The dividends declared on preferred shares for the period July 1, 2005, to July 31, 2005, for each of the Trusts were as follows:
|
DIVIDEND REINVESTMENT PLANS |
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Pursuant to each Trust’s Dividend Reinvestment Plan (the “Plan”), common shareholders of the 2008 Trusts, Insured Municipal and Municipal Target may elect, while the common shareholders of the 2018 Trusts, 2020 Trusts and Strategic Trusts are automatically enrolled, to have all distributions of dividends and capital gains reinvested by EquiServe Trust Company, N.A. (the “Plan Agent”) in the respective Trust’s shares pursuant to the Plan. Shareholders who do not participate in the Plan will receive all distributions in cash paid by check and mailed directly to the shareholders of record (or if the shares are held in street or other nominee name, then to the nominee) by the Plan Agent, which serves as agent for the shareholders in administering the Plan.
After a 2008 Trust, Insured Municipal, 2018 Trust, 2020 Trust and/or Municipal Target declares a dividend or determines to make a capital gain distribution, the Plan Agent will acquire shares for the participants’ account, by the purchase of outstanding shares on the open market, on the Trust’s primary exchange or elsewhere (“open market purchases”). These Trusts will not issue any new shares under the Plan.
After a Strategic Trust declares a dividend or determines to make a capital gain distribution, the Plan Agent will acquire shares for the participants’ account, depending upon the circumstances described below, either (i) through receipt of unissued but authorized shares from the Trust (“newly issued shares”) or (ii) by open market purchases. If, on the dividend payment date, the NAV is equal to or less than the market price per share plus estimated brokerage commissions (such condition being referred to herein as “market premium”), the Plan Agent will invest the dividend amount in newly issued shares on behalf of the participants. The number of newly issued shares to be credited to each participant’s account will be determined by dividing the dollar amount of the dividend by the NAV on the date the shares are issued. However, if the NAV is less than 95% of the market price on the payment date, the dollar amount of the dividend will be divided by 95% of the market price on the payment date. If, on the dividend payment date, the NAV is greater than the market value per share plus estimated brokerage commissions (such condition being referred to herein as “market discount”), the Plan Agent will invest the dividend amount in shares acquired on behalf of the participants in open market purchases.
Participation in the Plan is completely voluntary and may be terminated or resumed at any time without penalty by notice if received and processed by the Plan Administrator prior to the dividend record date; otherwise such termination or resumption will be effective with respect to any subsequently declared dividend or other distribution.
The Plan Agent’s fees for the handling of the reinvestment of dividends and distributions will be paid by each Trust. However, each participant will pay a pro rata share of brokerage commissions incurred with respect to the Plan Agent’s open market purchases in connection with the reinvestment of dividends and distributions. The automatic reinvestment of dividends and distributions will not relieve participants of any Federal income tax that may be payable on such dividends or distributions.
Each Trust reserves the right to amend or terminate the Plan. There is no direct service charge to participants in the Plan; however, each Trust reserves the right to amend the Plan to include a service charge payable by the participants. Participants that request a sale of shares through the Plan Agent are subject to a $2.50 sales fee and a $0.15 per share sold brokerage commission. All correspondence concerning the Plan should be directed to the Plan Agent at 250 Royall Street, Canton, MA 02021, or by calling (800) 699-1BFM.
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BOARD REVIEW OF INVESTMENT MANAGEMENT AGREEMENTS |
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At a meeting held on May 26, 2005, the board of trustees (the “Board” or the “Trustees”) of each trust (each a “Trust”), including the independent trustees (the “Independent Trustees”), unanimously approved the continuance of an Investment Management Agreement between each Trust and BlackRock Advisors, Inc. (the “Advisor”). For each Investment Management Agreement, the Boards also approved a related Sub-Investment Advisory Agreement, when applicable, among each respective Trust, the Advisor and BlackRock Financial Management, Inc. (the “Sub-Advisor”). The Investment Management Agreements and the Sub-Investment Advisory Agreements sometimes are referred to herein collectively as the “Agreements”. The Advisor and the Sub-Advisor sometimes are referred to herein collectively as “BlackRock”.
Information Received by the Boards
To assist each Board in its evaluation of the Agreements, the Independent Trustees received information from BlackRock on or about April 27, 2005 which detailed, among other things: the organization, business lines and capabilities of BlackRock, including the responsibilities of various departments and key personnel and biographical information relating to key personnel; financial statements for BlackRock, Inc., the PNC Financial Services Group, Inc. and each Trust; the advisory and/or administrative fees paid by each Trust to BlackRock, including comparisons, compiled by an independent third party, with the management fees of funds with similar investment objectives (“Peers”); the profitability of BlackRock and certain industry profitability analyses for advisors to registered investment companies; the expenses of BlackRock in providing the various services; non-investment advisory reimbursements and “fallout” benefits to BlackRock; the expenses of each Trust, including comparisons of the respective Trust’s expense ratios (both before and after any fee waivers) with the expense ratios of its Peers; and each Trust’s performance for the past one-, three-, five- and ten-year periods, when applicable, as well as each Trust’s performance compared to its Peers. This information supplemented the information received by each Board throughout the year regarding each Trust’s performance, expense ratios, portfolio composition, trade execution and compliance.
In addition to the foregoing materials, independent legal counsel to the Independent Trustees provided a legal memorandum outlining, among other things, the duties of the Boards under the 1940 Act as well as the general principles of relevant law in reviewing and approving advisory contracts, the requirements of the 1940 Act in such matters, an advisor’s fiduciary duty with respect to advisory agreements and compensation, and the standards used by courts in determining whether investment company boards of directors have fulfilled their duties and factors to be considered by the boards in voting on advisory agreements.
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Prior to the Board meeting, the Independent Trustees reviewed a preliminary binder of information, and, in consultation with independent counsel, submitted a memorandum on May 12, 2005, to BlackRock setting forth certain questions and requests for additional information. BlackRock responded to these questions in writing on May 24, 2005 and May 25, 2005. The Independent Trustees reviewed these responses with independent counsel on May 25, 2005.
At the Board meeting on May 26, 2005, BlackRock made a presentation to and responded to additional questions from the Boards. After the presentations and after reviewing the written materials, the Independent Trustees met in executive session with their legal counsel to review the Boards’ duties in reviewing the Agreements and to consider the renewal of the Agreements. With this background, the Boards considered each Agreement and, in consultation with independent counsel, reviewed the factors set out in judicial decisions and Securities and Exchange Commission statements relating to the renewal of the Agreements.
Matters Considered by the Boards
In connection with their deliberations, the Boards considered all factors they believed relevant with respect to each Trust, including the following: the nature, extent and quality of the services to be provided by BlackRock; the investment performance of each Trust; the costs of the services to be provided and profits to be realized by BlackRock and its affiliates from their relationship with the Trusts; the extent to which economies of scale would be realized as the BlackRock closed-end complex grows; and whether BlackRock realizes other benefits from its relationship with the Trusts.
Nature and Quality of Investment Advisory and Sub-Advisory Services. In evaluating the nature, extent and quality of BlackRock’s services, the Boards reviewed information concerning the types of services that BlackRock provides and is expected to provide to each Trust, narrative and statistical information concerning each Trust’s performance record and how such performance compares to each Trust’s Peers, information describing BlackRock’s organization and its various departments, the experience and responsibilities of key personnel and available resources. The Boards further noted the willingness of the personnel of BlackRock to engage in open, candid discussions with the Boards. The Boards further considered the quality of BlackRock’s investment process in making portfolio management decisions. Given the Boards’ experience with BlackRock, the Boards noted that they were familiar with and continue to have a good understanding of the organization, operations and personnel of BlackRock.
In addition to advisory services, the Independent Trustees considered the quality of the administrative or non-investment advisory services provided to the Trusts. In this regard, BlackRock provides each Trust with such administrative and other services (exclusive of, and in addition to, any such services provided by others for the Trusts) and officers and other personnel as are necessary for the operations of the respective Trust. In addition to investment management services, BlackRock and its affiliates provide each Trust with a wide range of services, including: preparing shareholder reports and communications, including annual and semi-annual financial statements and Trust web sites; communications with analysts to support secondary market trading; assisting with daily accounting and pricing; preparing periodic filings with regulators and stock exchanges; overseeing and coordinating the activities of other service providers; administering and organizing Board meetings and preparing the Board materials for such meetings; providing legal and compliance support (such as helping to prepare proxy statements and responding to regulatory inquiries); and performing other Trust administrative tasks necessary for the operation of the respective Trust (such as tax reporting and fulfilling regulatory filing requirements). In addition, in evaluating the administrative services, the Boards considered, in particular, BlackRock’s policies and procedures for assuring compliance with applicable laws and regulations in light of the new Securities and Exchange Commission regulations governing compliance. The Boards noted BlackRock’s focus on compliance and its compliance systems. The Independent Trustees noted that BlackRock’s commitment to supporting the secondary market for the common shares of its closed-end funds is particularly noteworthy.
The Investment Performance of the Trusts. As previously noted, the Boards received myriad performance information regarding each Trust and its Peers. Among other things, the Boards received materials reflecting each Trust’s historic performance and each Trust’s performance compared to its Peers. More specifically, each Trust’s one-, three-, five- and ten-year total returns (when applicable) were evaluated relative to its respective Peers (including the performance of individual peers as well as the Peers’ average performance).
The Boards also reviewed a narrative analysis of the Peer rankings that was prepared by an independent third party and summarized by BlackRock at the Boards’ request. The summary placed the Peer rankings into context by analyzing various factors that affect these comparisons. In evaluating the performance information, in certain limited instances, the Boards noted that the Peers most similar to a given Trust still would not adequately reflect such Trust’s investment objectives and strategies, thereby limiting the usefulness of the comparisons of such Trust’s performance with that of its Peers. The Boards noted the quality of information provided by BlackRock throughout the year with respect to the performance of the Trusts. The Boards considered this information in connection with its deliberations as to whether the level of management services provided to each Trust, in light of all the other facts and circumstances relating to that Trust, supports a conclusion that the Trust’s Agreement should be renewed.
Fees and Expenses. In evaluating the management fees and expenses that a Trust is expected to bear, the Boards considered each Trust’s current management fee structure and the Trust’s expected expense ratios in absolute terms as well as relative to the fees and expense ratios of applicable Peers. In reviewing fees, the Boards, among other things, reviewed comparisons of each Trust’s gross management fees before and after any applicable reimbursements and fee waivers and total expense ratios before and after any applicable waivers with those of the applicable Peers. The Boards also reviewed a narrative analysis of the Peer rankings that was prepared by an independent third party and summarized by BlackRock at the request of the Boards. This summary placed the rankings into context by analyzing various factors that affect these comparisons.
The Boards also compared the management fees charged to the Trusts by BlackRock to the management fees BlackRock charges other types of clients (such as open-end investment companies and institutional separately managed accounts). With respect to open-end investment com-
87
panies, the management fees charged to the Trusts generally were higher than those charged to the open-end investment companies. The Boards also noted that BlackRock provides the Trusts with certain services not provided to open-end funds, such as leverage management in connection with the issuance of preferred shares, stock exchange listing compliance requirements, rating agency compliance with respect to the leverage employed by the Trusts and secondary market support and other services not provided to the Trusts, such as monitoring of subscriptions and redemptions. With respect to separately managed institutional accounts, the management fees for such accounts were generally lower than those charged to the comparable Trusts. The Boards noted, however, the various services that are provided and the costs incurred by BlackRock in managing and operating the Trusts. For instance, BlackRock and its affiliates provide numerous services to the Trusts that are not provided to institutional accounts including, but not limited to: preparing shareholder reports and communications, including annual and semi-annual financial statements; preparing periodic filings with regulators and stock exchanges; overseeing and coordinating the activities of other service providers; administering and organizing Board meetings and preparing the Board materials for such meetings; income monitoring; expense budgeting; preparing proxy statements; and performing other Trust administrative tasks necessary for the operation of the respective Trust (such as tax reporting and fulfilling regulatory filing requirements). Further, the Boards noted the increased compliance requirements for the Trusts in light of new Securities and Exchange Commission regulations and other legislation. These services are generally not required to the same extent, if at all, for separate accounts.
The Boards considered this information in connection with its deliberations as to whether the fees paid by each Trust under its Agreements, in light of all the other facts and circumstances relating to that Trust, supports a conclusion that the Trust’s Agreements should be renewed.
Profitability. The Trustees also considered BlackRock’s profitability in conjunction with their review of fees. The Trustees reviewed BlackRock’s revenues, expenses and profitability margins on an after-tax basis. In reviewing profitability, the Trustees recognized that one of the most difficult issues in determining profitability is establishing a method of allocating expenses. The Trustees also reviewed BlackRock’s assumptions and methodology of allocating expenses. In this regard, the methods of allocation used appeared reasonable but the Boards noted the inherent limitations in allocating costs among various advisory products. The Boards also recognized that individual fund or product line profitability of other advisors is generally not publicly available.
The Boards recognized that profitability may be affected by numerous factors including, among other things, the types of funds managed, expense allocations and business mix, and therefore comparability of profitability is somewhat limited. Nevertheless, to the extent available, the Boards considered BlackRock’s pre-tax profit margin compared to the pre-tax profitability of various publicly-traded investment management companies and/or investment management companies that publicly disclose some or all of their financial results.
In evaluating the reasonableness of BlackRock’s compensation, the Boards also considered any other revenues paid to BlackRock, including partial reimbursements paid to BlackRock for certain non-investment advisory services. The Boards noted that these payments were less than BlackRock’s costs for providing these services. The Boards also considered indirect benefits (such as soft dollar arrangements) that BlackRock and its affiliates are expected to receive that are attributable to their management of the Trusts.
In reviewing each Trust’s fees and expenses, the Boards examined the potential benefits of economies of scale, and whether any economies of scale should be reflected in the Trust’s fee structures, for example through the use of breakpoints. In this connection, the Boards reviewed information provided by BlackRock, noting that most closed-end fund complexes do not have fund-level breakpoints, as closed-end funds generally do not experience substantial growth after their initial public offering and each fund is managed independently consistent with its own investment objectives. The information also revealed that only one closed-end fund complex used a complex-level breakpoint structure, and that this complex generally is homogeneous with regard to the types of funds managed and is about four times as large as the Trust’s complex. The Boards concluded that breakpoints were not warranted at this time.
Other Benefits. In evaluating fees, the Boards also considered indirect benefits or profits BlackRock or its affiliates may receive as a result of their relationships with the Trusts. The Trustees, including the Independent Trustees, considered the intangible benefits that accrue to BlackRock and its affiliates by virtue of their relationships with the Trusts, including potential benefits accruing to BlackRock and its affiliates as a result of potentially stronger relationships with members of the broker-dealer community, increased name recognition of BlackRock and its affiliates, enhanced sales of other investment funds and products sponsored by BlackRock and its affiliates and increased assets under management which may increase the benefits realized by BlackRock from soft dollar arrangements with broker-dealers. The Boards also considered the unquantifiable nature of these potential benefits.
Miscellaneous. During the Boards’ deliberations in connection with the Agreements, the Boards were aware that the Advisor pays compensation, out of its own assets, to the lead underwriter and to certain qualifying underwriters of many of its closed-end funds, and to employees of BlackRock and its affiliates that participated in the offering of such funds. The Boards considered whether the management fee met applicable standards in light of the services provided by BlackRock, without regard to whether BlackRock ultimately pays any portion of the anticipated compensation to the underwriters.
Conclusion
The Trustees did not identify any single factor discussed above as all-important or controlling. The Trustees, including a majority of Independent Trustees, determined that each of the factors described above, in light of all the other factors and all of the facts and circumstances applicable to each respective Trust, was acceptable for each Trust and supported the Trustees’ conclusion that the terms of each Agreement were fair and reasonable, that the respective Trust’s fees are reasonable in light of the services provided to the respective Trust, and that the renewal of each Agreement should be approved.
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We are required by the Internal Revenue Code to advise you within 60 days of a Trust’s tax year-end as to the Federal tax status of dividends paid by the Trusts during such tax year. Accordingly, during the tax year-end June 30, 2005, all dividends paid by the Strategic Trusts (the only Trusts with June 30th tax year-ends) were federally tax-exempt interest dividends.
The Joint Annual Meeting of Shareholders was held on May 26, 2005, to elect a certain number of Directors/Trustees for each of the following Trusts to three-year terms, unless otherwise indicated, expiring in 2008:
| | | | | | | | | | | |
Municipal Insured 2008 | | | | | | | |
| | | | | | | |
Elected the Class I Director as follows: | | | | | | | |
| | | | | | | | | | | |
Director | | | Votes For | | | Votes Withheld | |
| | |
| | |
| |
R. Glenn Hubbard1 | | | | 25,134,043 | | | | | 950,502 | | |
| | | | | | | | | | | |
Elected the Class II Director as follows: | | | | | | | | | | | |
| | | | | | | | | | | |
Director | | | | Votes For | | | | Votes Withheld | |
| | | |
| | | |
| |
Kathleen F. Feldstein1 | | | | 25,127,028 | | | | | 957,517 | | |
| | | | | | | | | | | |
Elected the Class III Directors as follows: | | | | | | | | | | | |
| | | | | | | | | | | |
Director | | | | Votes For | | | | Votes Withheld | |
| | | |
| | | |
| |
Andrew F. Brimmer | | | | 25,125,347 | | | | | 959,198 | | |
Kent Dixon | | | | 25,151,329 | | | | | 933,216 | | |
Robert S. Kapito | | | | 25,151,737 | | | | | 932,808 | | |
| | | | | | | | | | | |
Insured Municipal | | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
Elected the Class I Directors as follows: | | | | | | | | | | | |
| | | | | | | | | | | |
Director | | | | Votes For | | | | Votes Withheld | |
| | | |
| | | |
| |
Richard E. Cavanagh2 | | | | 6,279 | | | | | 14 | | |
R. Glenn Hubbard | | | | 24,505,715 | | | | | 322,870 | | |
James Clayburn La Force, Jr. | | | | 24,490,729 | | | | | 337,856 | | |
| | | | | | | | | | | |
Elected the Class II Director as follows: | | | | | | | | | | | |
| | | | | | | | | | | |
Director | | | | Votes For | | | | Votes Withheld | |
| | | |
| | | |
| |
Kathleen F. Feldstein1 | | | | 24,491,783 | | | | | 336,802 | | |
| | | | | | | | | | | |
Municipal 2018 | | | | | | | | | | | |
| | | | | | | | | | | |
Elected the Class I Trustees as follows: | | | | | | | | | | | |
| | | | | | | | | | | |
Trustee | | | | Votes For | | | | Votes Withheld | |
| | | |
| | | |
| |
Richard E. Cavanagh2 | | | | 5,165 | | | | | 176 | | |
R. Glenn Hubbard | | | | 15,565,463 | | | | | 205,676 | | |
James Clayburn La Force, Jr. | | | | 15,559,484 | | | | | 211,655 | | |
| | | | | | | | | | | |
Elected the Class II Trustee as follows: | | | | | | | | | | | |
| | | | | | | | | | | |
Trustee | | | | Votes For | | | | Votes Withheld | |
| | | |
| | | |
| |
Kathleen F. Feldstein1 | | | | 15,548,699 | | | | | 222,440 | | |
| | | | | | | | | | | |
Municipal 2020 | | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
Elected the Class II Trustees as follows: | | | | | | | | | | | |
| | | | | | | | | | | |
Trustee | | | | Votes For | | | | Votes Withheld | |
| | | |
| | | |
| |
Frank J. Fabozzi2 | | | | 6,951 | | | | | 13 | | |
Kathleen F. Feldstein | | | | 19,748,832 | | | | | 357,782 | | |
Walter F. Mondale | | | | 19,714,249 | | | | | 392,365 | | |
Ralph L. Schlosstein | | | | 19,750,067 | | | | | 356,547 | | |
| | | | | | | | | | | |
Municpal Target | | | | | | | | | | | |
| | | | | | | | | | | |
Elected the Class I Directors as follows: | | | | | | | | | | | |
| | | | | | | | | | | |
Director | | | | Votes For | | | | Votes Withheld | |
| | | |
| | | |
| |
Richard E. Cavanagh2 | | | | 11,303 | | | | | 25 | | |
R. Glenn Hubbard | | | | 42,403,512 | | | | | 794,365 | | |
James Clayburn La Force, Jr. | | | | 42,357,139 | | | | | 840,738 | | |
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| | | | | | | | | | | |
Elected the Class II Director as follows: | | | | | | | |
| | | | | | | |
Director | | | | Votes For | | | | Votes Withheld | |
| | | |
| | | |
| |
Kathleen F. Feldstein1 | | | | 42,376,847 | | | | | 821,030 | | |
| | | | | | | |
Municipal Strategic | | | | | | | | | | | |
| | | | | | | | | | | |
Elected the Class II Trustees as follows: | | | | | | | | | | | |
| | | | | | | |
Trustee | | | | Votes For | | | | Votes Withheld | |
| | | |
| | | |
| |
Frank J. Fabozzi2 | | | | 2,244 | | | | | 1 | | |
Kathleen F. Feldstein | | | | 6,830,641 | | | | | 94,495 | | |
Walter F. Mondale | | | | 6,821,510 | | | | | 103,626 | | |
Ralph L. Schlosstein | | | | 6,845,647 | | | | | 79,489 | | |
| | | | | | | |
California Insured 2008 | | | | | | | | | | | |
| | | | | | | | | | | |
Elected the Class I Director as follows: | | | | | | | | | | | |
| | | | | | | |
Director | | | | Votes For | | | | Votes Withheld | |
| | | |
| | | |
| |
R. Glenn Hubbard1 | | | | 10,059,947 | | | | | 95,837 | | |
| | | | | | | |
Elected the Class II Director as follows: | | | | | | | | | | | |
| | | | | | | |
Director | | | | Votes For | | | | Votes Withheld | |
| | | |
| | | |
| |
Kathleen F. Feldstein1 | | | | 10,060,327 | | | | | 95,457 | | |
| | | | | | | |
Elected the Class III Directors as follows: | | | | | | | | | | | |
| | | | | | | |
Director | | | | Votes For | | | | Votes Withheld | |
| | | |
| | | |
| |
Andrew F. Brimmer | | | | 10,060,039 | | | | | 95,745 | | |
Kent Dixon | | | | 10,061,382 | | | | | 94,402 | | |
Robert S. Kapito | | | | 10,061,147 | | | | | 94,637 | | |
| | | | | | | |
California 2018 | | | | | | | | | | | |
| | | | | | | | | | | |
Elected the Class I Trustees as follows: | | | | | | | | | | | |
| | | | | | | |
Trustee | | | | Votes For | | | | Votes Withheld | |
| | | |
| | | |
| |
Richard E. Cavanagh2 | | | | 2,209 | | | | | — | | |
R. Glenn Hubbard | | | | 6,384,551 | | | | | 28,322 | | |
James Clayburn La Force, Jr. | | | | 6,387,185 | | | | | 25,688 | | |
Elected the Class II Trustee as follows: | | | | | | | | | | | |
| | | | | | | |
Trustee | | | | Votes For | | | | Votes Withheld | |
| | | |
| | | |
| |
Kathleen F. Feldstein1 | | | | 6,385,099 | | | | | 27,774 | | |
| | | | | | | |
Florida Insured 2008 | | | | | | | | | | | |
| | | | | | | | | | | |
Elected the Class III Trustees as follows: | | | | | | | | | | | |
| | | | | | | |
Trustee | | | | Votes For | | | | Votes Withheld | |
| | | |
| | | |
| |
Andrew F. Brimmer | | | | 8,346,838 | | | | | 139,035 | | |
Kent Dixon | | | | 8,388,849 | | | | | 97,024 | | |
Robert S. Kapito | | | | 8,336,725 | | | | | 149,148 | | |
| | | | | | | | | | | |
Florida 2020 | | | | | | | | | | | |
| | | | | | | | | | | |
Elected the Class II Trustees as follows: | | | | | | | | | | | |
| | | | | | | |
Trustee | | | | Votes For | | | | Votes Withheld | |
| | | |
| | | |
| |
Frank J. Fabozzi2 | | | | 1,956 | | | | | — | | |
Kathleen F. Feldstein | | | | 5,379,180 | | | | | 53,584 | | |
Walter F. Mondale | | | | 5,374,513 | | | | | 58,251 | | |
Ralph L. Schlosstein | | | | 5,382,180 | | | | | 50,584 | | |
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| | | | | | | | | | | |
New York Insured 2008 | | | | | | | |
| | | | | | | |
Elected the Class I Director as follows: | | | | | | | |
| | | | | | | |
Director | | | | Votes For | | | | Votes Withheld | |
| | | |
| | | |
| |
R. Glenn Hubbard1 | | | | 9,579,899 | | | | | 662,980 | | |
| | | | | | | |
Elected the Class II Director as follows: | | | | | | | | | | | |
| | | | | | | |
Director | | | | Votes For | | | | Votes Withheld | |
| | | |
| | | |
| |
Kathleen F. Feldstein1 | | | | 9,586,065 | | | | | 656,814 | | |
| | | | | | | |
Elected the Class III Directors as follows: | | | | | | | | | | | |
| | | | | | | |
Director | | | | Votes For | | | | Votes Withheld | |
| | | |
| | | |
| |
Andrew F. Brimmer | | | | 9,587,623 | | | | | 655,256 | | |
Kent Dixon | | | | 9,589,440 | | | | | 653,439 | | |
Robert S. Kapito | | | | 9,595,362 | | | | | 647,517 | | |
| | | | | | | |
New York 2018 | | | | | | | | | | | |
| | | | | | | | | | | |
Elected the Class I Trustees as follows: | | | | | | | | | | | |
| | | | | | | |
Trustee | | | | Votes For | | | | Votes Withheld | |
| | | |
| | | |
| |
Richard E. Cavanagh2 | | | | 1,248 | | | | | 8 | | |
R. Glenn Hubbard | | | | 3,441,271 | | | | | 35,120 | | |
James Clayburn La Force, Jr. | | | | 3,441,271 | | | | | 35,120 | | |
| | | | | | | |
Elected the Class II Trustee as follows: | | | | | | | | | | | |
| | | | | | | |
Trustee | | | | Votes For | | | | Votes Withheld | |
| | | |
| | | |
| |
Kathleen F. Feldstein1 | | | | 3,436,717 | | | | | 39,674 | | |
| | | | | | | |
Pennsylvania Strategic | | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | |
Elected the Class II Trustees as follows: | | | | | | | | | | | |
| | | | | | | |
Trustee | | | | Votes For | | | | Votes Withheld | |
| | | |
| | | |
| |
Frank J. Fabozzi2 | | | | 545 | | | | | 8 | | |
Kathleen F. Feldstein | | | | 1,922,351 | | | | | 20,480 | | |
Walter F. Mondale | | | | 1,915,862 | | | | | 26,969 | | |
Ralph L. Schlosstein | | | | 1,926,187 | | | | | 16,644 | | |
| |
|
1 | Mr. Hubbard and Ms. Feldstein will serve until the end of the term for the Class of Directors/Trustees to which they were elected, if such class was not standing for election at the May 26, 2005, Annual Shareholder Meeting. |
2 | Voted on by the holders of preferred shares only. |
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The following Trusts had an additional proposal (Proposal #2A) to amend its respective Declaration of Trust in order to change the maximum number of permitted Trustees allowed on its respective Board to 11:
| | | | | | | | | | | | | | | | |
| | | Votes For | | | Votes Against | | | Votes Withheld | |
| | |
| | |
| | |
| |
Municipal 2018 | | | | 15,175,519 | | | | | 341,201 | | | | | 254,418 | | |
Municipal 2020 | | | | 19,317,546 | | | | | 506,803 | | | | | 282,264 | | |
California 2018 | | | | 6,322,300 | | | | | 52,424 | | | | | 38,149 | | |
Florida 2020 | | | | 5,292,795 | | | | | 96,583 | | | | | 43,386 | | |
New York 2018 | | | | 3,406,203 | | | | | 42,537 | | | | | 27,651 | | |
The following Trust had an additional proposal (Proposal #2B) to amend its Declaration of Trust in order to reduce the maximum number of permitted Trustees allowed on its Board from 15 to 11:
| | | | | | | | | | |
| | | Votes For | | | Votes Against | | | Votes Withheld | |
| | |
| | |
| | |
| |
Florida Insured 2008 | | | 8,324,731 | | | 97,491 | | | 63,651 | |
During the period, there were no material changes in any Trust’s investment objective or policies or to any Trust’s charters or by-laws that were not approved by the shareholders or in the principle risk factors associated with investment in the Trusts. There have been no changes in the persons who are primarily responsible for the day-to-day management of the Trusts’ portfolios.
Quarterly performance and other information regarding the Trusts may be found on BlackRock’s website, which can be accessed at http://www.blackrock.com/indiv/products/closedendfunds/funds.html. This reference to BlackRock’s website is intended to allow investors public access to information regarding the Trusts and does not, and is not intended, to incorporate BlackRock’s website into this report.
Certain of the officers of the Trusts listed on the inside back cover of this Report to Shareholders are also officers of the Advisor or Sub-Advisor. They serve in the following capacities for the Advisor or Sub-Advisor: Robert S. Kapito—Director and Vice Chairman of the Advisor and the Sub-Advisor, Kevin M. Klingert—Director of BlackRock Advisors, Inc. and Managing Director of the Advisor and the Sub-Advisor, Henry Gabbay, Anne Ackerley and Bartholomew Battista—Managing Directors of the Advisor and the Sub-Advisor, James Kong and Vincent Tritto—Managing Directors of the Sub-Advisor, and Brian P. Kindelan—Managing Director of the Advisor.
92
BlackRock Closed-End Funds
| |
Directors/Trustees | Transfer Agent |
Ralph L. Schlosstein, Chairman | Equiserve Trust Company, N.A. |
Andrew F. Brimmer | c/o Computershare Investor Services |
Richard E. Cavanagh | 250 Royall Street |
Kent Dixon | Canton, MA 02021 |
Frank J. Fabozzi | (800) 699-1BFM |
Kathleen F. Feldstein1 | |
R. Glenn Hubbard2 | Auction Agent3 |
Robert S. Kapito | Bank of New York |
James Clayburn La Force, Jr. | 101 Barclay Street, 7 West |
Walter F. Mondale | New York, NY 10286 |
| |
Officers | Auction Agent4 |
Robert S. Kapito, President | Deutsche Bank Trust Company Americas |
Henry Gabbay, Treasurer | 60 Wall Street, 27th Floor |
Bartholomew Battista, Chief Compliance Officer | New York, NY 10005 |
Anne Ackerley, Vice President | |
Kevin M. Klingert, Vice President | Independent Registered Public Accounting Firm |
James Kong, Assistant Treasurer | Deloitte & Touche LLP |
Vincent B. Tritto, Secretary | 200 Berkeley Street |
Brian P. Kindelan, Assistant Secretary | Boston, MA 02116 |
| |
Investment Advisor | Legal Counsel |
BlackRock Advisors, Inc. | Skadden, Arps, Slate, Meagher & Flom LLP |
100 Bellevue Parkway | Four Times Square |
Wilmington, DE 19809 | New York, NY 10036 |
(800) 227-7BFM | |
| Legal Counsel – Independent Trustees |
Sub-Advisor3 | Debevoise & Plimpton LLP |
BlackRock Financial Management, Inc. | 919 Third Avenue |
40 East 52nd Street | New York, NY 10022 |
New York, NY 10022 | |
Accounting Agent and Custodian
State Street Bank and Trust Company
225 Franklin Street
| This report is for shareholder information. This is not a prospectus intended for use in the purchase or sale of Trust shares. Statements and other information contained in this report are as dated and are subject to change. |
Boston, MA 02110 |
BlackRock Closed-End Funds
|
| c/o BlackRock Advisors, Inc. |
| 100 Bellevue Parkway |
| Wilmington, DE 19809 |
| (800) 227-7BFM |
| |
1 | Appointed as a Director/Trustee of the 2008 Trusts, Strategic Trusts, Insured Municipal Trust and Municipal Target Trust on January 19, 2005, and elected by Shareholders on May 26, 2005. |
2 | Appointed as a Director/Trustee of each Trust on November 16, 2004. Elected by Shareholders on May 26, 2005, as a Director/Trustee for each Trust, except the 2020 Trusts, Strategic Trusts and Florida Insured 2008 Trust, for which Mr. Hubbard’s class of Directors/Trustees did not stand for election. |
3 | For the 2018 Trusts and 2020 Trusts. |
4 | For the Trusts, except the 2018 Trusts and 2020 Trusts. |
The Trusts will mail only one copy of shareholder documents, including annual and semi-annual reports and proxy statements, to shareholders with multiple accounts at the same address. This practice is commonly called “householding” and is intended to reduce expenses and eliminate duplicate mailings of shareholder documents. Mailings of your shareholder documents may be householded indefinitely unless you instruct us otherwise. If you do not want the mailing of these documents to be combined with those for other members of your household, please contact the Trusts at (800) 699-1BFM.
The Trusts have delegated to the Advisor the voting of proxies relating to their voting securities pursuant to the Advisor’s proxy voting policies and procedures. You may obtain a copy of these proxy voting policies and procedures, without charge, by calling (800) 699-1BFM. These policies and procedures are also available on the website of the Securities and Exchange Commission (the “Commission”) at http://www.sec.gov.
Information on how proxies relating to the Trusts’ voting securities were voted (if any) by the Advisor during the most recent 12-month period ended December 31st is available, upon request, by calling (800) 699-1BFM or on the website of the Commission at http://www.sec.gov.
The Trusts file their complete schedule of portfolio holdings for the first and third quarters of their respective fiscal years with the Commission on Form N-Q. Each Trust’s Form N-Q will be available on the Commission’s website at http://www.sec.gov. Each Trust’s Form N-Q may be reviewed and copied at the Commission’s Public Reference Room in Washington, D.C. Information regarding the operation of the Public Reference Room may be obtained by calling (800) SEC-0330. Each Trust’s Form N-Q may also be obtained upon request, without charge, by calling (800) 699-1BFM.
| |
This report is for shareholder information. This is not a prospectus intended for use in the purchase or sale of Trust shares. Statements and other information contained in this report are as dated and are subject to change. | 
|
| |
CEF-SEMI-4 | |
Item 2. Code of Ethics.
Not applicable for semi-annual reports.
Item 3. Audit Committee Financial Expert.
Not applicable for semi-annual reports.
Item 4. Principal Accountant Fees and Services.
Not applicable for semi-annual reports.
Item 5. Audit Committee of Listed Registrants.
Not applicable for semi-annual reports.
Item 6. Schedule of Investments.
The Registrant’s Schedule of Investments is included as part of the Report to Shareholders filed under Item 1 of this Form.
Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies.
Not applicable for semi-annual reports.
Item 8. Portfolio Managers of Closed-End Management Investment Companies.
Not applicable for semi-annual reports.
Item 9. Purchases of Equity Securities by Closed-End Management Company and Affiliated Purchasers.
Not applicable because no such purchases were made during the period covered by this report.
Item 10. Submission of Matters to a Vote of Security Holders.
Not applicable because no applicable matters were voted on by shareholders during the period covered by this report.
Item 11. Controls and Procedures.
(a) The Registrant's principal executive officer and principal financial officer have evaluated the Registrant's disclosure controls and procedures as of a date within 90 days of this filing and have concluded that the Registrant’s disclosure controls and procedures are effective, as of such date, in ensuring that information required to be disclosed by the Registrant in this Form N-CSR was recorded, processed, summarized, and reported timely.
(b) The Registrant's principal executive officer and principal financial officer are aware of no changes in the Registrant's internal control over financial reporting that occurred during the Registrant's second fiscal quarter of the period covered by this report that has materially affected, or is reasonably likely to materially affect, the Registrant's internal control over financial reporting.
Item 12. Exhibits.
(a) (1) Not applicable.
(a) (2) Separate certifications of Principal Executive and Financial Officers pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
(a) (3) Not applicable.
(b) Certification of Principal Executive and Financial Officers pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
(Registrant) BlackRock Municipal 2018 Term Trust
By: __/s/ Henry Gabbay_____________________________________________
Name: Henry Gabbay
Title: Treasurer
Date: August 19, 2005
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
By: __/s/ Robert S. Kapito_____________________________________________
Name: Robert S. Kapito
Title: Principal Executive Officer
Date: August 19, 2005
By: __/s/ Henry Gabbay_____________________________________________
Name: Henry Gabbay
Title: Principal Financial Officer
Date: August 19, 2005
