<PAGE>
CMA MONEY FUND
----------------
NOTICE OF MEETING OF SHAREHOLDERS
FEBRUARY 25, 1994
----------------
To The Shareholders of
CMA Money Fund
Notice is hereby given that a Meeting of Shareholders (the "Meeting") of CMA
Money Fund (the "Fund") will be held at the offices of Merrill Lynch Asset
Management, 800 Scudders Mill Road, Plainsboro, New Jersey on Friday, February
25, 1994 at 9:00 A.M. for the following purposes:
(1) To elect six Trustees to serve for an indefinite term;
(2) To ratify or reject the selection of Deloitte & Touche as independent
auditors of the Fund for its fiscal year ending March 31, 1994;
(3) To consider and act upon a proposal to amend the fundamental
investment restrictions of the Fund relating to investments in
restricted or unmarketable securities and securities of unseasoned
issuers; and
(4) To transact such other business as may properly come before the
Meeting or any adjournment thereof.
The Trustees have fixed the close of business on December 20, 1993 as the
record date for the determination of shareholders entitled to notice of and to
vote at the Meeting or any adjournment thereof.
A complete list of the shareholders of the Fund entitled to vote at the
Meeting will be available and open to the examination of any shareholder of the
Fund for any purpose germane to the Meeting during ordinary business hours from
and after February 11, 1994, at the office of the Fund, 800 Scudders Mill Road,
Plainsboro, New Jersey 08536. You are cordially invited to attend the Meeting.
Shareholders who do not expect to attend the Meeting in person are requested to
complete, date and sign the enclosed form of proxy and return it promptly in
the envelope provided for that purpose. The enclosed proxy is being solicited
on behalf of the Board of Trustees of the Fund.
By Order of the Board of
Trustees
Robert Harris
Secretary
Plainsboro, New Jersey
Dated: January 7, 1994
<PAGE>
PROXY STATEMENT
----------------
CMA MONEY FUND
BOX 9011
PRINCETON, NEW JERSEY 08543-9011
----------------
MEETING OF SHAREHOLDERS
FEBRUARY 25, 1994
INTRODUCTION
This Proxy Statement is furnished in connection with the solicitation of
proxies on behalf of the Trustees of CMA Money Fund, a Massachusetts business
trust (the "Fund"), to be voted at the Meeting of Shareholders of the Fund (the
"Meeting"), to be held at the offices of Merrill Lynch Asset Management
("MLAM"), 800 Scudders Mill Road, Plainsboro, New Jersey, on Friday, February
25, 1994 at 9:00 A.M. The approximate mailing date of this Proxy Statement is
January 12, 1994.
All properly executed proxies received prior to the Meeting will be voted at
the Meeting in accordance with the instructions marked thereon or otherwise as
provided therein. Unless instructions to the contrary are marked, proxies will
be voted for the election of the six Trustees named herein to serve for an
indefinite term, for the ratification of the selection of independent auditors
to serve for the Fund's current fiscal year and for the proposal to amend of
the fundamental investment restrictions of the Fund relating to investments in
restricted or unmarketable securities and securities of unseasoned issuers. Any
proxy may be revoked at any time prior to the exercise thereof by giving
written notice to the Secretary of the Fund.
The Trustees have fixed the close of business on December 20, 1993 as the
record date for the determination of shareholders entitled to notice of and to
vote at the Meeting and at any adjournment thereof. Shareholders on the record
date will be entitled to one vote for each share held, with no shares having
cumulative voting rights. As of December 20, 1993, the Fund had outstanding
26,694,570,355 shares of beneficial interest, par value $0.10 per share. To the
knowledge of management of the Fund, no person owned beneficially more than 5%
of its outstanding shares at such date.
The Trustees of the Fund know of no business other than that mentioned in
Items 1, 2 and 3 of the Notice of Meeting which will be presented for
consideration at the Meeting. If any other matter is properly presented, it is
the intention of the persons named in the enclosed proxy to vote in accordance
with their best judgment.
<PAGE>
ELECTION OF TRUSTEES
At the Meeting, six Trustees will be elected to serve for an indefinite term
until their successors are elected and qualified. It is the intention of the
persons named in the enclosed proxy to nominate and vote in favor of the
election of the persons listed below.
There normally will be no meeting of shareholders for the purpose of electing
Trustees unless and until such time as less than a majority of the Trustees
holding office have been elected by shareholders, at which time the Trustees
then in office will call a special meeting of shareholders for the election of
Trustees. Shareholders may, in accordance with the terms of the Declaration of
Trust of the Fund, cause a meeting to be held for the purpose of voting on the
removal of Trustees at the request of 10% of the outstanding shares of the
Fund. A Trustee may be removed by a vote of the holders of at least two-thirds
of the shares of the Fund entitled to vote on the matter. See "Additional
Information--Meetings of Stockholders" below.
Each nominee listed below has consented to serve as a Trustee. The Trustees
of the Fund know of no reason why any of these nominees will be unable to
serve, but in the event of any such unavailability, the proxies received will
be voted for such substitute nominee or nominees as the Trustees may recommend.
Certain information concerning the nominees is set forth below:
<TABLE>
<CAPTION>
SHARES OF THE FUND
PRINCIPAL OCCUPATIONS BENEFICIALLY
DURING PAST FIVE YEARS TRUSTEE OWNED AT
NAME AND ADDRESS OF NOMINEE AGE AND PUBLIC DIRECTORSHIPS(1) SINCE DECEMBER 23, 1993
--------------------------- --- --------------------------- ------- ------------------
<C> <C> <S> <C> <C>
Ronald W. Forbes(1)(2)...... 53 Professor of Finance, School of 1981 -0-
School of Business BA 309 Business, State University of
State University of New New York at Albany, since 1989,
York and Associate Professor prior
at Albany thereto; Member, Task Force on
1400 Washington Avenue Municipal Securities Markets,
Albany, New York 12222 Twentieth Century Fund
Cynthia A. Montgomery(1).... 41 Professor, Harvard Business -- 550,000
Harvard Business School School, since 1989; Associate
Soldiers Field Road Professor, J.L. Kellogg Graduate
Boston, Massachusetts 02163 School of Management, Northwest-
ern University, 1985-1989; As-
sistant Professor, Graduate
School of Business Administra-
tion, University of Michigan,
1979-1985; Director, UNUM Corpo-
ration.
Charles C. Reilly(1)(2)..... 62 President and Chief Investment 1990 -0-
9 Hampton Harbor Road Officer of Verus Capital, Inc.
Hampton Bays, New York from 1979 to 1990; Senior Vice
11946 President of Arnhold and S.
Bleichroeder, Inc. from 1973 to
1990; Adjunct Professor, Colum-
bia University Graduate School
of Business since 1990; Adjunct
Professor, Wharton School, Uni-
versity of Pennsylvania, 1990;
Director, Harvard Business
School Alumni Association.
</TABLE>
2
<PAGE>
<TABLE>
<CAPTION>
SHARES OF
THE FUND
PRINCIPAL OCCUPATIONS BENEFICIALLY
DURING PAST FIVE YEARS TRUSTEE OWNED AT
NAME AND ADDRESS OF NOMINEE AGE AND PUBLIC DIRECTORSHIPS(1) SINCE DECEMBER 23, 1993
--------------------------- --- --------------------------- ------- -----------------
<C> <C> <S> <C> <C>
Kevin A. Ryan(1)(2)......... 61 Professor of Education at Boston 1992 -0-
127 Commonwealth Avenue University since 1982; Founder
Chestnut Hill, and current Director of The Bos-
Massachusetts 02167 ton University Center for the
Advancement of Ethics and Char-
acter.
Richard R. West(1)(2)....... 55 Professor of Finance, and Dean 1979 192,202
482 Tepi Drive from 1984 to 1993, New York Uni-
Southbury, Connecticut versity Leonard N. Stern School
06488 of Business Administration; Pro-
fessor of Finance at the Amos
Tuck School of Business Adminis-
tration from 1976 to 1984 and
Dean from 1976 to 1983; Director
of Vornado, Inc. (real estate
holding company), Bowne & Co.,
Inc. (printer), Smith Corona
Corporation (manufacturer of
typewriters and word processors)
and Alexander's Inc.
Arthur Zeikel(1)(3)......... 61 President and Chief Investment 1977 223,570
P.O. Box 9011 Officer of Fund Asset Management
Princeton, New Jersey ("FAM" or the "Investment Advis-
08543-9011 er") since 1977 and Director
thereof from 1977 to 1993; Di-
rector of Princeton Services,
Inc. ("Princeton Services")
since 1993; President of MLAM
since 1977, Chief Investment Of-
ficer thereof since 1976 and Di-
rector thereof from 1976 to
1993; Executive Vice President
of Merrill Lynch & Co., Inc.
("ML & Co.") since 1990; Execu-
tive Vice President of Merrill
Lynch, Pierce, Fenner & Smith
Incorporated ("Merrill Lynch")
since 1990 and Senior Vice Pres-
ident thereof from 1985 to 1990.
</TABLE>
- --------
(1) Each of the nominees is a director or trustee of certain other investment
companies for which MLAM or FAM acts as investment adviser. See "Merrill
Lynch Investment Company Directorships" below.
(2) Member of Audit and Nominating Committee of the Board of Trustees.
(3) Interested person, as defined in the Investment Company Act of 1940, of the
Fund.
3
<PAGE>
Committee's and Trustees' Meetings. The Board of Trustees has a standing
Audit and Nominating Committee which consists of the Trustees who are not
"interested persons" of the Fund within the meaning of the Investment Company
Act of 1940. The purposes of the Audit and Nominating Committee are (i) to
review the scope of the annual audit conducted by the Fund's independent
accountants and the evaluation by such accountants of the accounting procedures
followed by the Fund, (ii) to consider matters generally within the
responsibility of the non-interested directors of investment companies under
the Investment Company Act of 1940 and (iii) to select and nominate the
Trustees who are not "interested persons" of the Fund as defined in the
Investment Company Act of 1940. The Audit and Nominating Committee generally
will not consider nominees recommended by shareholders of the Fund.
During the Fund's fiscal year ended March 31, 1993, the Trustees held four
meetings and the Audit and Nominating Committee held five meetings. Each
Trustee nominated for election who was a Trustee during such fiscal year
attended at least 75% of the aggregate of the number of these meetings of the
Trustees and, if a member, of the Audit and Nominating Committee held during
the year.
Interested Persons. The Fund considers one of its Trustees, Mr. Zeikel, to be
an "interested person" of the Fund within the meaning of Section 2(a)(19) of
the Investment Company Act of 1940. Mr. Zeikel is the President of the Fund,
the President of FAM and MLAM, and a Director of Princeton Services, the
general partner of FAM and MLAM.
Compensation of Trustees. FAM, the investment adviser, pays all compensation
of all officers of the Fund and all Trustees of the Fund who are affiliated
with ML & Co. or its subsidiaries. The Fund presently pays each Trustee not
affiliated with the investment adviser an annual fee of $8,000 plus $800 per
meeting attended and pays all Trustees' actual out-of-pocket expenses relating
to attendance at meetings. Each member of the Audit and Nominating Committee
receives an annual fee of $4,000 and the chairman of such committee receives an
annual fee of $1,000. The aggregate fees and expenses paid to the unaffiliated
Trustees totaled $116,477 for the fiscal year ended March 31, 1993.
Merrill Lynch Investment Company Directorships. FAM and MLAM act as the
investment adviser for over 90 registered investment companies. Mr. Zeikel is a
trustee or director of each of these companies except for Merrill Lynch Series
Fund, Inc., Merrill Lynch Institutional Intermediate Fund, Merrill Lynch Funds
for Institutions Series and Merrill Lynch Institutional Tax-Exempt Fund. Each
of the nominees is a director or trustee of Merrill Lynch Utility Income Fund,
MuniVest Fund, Inc., MuniVest Fund II, Inc., Senior High Income Portfolio,
Inc., Senior High Income Portfolio II, Inc., Taurus MuniCalifornia Holdings,
Inc. and Taurus MuniNewYork Holdings, Inc. Messrs. Forbes, Reilly, Ryan and
West are trustees or directors of and Ms. Montgomery is nominated to be a
trustee or director of CMA Treasury Fund, CMA Tax-Exempt Fund, CMA Government
Securities Fund, CMA Multi-State Municipal Series Trust, CBA Money Fund,
Merrill Lynch Strategic Dividend Fund, Merrill Lynch Municipal Series Trust,
Merrill Lynch Corporate Bond Fund, Inc., Merrill Lynch Municipal Bond Fund,
Inc., The Corporate Fund Accumulation Program, Inc., The Municipal Fund
Accumulation Program, Inc., Merrill Lynch Prime Fund, Inc., Merrill Lynch
Global Utility Fund, Inc., Merrill Lynch High Income Municipal Bond Fund, Inc.,
and Merrill Lynch Fund for Tomorrow, Inc. In addition, Messrs. Reilly and West
are directors of Merrill Lynch Healthcare Fund, Inc., Merrill Lynch
International Holdings, Inc., Merrill Lynch Latin America Fund, Inc., Merrill
Lynch Short-Term Global Income Fund, Inc., Merrill Lynch Technology Fund, Inc.,
Merrill Lynch Global Bond Fund for Investment
4
<PAGE>
and Retirement, Merrill Lynch Global Allocation Fund, Inc., Merrill Lynch
Pacific Fund, Inc., Merrill Lynch Developing Capital Markets Fund, Inc.,
Merrill Lynch EuroFund, Merrill Lynch Dragon Fund, Inc., Merrill Lynch
International Equity Fund, and Merrill Lynch Americas Income Fund, Inc.
Officers of the Fund. The Board of Trustees has elected seven officers of the
Fund. The following sets forth information concerning each of these officers:
<TABLE>
<CAPTION>
OFFICER
NAME AND PRINCIPAL OCCUPATION OFFICE AGE SINCE
----------------------------- ------ --- -------
<S> <C> <C> <C>
Arthur Zeikel....................................... President 61 1977
President and Chief Investment Officer of FAM since
1977 and Director thereof from 1977 to 1993;
Director of Princeton Services since 1993;
President of MLAM since 1977, Chief Investment
Officer thereof since 1976 and Director thereof
from 1976 to 1993; an Executive Vice President of
ML & Co. since 1990; an Executive Vice President
of Merrill Lynch since 1990 and a Senior Vice
President from 1985 to 1990.
Terry K. Glenn...................................... Executive Vice 53 1986
Executive Vice President of FAM and MLAM since 1983 President
and Director thereof from 1992 to 1993; Director
of Princeton Services since 1993; President of
Merrill Lynch Funds Distributor, Inc. (the
"Distributor") since 1986 and Director thereof
since 1991; President of Princeton Administrators.
Joseph T. Monagle................................... Senior Vice 45 1985
Senior Vice President of FAM and MLAM since 1990; President
Vice President of MLAM from 1978 to 1990.
Donald C. Burke..................................... Vice President 33 1993
Vice President of MLAM since 1990; employee of
Deloitte & Touche from 1982 to 1990.
Kevin J. McKenna.................................... Vice President 36 1991
Vice President of MLAM since 1985.
Gerald M. Richard................................... Treasurer 44 1984
Senior Vice President and Treasurer of FAM and MLAM
since 1984; Treasurer of the Distributor since
1984 and Vice President since 1981.
Robert Harris....................................... Secretary 41 1984
Vice President of MLAM since 1984; Secretary of the
Distributor since 1982.
</TABLE>
Share Ownership. On December 23, 1993, the Trustees and officers of the Fund
as a group (11 persons) owned an aggregate of less than 1/4 of 1% of the
outstanding shares of beneficial interest of the Fund. Mr. Zeikel, a Trustee of
the Fund, and the officers of the Fund owned on December 23, 1993, an aggregate
of less than 1/4 of 1% of the outstanding shares of Common Stock of ML & Co.
5
<PAGE>
SELECTION OF INDEPENDENT AUDITORS
At their meeting on December 8, 1993, the Trustees of the Fund, including a
majority of the Trustees who are not interested persons of the Fund, selected
the firm of Deloitte & Touche ("D&T"), independent auditors, to examine the
financial statements of the Fund for the fiscal year ending March 31, 1994. The
Fund knows of no direct or indirect financial interest of such firm in the
Fund. Such appointment is subject to ratification or rejection by the
shareholders of the Fund. Unless a contrary specification is made, the
accompanying proxy will be voted in favor of ratifying the selection of such
auditors.
D&T also acts as independent auditors for ML & Co. and all of its
subsidiaries and for other investment companies for which FAM or MLAM acts as
investment adviser. The fees received by D&T from these other entities are
substantially greater, in the aggregate, than the total fees received by it
from the Fund. The Trustees considered the fact that D&T has been retained as
the independent auditors for ML & Co. and the other entities described above in
their evaluation of the independence of D&T with respect to the Fund.
Representatives of D&T are expected to be present at the Meeting and will
have the opportunity to respond to questions from shareholders and to make a
statement if they so desire.
PROPOSAL TO AMEND THE FUNDAMENTAL INVESTMENT RESTRICTIONS OF THE FUND
RELATING TO INVESTMENTS IN RESTRICTED OR UNMARKETABLE SECURITIES AND SECURITIES
OF UNSEASONED ISSUERS
The Fund currently is restricted from investing in securities with legal or
contractual restrictions on resale (except for repurchase agreements) or for
which no readily available market exists or in securities of issuers (other
than issuers of U.S. Government agency securities) having a record, together
with predecessors, of less than three years of continuous operations if,
regarding all such securities, more than 5% of the Fund's total assets (taken
at market value) would be invested in such securities. At the meeting held on
December 8, 1993, the Trustees of the Fund voted to approve an amendment to
this restriction and determined to recommend that shareholders approve such
amendment.
As amended, the current restriction would be separated into two investment
restrictions. One investment restriction would increase the Fund's ability to
invest in restricted or unmarketable securities by permitting the Fund to
invest up to 10% of its total assets in such securities. The other restriction
would limit investments in unseasoned issuers alone to not more than 5% of
total assets. The net result of the changes would be an increase in the Fund's
ability to invest in restricted or unmarketable securities and unseasoned
issuers. The amended restrictions as set forth in the Fund's Statement of
Additional Information would read as follows:
The Money Market Fund may not: . . . (11) invest in securities with legal
or contractual restrictions on resale (except for repurchase agreements) or
for which no readily available market exists if, regarding all such
securities, more than 10% of its total assets (taken at market value) would
be invested in such securities ; (12) invest in securities of issuers
(other than issuers of U.S. Government agency securities) having a record,
together with predecessors, of less than three years of continuous
operation if, regarding all such securities, more than 5% of its total
assets (taken at market value) would be invested in such securities; . . .
6
<PAGE>
These changes to the investment restrictions will provide the Fund with
greater flexibility in making portfolio investments and bring the Fund's
investment restrictions on restricted or unmarketable securities and securities
of unseasoned issuers more in conformity with the investment restrictions of
more recently organized money market funds. The Trustees recommend that the
shareholders vote in favor of the proposal to amend the fundamental investment
restrictions.
THE INVESTMENT ADVISORY AGREEMENT
FAM acts as the investment adviser for the Fund and provides the Fund with
management services pursuant to an investment advisory agreement dated November
11, 1980 (the "Investment Advisory Agreement"). FAM has acted as the investment
adviser for the Fund since the Fund commenced operations on August 29, 1977.
On June 2, 1993, the Board of Trustees of the Fund, including a majority of
the Trustees who are not interested persons of the Fund, approved the
continuance of the Investment Advisory Agreement for a period of one year. In
their consideration of this matter, the Trustees received extensive information
relating to, among other things, the nature, quality and extent of the
advisory, administrative and other services provided to the Fund by FAM and its
affiliates (including Merrill Lynch), comparative data with respect to the
advisory and management fees paid by other money market funds, the operating
expenses and expense ratio of the Fund as compared to such funds and the
performance of the Fund as compared to the performance of such other money
market funds. The Trustees also have received information as to the costs of
FAM and its affiliates for providing services to the Fund and to the Cash
Management Account financial service program of Merrill Lynch of which the Fund
is a part.
INFORMATION CONCERNING FAM
Effective January 1, 1994, FAM was reorganized as a Delaware limited
partnership. FAM (the general partner of which is Princeton Services, a wholly-
owned subsidiary of ML & Co.) is owned and controlled by ML & Co. and is
located at 800 Scudders Mill Road, Plainsboro, New Jersey 08536. ML & Co. is
located at 250 Vesey Street, New York, New York 10281. The reorganization did
not result in a change of management of FAM, in any of its personnel, or in an
adverse change in its financial condition. Prior to the reorganization, FAM
(which was known as Fund Asset Management, Inc.) was a Delaware corporation
which was incorporated in 1976. FAM was a wholly-owned subsidiary of MLAM (a
Delaware corporation, which was also reorganized as a Delaware limited
partnership effective January 1, 1994) prior to its reorganization. MLAM was a
wholly-owned subsidiary of ML & Co. prior to its reorganization and continues
to be owned and controlled by ML & Co. after its reorganization. MLAM is also
located at 800 Scudders Mill Road, Plainsboro, New Jersey 08536. FAM and MLAM
act as the investment adviser for more than 90 other registered investment
companies. In addition, MLAM offers portfolio management and portfolio analysis
services to individuals and institutions. FAM's audited balance sheet for its
fiscal year ended December 28, 1992 is appended to this Proxy Statement as
Exhibit A. An unaudited balance sheet for FAM as of September 24, 1993 is
appended to this Proxy Statement as Exhibit B. FAM represents that, to its
knowledge, there has been no material adverse change in its financial condition
since September 24, 1993.
7
<PAGE>
FAM has access to the expertise of its affiliate, Merrill Lynch Government
Securities, Inc. ("GSI"), which is a wholly-owned subsidiary of ML & Co. In
terms of dollar volume of trading, GSI is one of the largest dealers in United
States Government securities and Government agency securities, acting both as a
primary dealer and a secondary market trader. GSI is one of the reporting
dealers in government securities who report their daily position and activity
to the Federal Reserve Bank of New York. A subsidiary of GSI acts as a dealer
in bankers' acceptances, certificates of deposit and commercial paper. See
"Portfolio Transactions" herein for information with respect to the ability of
the Fund to conduct portfolio transactions with GSI and its subsidiary. In
addition, FAM has access to the securities and economic research of Merrill
Lynch.
Securities held by the Fund may also be held by, or be appropriate
investments for, other funds or clients (collectively referred to as "clients")
for which the Investment Adviser or MLAM acts as an independent adviser.
Because of different investment objectives or other factors, a particular
security may be bought for one or more clients when one or more clients are
selling the security. If purchases or sales of securities for the Fund or other
clients arise for consideration at or about the same time, transactions in such
securities will be made, insofar as feasible, for the respective clients in a
manner deemed equitable to all by the Investment Adviser or MLAM. To the extent
that transactions on behalf of more than one client of the Investment Adviser
or MLAM during the same period may increase the demand for securities being
purchased or the supply of securities being sold, there may be an adverse
effect on price.
The following table sets forth the name, title and principal occupation of
the principal executive officer of FAM and the directors of Princeton Services,
the general partner of FAM:
<TABLE>
<CAPTION>
NAME* TITLE PRINCIPAL OCCUPATION
----- ----- --------------------
<S> <C> <C>
Arthur Zeikel....... President and Chief President of MLAM and FAM
Investment Officer of FAM and Executive Vice Presi-
and Director of Princeton dent of ML & Co.
Services
Terry K. Glenn...... Executive Vice President of Executive Vice President of
FAM and Director of MLAM and FAM
Princeton Services
Philip L. Kirstein.. Senior Vice President and Senior Vice President and
General Counsel of FAM and General Counsel of MLAM and
Director of Princeton FAM
Services
</TABLE>
- --------
* Mr. Zeikel is presently the President and a Trustee, and Mr. Glenn is
presently the Executive Vice President, of the Fund. The address of Messrs.
Zeikel, Glenn and Kirstein is P.O. Box 9011, Princeton, New Jersey 08543-9011,
which is also the address of FAM and MLAM.
TERMS OF THE INVESTMENT ADVISORY AGREEMENT
Pursuant to the Investment Advisory Agreement, subject to the direction of
the Trustees, the Investment Adviser is responsible for the actual management
of the Fund's portfolio and constantly reviews the Fund's holdings in light of
its own research analysis and that from other relevant sources. The
responsibility for making decisions to buy, sell or hold a particular security
rests with the Investment Adviser. The Investment Adviser performs certain of
the other administrative services and provides all the office space,
facilities, equipment and necessary personnel for portfolio management of the
Fund.
8
<PAGE>
Advisory Fee. The Investment Advisory Agreement provides that, as
compensation for its services to the Fund, the Investment Adviser shall receive
from the Fund at the end of each month a fee at the annual rate of 0.50% of
average net assets not exceeding $500 million, 0.425% of average net assets in
excess of $500 million but not in excess of $1 billion and 0.375% of average
net assets in excess of $1 billion. For the fiscal year ended March 31, 1993,
the total advisory fees payable, prior to any reimbursement by the Fund to the
Investment Adviser aggregated $103,584,527 (based on average net assets of
approximately $27.4 billion) and the effective fee rate was 0.378%. At November
30, 1993, the net assets of the Fund aggregated approximately $26.7 billion. At
this asset level the annual effective fee rate (without regard to any possible
reimbursement) is approximately 0.378% of average net assets and the annual
advisory fee would aggregate approximately $101.1 million.
Payment of Expenses. The Investment Advisory Agreement obligates the
Investment Adviser to provide investment advisory services, to furnish
administrative services, office space and facilities for management of the
Fund's affairs, to pay all compensation of and furnish office space for
officers and employees of the Fund, as well as the fees of all Trustees of the
Fund who are affiliated persons of ML & Co. or any of its subsidiaries. Except
for certain expenses incurred by the Distributor (see "Distribution
Arrangements"), the Fund pays all other expenses incurred in the operation of
the Fund, including, among other things, taxes, expenses for legal and auditing
services, costs of printing proxies, reports, prospectuses, and statements of
additional information sent to shareholders, charges of the Custodian and
Transfer Agent, expenses of redemption of shares, Securities and Exchange
Commission fees, expenses of registering the shares under Federal and state
securities laws, fees and expenses of unaffiliated trustees, accounting and
pricing costs (including the daily calculation of net asset value), insurance,
interest, brokerage costs, litigation and other extraordinary or non-recurring
expenses, and other expenses properly payable by the Fund. Accounting services
are provided for the Fund by the Investment Adviser, and the Fund reimburses
the Investment Adviser for its costs in connection with such services. For the
year ended March 31, 1993, the amount of such reimbursement was $561,239.
The State of California imposes limitations on the expenses of the Fund. At
the date of this Proxy Statement, such annual expense limitations require that
the Investment Adviser reimburse the Fund in any amount necessary to prevent
such operating expenses from exceeding in any fiscal year 2.5% of the Fund's
first $30 million of average net assets, 2.0% of the next $70 million of
average net assets and 1.5% of the remaining average net assets. No fee payment
will be made to the Investment Adviser during any year which will cause such
expenses to exceed the pro rata expense limitation at the time of such payment.
During the fiscal year ended March 31, 1993, the Fund was not required to make
any reimbursement pursuant to such limitations.
Duration and Termination. The Investment Advisory Agreement will continue in
effect from year to year if approved annually (a) by the Trustees of the Fund
or by a majority of the outstanding voting securities of the Fund and (b) by a
majority of Trustees who are not parties to such contract or interested persons
(as defined in the Investment Company Act of 1940) of any such party. Such
contract is not assignable and may be terminated without penalty on 60 days'
written notice at the option of either party thereto or by the vote of the
shareholders of the Fund.
Transfer Agency Arrangements. Pursuant to a Transfer Agency, Shareholder
Servicing Agency, and Proxy Agency Agreement (the "Transfer Agency Agreement")
between the Fund and Financial Data
9
<PAGE>
Services, Inc. (the "Transfer Agent"), a subsidiary of ML & Co., the Transfer
Agent is responsible for the issuance, transfer and redemption of shares and
the opening and maintenance of shareholder accounts. The Fund pays the Transfer
Agent a fee of $5.25 per account for the first one million accounts and $4.75
per shareholder account thereafter. At March 31, 1993, the Fund had 1,027,331
accounts. At this level of accounts, the annual fee payable to the Transfer
Agent would aggregate approximately $5,379,822. The Transfer Agent is also
entitled to reimbursement for out-of-pocket expenses incurred by it under the
Transfer Agency Agreement and to payment of specified fees in connection with
the closing of accounts and certain other events. For the fiscal year ended
March 31, 1993, $1,476,574 (including out-of-pocket expenses, closed account
and other fees) was paid to the Transfer Agent pursuant to the Transfer Agency
Agreement.
DISTRIBUTION ARRANGEMENTS
The shares of the Fund are offered to participants in the Cash Management
Account (R) financial service program ("CMA (R)") of Merrill Lynch to provide a
medium for the investment of free credit cash balances held in CMA accounts.
Shares of the Fund also are offered to other investors who do not participate
in the CMA program. The minimum initial purchase for investors who do not
participate in the CMA program is $5,000 and subsequent purchases must be
$1,000 or more. Additionally, such investors do not receive many of the
services available to participants in the CMA program. A CMA account is a
conventional Merrill Lynch securities margin account which is linked to the
Fund and 13 other money market funds (CMA Treasury Fund, CMA Government
Securities Fund, CMA Tax-Exempt Fund, CMA Arizona Municipal Money Fund, CMA
California Municipal Money Fund, CMA Connecticut Municipal Money Fund, CMA
Massachusetts Municipal Money Fund, CMA Michigan Municipal Money Fund, CMA New
Jersey Municipal Money Fund, CMA New York Municipal Money Fund, CMA North
Carolina Municipal Money Fund, CMA Ohio Municipal Money Fund and CMA
Pennsylvania Municipal Money Fund), money market deposit accounts maintained
with depository institutions and to a Visa card/check account ("Visa Account").
A subscriber to the CMA program may automatically invest his free credit
balances periodically in shares of the Fund and earn a return thereon pending
further investment of such funds in other aspects of the CMA program or
utilization through the Visa Account. The shares of the Fund are offered at net
asset value without a sales charge. Merrill Lynch charges CMA customers a
service fee to defray its costs of maintaining the CMA account.
Merrill Lynch has acted as the Distributor for the Fund since the Fund
commenced operations in 1977. On June 2, 1993, the Trustees of the Fund,
including a majority of the non-interested Trustees, approved the continuance
of the Distribution Agreement for an additional year. The Distribution
Agreement is renewable annually and may be terminated upon 60 days' written
notice by either party. The Distribution Agreement obligates Merrill Lynch to
pay certain expenses in connection with the offering of the shares of the Fund.
After the prospectuses, statements of additional information and periodic
reports have been prepared, set in type and mailed to shareholders, Merrill
Lynch pays for the printing and distribution of copies thereof used in
connection with the offering to investors. Merrill Lynch also pays for other
supplementary sales literature and advertising costs.
10
<PAGE>
PORTFOLIO TRANSACTIONS
The Fund invests in short-term securities which are direct obligations of the
U.S. Government and repurchase agreements pertaining to such securities. The
Fund has no obligation to deal with any dealer or group of dealers in the
execution of transactions in portfolio securities. Subject to policy
established by the Trustees and officers of the Fund, the Investment Adviser is
primarily responsible for the Fund's portfolio decisions and the placing of the
Fund's portfolio transactions. In placing orders, it is the policy of the Fund
to obtain the best net results, taking into account the firm's general
execution and operational facilities, the type of transaction involved and
other factors such as the firm's risk in positioning the securities involved.
While the Investment Adviser generally seeks reasonably competitive spreads or
commissions, the Fund will not necessarily be paying the lowest spread or
commission available. The Fund's policy of investing in securities with short
maturities will result in high portfolio turnover.
The securities in which the Fund invests are traded primarily in the over-
the-counter market. Where possible, the Fund will deal directly with the
dealers who make a market in the securities involved except in those
circumstances where better prices and execution are available elsewhere. Such
dealers usually are acting as principal for their own account. U.S. Government
securities are generally traded on a net basis and do not normally involve
either brokerage commissions or transfer taxes. The cost of portfolio
securities transactions of the Fund will primarily consist of dealer spreads
and underwriting commissions.
Under the Investment Company Act of 1940, persons affiliated with the Fund
are prohibited from dealing with the Fund as a principal in the purchase and
sale of securities unless a permissive order allowing such transactions is
obtained from the Securities and Exchange Commission. Since over-the-counter
transactions are usually principal transactions, affiliated persons of the
Fund, including GSI and Merrill Lynch, may not serve as the Fund's dealer in
connection with such transactions except pursuant to the exemptive order
described below. Affiliated persons of the Fund may serve as its broker in
over-the-counter transactions conducted on an agency basis.
The Securities and Exchange Commission has issued an order which permits the
Fund to conduct principal transactions with GSI in U.S. Government and
Government agency securities and with a subsidiary of GSI in certificates of
deposit and other short-term bank money instruments and commercial paper. This
order contains a number of conditions, including conditions designed to insure
that the price to the Fund available from GSI or its subsidiary is equal to or
better than that available from other sources. GSI and its subsidiary have
informed the Fund that they will in no way, at any time, attempt to influence
or control the activities of the Fund or the Investment Adviser in placing such
principal transactions. The permissive order allows GSI or its subsidiary to
receive a dealer spread on any transaction with the Fund no greater than its
customary dealer spread for transactions of the type involved. During the
fiscal year ended March 31, 1993, the Fund engaged in 609 such transactions
aggregating approximately $23.5 billion.
The Trustees of the Fund have considered the possibilities of recapturing for
the benefit of the Fund expenses of possible portfolio transactions, such as
dealer spreads and underwriting commissions, by conducting such portfolio
transactions through affiliated entities, including GSI and Merrill Lynch.
After considering all factors deemed relevant, the Trustees made a
determination not to seek such recapture. The Trustees will reconsider this
matter from time to time.
11
<PAGE>
The Fund does not expect to use one particular dealer, but, subject to
obtaining the best net results as described above, dealers who provide
supplemental investment research to the Investment Adviser may receive orders
for transactions by the Fund. Information so received will be in addition to
and not in lieu of the services required to be performed by the Investment
Adviser under its Investment Advisory Agreement and the expenses of the
Investment Adviser will not necessarily be reduced as a result of the receipt
of such supplemental information. Such supplemental information may be used by
the Investment Adviser in managing other investment companies or advisory
accounts.
ADDITIONAL INFORMATION
The expense of preparation, printing and mailing of the enclosed form of
proxy and accompanying Notice and Proxy Statement will be borne by the Fund.
The Fund will reimburse banks, brokers and others for their reasonable expenses
in forwarding proxy solicitation material to the beneficial owners of the
shares of the Fund.
In order to obtain the necessary quorum at the Meeting (i.e., a majority of
the shares of the Fund entitled to vote at the Meeting, present in person or by
proxy), supplementary solicitation may be made by mail, telephone, telegraph or
personal interview by officers of the Fund. It is anticipated that the cost of
such supplementary solicitation, if any, will be nominal. In addition, the Fund
may retain an outside firm to solicit proxies on behalf of the Trustees of the
Fund. The fees and expenses of any such firm will be borne by the Investment
Adviser.
The proposal to elect the Fund's Trustees (Item 1) and the proposal to ratify
the selection of the Fund's auditors (Item 2) may be approved by majority vote
of the shareholders, present in person or by proxy, at a meeting at which a
quorum is duly constituted. The proposal to amend the fundamental investment
restrictions of the Fund relating to investments in restricted or unmarketable
securities and securities of unseasoned issuers (Item 3) requires the
affirmative vote of the lesser of (i) 67% of the shares represented at a
meeting at which more than 50% of the outstanding shares are represented or
(ii) more than 50% of the outstanding shares.
All shares represented by properly executed proxies, unless such proxies have
previously been revoked, will be voted at the Meeting in accordance with the
directions on the proxies; if no direction is indicated, the shares will be
voted "FOR" the six Trustee nominees, "FOR" the ratification of D&T as
independent auditors for the Fund and "FOR" the proposal to amend the
fundamental investment restrictions of the Fund. Shares will not be voted for
any of the aforementioned proposals, however, unless (i) in the judgment of the
Fund's Board of Trustees, there has been no material adverse change in the
financial condition of FAM between September 24, 1993 and the date of FAM's
most recently completed fiscal quarter and (ii) the Fund shall have received a
certificate of the President or a Senior Vice President of FAM, dated the
Meeting date, attesting that, to the knowledge of such officer, there has been
no material adverse change in the financial condition of FAM unless such
material adverse change has been disclosed to shareholders in additional proxy
solicitation materials.
12
<PAGE>
Broker-dealer firms, including Merrill Lynch, holding Fund shares in "street
name" for the benefit of their customers and clients will request the
instructions of such customers and clients on how to vote their shares on both
Items before the Meeting. The Fund understands that, under the rules of the New
York Stock Exchange, such broker-dealer firms may, without instructions from
their customers and clients, grant authority to the proxies designated to vote
on the election of Trustees (Item 1) and ratification of the selection of
independent auditors (Item 2) if no instructions have been received prior to
the date specified in the broker-dealer firm's request for voting instructions.
Merrill Lynch has advised that it intends to exercise discretion over shares
held in its name for which no instructions are received by voting such shares
in the same proportion as it has voted shares for which it has received
instructions. Broker-dealer firms, including Merrill Lynch, will not be
permitted to grant voting authority without instructions with respect to Item
3. The Fund will include shares held of record by broker-dealers as to which
such authority has been granted in its tabulation of the total number of votes
present for purposes of determining whether the necessary quorum of
shareholders exists. The Fund also will count towards a quorum shares as to
which proxies are returned by record shareholders but which are marked
"abstain" on any Item. Accordingly, a failure to instruct or an abstention will
have no effect with respect to the vote on Item 1 or Item 2; however, such a
failure or abstention with respect to the vote on Item 3 will have the same
effect as a vote against the proposal.
The Declaration of Trust establishing the Fund, dated June 17, 1977, a copy
of which, together with all amendments thereto (the "Declaration"), is on file
in the office of the Secretary of the Commonwealth of Massachusetts, provides
that the name of the Fund refers to the Trustees under the Declaration
collectively as Trustees, but not as individuals or personally; and no Trustee,
shareholder, officer, employee or agent of the Fund shall be held to any
personal liability, nor shall resort be had to their private property for the
satisfaction of any obligation or claim of the Fund but the Trust Estate only
shall be liable.
MEETINGS OF SHAREHOLDERS
The Declaration does not require that the Trust hold an annual meeting of
shareholders. However, the Trust will be required to call special meetings of
shareholders in accordance with the requirements of the Investment Company Act
of 1940 to seek approval of new management and advisory arrangements, of a
material increase in distribution fees or of a change in the fundamental
policies, objectives or restrictions of the Fund. The Trust also would be
required to hold a special shareholders' meeting to elect new Trustees at such
time as less than a majority of the Trustees holding office have been elected
by shareholders. The Declaration provides that a shareholders' meeting may be
called for any reason at the request of 10% of the outstanding shares of the
Trust or by a majority of the Trustees.
By Order of the Board of
Trustees
Robert Harris
Secretary
Dated: January 7, 1994
13
<PAGE>
EXHIBIT A
INDEPENDENT AUDITORS' REPORT
Fund Asset Management, Inc.:
We have audited the accompanying balance sheet of Fund Asset Management, Inc.
(the "Company") as of December 25, 1992. This balance sheet is the
responsibility of the Company's management. Our responsibility is to express an
opinion on the balance sheet based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the balance sheet is free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the balance sheet. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall balance sheet presentation. We
believe that our audit provides a reasonable basis for our opinion.
In our opinion, such balance sheet presents fairly, in all material respects,
the financial position of the Company at December 25, 1992 in conformity with
generally accepted accounting principles.
DELOITTTE & TOUCHE
Parsippany, New Jersey
February 19, 1993
A-1
<PAGE>
FUND ASSET MANAGEMENT, INC.
BALANCE SHEET, DECEMBER 25, 1992
<TABLE>
<CAPTION>
ASSETS
<S> <C>
Cash............................................................. $ 21,356
Receivable from affiliated companies:
Lease transactions.............................................. 46,734,122
Fund management fees receivable.................................. 20,435,376
Investments in leases:
Leveraged leases................................................ 121,508,161
Sales-type lease................................................ 12,831,711
Investments in affiliated investment companies at the lower of
cost or market
(market: $33,307,413)........................................... 32,952,761
Investment in affiliated Limited Partnership..................... 32,293,647
Deferred charges................................................. 586,166
------------
Total Assets..................................................... $267,363,300
============
LIABILITIES AND STOCKHOLDER'S EQUITY
Liabilities:
Payable to Merrill Lynch Investment Management, Inc. and affili-
ates............................................................ $ 54,881,755
Deferred income taxes:
Arising from leveraged leases................................... 111,585,182
Arising from sales-type lease................................... 5,245,721
Other........................................................... 15,892,806
Other............................................................ 6,000
------------
Total liabilities................................................ 187,611,464
------------
Stockholder's Equity:
Common stock, par value $1.00 per share--authorized 25,000
shares;
outstanding 1,000 shares........................................ 1,000
Additional paid-in capital....................................... 684,594,627
Retained earnings................................................ 79,271,257
Proceeds receivable from ML & Co. from sale of subsidiary........ (684,115,048)
------------
Total stockholder's equity....................................... 79,751,836
------------
Total Liabilities and Stockholder's Equity....................... $267,363,300
============
</TABLE>
See notes to balance sheet.
A-2
<PAGE>
FUND ASSET MANAGEMENT, INC.
NOTES TO BALANCE SHEET
DECEMBER 25, 1992
1. Summary of Significant Accounting Policies
Organization--Fund Asset Management, Inc. (the "Company"), a wholly-owned
subsidiary of Merrill Lynch Investment Management, Inc. (the "Parent"), which
is an indirect wholly-owned subsidiary of Merrill Lynch & Co., Inc. ("ML &
Co."), serves as an investment adviser to various registered open-end
investment companies. The Company is also a lessor participant in certain
leveraged and sales-type lease agreements.
Income Taxes--The results of the operations of the Company are included in
the consolidated Federal and combined state and local income tax returns filed
by ML & Co. It is the policy of ML & Co. to allocate the tax associated with
such operating results to each respective subsidiary in a manner which
approximates the separate company method. Effective in the first quarter of
1992, ML & Co. adopted Statement of Financial Accounting Standards No. 109,
"Accounting for Income Taxes" ("SFAS 109") which requires an asset and
liability method in recording income taxes on all transactions that have been
recognized in the financial statements. SFAS 109 provides that deferred taxes
be adjusted to reflect tax rates at which future tax liabilities or assets are
expected to be settled or realized. Previously, the Company accounted for
income taxes in accordance with SFAS 96. The current year's impact on adopting
SFAS 109 was minimal.
2. Transactions with Affiliates
The Company serves as an investment adviser for certain affiliated investment
companies. The Company maintains investments in certain of these investment
companies. Such investments are carried at the lower of cost or market value.
Market value is determined based upon quoted market prices.
During 1992, the Company sold its investment in Merrill Lynch Interfunding,
Inc. an investor in select credit instruments, and Merlease Leasing Corp., a
lessor participant in lease agreements, to an affiliate at book value,
resulting in a receivable from ML & Co. This receivable is reflected as a
reduction to stockholder's equity.
The Company has an arrangement with Merrill Lynch, Pierce, Fenner & Smith
Incorporated ("MLPF&S") which provides that the Company, which receives revenue
as investment adviser to certain investment companies (the "Funds"), reimburse
MLPF&S for certain costs incurred in processing transactions involving shares
of the Funds.
The "Receivable from affiliated companies" arising from lease transactions is
summarized as follows:
<TABLE>
<S> <C>
Monies advanced to fund lease transactions................ $(117,240,047)
Tax benefits allocated to the Company by ML & Co. ........ 150,407,083
Other..................................................... 13,567,086
-------------
Total................................................. $ 46,734,122
=============
</TABLE>
The Company has a 49 percent limited partnership interest in ML Plainsboro
Limited Partnership ("MLP"), whose general partner is an affiliate. Profits and
losses are allocated to the Company based on its percentage interest.
A-3
<PAGE>
FUND ASSET MANAGEMENT, INC.
NOTES TO BALANCE SHEET--CONTINUED
DECEMBER 25, 1992
ML & Co. is the holder of the Company's excess cash, which is available on
demand to meet current liabilities. ML & Co. credits the Company for interest,
at a floating rate approximating ML & Co.'s average borrowing rate, based on
the Company's average daily balances due to/from ML & Co.
3. Investments in Leases
The Company is a lessor participant in leveraged leases. The Company's net
investment in leveraged leases is summarized as follows:
<TABLE>
<S> <C>
Rentals receivable (net of principal and interest on
nonrecourse debt)........................................ $117,309,811
Estimated residual values of leased assets.................. 40,329,738
Less:
Unearned and deferred income.............................. (34,891,388)
Allowance for uncollectibles.............................. (1,240,000)
------------
Investment in leveraged leases.............................. 121,508,161
Less deferred taxes arising from leveraged leases........... (111,585,182)
------------
Net investment in leveraged leases.......................... $ 9,922,979
============
</TABLE>
Pertinent information relating to the Company's investments in leverage
leases is summarized as follows:
<TABLE>
<CAPTION>
ESTIMATED
LENGTH OF RESIDUAL VALUE
LEASE EQUITY OF LEASED
TYPE OF PROPERTY (YEARS) INVESTMENT PROPERTY
---------------- --------- ---------- --------------
<S> <C> <C> <C>
Chemical tanker....................... 20 42.75% 15.0%
Generating plant...................... 24-25 34.06% 15.0%
</TABLE>
Financing beyond the Company's equity interest in the purchase price of the
properties was furnished by outside parties in the form of long-term debt that
provides for no recourse against the Company and is secured by a first lien on
the properties and related rentals. At the end of the respective lease terms,
ownership of the properties remains with the Company.
The Company's investment in the sales-type leases consisted of the following
elements at December 25, 1992:
<TABLE>
<S> <C>
Minimum lease payments receivable............................ $13,612,690
Less--unearned income........................................ (780,979)
-----------
Investment in sales-type financing leases.................... $12,831,711
===========
</TABLE>
At December 25, 1992 minimum lease payments receivable are $9,941, 000 for
1993, $3,672,000 for 1994.
For Federal income tax purposes, the Company receives the investment tax
credit and has the benefit of tax deductions for (i) depreciation on the entire
amount of leased assets and (ii) interest on the outstanding long-term debt.
For state and local tax purposes, the Company also receives the benefits of tax
deductions
A-4
<PAGE>
FUND ASSET MANAGEMENT, INC.
NOTES TO BALANCE SHEET--CONTINUED
DECEMBER 25, 1992
from (i) and (ii) above. Since, during the early years of the leases, those
deductions exceed the Company's lease rental income, substantial excess
deductions are available to be applied against the Company's other income and
the consolidated income of ML & Co. In the later years of these leases, rental
income will exceed the related deductions and taxes will be payable (to the
extent that net deductions arising from additional leveraged lease transactions
do not offset such net lease income). Deferred taxes have been provided to
reflect these temporary differences.
4. Income Taxes
As part of the consolidated group, the Company transfers its current Federal
and state tax liabilities to MLIM. No such amounts were due to MLIM at December
25, 1992.
5. Pension Plan
The Company participates in the ML & Co. Comprehensive Retirement Program
(the "Program"), consisting of the Retirement Accumulation Plan ("RAP") and the
Employee Stock Ownership Plan (the "ESOP"). Under the Program, cash
contributions made by the Company and the ML & Co. stock held by the ESOP will
be allocated quarterly to participant's accounts. Allocations will be based on
years of service, age and eligible compensation. Actuarial data regarding the
Company's Plan participants is not separately available.
6. Postretirement Benefits Other Than Pensions
The Company provides certain health care and life insurance benefits for
retired employees. The Company reserves the right to amend or terminate this
program at any time. Substantially all of the Company's employees become
eligible for these benefits upon attainment of age 55 and completion of 10
years of service. The cost of these benefits is expensed as claims are paid.
In December 1990, the Financial Accounting Standards Board issued Statement
of Financial Accounting Standards No. 106, Employers' Accounting for
Postretirement Benefits Other Than Pensions ("SFAS 106"). SFAS 106, effective
for fiscal year 1993, will require that the Company change its method of
accounting for postretirement health care and life insurance benefits from
expensing these costs on a pay-as-you-go basis to an accrual basis. This change
in accounting will require the recognition of a transition obligation which
represents the actuarial present value of benefits attributed to prior employee
service. The Company has not yet determined what effect the adoption of SFAS
106 will have on its financial condition, results of operations or liquidity.
7. Name Change
Effective December 28, 1991, the Parent, through an amendment of its
certificate of incorporation, changed its name to Merrill Lynch Investment
Management, Inc. ("MLIM"). MLIM will do business under the name "Merrill Lynch
Asset Management".
A-5
<PAGE>
EXHIBIT B
FUND ASSET MANAGEMENT, INC.
BALANCE SHEET
SEPTEMBER 24, 1993 (UNAUDITED)
ASSETS
<TABLE>
<CAPTION>
<S> <C>
Cash............................................................ $ 561,297
Receivable from Affiliated Companies--Lease transactions........ 63,526,920
Investment in Affiliated Limited Partnership.................... 31,483,140
Investment in Leases:
Leveraged leases.............................................. 118,273,550
Sales-type lease.............................................. 8,152,491
Investment in Affiliated Investment Companies--at the lower of
cost or market
(market: $18,285,362).......................................... 16,702,798
Fund Management Fees Receivable................................. 22,057,239
-------------
TOTAL ASSETS.................................................... $ 260,757,435
=============
LIABILITIES AND STOCKHOLDER'S EQUITY
LIABILITIES
Payable to Merrill Lynch Investment Management, Inc. and Affili-
ates........................................................... $ 19,667,011
Other Payables.................................................. 11,400
Deferred Income Taxes:
Arising from leveraged leases................................. 111,401,573
Arising from sales-type lease................................. 2,333,002
Other......................................................... 15,876,124
-------------
Total Liabilities............................................... 149,289,110
-------------
STOCKHOLDER'S EQUITY
Common Stock, par value $1.00 per share--authorized 25,000
shares; outstanding
1,000 shares................................................... 1,000
Additional Paid-in Capital...................................... 684,594,627
Retained Earnings............................................... 110,987,716
Proceeds Receivable from ML&Co. from Sale of Subsidiary......... (684,115,018)
-------------
Total Stockholder's Equity...................................... 111,468,325
-------------
TOTAL LIABILITIES AND STOCKHOLDER'S EQUITY...................... $ 260,757,435
=============
</TABLE>
B-1
<PAGE>
CMA MONEY FUND PROXY
Box 9011, Princeton, New Jersey 08543-9011
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES
The undersigned hereby appoints Arthur Zeikel, Terry K. Glenn and Robert Harris
as proxies, each with the power to appoint his substitute, and hereby authorizes
them to represent and to vote, as designated below, all shares of beneficial
interest of CMA Money Fund (the "Fund") held of record by the undersigned on
December 20, 1993 at a special meeting of shareholders of the Fund to be held on
February 25, 1994 or any adjournment thereof.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED BY THE
UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED FOR
PROPOSALS 1, 2 AND 3.
FOR WITHHOLD To withold authority to vote for
1. Election of Trustees. [_] [_] any individual nominee, write the
name on the following line:
----------------------------------
Nominees: Ronald W. Forbes, Cynthia A. Montgomery, Charles C. Reilly, Kevin
A. Ryan, Richard R. West, Arthur Zeikel
2. Proposal to ratify the selection of Deloitte & Touche as the independent
auditors of the Fund to serve for the current fiscal year.
FOR AGAINST ABSTAIN
[_] [_] [_]
3. Proposal to amend the fundamental investment restrictions of the Fund
relating to investments in restricted or unmarketable securities and
securities of unseasoned issuers.
FOR AGAINST ABSTAIN
[_] [_] [_]
4. In the discretion of such proxies, upon such other business as may properly
come before the meeting or any adjournment thereof.
Please sign exactly as name appears hereon. When shares are held by
joint tenants, both should sign. When signing as attorney or as
executor, administrator, trustee or guardian, please give full title as such.
If a corporation, please sign in full corporate name by president or other
authorized officer. If a partnership, please sign in partnership name by
authorized person.
- ----------------------------------------------------
Signature Date
- ----------------------------------------------------
Signature, if held jointly Date
Please mark boxes in blue or black ink.
<PAGE>
- -------------------------------------------------------------------------------
BY SIGNING AND PROMPTLY RETURNING THE ENCLOSED PROXY YOU MAY SAVE
YOUR FUND THE EXPENSE OF ADDITIONAL SOLICITATION COSTS.
- -------------------------------------------------------------------------------
THE ENCLOSED PROXY CARD HAS BEEN FORWARDED TO YOU BECAUSE YOU
WERE A SHAREHOLDER ON THE RECORD DATE.
IT IS IMPORTANT THAT YOU VOTE AND SIGN THIS PROXY AND RETURN
IT IN THE ENCLOSED ENVELOPE AS SOON AS POSSIBLE.
- -------------------------------------------------------------------------------
