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Disclosure of Investment Advisory Agreements and
Sub-Advisory Agreements (continued)
|
B. The Investment Performance of the Fund and BlackRock:
The Boards, including the Independent Board
Members, also reviewed and considered the performance history of their Funds.
In preparation for the April 14, 2011 meeting, the Boards worked with BlackRock
and Lipper to develop a template for, and was provided with reports
independently prepared by Lipper, which included a comprehensive analysis of
each Fund’s performance. The Boards also reviewed a narrative and statistical
analysis of the Lipper data that was prepared by BlackRock, which analyzed
various factors that affect Lipper’s rankings. In connection with their review,
each Board received and reviewed information regarding the investment
performance of its Fund as compared to funds in that Fund’s applicable Lipper
category and, with respect to BFZ, RFA, BBF, RNY and BNY, a customized peer
group selected by BlackRock. The Boards were provided with a description of the
methodology used by Lipper to select peer funds. The Boards and each Board’s
Performance Oversight Committee regularly review, and meet with Fund management
to discuss, the performance of the Funds throughout the year.
The Board of BFO noted that
BFO performed below the median of its Lipper Performance Composite in the
three- and five-year periods reported, but that BFO performed at or above the
median of its Lipper Performance Composite in the one-year period reported. The
Board of BFO and BlackRock reviewed and discussed the reasons for BFO’s
underperformance during the three- and five-year periods compared with its
Peers. The Board of BFO was informed that, among other things, BFO has a targeted
maturity, and as such is managed to achieve the specific maturity goal.
The Boards of BFZ, RNY and
BNY noted that, in general, each of BFZ, RNY and BNY performed better than its
respective Peers in that each of BFZ’s, RNY’s and BNY’s performance was at or
above the median of its respective Customized Lipper Peer Group Composite in
each of the one-, three- and five-year periods reported.
The Board of RFA noted that
RFA performed below the median of its Customized Lipper Peer Group Composite in
the three- and five-year periods reported, but that RFA performed at or above
the median of its Customized Lipper Peer Group Composite in the one-year period
reported. The Board of RFA and BlackRock reviewed and discussed the reasons for
RFA’s underper-formance during the three- and five-year periods compared with
its Peers. The Board was informed that, among other things, performance was
hindered by exposure to Florida insured bonds backed by monoline insurers.
The Board of RNJ noted that
RNJ performed below the median of its Lipper Performance Composite in the
three- and five-year periods reported, but that RNJ performed at or above the
median of its Lipper Performance Composite in the one-year period reported. The
Board of RNJ and BlackRock reviewed and discussed the reasons for RNJ’s
underperformance during the three- and five-year periods compared with its
Peers. The Board of RNJ was informed that, among other things, that over the
three-year period performance was hindered by high yield holdings.
The Boards of RFA and RNJ and
BlackRock discussed BlackRock’s strategy for improving each Fund’s performance
and BlackRock’s commitment to providing the resources necessary to assist each
Fund’s portfolio managers and to improve each Fund’s performance, in part
through the repositioning of each Fund’s respective portfolio.
The Board of BNJ noted that,
in general, BNJ performed better than its Peers in that BNJ’s performance was
at or above the median of its Lipper Performance Composite in each of the one-,
three- and five-year periods reported.
The Board of BBF noted that,
in general, BBF performed better than its Peers in that BBF’s performance was
at or above the median of its Customized Lipper Peer Group Composite in two of
the one-, three- and five-year periods reported.
The Boards noted that
BlackRock has made changes to the organization of the overall fixed income
group management structure designed to result in a strengthened leadership
team.
C. Consideration of the Advisory/Management Fees and the Cost
of the Services and Profits to be Realized by BlackRock and its Affiliates from
their Relationship with the Fund:
Each Board, including the Independent Board Members, reviewed its Fund’s
contractual management fee ratio compared with the other funds in its Lipper
category. It also compared the Fund’s total expense ratio, as well as actual
management fee ratio, to those of other funds in its Lipper category. The
Boards considered the services provided and the fees charged by BlackRock to
other types of clients with similar investment mandates, including separately
managed institutional accounts.
The Boards received and
reviewed statements relating to BlackRock’s financial condition and
profitability with respect to the services it provided the Funds. The Boards
were also provided with a profitability analysis that detailed the revenues
earned and the expenses incurred by BlackRock for services provided to the
Funds. The Boards reviewed BlackRock’s profitability with respect to the Funds
and other funds the Boards currently oversee for the year ended December 31,
2010 compared to available aggregate profitability data provided for the years
ended December 31, 2009, and December 31, 2008. The Boards reviewed
BlackRock’s profitability with respect to other fund complexes managed by the
Manager and/or its affiliates. The Boards reviewed BlackRock’s assumptions and
methodology of allocating expenses in the profitability analysis, noting the
inherent limitations in allocating costs among various advisory products. The
Boards recognized that profitability may be affected by numerous factors
including, among other things, fee waivers and expense reimbursements by the
Manager, the types of funds managed, expense allocations and business mix, and
the difficulty of comparing profitability as a result of those factors.
The Boards noted that, in
general, individual fund or product line profitability of other advisors is not
publicly available. The Boards considered BlackRock’s overall operating margin,
in general, compared to the operating margin for leading investment management
firms whose operations include advising closed-end funds, among other product
types. That data indicates that operating margins for BlackRock, in general and
with respect to its registered funds, are generally consistent with margins
earned by similarly situated publicly traded competitors. In addition, the
Boards considered, among other things, certain third party data comparing
BlackRock’s operating margin with that of other publicly-traded asset
management firms. That third party data indicates that larger asset bases do
not, in themselves, translate to higher profit margins.
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ANNUAL REPORT
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JULY 31, 2011
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67
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Disclosure of Investment Advisory Agreements and
Sub-Advisory Agreements (concluded)
|
In addition, the Boards
considered the cost of the services provided to the Funds by BlackRock, and
BlackRock’s and its affiliates’ profits relating to the management of the Funds
and the other funds advised by BlackRock and its affiliates. As part of its
analysis, the Boards reviewed BlackRock’s methodology in allocating its costs
to the management of the Funds. The Boards also considered whether BlackRock
has the financial resources necessary to attract and retain high-quality
investment management personnel to perform its obligations under the Agreements
and to continue to provide the high quality of services that is expected by the
Boards.
The Board of each of BFO,
BFZ, RFA, BBF, RNJ, RNY and BNY noted that its Fund’s contractual management
fee ratio (a combination of the advisory fee and the administration fee, if
any) was lower than or equal to the median contractual management fee ratio
paid by such Fund’s Peers, in each case before taking into account any expense
reimbursements or fee waivers.
The Board of BNJ noted that
BNJ’s contractual management fee ratio (a combination of the advisory fee and
the administration fee, if any) was above the median contractual management fee
ratio paid by the BNJ’s Peers, in each case before taking into account any
expense reimbursements or fee waivers. The Board of BNJ also noted, however,
that the BNJ’s contractual management fee ratio was reasonable relative to the
median contractual management fee ratio paid by the BNJ’s peers.
D. Economies of Scale:
Each Board, including the Independent Board
Members, considered the extent to which economies of scale might be realized as
the assets of its Fund increase. Each Board also considered the extent to which
its Fund benefits from such economies and whether there should be changes in
the advisory fee rate or structure in order to enable the Fund to participate
in these economies of scale, for example through the use of breakpoints in the
advisory fee based upon the asset level of the Fund. Based on the
ad hoc
Joint Product Pricing Committees’
and the Boards’ review and consideration of this issue, the Boards concluded
that closed-end funds are typically priced at scale at a fund’s inception;
therefore, the implementation of breakpoints was not necessary.
The Boards noted that most closed-end
funds do not have fund level breakpoints because closed-end funds generally do
not experience substantial growth after the initial public offering. The Boards
noted that only one closed-end fund in the Fund Complex has breakpoints in its
advisory fee structure.
E. Other Factors Deemed Relevant by the Board Members:
The Boards, including the Independent Board
Members, also took into account other ancillary or “fall-out” benefits that
BlackRock or its affiliates and significant shareholders may derive from their
respective relationships with the Funds, both tangible and intangible, such as
BlackRock’s ability to leverage its investment professionals who manage other
portfolios and risk management personnel, an increase in BlackRock’s profile in
the investment advisory community, and the engagement of BlackRock’s affiliates
as service providers to the Funds, including for securities lending services.
The Boards also considered BlackRock’s overall operations and its efforts to
expand the scale of, and improve the quality of, its operations. The Boards
also noted that BlackRock may use and benefit from third party research
obtained by soft dollars generated by certain registered fund transactions to
assist in managing all or a number of its other client accounts. The Boards
further noted that BlackRock’s funds may invest in affiliated ETFs without any
offset against the management fees payable by the funds to BlackRock.
In connection with its
consideration of the Agreements, the Boards also received information regarding
BlackRock’s brokerage and soft dollar practices. The Boards received reports
from BlackRock which included information on brokerage commissions and trade
execution practices throughout the year.
The Boards noted the
competitive nature of the closed-end fund marketplace and that shareholders are
able to sell their Fund shares in the secondary market if they believe that the
Fund’s fees and expenses are too high or if they are dissatisfied with the
performance of the Fund.
Conclusion
Each Board, including the
Independent Board Members, unanimously approved the continuation of the
Advisory Agreement between the Manager and its Fund for a one-year term ending
June 30, 2012 and the Sub-Advisory Agreement between the Manager and the
Sub-Advisor, with respect to its Fund, for a one-year term ending June 30,
2012. As part of its approval, the Boards considered the detailed review of
BlackRock’s fee structure, as it applies to the Funds, conducted by the
ad hoc
Joint Product Pricing Committee.
Based upon their evaluations of all of the aforementioned factors in their
totality, the Boards, including the Independent Board Members, were satisfied
that the terms of the Agreements were fair and reasonable and in the best
interest of the Funds and their shareholders. In arriving at their decision to
approve the Agreements, the Boards did not identify any single factor or group
of factors as all-important or controlling, but considered all factors
together, and different Board Members may have attributed different weights to
the various factors considered. The Independent Board Members were also
assisted by the advice of independent legal counsel in making these
determinations. The contractual fee arrangements for the Funds reflect the
results of several years of review by the Board Members and predecessor Board
Members, and discussions between such Board Members (and predecessor Board
Members) and BlackRock. As a result, the Board Members’ conclusions may be
based in part on their consideration of these arrangements in prior years.
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68
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ANNUAL REPORT
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JULY 31, 2011
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A
utomatic Dividend Reinvestment Plan
|
Pursuant to each Trust’s
Dividend Reinvestment Plan (the “Reinvestment Plan”), Common Shareholders are
automatically enrolled to have all distributions of dividends and capital gains
reinvested by Computershare Trust Company, N.A. (the “Reinvestment Plan Agent”)
in the respective Trust’s shares pursuant to the Reinvestment Plan.
Shareholders who do not participate in the Reinvestment 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 Reinvestment Plan Agent, which serves as agent for the
shareholders in administering the Reinvestment Plan.
After BFZ, RFA, BBF, RNJ,
BNJ, RNY and BNY declares a dividend or determines to make a capital gain
distribution, the Reinvestment Plan Agent will acquire shares for the
participants’ account, depending upon the following circumstances, either (i)
through receipt of unissued but authorized shares from the Trust (“newly issued
shares”) or (ii) by purchase of outstanding shares on the open market or on the
Trust’s primary exchange. 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 often referred to as a “market premium”), the Reinvestment 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 dividend payment date, the dollar
amount of the dividend will be divided by 95% of the market price on the
dividend payment date. If, on the dividend payment date, the NAV is greater
than the market value per share plus estimated brokerage commissions (such condition
often referred to as a “market discount”), the Reinvestment Plan Agent will
invest the dividend amount in shares acquired on behalf of the participants in
open market purchases. If the Reinvestment Plan Agent is unable to invest the
full dividend amount in open market purchases, or if the market discount shifts
to a market premium during the purchase period, the Reinvestment Plan Agent
will invest any un-invested portion in newly issued shares.
After BFO declares a dividend
or determines to make a capital gain distribution, the Reinvestment Plan Agent
will acquire shares for the participants’ account by the purchase of
outstanding shares on the open market or on BFO’s primary exchange. BFO will
not issue any new shares under the Reinvestment Plan.
Participation in the
Reinvestment Plan is completely voluntary and may be terminated or resumed at
any time without penalty by notice if received and processed by the
Reinvestment Plan Agent 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 Reinvestment 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 Reinvestment 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 Reinvestment Plan. There is no direct service charge
to participants in the Reinvestment Plan; however, each Trust reserves the
right to amend the Reinvestment Plan to include a service charge payable by the
participants. Participants that request a sale of shares through the
Reinvestment Plan Agent are subject to a $2.50 sales fee and a $0.15 per share
sold brokerage commission. All correspondence concerning the Reinvestment Plan
should be directed to the Reinvestment Plan Agent at P.O. Box 43078,
Providence, RI 02940-3078, Telephone (800) 699-1BFM or overnight correspondence
should be directed to the Reinvestment Plan Agent at 250 Royall Street, Canton,
MA 02021.
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ANNUAL REPORT
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JULY 31, 2011
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69
|
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|
|
|
|
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|
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|
|
|
|
Name, Address
and Year of Birth
|
|
Position(s)
Held with
Trusts
|
|
Length
of Time
Served as
a Trustee
2
|
|
Principal Occupation(s) During Past
Five Years
|
|
Number of BlackRock-
Advised Registered
Investment Companies
(“RICs”) Consisting of
Investment Portfolios
(“Portfolios”) Overseen
|
|
Public
Directorships
|
|
Independent
Trustees
1
|
|
|
|
|
|
Richard E. Cavanagh
55 East 52nd
Street
New York, NY 10055
1946
|
|
Chairman of
the Board
and Trustee
|
|
Since
1994
|
|
Trustee, Aircraft Finance Trust from 1999 to 2009;
Director, The Guardian Life Insurance Company of America since 1998; Trustee,
Educational Testing Service from 1997 to 2009 and Chairman thereof from 2005
to 2009; Senior Advisor, The Fremont Group since 2008 and Director thereof
since 1996; Adjunct Lecturer, Harvard University since 2007; President and
Chief Executive Officer, The Conference Board, Inc. (global business research
organization) from 1995 to 2007.
|
|
95 RICs consisting of
95 Portfolios
|
|
Arch Chemical (chemical and allied products)
|
|
Karen P. Robards
55 East 52nd
Street
New York, NY 10055
1950
|
|
Vice Chairperson
of the Board,
Chairperson
of the Audit
Committee
and Trustee
|
|
Since
2007
|
|
Partner of Robards & Company, LLC (financial
advisory firm) since 1987; Co-founder and Director of the Cooke Center for
Learning and Develop- ment (a not-for-profit organization) since 1987;
Director of Care Invest- ment Trust, Inc. (health care real estate investment
trust) from 2007 to 2010; Director of Enable Medical Corp. from 1996 to 2005;
Investment Banker at Morgan Stanley from 1976 to 1987.
|
|
95 RICs consisting of
95 Portfolios
|
|
AtriCure, Inc. (medical devices)
|
|
Michael J. Castellano
55 East 52nd
Street
New York, NY 10055
1946
|
|
Trustee and
Member of
the Audit
Committee
|
|
Since
2011
|
|
Managing Director and Chief Financial Officer of
Lazard Group LLC from 2001 to 2011; Chief Financial Officer of Lazard Ltd
from 2004 to 2011; Director, Support Our Aging Religions (non-profit) since
2009; Director, National Advisory Board of Church Management at Villanova
University since 2010.
|
|
95 RICs consisting of
95 Portfolios
|
|
None
|
|
Frank J. Fabozzi
55 East 52nd
Street
New York, NY 10055
1948
|
|
Trustee and
Member of
the Audit
Committee
|
|
Since
1988
|
|
Editor of and Consultant for The Journal of Portfolio
Management since 1986; Professor of Finance, EDHEC Business School since
2011; Professor in the Practice of Finance and Becton Fellow, Yale University
School of Management from 2006 to 2011; Adjunct Professor of Finance and
Becton Fellow, Yale University from 1994 to 2006.
|
|
95 RICs consisting of
95 Portfolios
|
|
None
|
|
Kathleen F. Feldstein
55 East 52nd
Street
New York, NY 10055
1941
|
|
Trustee
|
|
Since
2005
|
|
President of Economics Studies, Inc. (private
economic consulting firm) since 1987; Chair, Board of Trustees, McLean
Hospital from 2000 to 2008 and Trustee Emeritus thereof since 2008; Member of
the Board of Partners Community Healthcare, Inc. from 2005 to 2009; Member of
the Corporation of Partners HealthCare since 1995; Trustee, Museum of Fine
Arts, Boston since 1992; Member of the Visiting Committee to the Harvard
University Art Museum since 2003; Director, Catholic Charities of Boston since
2009.
|
|
95 RICs consisting of
95 Portfolios
|
|
The McClatchy Company (publishing); BellSouth
(telecom- munications); Knight Ridder (publishing)
|
|
James T. Flynn
55 East 52nd
Street
New York, NY 10055
1939
|
|
Trustee and
Member of
the Audit
Committee
|
|
Since
2007
|
|
Chief Financial Officer of JPMorgan & Co., Inc.
from 1990 to 1995.
|
|
95 RICs consisting of
95 Portfolios
|
|
None
|
|
Jerrold B. Harris
55 East 52nd
Street
New York, NY 10055
1942
|
|
Trustee
|
|
Since
2007
|
|
Trustee, Ursinus College since 2000; Director,
Troemner LLC (scientific equipment) since 2000; Director of Delta Waterfowl
Foundation since 2001; President and Chief Executive Officer, VWR Scientific
Products Corporation from 1990 to 1999.
|
|
95 RICs consisting of
95 Portfolios
|
|
BlackRock Kelso Capital Corp. (business develop- ment
company)
|
|
|
|
|
|
|
|
|
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70
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ANNUAL REPORT
|
JULY 31, 2011
|
|
|
|
|
|
|
|
Officers and Trustees (continued)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Name, Address
and Year of Birth
|
|
Position(s)
Held with
Trusts
|
|
Length
of Time
Served as
a Trustee
2
|
|
Principal Occupation(s) During Past
Five Years
|
|
Number of BlackRock-
Advised Registered
Investment Companies
(“RICs”) Consisting of
Investment Portfolios
(“Portfolios”) Overseen
|
|
Public
Directorships
|
|
Independent
Trustees
1
(concluded)
|
|
|
|
|
|
R. Glenn Hubbard
55 East 52nd
Street
New York, NY 10055
1958
|
|
Trustee
|
|
Since
2004
|
|
Dean, Columbia Business School since 2004; Columbia
faculty member since 1988; Co-Director, Columbia Business School’s
Entrepreneurship Program from 1997 to 2004; Chairman, US Council of Economic
Advisers under the President of the United States from 2001 to 2003;
Chairman, Economic Policy Committee of the OECD from 2001 to 2003.
|
|
95 RICs consisting of
95 Portfolios
|
|
ADP (data and information services); KKR Financial
Corporation (finance); Metropolitan Life Insurance Company (insurance)
|
|
W. Carl Kester
55 East 52nd
Street
New York, NY 10055
1951
|
|
Trustee and
Member of
the Audit
Committee
|
|
Since
2007
|
|
George Fisher Baker Jr. Professor of Business
Administration, Harvard Business School; Deputy Dean for Academic Affairs
from 2006 to 2010; Chairman of the Finance Department, Harvard Business
School from 2005 to 2006; Senior Associate Dean and Chairman of the MBA
Program of Harvard Business School from 1999 to 2005; Member of the faculty
of Harvard Business School since 1981.
|
|
95 RICs consisting of
95 Portfolios
|
|
None
|
|
|
|
1
|
Trustees serve until their
resignation,removal or death,or until December 31 of the year in which they turn
72.
|
|
|
|
|
|
2
|
Date shown is the earliest date a person has served
for the Trusts covered by this annual report. Following the combination of
Merrill Lynch Investment Managers, L.P. (“MLIM”) and BlackRock, Inc.
(“BlackRock”) in September 2006, the various legacy MLIM and legacy BlackRock
Fund boards were realigned and consolidated into three new Fund boards in
2007. As a result, although the chart shows trustees as joining the Trusts’
board in 2007, each trustee first became a member of the board of directors
of other legacy MLIM or legacy BlackRock Funds as follows: Richard E.
Cavanagh, 1994; Frank J. Fabozzi, 1988; Kathleen F. Feldstein, 2005; James T.
Flynn, 1996; Jerrold B. Harris, 1999; R. Glenn Hubbard, 2004; W. Carl Kester,
1995 and Karen P. Robards, 1998.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interested
Trustees
3
|
|
Paul L. Audet
55 East 52nd
Street
New York, NY 10055
1953
|
|
Trustee
|
|
Since
2011
|
|
Senior Managing Director, BlackRock, Inc., and Head
of BlackRock’s Real Estate business from 2008 to 2011; Member of BlackRock’s
Global Oper- ating and Corporate Risk Management Committees and of the
BlackRock Alternative Investors Executive Committee and Investment Committee
for the Private Equity Fund of Funds business since 2008; Head of BlackRock’s
Global Cash Management business from 2005 to 2010; Acting Chief Financial
Officer of BlackRock from 2007 to 2008; Chief Financial Officer of BlackRock
from 1998 to 2005; Senior Vice President of Finance at PNC Bank Corp. and
Chief Financial Officer of the Investment Management and Mutual Fund
Processing businesses from 1996 to 1998 and Head of PNC’s Mergers &
Acquisitions unit from 1992 to 1998; Member of PNC’s Corpo- rate
Asset-Liability Committee and Marketing Committees from 1992 to 1998; Chief
Financial Officer of PNC’s eastern operations from 1991 to 1992; Senior Vice
President of First Fidelity Bancorporation, responsible for the Corporate
Finance, Asset-Liability Committee, and Mergers & Acquisitions functions
from 1986 to 1991.
|
|
95 RICs consisting of
95 Portfolios
|
|
None
|
|
Henry Gabbay
55 East 52nd Street
New York, NY 10055
1947
|
|
Trustee
|
|
Since
2007
|
|
Consultant, BlackRock, Inc. from 2007 to 2008;
Managing Director, BlackRock, Inc. from 1989 to 2007; Chief Administrative
Officer, BlackRock Advisors, LLC from 1998 to 2007; President of BlackRock
Funds and BlackRock Bond Allocation Target Shares from 2005 to 2007;
Treasurer of certain closed-end Funds in the BlackRock fund complex from 1989
to 2006.
|
|
162 RICs consisting of
293 Portfolios
|
|
None
|
|
|
|
3
|
Mr. Audet is an “interested person,” as defined in
the 1940 Act, of the Trusts based on his position with BlackRock, Inc. and
its affiliates. Mr. Gabbay is an “interested person” of the Trusts based on
his former positions with BlackRock, Inc. and its affiliates as well as his
ownership of BlackRock, Inc. and The PNC Financial Services Group, Inc.
securities. Trustees serve until their resignation, removal or death, or
until December 31 of the year in which they turn 72.
|
|
|
|
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ANNUAL REPORT
|
JULY 31, 2011
|
71
|
|
|
|
|
|
|
|
Officers and Trustees (concluded)
|
|
|
|
|
|
|
|
|
|
|
Name, Address
and Year of Birth
|
|
Position(s)
Held with
Trusts
|
|
Length
of Time
Served
|
|
Principal Occupation(s) During Past
Five Years
|
|
Trusts
Officers
1
|
|
|
|
|
|
|
|
John M. Perlowski
55 East 52nd
Street
New York, NY 10055
1964
|
|
President and
Chief Executive
Officer
|
|
Since
2011
|
|
Managing Director of BlackRock, Inc. since 2009;
Global Head of BlackRock Fund Administration since 2009; Managing Director
and Chief Operating Officer of the Global Product Group at Goldman Sachs
Asset Management, L.P. from 2003 to 2009; Treasurer of Goldman Sachs Mutual
Funds from 2003 to 2009 and Senior Vice President thereof from 2007 to 2009;
Director of Goldman Sachs Offshore Funds from 2002 to 2009; Director of
Family Resource Network (charitable foundation) since 2009.
|
|
Anne Ackerley
55 East 52nd
Street
New York, NY 10055
1962
|
|
Vice
President
|
|
Since
2007
2
|
|
Managing Director of BlackRock, Inc. since 2000;
President and Chief Executive Officer of the BlackRock-advised funds from
2009 to 2011; Vice President of the BlackRock-advised funds from 2007 to
2009; Chief Operating Officer of BlackRock’s Global Client Group since 2009;
Chief Operating Officer of BlackRock’s U.S. Retail Group from 2006 to 2009;
Head of BlackRock’s Mutual Fund Group from 2000 to 2006.
|
|
Brendan Kyne
55 East 52nd
Street
New York, NY 10055
1977
|
|
Vice
President
|
|
Since
2009
|
|
Managing Director of BlackRock, Inc. since 2010;
Director of BlackRock, Inc. from 2008 to 2009; Head of Product Development
and Management for BlackRock’s US Retail Group since 2009, Co-head thereof
from 2007 to 2009; Vice President of BlackRock, Inc. from 2005 to 2008.
|
|
Neal Andrews
55 East 52nd
Street
New York, NY 10055
1966
|
|
Chief
Financial
Officer
|
|
Since
2007
|
|
Managing Director of BlackRock, Inc. since 2006;
Senior Vice President and Line of Business Head of Fund Accounting and
Administration at PNC Global Investment Servicing (US) Inc. from 1992 to
2006.
|
|
Jay Fife
55 East 52nd
Street
New York, NY 10055
1970
|
|
Treasurer
|
|
Since
2007
|
|
Managing Director of BlackRock, Inc. since 2007 and
Director of BlackRock, Inc. in 2006; Assistant Treasurer of the MLIM and Fund
Asset Management, L.P.-advised funds from 2005 to 2006; Director of MLIM Fund
Services Group from 2001 to 2006.
|
|
Brian Kindelan
55 East 52nd
Street
New York, NY 10055
1959
|
|
Chief Compliance
Officer and
Anti-Money
Laundering Officer
|
|
Since
2007
|
|
Chief Compliance Officer of the BlackRock-advised
Funds since 2007; Managing Director and Senior Counsel of BlackRock, Inc.
since 2005.
|
|
Ira P. Shapiro
55 East 52nd
Street
New York, NY 10055
1963
|
|
Secretary
|
|
Since
2010
|
|
Managing Director of BlackRock, Inc. since 2009;
Managing Director and Associate General Counsel of Barclays Global Investors
from 2008 to 2009 and Principal thereof from 2004 to 2008.
|
|
|
|
1
|
Officers of the Trusts serve at the pleasure of the
Board of Trustees.
|
|
|
|
|
|
2
|
Ms. Ackerley was President and Chief Executive Officer
from 2009 to 2011.
|
|
|
|
Investment
Advisor
|
|
|
|
BlackRock Advisors, LLC
|
|
Wilmington, DE 19809
|
|
|
|
Sub-Advisor
|
|
|
|
BlackRock Financial Management, Inc.
|
|
New York, NY 10055
|
|
|
|
Custodian
|
|
|
|
State Street Bank and Trust Company
|
|
Boston, MA 02111
|
|
|
|
Transfer
Agent
|
|
|
|
Common
Shares:
|
|
Computershare Trust
Company, N.A.
|
|
Providence, RI 02940
|
|
|
|
Auction
Agent
|
|
|
|
AMPS:
|
|
BNY Mellon Shareowner
Services
|
|
Jersey City, NJ 07310
|
|
|
|
Accounting
Agent
|
|
|
|
State Street Bank and Trust Company
|
|
Boston, MA 02116
|
|
|
|
Independent Registered Public Accounting Firm
|
|
|
|
Deloitte & Touche LLP
|
|
Boston, MA 02116
|
|
|
|
Legal
Counsel
|
|
|
|
Skadden, Arps, Slate, Meagher & Flom LLP
|
|
New York, NY 10036
|
|
|
|
Address of
the Trusts
|
|
|
|
100 Bellevue Parkway
|
|
Wilmington, DE 19809
|
|
|
|
Effective April 14, 2011,
Michael J. Castellano became Trustee of the Trusts and Member of the Audit
Committee.
|
|
|
|
Effective July 28, 2011,
Richard S. Davis resigned as Trustee of the Trusts, and Paul L. Audet became
Trustee of the Trusts.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
72
|
ANNUAL REPORT
|
JULY 31, 2011
|
|
|
|
|
|
|
|
A
dditional
Information
|
|
|
|
Proxy Results
|
The Annual Meeting of
Shareholders was held on July 28, 2011 for shareholders of record on May 31,
2011 to elect trustee nominees for each Trust. There were no broker non-votes
with regard to any of the Trusts.
Approved the Class I Trustees
as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Paul L.
Audet
|
|
Michael
J. Castellano
|
|
R.
Glenn Hubbard
|
|
|
|
|
Votes
For
|
|
Votes
Withheld
|
|
Abstain
|
|
Votes
For
|
|
Votes
Withheld
|
|
Abstain
|
|
Votes For
|
|
Votes
Withheld
|
|
Abstain
|
|
|
BFZ
|
|
|
26,719,826
|
|
|
448,117
|
|
|
0
|
|
|
26,701,972
|
|
|
465,971
|
|
|
0
|
|
|
26,582,545
|
|
|
585,398
|
|
|
0
|
|
|
BFO
|
|
|
4,816,716
|
|
|
389,250
|
|
|
0
|
|
|
4,810,951
|
|
|
395,015
|
|
|
0
|
|
|
4,816,451
|
|
|
389,515
|
|
|
0
|
|
|
RFA
|
|
|
1,044,132
|
|
|
14,872
|
|
|
0
|
|
|
1,044,191
|
|
|
14,813
|
|
|
0
|
|
|
1,044,191
|
|
|
14,813
|
|
|
0
|
|
|
BBF
|
|
|
5,880,103
|
|
|
160,207
|
|
|
0
|
|
|
5,880,103
|
|
|
160,207
|
|
|
0
|
|
|
5,877,828
|
|
|
162,482
|
|
|
0
|
|
|
RNJ
|
|
|
854,649
|
|
|
80,135
|
|
|
0
|
|
|
854,649
|
|
|
80,135
|
|
|
0
|
|
|
852,459
|
|
|
82,325
|
|
|
0
|
|
|
BNJ
|
|
|
6,477,765
|
|
|
332,957
|
|
|
0
|
|
|
6,476,512
|
|
|
334,210
|
|
|
0
|
|
|
6,500,276
|
|
|
310,446
|
|
|
0
|
|
|
RNY
|
|
|
1,174,460
|
|
|
53,744
|
|
|
0
|
|
|
1,179,793
|
|
|
48,411
|
|
|
0
|
|
|
1,179,793
|
|
|
48,411
|
|
|
0
|
|
|
BNY
|
|
|
11,106,001
|
|
|
402,645
|
|
|
0
|
|
|
11,268,947
|
|
|
239,699
|
|
|
0
|
|
|
11,242,597
|
|
|
266,049
|
|
|
0
|
|
|
|
|
|
|
W. Carl
Kester
1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Votes
For
|
|
Votes
Withheld
|
|
Abstain
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BFZ
|
|
|
4,148
|
|
|
65
|
|
|
0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BFO
|
|
|
1,288
|
|
|
4
|
|
|
0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
RFA
|
|
|
117
|
|
|
0
|
|
|
0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BBF
|
|
|
1,366
|
|
|
0
|
|
|
0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
RNJ
|
|
|
236
|
|
|
0
|
|
|
0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BNJ
|
|
|
1,533
|
|
|
772
|
|
|
0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
RNY
|
|
|
324
|
|
|
0
|
|
|
0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BNY
|
|
|
2,922
|
|
|
33
|
|
|
0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1
|
Voted on by holders of
Preferred Shares only.
|
For the Trusts listed above,
Trustees whose term of office continued after the Annual Meeting of
Shareholders because they were not up for election are Richard E. Cavanagh,
Frank J. Fabozzi, Kathleen F. Feldstein, James T. Flynn, Henry Gabbay, Jerrold
B. Harris and Karen P. Robards.
|
|
|
|
|
|
|
|
|
|
|
|
ANNUAL REPORT
|
JULY 31, 2011
|
73
|
|
|
|
|
|
|
|
Additional Information
(continued)
|
|
|
|
Dividend Policy
|
The Trusts’ dividend policy
is to distribute all or a portion of their net investment income to their
shareholders on a monthly basis. In order to provide shareholders with a more
stable level of dividend distributions, the Trusts may at times pay out less
than the entire amount of net investment income earned in any particular month
and may at times in any particular month pay out such accumulated but
undistributed income in addition to net investment income earned in that month.
As a result, the dividends paid by the Trusts for any particular month may be
more or less than the amount of net investment income earned by the Trusts
during such month. The Trusts’ current accumulated but undistributed net
investment income, if any, is disclosed in the Statements of Assets and
Liabilities, which comprises part of the financial information included in this
report.
On July 29, 2010, the Manager
announced that a shareholder derivative complaint was filed on July 27, 2010 in
the Supreme Court of the State of New York, New York County with respect to BFZ
and BNJ, which had previously received a demand letter from a law firm on
behalf of each trust’s common shareholders. The complaint was filed against the
Manager, BlackRock, BFZ, BNJ and certain of the directors, officers and
portfolio managers (collectively, the “BlackRock Parties”) in connection with
the redemption of auction-market preferred shares, auction rate preferred
shares, auction preferred shares and auction rate securities (collectively,
“AMPS”). The complaint alleges, among other things, that the BlackRock Parties
breached their fiduciary duties to the common shareholders of BFZ and BNJ (the
“Shareholders”) by redeeming AMPS at their liquidation preference and alleges
that such redemptions caused losses to the Shareholders. The plaintiffs are
seeking monetary damages for the alleged losses suffered and to enjoin BFZ and
BNJ from future redemptions of AMPS at their liquidation preference. The
BlackRock Parties believe that the claims asserted in the complaint are without
merit and intend to vigorously defend themselves in the litigation.
On March 29, 2011, the
Manager announced that BBF received a demand letter from a law firm on behalf
of BBF’s common shareholders. The demand letter alleges that the Manager and
BBF’s officers and Board of Trustees (the “Board”) breached their fiduciary
duties by redeeming at par certain of BBF’s AMPS, and demanded that the Board
take action to remedy those alleged breaches. A committee consisting of the
Independent Directors, with the assistance of their independent counsel,
reviewed these demands. Based on the committee’s investigation and unanimous
recommendation, the Board rejected these demands as inconsistent with the best
interests of BBF and its shareholders.
The Trusts do not make
available copies of their Statements of Additional Information because the
Trusts’ shares are not continuously offered, which means that the Statement of
Additional Information of each Trust has not been updated after completion of
the respective Trust’s offerings and the information contained in the Trust’s
Statement of Additional Information may have become outdated.
During the period there were
no material changes in the Trusts’ investment objectives or policies or to the
Trusts’ charters or by-laws that would delay or prevent a change of control of
the Trusts that were not approved by the shareholders or in the principal 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,
semi-annual and annual reports and other information regarding the Trusts may
be found on BlackRock’s website, which can be accessed at
http://www.blackrock.com. 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 in this report.
Electronic Delivery
Electronic copies of
most financial reports are available on the Trusts’ websites or shareholders
can sign up for e-mail notifications of quarterly statements, annual and
semi-annual reports by enrolling in the Trusts’ electronic delivery program.
Shareholders Who Hold Accounts with Investment Advisors,
Banks or Brokerages:
Please contact your
financial advisor to enroll. Please note that not all investment advisors,
banks or brokerages may offer this service.
Householding
The 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 call (800)
441-7762.
|
|
|
|
|
|
|
|
|
|
|
74
|
ANNUAL REPORT
|
JULY 31, 2011
|
|
|
|
|
|
|
|
Additional Information
(concluded)
|
|
|
|
General Information (concluded)
|
Availability of Quarterly Schedule of Investments
Each Trust files its
complete schedule of portfolio holdings with the SEC for the first and third
quarters of each fiscal year on Form N-Q. The Trusts’ Forms N-Q are available
on the SEC’s website at http://www.sec.gov and may also be reviewed and copied
at the SEC’s Public Reference Room in Washington, D.C. Information on how to
access documents on the SEC’s website without charge may be obtained by calling
(800) SEC-0330. Each Trust’s Forms N-Q may also be obtained upon request and
without charge by calling (800) 441-7762.
Availability of Proxy Voting Policies and Procedures
A description of the
policies and procedures that the Trusts use to determine how to vote proxies
relating to portfolio securities is available (1) without charge, upon request,
by calling (800) 441-7762; (2) at http://www.blackrock.com; and (3) on the
SEC’s website at http://www.sec.gov.
Availability of Proxy Voting Record
Information about how
the Trusts voted proxies relating to securities held in the Trusts’ portfolios
during the most recent 12-month period ended June 30 is available upon request
and without charge (1) at http://www.blackrock.com or by calling (800) 441-7762
and (2) on the SEC’s website at http://www.sec.gov.
Availability of Trust Updates
BlackRock will update
performance and certain other data for the Trusts on a monthly basis on its
website in the “Closed-end Funds” section of http://www.blackrock.com.
Investors and others are advised to periodically check the website for updated
performance information and the release of other material information about the
Trusts.
Certain Trusts are listed for
trading on the NYSE and have filed with the NYSE their annual chief executive
officer certification regarding compliance with the NYSE’s listing standards.
The Trusts filed with the SEC the certification of its chief executive officer
and chief financial officer required by section 302 of the Sarbanes-Oxley Act.
|
|
|
BlackRock Privacy Principles
|
BlackRock is committed to
maintaining the privacy of its current and former fund investors and individual
clients (collectively, “Clients”) and to safeguarding their non-public personal
information. The following information is provided to help you understand what
personal information BlackRock collects, how we protect that information and
why in certain cases we share such information with select parties.
If you are located in a
jurisdiction where specific laws, rules or regulations require BlackRock to
provide you with additional or different privacy-related rights beyond what is
set forth below, then BlackRock will comply with those specific laws, rules or
regulations.
BlackRock obtains or verifies
personal non-public information from and about you from different sources,
including the following: (i) information we receive from you or, if applicable,
your financial intermediary, on applications, forms or other documents; (ii)
information about your transactions with us, our affiliates, or others; (iii)
information we receive from a consumer reporting agency; and (iv) from visits
to our websites.
BlackRock does not sell or
disclose to non-affiliated third parties any non-public personal information
about its Clients, except as permitted by law or as is necessary to respond to
regulatory requests or to service Client accounts. These non-affiliated third
parties are required to protect the confidentiality and security of this
information and to use it only for its intended purpose.
We may share information with
our affiliates to service your account or to provide you with information about
other BlackRock products or services that may be of interest to you. In
addition, BlackRock restricts access to non-public personal information about its
Clients to those BlackRock employees with a legitimate business need for the
information. BlackRock maintains physical, electronic and procedural safeguards
that are designed to protect the non-public personal information of its
Clients, including procedures relating to the proper storage and disposal of
such information.
|
|
|
|
|
|
|
|
|
|
|
|
ANNUAL REPORT
|
JULY 31, 2011
|
75
|
This report is transmitted to
shareholders only. It is not a prospectus. Past performance results shown in
this report should not be considered a representation of future performance.
The Trusts have leveraged their Common Shares, which creates risks for Common
Shareholders, including the likelihood of greater volatility of net asset value
and market price of the Common Shares and the risk that fluctuations in
short-term dividend rates of the AMPS, currently set at the maximum reset rate
as a result of failed auctions, may reduce the Common Shares’ yield. Statements
and other information herein are as dated and are subject to change.
|
|
|
|
|
|
|
|
|
#CEF-BK8-07/11
|
|
Item 2 –
|
Code of Ethics – The registrant (or the “Fund”) has adopted a code of ethics, as of the end of the period covered by this report, applicable to the registrant’s principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions. During the period covered by this report, there
have been no amendments to or waivers granted under the code of ethics. A copy of the code of ethics is available without charge at www.blackrock.com.
|
|
|
|
|
Item 3 –
|
Audit Committee Financial Expert – The registrant’s board of directors (the “board of directors”), has determined that (i) the registrant has the following audit committee financial experts serving on its audit committee and (ii) each audit committee financial expert is independent:
|
|
|
|
|
|
Frank J. Fabozzi
|
|
|
James T. Flynn
|
|
|
W. Carl Kester
|
|
|
Karen P. Robards
|
|
|
|
|
|
The registrant’s board of directors has determined that W. Carl Kester and Karen P. Robards qualify as financial experts pursuant to Item 3(c)(4) of Form N-CSR.
|
|
|
|
|
|
Prof. Kester has a thorough understanding of generally accepted accounting principles, financial statements and internal control over financial reporting as well as audit committee functions. Prof. Kester has been involved in providing valuation and other financial consulting services to corporate clients since 1978. Prof. Kester’s financial consulting services present a breadth and level
of complexity of accounting issues that are generally comparable to the breadth and complexity of issues that can reasonably be expected to be raised by the registrant’s financial statements.
|
|
|
|
|
|
Ms. Robards has a thorough understanding of generally accepted accounting principles, financial statements and internal control over financial reporting as well as audit committee functions. Ms. Robards has been President of Robards & Company, a financial advisory firm, since 1987. Ms. Robards was formerly an investment banker for more than 10 years where she was responsible for evaluating
and assessing the performance of companies based on their financial results. Ms. Robards has over 30 years of experience analyzing financial statements. She also is a member of the audit committee of one publicly held company and a non-profit organization.
|
|
|
|
|
|
Under applicable securities laws, a person determined to be an audit committee financial expert will not be deemed an “expert” for any purpose, including without limitation for the purposes of Section 11 of the Securities Act of 1933, as a result of being designated or identified as an audit committee financial expert. The designation or identification as an audit committee
financial expert does not impose on such person any duties, obligations, or liabilities greater than the duties, obligations, and liabilities imposed on such person as a member of the audit committee and board of directors in the absence of such designation or identification. The designation or identification of a person as an audit committee financial expert does not affect the duties, obligations, or liability of any other member of the audit committee or board of
directors.
|
|
Item 4 –
|
Principal Accountant Fees and Services
|
|
|
|
|
|
The following table presents fees billed by Deloitte & Touche LLP (“D&T”) in each of the last two fiscal years for the services rendered to the Fund:
|
|
|
(a) Audit Fees
|
(b) Audit-Related Fees
1
|
(c) Tax Fees
2
|
(d) All Other Fees
3
|
|
Entity Name
|
Current
Fiscal Year
End
|
Previous
Fiscal Year
End
|
Current
Fiscal Year
End
|
Previous
Fiscal Year
End
|
Current
Fiscal Year
End
|
Previous
Fiscal Year
End
|
Current
Fiscal Year
End
|
Previous
Fiscal Year
End
|
|
BlackRock New Jersey Investment Quality Municipal Trust, Inc.
|
$18,600
|
$17,700
|
$3,500
|
$3,500
|
$6,100
|
$6,100
|
$0
|
$0
|
|
|
The following table presents fees billed by D&T that were required to be approved by the registrant’s audit committee (the “Committee”) for services that relate directly to the operations or financial reporting of the Fund and that are rendered on behalf of BlackRock Advisors, LLC (“Investment Adviser” or “BlackRock”) and
entities controlling, controlled by, or under common control with BlackRock (not including any sub-adviser whose role is primarily portfolio management and is subcontracted with or overseen by another investment adviser) that provide ongoing services to the Fund (“Fund Service Providers”):
|
|
|
Current Fiscal Year End
|
Previous Fiscal Year End
|
|
(b) Audit-Related Fees
1
|
$0
|
$0
|
|
(c) Tax Fees
2
|
$0
|
$0
|
|
(d) All Other Fees
3
|
$3,030,000
|
$2,950,000
|
1
The nature of the services includes assurance and related services reasonably related to the performance of the audit of financial statements not included in Audit Fees.
2
The nature of the services includes tax compliance, tax advice and tax planning.
3
The nature of the services includes a review of the Fund’s compliance procedures and attestation thereto.
|
|
(e)(1) Audit Committee Pre-Approval Policies and Procedures:
|
|
|
|
|
|
The Committee has adopted policies and procedures with regard to the pre-approval of services. Audit, audit-related and tax compliance services provided to the registrant on an annual basis require specific pre-approval by the Committee. The Committee also must approve other non-audit services provided to the registrant and those non-audit services provided to the Investment Adviser and Fund
Service Providers that relate directly to the operations and the financial reporting of the registrant. Certain of these non-audit services that the Committee believes are a) consistent with the SEC’s auditor independence rules and b) routine and recurring services that will not impair the independence of the independent accountants may be approved by the Committee without consideration on a specific case-by-case basis (“general pre-approval”). The term
of any general pre-approval is 12 months from the date of the pre-approval, unless the Committee provides for a different period. Tax or other non-audit services provided to the registrant which have a direct impact on the operations or financial reporting of the registrant will only be deemed pre-approved provided that any individual project does not exceed $10,000 attributable to the registrant or $50,000 per project. For this purpose, multiple projects will be
aggregated to determine if they exceed the previously mentioned cost levels.
|
|
|
Any proposed services exceeding the pre-approved cost levels will require specific pre-approval by the Committee, as will any other services not subject to general pre-approval (e.g., unanticipated but permissible services). The Committee is informed of each service approved subject to general pre-approval at the next regularly scheduled in-person board meeting. At this
meeting, an analysis of such services is presented to the Committee for ratification. The Committee may delegate to the Committee Chairman the authority to approve the provision of and fees for any specific engagement of permitted non-audit services, including services exceeding pre-approved cost levels.
|
|
|
|
|
|
(e)(2) None of the services described in each of Items 4(b) through (d) were approved by the Committee pursuant to the de minimis exception in paragraph (c)(7)(i)(C) of Rule 2-01 of Regulation S-X.
|
|
|
|
|
|
(f) Not Applicable
|
|
|
|
|
|
(g) The aggregate non-audit fees paid to the accountant for services rendered by the accountant to the registrant, the Investment Adviser and the Fund Service Providers were:
|
|
Entity Name
|
Current Fiscal Year End
|
Previous Fiscal Year End
|
|
BlackRock New Jersey Investment Quality Municipal Trust, Inc.
|
$9,600
|
$20,377
|
|
|
Additionally, SAS No. 70 fees for the current and previous fiscal years of $3,030,000 and $2,950,000, respectively, were billed by D&T to the Investment Adviser.
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|
(h) The Committee has considered and determined that the provision of non-audit services that were rendered to the Investment Adviser, and the Fund Service Providers that were not pre-approved pursuant to paragraph (c)(7)(ii) of Rule 2-01 of Regulation S-X is compatible with maintaining the principal accountant’s independence.
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Item 5 –
|
Audit Committee of Listed Registrants
|
|
|
(a)
|
The following individuals are members of the registrant’s separately-designated standing audit committee established in accordance with Section 3(a)(58)(A) of the Securities Exchange Act of 1934 (15 U.S.C. 78c(a)(58)(A)):
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|
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Michael Castellano
|
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Frank J. Fabozzi
|
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James T. Flynn
|
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|
|
W. Carl Kester
|
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|
Karen P. Robards
|
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|
|
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|
(b)
|
Not Applicable
|
|
Item 6 –
|
Investments
|
|
|
(a) The registrant’s Schedule of Investments is included as part of the Report to Stockholders filed under Item 1 of this Form.
|
|
|
(b) Not Applicable due to no such divestments during the semi-annual period covered since the previous Form N-CSR filing.
|
|
Item 7 –
|
Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies – The board of directors has delegated the voting of proxies for the Fund’s portfolio securities to the Investment Adviser pursuant to the Investment Adviser’s proxy voting guidelines. Under these guidelines, the Investment Adviser will vote proxies related to
Fund securities in the best interests of the Fund and its stockholders. From time to time, a vote may present a conflict between the interests of the Fund’s stockholders, on the one hand, and those of the Investment Adviser, or any affiliated person of the Fund or the Investment Adviser, on the other. In such event, provided that the Investment Adviser’s Equity Investment Policy Oversight Committee, or a sub-committee thereof (the “Oversight
Committee”) is aware of the real or potential conflict or material non-routine matter and if the Oversight Committee does not reasonably believe it is able to follow its general voting guidelines (or if the particular proxy matter is not addressed in the guidelines) and vote impartially, the Oversight Committee may retain an independent fiduciary to advise the Oversight Committee on how to vote or to cast votes on behalf of the Investment Adviser’s clients.
If the Investment Adviser determines not to retain an independent fiduciary, or does not desire to follow the advice of such independent fiduciary, the Oversight Committee shall determine how to vote the proxy after consulting with the Investment Adviser’s Portfolio Management Group and/or the Investment Adviser’s Legal and Compliance Department and concluding that the vote cast is in its client’s best interest notwithstanding the conflict. A copy of
the Fund’s Proxy Voting Policy and Procedures are attached as Exhibit 99.PROXYPOL. Information on how the Fund voted proxies relating to portfolio securities during the most recent 12-month period ended June 30 is available without charge, (i) at www.blackrock.com and (ii) on the SEC’s website at
http://www.sec.gov
.
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Item 8 –
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Portfolio Managers of Closed-End Management Investment Companies – as of July 31, 2011.
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(a)(1)
|
The registrant is managed by a team of investment professionals comprised of Robert Sneeden, Director at BlackRock, Theodore R. Jaeckel, Jr., CFA, Managing Director at BlackRock, and Walter O’Connor, Managing Director at BlackRock. Each is a member of BlackRock’s municipal tax-exempt management group. Each is jointly responsible for the day-to-day management of
the registrant’s portfolio, which includes setting the registrant’s overall investment strategy, overseeing the management of the registrant and/or selection of its investments. Messrs. Sneeden, Jaeckel and O’Connor have been members of the registrant’s portfolio management team since 2008, 2006 and 2006, respectively.
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|
Portfolio Manager
|
Biography
|
|
Robert Sneeden
|
Director of BlackRock since 2006; Vice President of Merrill Lynch Investment Managers, L.P. (“MLIM”) from 1998 to 2006.
|
|
Theodore R. Jaeckel, Jr.
|
Managing Director at BlackRock since 2006; Managing Director of MLIM from 2005 to 2006; Director of MLIM from 1997 to 2005.
|
|
Walter O’Connor
|
Managing Director of BlackRock since 2006; Managing Director of MLIM from 2003 to 2006; Director of MLIM from 1998 to 2003.
|
|
|
(a)(2)
|
As of July 31, 2011:
|
|
|
(ii) Number of Other Accounts Managed
and Assets by Account Type
|
(iii) Number
of
Other
Accounts
and
Assets
for Which Advisory Fee is
Performance-Based
|
|
(i) Name of
Portfolio Manager
|
Other
Registered
Investment
Companies
|
Other Pooled
Investment
Vehicles
|
Other
Accounts
|
Other
Registered
Investment
Companies
|
Other Pooled
Investment
Vehicles
|
Other
Accounts
|
|
Robert Sneeden
|
13
|
0
|
0
|
0
|
0
|
0
|
|
|
$1.93 Billion
|
$0
|
$0
|
$0
|
$0
|
$0
|
|
Theodore R. Jaeckel, Jr.
|
65
|
0
|
0
|
0
|
0
|
0
|
|
|
$20.54 Billion
|
$0
|
$0
|
$0
|
$0
|
$0
|
|
Walter O’Connor
|
64
|
0
|
0
|
0
|
0
|
0
|
|
|
$19.38 Billion
|
$0
|
$0
|
$0
|
$0
|
$0
|
|
|
(iv)
|
Potential Material Conflicts of Interest
|
|
|
BlackRock, Inc. has built a professional working environment, firm-wide compliance culture and compliance procedures and systems designed to protect against potential incentives that may favor one account over another. BlackRock, Inc. has adopted policies and procedures that address the allocation of investment opportunities, execution of portfolio transactions, personal trading by employees
and other potential conflicts of interest that are designed to ensure that all client accounts are treated equitably over time. Nevertheless, BlackRock, Inc. furnishes investment management and advisory services to numerous clients in addition to the Fund, and BlackRock, Inc. may, consistent with applicable law, make investment recommendations to other clients or accounts (including accounts which are hedge funds or have performance or higher fees paid to BlackRock,
Inc., or in which portfolio managers have a personal interest in the receipt of such fees), which may be the same as or different from those made to the Fund. In addition, BlackRock, Inc., its affiliates and significant shareholders and any officer, director, shareholder or employee may or may not have an interest in the securities whose purchase and sale BlackRock, Inc. recommends to the Fund. BlackRock, Inc., or any of its affiliates or significant
shareholders, or any officer, director, shareholder, employee or any member of their families may take different actions than those recommended to the Fund by BlackRock, Inc. with respect to the same securities. Moreover, BlackRock, Inc. may refrain from rendering any advice or services concerning securities of companies of which any of BlackRock, Inc.’s (or its affiliates’ or significant shareholders’) officers, directors or employees are
directors or officers, or companies as to which BlackRock, Inc. or any of its affiliates or significant shareholders or the officers, directors and employees of any of them has any substantial economic interest or possesses material non-public information. Certain portfolio managers also may manage accounts whose investment strategies may at times be opposed to the strategy utilized for a fund. It should also be noted that a portfolio manager may be managing
hedge fund and/or long only accounts, or may be part of a team managing hedge fund and/or long only accounts, subject to incentive fees. Such portfolio managers may therefore be entitled to receive a portion of any incentive fees earned on such accounts. Additional portfolio managers may in the future manage other such accounts or funds and may be entitled to receive incentive fees.
|
|
|
As a fiduciary, BlackRock, Inc. owes a duty of loyalty to its clients and must treat each client fairly. When BlackRock, Inc. purchases or sells securities for more than one account, the trades must be allocated in a manner consistent with its fiduciary duties. BlackRock, Inc. attempts to allocate investments in a fair and equitable manner among
client accounts, with no account receiving preferential treatment. To this end, BlackRock, Inc. has adopted policies that are intended to ensure reasonable efficiency in client transactions and provide BlackRock, Inc. with sufficient flexibility to allocate investments in a manner that is consistent with the particular investment discipline and client base, as appropriate.
|
|
|
(a)(3)
|
As of July 31, 2011:
|
|
|
Portfolio Manager Compensation Overview
|
|
|
|
|
|
BlackRock’s financial arrangements with its portfolio managers, its competitive compensation and its career path emphasis at all levels reflect the value senior management places on key resources. Compensation may include a variety of components and may vary from year to year based on a number of factors. The principal components of compensation include a base salary, a performance-based
discretionary bonus, participation in various benefits programs and one or more of the incentive compensation programs established by BlackRock.
|
|
|
|
|
|
Base compensation.
Generally, portfolio managers receive base compensation based on their position with the firm.
|
|
|
|
|
|
Discretionary Incentive Compensation.
Discretionary incentive compensation is a function of several components: the performance of BlackRock, Inc., the performance of the portfolio manager’s group within BlackRock, the investment performance, including risk-adjusted returns, of the firm’s assets under management or supervision by
that portfolio manager relative to predetermined benchmarks, and the individual’s performance and contribution to the overall performance of these portfolios and BlackRock. In most cases, these benchmarks are the same as the benchmark or benchmarks against which the performance of the Fund or other accounts managed by the portfolio managers are measured. BlackRock’s Chief Investment Officers determine the benchmarks against which the performance
of funds and other accounts managed by each portfolio manager is compared and the period of time over which performance is evaluated. With respect to the portfolio managers, such benchmarks include a combination of market-based indices (e.g., Barclays Capital Municipal Bond Index), certain customized indices and certain fund industry peer groups.
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|
|
|
|
|
Among other things, BlackRock’s Chief Investment Officers make a subjective determination with respect to each portfolio manager’s compensation based on the performance of the Funds and other accounts managed by each portfolio manager relative to the various benchmarks.
|
|
|
|
|
|
Performance of fixed income funds is measured on both a pre-tax and after-tax basis over various time periods including 1-, 3- and 5-year periods, as applicable. With respect to the performance of the other listed Index and Multi-Asset Funds, performance is measured on, among other things, a pre-tax basis over various time periods including 1-, 3- and 5-year periods, as
applicable.
|
|
|
Distribution of Discretionary Incentive Compensation
|
|
|
|
|
|
Discretionary incentive compensation is distributed to portfolio managers in a combination of cash and BlackRock, Inc. restricted stock units which vest ratably over a number of years. For some portfolio managers, discretionary incentive compensation is also distributed in deferred cash awards that notionally track the returns of select BlackRock investment products they manage and that vest
ratably over a number of years. The BlackRock, Inc. restricted stock units, upon vesting, will be settled in BlackRock, Inc. common stock. Typically, the cash bonus, when combined with base salary, represents more than 60% of total compensation for the portfolio managers. Paying a portion of annual bonuses in stock puts compensation earned by a portfolio manager for a given year “at risk” based on BlackRock’s ability to sustain and improve its
performance over future periods. Providing a portion of annual bonuses in deferred cash awards that notionally track the BlackRock investment products they manage provides direct alignment with investment product results.
|
|
|
|
|
|
Long-Term Incentive Plan Awards —
From time to time long-term incentive equity awards are granted to certain key employees to aid in retention, align their interests with long-term shareholder interests and motivate performance. Equity awards are generally granted in the form of BlackRock, Inc. restricted stock units that, once vested, settle in
BlackRock, Inc. common stock. Messrs. Jaeckel and O’Connor have each received long-term incentive awards.
|
|
|
|
|
|
Deferred Compensation Program —
A portion of the compensation paid to eligible BlackRock employees may be voluntarily deferred into an account that tracks the performance of certain of the firm’s investment products. Each participant in the deferred compensation program is permitted to allocate his deferred amounts among various BlackRock investment
options. Messrs. Jaeckel, O’Connor and Sneeden have each participated in the deferred compensation program.
|
|
|
|
|
|
Other compensation benefits.
In addition to base compensation and discretionary incentive compensation, portfolio managers may be eligible to receive or participate in one or more of the following incentive savings plans. BlackRock, Inc. has created a variety of incentive savings plans in which BlackRock, Inc. employees are eligible to participate, including a
401(k) plan, the BlackRock Retirement Savings Plan (RSP), and the BlackRock Employee Stock Purchase Plan (ESPP). The employer contribution components of the RSP include a company match equal to 50% of the first 8% of eligible pay contributed to the plan capped at $5,000 per year, and a company retirement contribution equal to 3-5% of eligible compensation. The RSP offers a range of investment options, including registered investment companies and collective
investment funds managed by the firm. BlackRock contributions follow the investment direction set by participants for their own contributions or, absent participant investment direction, are invested into an index target date fund that corresponds to, or is closest to, the year in which the participant attains age 65. The ESPP allows for investment in BlackRock, Inc. common stock at a 5% discount on the fair market value of the stock on the purchase date.
Annual participation in the ESPP is limited to the purchase of 1,000 shares or a dollar value of $25,000. Each portfolio manager is eligible to participate in these plans.
|
|
|
(a)(4)
|
Beneficial Ownership of Securities
– As of July 31, 2011.
|
|
Portfolio Manager
|
Dollar Range of Equity Securities
of the Fund Beneficially Owned
|
|
Robert Sneeden
|
None
|
|
Theodore R. Jaeckel, Jr.
|
None
|
|
Walter O’Connor
|
None
|
|
Item 9 –
|
Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers – Not Applicable due to no such purchases during the period covered by this report.
|
|
|
|
|
Item 10 –
|
Submission of Matters to a Vote of Security Holders – There have been no material changes to these procedures.
|
|
|
|
|
Item 11 –
|
Controls and Procedures
|
|
|
|
|
|
(a) – The registrant’s principal executive and principal financial officers, or persons performing similar functions, have concluded that the registrant’s disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940, as amended (the “1940 Act”)) are effective as of a date within 90 days of the filing
of this report based on the evaluation of these controls and procedures required by Rule 30a-3(b) under the 1940 Act and Rule 13a-15(b) under the Securities Exchange Act of 1934, as amended.
|
|
|
|
|
|
(b) – There were no changes in the registrant’s internal control over financial reporting (as defined in Rule 30a-3(d) under the 1940 Act) that occurred during the second fiscal quarter of the period covered by this report that have materially affected, or are reasonably likely to materially affect, the registrant’s internal control over financial
reporting.
|
|
|
|
|
Item 12 –
|
Exhibits attached hereto
|
|
|
|
|
|
(a)(1) – Code of Ethics – See Item 2
|
|
|
|
|
|
(a)(2) – Certifications – Attached hereto
|
|
|
|
|
|
(a)(3) – Not Applicable
|
|
|
|
|
|
(b) – Certifications – Attached hereto
|
|
|
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
|
|
|
|
|
|
BlackRock New Jersey Investment Quality Municipal Trust, Inc.
|
|
|
|
|
|
By:
|
/s/ John M. Perlowski
|
|
|
|
|
John M. Perlowski
|
|
|
|
Chief Executive Officer (principal executive officer) of
|
|
|
|
BlackRock New Jersey Investment Quality Municipal Trust, Inc.
|
|
|
|
|
|
Date: October 4, 2011
|
|
|
|
|
|
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/ John M. Perlowski
|
|
|
|
|
John M. Perlowski
|
|
|
|
Chief Executive Officer (principal executive officer) of
|
|
|
|
BlackRock New Jersey Investment Quality Municipal Trust, Inc.
|
|
|
|
|
|
Date: October 4, 2011
|
|
|
|
|
|
By:
|
/s/ Neal J. Andrews
|
|
|
|
|
Neal J. Andrews
|
|
|
|
Chief Financial Officer (principal financial officer) of
|
|
|
|
BlackRock New Jersey Investment Quality Municipal Trust, Inc.
|
|
|
|
|
|
|
Date: October 4, 2011
|
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