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As filed with the Securities and Exchange Commission on November 28, 2000
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A)
OF THE SECURITIES EXCHANGE ACT OF 1934 (AMENDMENT NO.)
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Proxy Statement
[_] Definitive Proxy Statement
[X] Definitive Additional Materials
[_] Soliciting Material Under Rule 14a-12
[_] Confidential, For Use of the Commission
Only (as permitted by Rule 14a-6(e)(2))
MuniHoldings Florida Insured Fund
P.O. Box 9011 Princeton, New Jersey 08543-9011
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(Name of Registrant as Specified In Its Charters)
SAME AS ABOVE
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(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which
the filing fee is calculated and state how it was determined):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[_] Fee paid previously with preliminary materials:
[_] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration statement
number, or the form or schedule and the date of its filing.
(1) Amount previously paid:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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MUNIHOLDINGS FLORIDA INSURED FUND
MUNIHOLDINGS FLORIDA INSURED FUND V
Dear Shareholder:
You are being asked to consider a transaction involving the Funds listed
above. The transaction is a reorganization in which MuniHoldings Florida Insured
Fund will acquire MuniHoldings Florida Insured Fund V.
On December 13, 2000, each Fund will hold an Annual Meeting of Shareholders
at which the Reorganization will be considered. The Reorganization must be
approved by the holders of Auction Market Preferred Shares of MuniHoldings
Florida Insured Fund as well as by the holders of both Auction Market Preferred
Shares and the holders of Common Shares of MuniHoldings Florida Insured Fund V.
A joint proxy statement and prospectus that provides information about the
proposed Reorganization and about each Fund was previously mailed to you. A
Question and Answer sheet that addresses frequently asked questions is enclosed
with this letter.
You are being asked to approve the Agreement and Plan of Reorganization
between the Funds pursuant to which MuniHoldings Florida Insured Fund will
acquire substantially all of the assets and assume substantially all of the
liabilities of MuniHoldings Florida Insured Fund V in exchange for newly issued
Common Shares and newly issued shares of an existing series of Auction Market
Preferred Shares of MuniHoldings Florida Insured Fund. These shares will be
distributed by MuniHoldings Florida Insured Fund V to its shareholders so that
holders of its Common Shares will receive Common Shares in MuniHoldings Florida
Insured Fund and holders of its Auction Market Preferred Shares will receive
Auction Market Preferred Shares in MuniHoldings Florida Insured Fund as
described in the joint proxy statement and prospectus.
The Board of Trustees of each Fund has reviewed the proposed Reorganization
and recommends that you vote FOR the proposed Reorganization.
Sincerely,
Jodi M. Pinedo
Secretary of MuniHoldings Florida Insured Fund and
Enclosure MuniHoldings Florida Insured Fund V
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In this Question and Answer Sheet, we will refer to MuniHoldings Florida Insured
Fund as Florida Insured and MuniHoldings Florida Insured Fund V as Florida
Insured V.
Q. Why am I receiving this proxy?
A. As a shareholder of Florida Insured or Florida Insured V, you are being
asked to consider a transaction in which Florida Insured will acquire
substantially all the assets and assume substantially all the liabilities
of Florida Insured V. This transaction is referred to in this question
and answer sheet as the Reorganization. The Reorganization requires the
approval of the holders of Auction Market Preferred Shares ("AMPS") of
Florida Insured and the holders of Common Shares and AMPS of Florida
Insured V.
Q. Who is receiving this proxy?
A. Those receiving this proxy are: (1) the holders of AMPS of Florida
Insured, (2) the holders of AMPS of Florida Insured V, and (3) the
holders of Common Shares of Florida Insured V. The Reorganization
requires the vote of these shareholders. The Reorganization does not
require the vote of the holders of Common Shares of Florida Insured.
Q. Which Fund will be the surviving fund and which Fund will be the acquired
fund in the Reorganization?
A. Florida Insured will be the surviving fund (the "Surviving Fund").
Florida Insured V will be the acquired fund.
Q. Will the Reorganization change my privileges as a shareholder?
A. Your privileges as a shareholder will not change in any substantial way
as a result of the Reorganization. In addition, the shareholder services
available to you after the Reorganization will be substantially the same
as the shareholder services currently available to you.
Q. How will the Reorganization affect shareholders?
A. Shareholders should consider the following:
. After the Reorganization, each Fund's shareholders will be invested in
a Fund with an increased level of net assets with substantially
similar investment objectives and policies.
. After the Reorganization, holders of Common Shares in the Surviving
Fund are expected to experience
. greater efficiency and flexibility in portfolio management
. a more liquid market for the Common Shares
. a lower anticipated aggregate operating expense ratio (the ratio
of operating expenses to total fund assets) than Florida Insured
V prior to the Reorganization. The estimated costs of the
Reorganization, however, are expected to result in a reduction in
net asset value that is expected to be recovered after the
Reorganization because of the anticipated lower operating expense
ratio.
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Q. If I own Common Shares of Florida Insured V, will I own the same number
of Common Shares of Florida Insured after the Reorganization as I
currently own?
A. No. You will receive Common Shares of Florida Insured with the same
aggregate net asset value as the Common Shares of Florida Insured V that
you own on the business day prior to the closing date of the
Reorganization (the "Valuation Date"). The number of shares you receive
will depend on the relative net asset values of the Common Shares of the
Funds on that date. For example, let us assume that you own 10 Florida
Insured V Common Shares. If the net asset value of Florida Insured V
Common Shares on the Valuation Date is $6 per share, and the net asset
value of the Florida Insured Common Shares on the Valuation Date is $12
per share, you will receive 5 Florida Insured Common Shares in the
Reorganization. The aggregate net asset value of your investment will not
change. (10 Florida Insured V shares x $6 = $60; 5 Florida Insured shares
x $12 = $60).
Thus, if on the Valuation Date the net asset value of the Common Shares
of Florida Insured is higher than the net asset value of the Common
Shares of Florida Insured V, you will receive fewer Common Shares of
Florida Insured in the Reorganization than you held in Florida Insured V
before the Reorganization. On the other hand, if the net asset value of
the Common Shares of Florida Insured is lower than the net asset value of
the Common Shares of Florida Insured V, you will receive a greater number
of Florida Insured Common Shares in the Reorganization. The aggregate net
asset value of your shares after the Reorganization will be the same as
before the Reorganization.
Q. I currently hold Auction Market Preferred Shares of Florida Insured V.
After the Reorganization, what will I hold?
A. If prior to the Reorganization you After the Reorganization you will
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hold: hold:
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Florida Insured V Series A AMPS Florida Insured Series B AMPS
You will receive shares of Florida Insured's Series B AMPS with the same
aggregate liquidation preference as the shares of AMPS of Florida Insured
V you currently hold. Since each share of AMPS has a $25,000 liquidation
preference, the holders of AMPS of Florida Insured V will receive one
share of Florida Insured Series B AMPS for each share they currently
hold. The auction and dividend payment dates for the Florida Insured
Series B AMPS that you will receive in the Reorganization will be
different from the auction and dividend payment dates for the Florida
Insured V Series A AMPS. This will not adversely affect the value of your
investment.
Q. Should I send in my share certificates now?
A. No. After the Reorganization is completed, we will send holders of Common
Shares of Florida Insured V written instructions for exchanging their
share certificates. Florida Insured V shareholders should exchange their
share certificates after the Reorganization promptly in order to continue
to receive dividend payments on their shares. Dividends declared will
accrue but payments will not be made until Florida Insured V Common Share
certificates are surrendered and exchanged for share certificates of the
Surviving Fund. Shareholders of Florida Insured will keep their share
certificates.
Holders of AMPS will not be required to surrender share certificates. All
exchanges of AMPS will be accomplished by book entry.
Q. What are the tax consequences for shareholders?
A. The Reorganization is structured as a tax-free transaction so that the
completion of the Reorganization itself will not result in Federal income
tax liability for shareholders of either Fund, except for taxes on any
cash received for a fractional Common Share. The Funds have applied for a
private letter ruling from the Internal Revenue Service with respect to
the tax treatment of the Reorganization.
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Q. Who will manage the Surviving Fund after the Reorganization?
A. Fund Asset Management L.P. serves as the investment adviser for the Funds
and will be the investment adviser of the Surviving Fund after the
Reorganization. The portfolio of Florida Insured is managed by Robert A.
DiMella and Robert D. Sneeden. The portfolio of Florida Insured V is
managed by Mr. Sneeden. After the Reorganization, the portfolio of the
Surviving Fund will be managed by Messrs. DiMella and Sneeden.
Q. Will there be a Shareholders' Meeting for each Fund?
A. Yes, an Annual Meeting of Shareholders for each Fund will be held on
December 13, 2000, at 800 Scudders Mill Road, Plainsboro, New Jersey at
the time specified below.
Fund Time
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Florida Insured 10:00 a.m.
Florida Insured V 10:30 a.m.
Q. Why is my vote important?
A. Approval of the Reorganization requires the affirmative vote of (i)
shareholders representing a majority of the outstanding Common Shares and
AMPS of Florida Insured V, voting together as a single class, and a
majority of the outstanding AMPS of Florida Insured V, voting as a
separate class, and (ii) shareholders representing a majority of the
outstanding shares of Florida Insured AMPS, voting as a separate class.
For purposes of any vote, a quorum consists of a majority of the Common
Shares and AMPS entitled to vote at that Meeting. The Board of Trustees
of each Fund urges every shareholder to vote. Please read all proxy
materials thoroughly before casting your vote.
Q. How can I vote?
A. You may vote by signing and returning your proxy card in the enclosed
postage-paid envelope. You may also vote your shares on the Internet at
http://www.proxyvote.com until 4:00 p.m. on December 12, 2000. Or refer
to the "800" number printed on your voting instruction form. On the
Internet you will be asked for a control number that you received in your
proxy mailing. You may also vote in person at the Annual Meeting of
Shareholders. If you submitted a proxy by mail, by telephone or on the
Internet, you may withdraw it at the Meeting and then vote in person at
the Meeting or you may submit a superseding proxy by mail, by telephone
or on the Internet.
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Q. Have the Funds retained a proxy solicitation firm?
A. Yes, each Fund has hired Shareholder Communications Corporation to assist
in the solicitation of proxies for the Meeting. While the Funds expect
most proxies to be returned by mail, the Funds may also solicit proxies
by telephone, fax, telegraph or personal interview.
Q. What if there are not enough votes to reach a quorum by the scheduled
meeting date?
A. In order to ensure that we receive enough votes, we may need to take
further action. We or our proxy solicitation firm may contact you by mail
or telephone. Therefore, we encourage shareholders to vote as soon as
they review the enclosed proxy materials to avoid additional mailings or
telephone calls. If enough shares are not represented at an Annual
Meeting of Shareholders to achieve the necessary quorum, or if the
necessary quorum is present but there are not sufficient votes to approve
the proposal by the time of the Annual Meeting of Shareholders on
December 13, 2000, such Annual Meeting may be adjourned to permit further
solicitation of proxy votes.
Q. What is the Board's recommendation?
A. The Board of Trustees of each Fund believes the Reorganization is in the
best interests of the Fund and its shareholders. It encourages
shareholders to vote FOR the Reorganization.
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