and the  independent  accountants
and  subject to the  limitation  on the  responsibilities  and role of the Audit
Committee set forth in the Audit Committee  Charter and those  discussed  above,
the  Audit  Committee  of the Fund  recommended  to the Board  that the  audited
financial  statements  be included in the Fund's  Annual Report and be mailed to
stockholders and filed with the SEC.

Submitted  by the Audit  Committee  of the Fund's  Board of  Directors:  Joel W.
Looney, Richard I. Barr and Dean L. Jacobson

NOMINATING  COMMITTEE.  The Board of Directors has a nominating  committee  (the
"Nominating Committee") composed of the Fund's Independent Directors, consisting
of Dr.  Jacobson  and Messrs.  Looney and Barr,  which  Nominating  Committee is
responsible for considering  candidates for election to the Board in the event a
position  is vacated or  created.  Each member of the  Nominating  Committee  is
independent,  as  that  term is  defined  by the  NYSE  Listing  Standards.  The
Nominating  Committee met on ___________,  2009 with regard to the nomination of
the Director nominees set forth in the proposal above. The Nominating  Committee
met [once]  during the fiscal year ended March 31, 2009.  The Board of Directors
has adopted a charter for the  Nominating  Committee  that is  available  on the
Fund's website, www.firstopportunityfund.com.  The Nominating Committee does not
have a formal process for identifying candidates. The Nominating Committee takes
into  consideration  such  factors  as  it  deems  appropriate  when  nominating
candidates.  These factors may include judgment,  skill,  diversity,  experience
with  investment  companies  and  other  organizations  of  comparable  purpose,
complexity,  size and subject to similar legal  restrictions and oversight,  the
interplay  of the  candidate's  experience  with the  experience  of other Board
members,  and the extent to which the candidate would be a desirable addition to
the Board and any committees thereof.

The  Nominating  Committee  will consider all  qualified  candidates in the same
manner.  The  Nominating  Committee may modify its policies and  procedures  for
director  nominees  and  recommendations  in  response  to changes in the Fund's
circumstances,  and  as  applicable  legal  or  listing  standards  change.  The
Nominating   Committee  would  consider  director   candidates   recommended  by
stockholders  (if a vacancy  were to exist) and  submitted  in  accordance  with
applicable  law and  procedures  as  described  in  this  Proxy  Statement  (see
"Submission of Stockholder  Proposals" below).  Such  recommendations  should be
mailed to the Secretary of the Fund.


The Fund does not have a compensation committee.


                           OTHER BOARD-RELATED MATTERS

Stockholders  who wish to send  communications  to the Board should send them to
the  address  of  the  Fund  and  to  the  attention  of  the  Board.  All  such
communications will be directed to the Board's attention.

The Fund does not have a formal policy regarding Board member  attendance at the
Annual Meeting of  Stockholders;  however,  all of the Directors of the Fund who
were  Directors  at the time,  attended  the July 28,  2008,  Annual  Meeting of
Stockholders.

Required Vote.  The election of each of Messrs.  Looney,  Barr and Horejsi,  Dr.
Jacobson and Ms.  Ciciora as Directors of the Fund will require the  affirmative
vote of a  plurality  of the votes cast by  holders  of the Common  Stock at the
Meeting in person or by proxy.

       THE BOARD OF DIRECTORS, INCLUDING ALL OF THE INDEPENDENT DIRECTORS,
     UNANIMOUSLY RECOMMENDS THAT STOCKHOLDERS VOTE "FOR" THE ELECTION OF ALL
                                 THE NOMINEES.


                       SUBMISSION OF STOCKHOLDER PROPOSALS

Notice is hereby  given that for a  stockholder  proposal to be  considered  for
inclusion in the Fund's proxy  material  relating to its 2010 annual  meeting of
stockholders,  the  stockholder  proposal must be addressed to, and received by,
the Fund not earlier than  _____________,  2009 and not later than ____________,
2009  Any such  proposal  shall  set  forth as to each  matter  the  stockholder
proposes to bring  before the meeting (i) a brief  description  of the  business
desired to be brought  before the meeting and the  reasons for  conducting  such
business at the meeting, (ii) the name and address, as they appear on the Fund's
books, of the stockholder proposing such business, (iii) the class and number of
shares of the  capital  stock of the Fund  which are  beneficially  owned by the
stockholder, and (iv) any material interest of the stockholder in such business.
Stockholder proposals,  including any accompanying supporting statement, may not
exceed 500 words.  A stockholder  desiring to submit a proposal must be a record
or  beneficial  owner of Shares with a market  value of at least $2,000 and must
have held such  Shares  for at least one year.  Further,  the  stockholder  must
continue  to hold such  Shares  through  the date on which the  meeting is held.
Documentary  support  regarding  the foregoing  must be provided  along with the
proposal.   Joint  proposals  to  more  than  one  fund  are  not   permissible;
stockholders  may  not  submit  one  proposal  (plus  the  required   additional
documentation)  for more  than  one  fund.  There  are  additional  requirements
regarding proposals of stockholders,  and a stockholder contemplating submission
of a  proposal  is  referred  to Rule  14a-8  promulgated  under the  Securities
Exchange Act of 1934 (the "Exchange Act").  The timely  submission of a proposal
does not guarantee its inclusion in the Fund's proxy materials.

Pursuant to the Fund's Bylaws, at any annual meeting of the  stockholders,  only
business that has been properly brought before the meeting will be conducted. To
be  properly  brought  before  the  annual  meeting,  the  business  must be (i)
specified in the notice of meeting,  (ii) by or at the direction of the Board of
Directors,  or  (iii)  otherwise  properly  brought  before  the  meeting  by  a
stockholder.  For business to be properly brought before the annual meeting by a
stockholder, the stockholder must have given timely notice thereof in writing to
the Secretary of the Fund. To be timely, a stockholder's notice must be received
by the Secretary at 2344 Spruce Street, Suite A, Boulder, Colorado 80302 by 5:00
P.M.  Mountain  Time not earlier than the 150th day and not later than the 120th
day prior to the first  anniversary  of the date of public release of the notice
for the preceding  year's  annual  meeting.  However,  if the date of the annual
meeting is advanced  or delayed by more than 30 days from the first  anniversary
of  the  date  of  the  preceding  year's  annual  meeting,  for  notice  by the
stockholder  to be timely,  it must be received by the  Secretary not later than
5:00 P.M.  Mountain Time on the later of the 120th day prior to the date of such
annual  meeting or the tenth day following the day on which public  announcement
of the  date of such  meeting  is  first  made.  The  public  announcement  of a
postponement  or  adjournment of an annual meeting shall not commence a new time
period for the giving of a stockholder's notice as described above.


Pursuant to the Fund's Bylaws, such stockholder's  notice shall set forth (i) as
to each  individual  whom the  stockholder  proposes to nominate for election or
reelection  as a director,  (A) the name,  age,  business  address and residence
address of such  individual,  (B) the class,  series and number of any shares of
stock of the Fund that are beneficially  owned by such individual,  (C) the date
such shares were acquired and the  investment  intent of such  acquisition,  (D)
whether  such  stockholder  believes  any  such  individual  is,  or is not,  an
"interested  person" of the Fund,  as  defined  in the 1940 Act and  information
regarding such individual that is sufficient,  in the discretion of the Board of
Directors or any  committee  thereof or any  authorized  officer of the Fund, to
make such determination, (E) the extent to which such individual (including such
individual's principals) has entered into any hedging transaction or arrangement
with the effect or intent of mitigating or otherwise  managing  profit,  loss or
risk of  changes  in the value of the common  stock or the daily  quoted  market
price  of  the  Fund  held  by  such  individual  (including  such  individual's
principals),  or increasing or  decreasing  the voting power of such  individual
(including such individual's  principals),  including  independently  verifiably
information  in  support  of the  foregoing,  (F)  the  investment  strategy  or
objective - including any related  disclosure  documents or other  independently
verifiable  information  in  support  of the  foregoing  - for  such  individual
(including such individual's principals), and (G) all other information relating
to such individual that is required to be disclosed in  solicitations of proxies
for election of directors in an election contest (even if an election contest is
not involved), or is otherwise required, in each case pursuant to Regulation 14A
(or any  successor  provision)  under the Exchange Act and the rules  thereunder
(including  such  individual's  written  consent  to being  named  in the  proxy
statement as a nominee and to serving as a director if elected);  (ii) as to any
other  business  that the  stockholder  proposes to bring before the meeting,  a
description  of such  business,  the reasons for proposing  such business at the
meeting and any material  interest in such business of such  stockholder and any
Stockholder  Associated  Person  (as  defined  below),  individually  or in  the
aggregate,  including  any  anticipated  benefit  to  the  stockholder  and  the
Stockholder Associated Person therefrom;  (iii) as to the stockholder giving the
notice and any Stockholder  Associated Person,  the class,  series and number of
all shares of stock of the Fund which are owned by such  stockholder and by such
Stockholder  Associated  Person,  if any, and the nominee holder for, and number
of, shares owned  beneficially  but not of record by such stockholder and by any
such Stockholder Associated Person; (iv) as to the stockholder giving the notice
and any  Stockholder  Associated  Person  covered by the  immediately  preceding
clauses (ii) or (iii), the name and address of such stockholder,  as they appear
on the Fund's stock ledger and current name and address,  if  different,  and of
such  Stockholder  Associated  Person;  and  (v)  to  the  extent  known  by the
stockholder  giving the notice,  the name and  address of any other  stockholder
supporting  the nominee for election or reelection as a director or the proposal
of  other  business  on the  date of  such  stockholder's  notice.  "Stockholder
Associated  Person" of any  stockholder  shall mean (i) any person  controlling,
directly or indirectly,  or acting in concert with, such  stockholder,  (ii) any
beneficial  owner of shares of stock of the Fund owned of record or beneficially
by such  stockholder  and (iii) any person  controlling,  controlled by or under
common control with such  Stockholder  Associated  Person.  Stockholders may not
submit more than one notice (plus the  required  additional  documentation)  for
more than one Fund.


                             ADDITIONAL INFORMATION

INDEPENDENT ACCOUNTANTS.  At its regularly scheduled Board meeting held on April
24, 2009, the Audit  Committee of the Board,  consisting of those  Directors who
are not "interested persons" (as defined in the 1940 Act) of the Fund, selected,
and the Board ratified,  the selection of Deloitte & Touche LLP  ("Deloitte") of
Denver, Colorado as the Fund's independent registered public accounting firm for
the Fund's  fiscal year ending March 31, 2010.  Deloitte  served as  independent
accountants  for the Fund's  fiscal  years  ending  March 31, 2008 and March 31,
2009.

In addition to performing independent audit services for the Fund, Deloitte also
performs  certain  non-audit  related  services,  i.e., tax, and consulting,  on
behalf  of  the  Fund's  adviser,   Wellington  Management  Company,  L.P.  (the
"investment  adviser").  Under the Sarbanes-Oxley  rules, as adopted by the SEC,
and under the Audit Committee Charter,  the Audit Committee must pre-approve all
non-audit services to be provided by the auditors to the Fund, and all non-audit
services to be provided by the auditors to the Fund's investment adviser and any
service  providers  controlling,  controlled by or under common control with the
Fund's investment adviser ("adviser  affiliates") that provide on-going services
to the Fund, if the engagement  relates directly to the operations and financial
reporting of the Fund,  or must  establish  detailed  pre-approval  policies and
procedures  for such  services in accordance  with  applicable  laws.  The Audit
Committee has reviewed the non-audit  services to be provided by Deloitte to the
investment  adviser  (no  such  services  are  provided  to the  Fund)  and  has
pre-approved  the provision of those  services.  Accordingly,  all of the audit,
audit-related,  non-audit,  and tax services  described below for which Deloitte
billed the Fund fees for the fiscal  years  ended  March 31,  2008 and March 31,
2009, were either  pre-approved by the Audit Committee or were for services that
were unrelated to the direct operations and/or financial  reporting of the Fund.
Deloitte  has  informed  the Fund that it has no direct  or  indirect  financial
interest in the Fund.



A  representative  of  Deloitte  will not be present at the  Meeting but will be
available by telephone and will have an  opportunity  to make a statement if the
representative  so desires  and will be  available  to  respond  to  appropriate
questions.

Set forth below are audit fees and non-audit related fees billed to the Fund for
professional  services  received from Deloitte for the Fund's fiscal years ended
March 31, 2008 and March 31, 2009.




 Fiscal Year Ended        Audit Fees      Audit-Related Fees        Tax Fees*         All Other Fees

                                                                               
     3/31/2008             $29,000                $ -                $5,175                $ -


     3/31/2009             $29,000                $ -                $7,250                $ -


     * "Tax Fees" are those fees billed to the Fund by Deloitte in connection
     with tax consulting services, including primarily the review of the Fund's
     income tax returns.




SECTION 16(A) BENEFICIAL  OWNERSHIP REPORTING  COMPLIANCE.  Section 16(a) of the
Exchange Act and Section 30(h) of the 1940 Act require the Fund's  Directors and
officers,  persons affiliated with the Fund's investment  advisers,  and persons
who own more than 10% of a registered  class of the Fund's  securities,  to file
reports of  ownership  and  changes of  ownership  with the SEC and the New York
Stock  Exchange.  Directors,  officers  and  greater-than-10%  stockholders  are
required by SEC regulations to furnish the Fund with copies of all Section 16(a)
forms they file. Based solely upon the Fund's review of the copies of such forms
it receives and written  representations  from such  persons,  the Fund believes
that  through the date hereof all such filing  requirements  applicable  to such
persons were complied with.

BROKER NON-VOTES AND ABSTENTIONS. A proxy for 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,  is a broker  "non-vote".
Proxies   that   reflect   abstentions   or   broker   non-votes   (collectively
"abstentions")  will be counted as shares that are present and  entitled to vote
on the matter for purposes of determining the presence of a quorum. Accordingly,
abstentions and broker non-votes  effectively will be a vote against adjournment
and Proposals 1, 2, 3, 4, 5 and 6.

OTHER  MATTERS TO COME BEFORE THE  MEETING.  The Fund does not intend to present
any other business at the Meeting,  nor is it aware that any stockholder 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 discretion.



--------------------------------------------------------------------------------
IT IS IMPORTANT THAT PROXIES BE RETURNED PROMPTLY EVEN IF YOU PLAN TO ATTEND THE
MEETING.  STOCKHOLDERS  ARE  URGED  TO SIGN  THE  ENCLOSED  PROXY  CARD  (UNLESS
AUTHORIZING  THEIR PROXY VIA  TOUCH-TONE  TELEPHONE OR THROUGH THE INTERNET) AND
MAIL IT IN THE ENCLOSED  ENVELOPE SO AS TO ENSURE A QUORUM AT THE MEETING.  THIS
IS  IMPORTANT  WHETHER YOU OWN FEW OR MANY SHARES.  INSTRUCTIONS  FOR THE PROPER
EXECUTION OF PROXIES ARE SET FORTH ON THE INSIDE COVER.
--------------------------------------------------------------------------------





                                   EXHIBIT A-1



               PROPOSED INVESTMENT CO-ADVISORY AGREEMENT WITH RMA





                                   EXHIBIT A-2



               PROPOSED INVESTMENT CO-ADVISORY AGREEMENT WITH SIA





                                    EXHIBIT B



           PROPOSED SUB-ADVISORY AGREEMENT WITH WELLINGTON MANAGEMENT





                                    EXHIBIT C



                          FORM OF ARTICLES OF AMENDMENT




                               [GRAPHIC OMITTED]
                          FIRST OPPORTUNITY FUND, INC.

                          www.firstopportunityfund.com


                                      PROXY


                          FIRST OPPORTUNITY FUND, INC.

                    PROXY SOLICITED BY THE BOARD OF DIRECTORS

The  undersigned  holder of shares of Common  Stock of First  Opportunity  Fund,
Inc., a Maryland  corporation  (the "Fund"),  hereby appoints Stephen C. Miller,
Carl D.  Johns,  and  Nicole L.  Murphey,  or any of them,  as  proxies  for the
undersigned,  with full powers of  substitution  in each of them,  to attend the
Annual  Meeting  of   Stockholders   (the  "Annual   Meeting")  to  be  held  at
____________________  at  ___  a.m.  Pacific  Daylight  Time  (local  time),  on
_____________,  2009, and any adjournments or postponements  thereof, to cast on
behalf of the  undersigned all votes that the undersigned is entitled to cast at
the Annual  Meeting and to otherwise  represent  the  undersigned  at the Annual
Meeting with all the powers  possessed by the undersigned if personally  present
at the Meeting.

The votes entitled to be cast will be cast as instructed below. If this Proxy is
executed  but no  instruction  is given,  the votes  entitled  to be cast by the
undersigned  will be cast "FOR"  each of the  proposals  described  in the Proxy
Statement.

The undersigned hereby acknowledges  receipt of the Notice of Annual Meeting and
Proxy Statement.  In their  discretion,  the proxies are authorized to vote upon
such other  business as may properly come before the Meeting.  A majority of the
proxies  present  and acting at the Special  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.


                   CONTINUED AND TO BE SIGNED ON REVERSE SIDE





Please indicate your vote by an "X" in the appropriate box below.

This proxy,  if properly  executed,  will be voted in the manner directed by the
undersigned  stockholder.  IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED FOR
ALL PROPOSALS.

Please refer to the Proxy Statement for a discussion of the Proposals.

                                                                                             

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

 1.          To approve or disapprove the proposed  investment  advisory  FOR____     AGAINST___         ABSTAIN ___
             agreement with Rocky Mountain Advisers, LLC.

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

THE BOARD OF DIRECTORS,  INCLUDING ALL OF THE INDEPENDENT  DIRECTORS,  UNANIMOUSLY  RECOMMENDS THAT  STOCKHOLDERS VOTE "FOR" THIS
PROPOSAL, AS MORE FULLY DESCRIBED IN THE PROXY STATEMENT

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

2.           To approve or disapprove the proposed  investment  advisory  FOR___      AGAINST ___        ABSTAIN ___
             agreement with Stewart Investment Advisers.

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

THE BOARD OF DIRECTORS,  INCLUDING ALL OF THE INDEPENDENT  DIRECTORS,  UNANIMOUSLY  RECOMMENDS THAT  STOCKHOLDERS VOTE "FOR" THIS
PROPOSAL, AS MORE FULLY DESCRIBED IN THE PROXY STATEMENT
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------------ ------------------------------------------------------------ ----------- ------------------ -------------------------

3.           To   approve  or   disapprove   the   proposed   investment  FOR ___     AGAINST ___        ABSTAIN ____
             sub-advisory agreement with Wellington Management LLP.
------------ ------------------------------------------------------------ ----------- ------------------ -------------------------
----------------------------------------------------------------------------------------------------------------------------------

THE BOARD OF DIRECTORS,  INCLUDING ALL OF THE INDEPENDENT  DIRECTORS,  UNANIMOUSLY  RECOMMENDS THAT  STOCKHOLDERS VOTE "FOR" THIS
PROPOSAL, AS MORE FULLY DESCRIBED IN THE PROXY STATEMENT
----------------------------------------------------------------------------------------------------------------------------------
------------ ------------------------------------------------------------ ----------- ------------------ -------------------------

4.           To  approve  or  disapprove   elimination   of  the  Fund's  FOR ___     AGAINST ___        ABSTAIN ___
             fundamental  policy of investing at least 65% of its assets
             in  financial   services   companies  (the   "Concentration
             Policy").
------------ ------------------------------------------------------------ ----------- ------------------ -------------------------
----------------------------------------------------------------------------------------------------------------------------------

THE BOARD OF DIRECTORS,  INCLUDING ALL OF THE INDEPENDENT  DIRECTORS,  UNANIMOUSLY  RECOMMENDS THAT  STOCKHOLDERS VOTE "FOR" THIS
PROPOSAL, AS MORE FULLY DESCRIBED IN THE PROXY STATEMENT
----------------------------------------------------------------------------------------------------------------------------------
------------ ------------------------------------------------------------ ----------- ------------------ -------------------------

5.           To approve or disapprove amending the Concentration  Policy  FOR ___     AGAINST ___        ABSTAIN ___
             to reduce the Fund's  minimum  threshold  for  investing in
             financial services companies to 25%.
------------ ------------------------------------------------------------ ----------- ------------------ -------------------------
----------------------------------------------------------------------------------------------------------------------------------

THE BOARD OF DIRECTORS,  INCLUDING ALL OF THE INDEPENDENT  DIRECTORS,  UNANIMOUSLY  RECOMMENDS THAT  STOCKHOLDERS VOTE "FOR" THIS
PROPOSAL, AS MORE FULLY DESCRIBED IN THE PROXY STATEMENT
----------------------------------------------------------------------------------------------------------------------------------
------------ ------------------------------------------------------------ ----------- ------------------ -------------------------

6.           To  approve  or  disapprove  an  amendment  to  the  Fund's  FOR ___     AGAINST ___        ABSTAIN ____
             charter  classifying  the  board of  directors  of the Fund
             into three separate  classes and making related  changes to
             the charter
------------ ------------------------------------------------------------ ----------- ------------------ -------------------------
----------------------------------------------------------------------------------------------------------------------------------

THE BOARD OF DIRECTORS,  INCLUDING ALL OF THE INDEPENDENT  DIRECTORS,  UNANIMOUSLY  RECOMMENDS THAT  STOCKHOLDERS VOTE "FOR" THIS
PROPOSAL, AS MORE FULLY DESCRIBED IN THE PROXY STATEMENT
----------------------------------------------------------------------------------------------------------------------------------
------------ ------------------------------------------------------------ ----------- ------------------ -------------------------

7.           Election of Directors:  Nominees are Richard I. Barr,  John  FOR ___     WITHHOLD ___       FOR ALL EXCEPT ____
             S. Horejsi,  Susan L. Ciciora,  Dr. Dean L.  Jacobson,  and
             Joel W. Looney
------------ ------------------------------------------------------------ ----------- ------------------ -------------------------
----------------------------------------------------------------------------------------------------------------------------------

Instruction:  If you do not wish your shares  voted "for" a particular  nominee,  mark the "For All Except" box and strike a line
through  the  name(s) of the  nominee(s).  Your shares will be voted  "For" the  remaining  nominee(s).  THE BOARD OF  DIRECTORS,
INCLUDING ALL OF THE INDEPENDENT DIRECTORS, UNANIMOUSLY RECOMMENDS THAT STOCKHOLDERS VOTE "FOR" ELECTION OF ALL THE NOMINEES
----------------------------------------------------------------------------------------------------------------------------------


MARK HERE FOR ADDRESS CHANGE AND NOTE AT LEFT        ____

PLEASE SIGN, DATE AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE.

NOTE: Please sign exactly as your name appears on this Proxy. If joint owners,
EACH should sign this Proxy. When signing as attorney, executor, administrator,
trustee, guardian or corporate officer, please give your full title.






Signature:
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Date:
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Signature:
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Date:
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