CORPORATE FUND ACCUMULATION PROGRAM INC, DEF 14A, 2000-05-26

CORPORATE FUND ACCUMULATION PROGRAM INC
DEF 14A, 2000-05-26

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<PAGE>

As filed with the Securities and Exchange Commission on May 26, 2000

SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE

SECURITIES EXCHANGE ACT OF 1934 (AMENDMENT NO. 1)

Filed by the Registrants [X] Check the appropriate box:
Filed by a Party other than the Registrant [_]

[_]Preliminary Proxy Statement

[X]Definitive Proxy Statement
[_]Definitive Additional Materials
[_Soliciting]Material
Pursuant to Rule 14a-11(c)
or Rule 14a-12

GLOBAL FINANCIAL SERVICES MASTER TRUST

MASTER INTERNET STRATEGIES TRUST
MERCURY GLOBAL HOLDINGS, INC.
MERCURY INTERNET STRATEGIES FUND, INC.
MERRILL LYNCH AMERICAS INCOME FUND, INC.
MERRILL LYNCH CORPORATE BOND FUND, INC.
MERRILL LYNCH DEVELOPING CAPITAL MARKETS FUND, INC.
MERRILL LYNCH DRAGON FUND, INC.
MERRILL LYNCH EUROFUND
MERRILL LYNCH GLOBAL ALLOCATION FUND, INC.
MERRILL LYNCH GLOBAL BOND FUND FOR INVESTMENT AND RETIREMENT
MERRILL LYNCH GLOBAL FINANCIAL SERVICES FUND, INC.
MERRILL LYNCH GLOBAL SMALLCAP FUND, INC.
MERRILL LYNCH GLOBAL TECHNOLOGY FUND, INC.
MERRILL LYNCH GLOBAL UTILITY FUND, INC.
MERRILL LYNCH GLOBAL VALUE FUND, INC.
MERRILL LYNCH HEALTHCARE FUND, INC.
MERRILL LYNCH HIGH INCOME MUNICIPAL BOND FUND, INC.
MERRILL LYNCH INTERNATIONAL EQUITY FUND
MERRILL LYNCH INTERNET STRATEGIES FUND, INC.
MERRILL LYNCH LATIN AMERICA FUND, INC.
MERRILL LYNCH MUNICIPAL BOND FUND, INC.
MERRILL LYNCH MUNICIPAL INTERMEDIATE TERM FUND
OF MERRILL LYNCH MUNICIPAL SERIES TRUST
MERRILL LYNCH MUNICIPAL STRATEGY FUND, INC.
MERRILL LYNCH PACIFIC FUND, INC.
MERRILL LYNCH SENIOR FLOATING RATE FUND, INC.
MERRILL LYNCH SENIOR FLOATING RATE FUND II, INC.
MERRILL LYNCH SHORT-TERM GLOBAL INCOME FUND, INC.
MERRILL LYNCH STRATEGIC DIVIDEND FUND
MERRILL LYNCH U.S. HIGH YIELD FUND, INC.
THE CORPORATE FUND ACCUMULATION PROGRAM, INC.
THE MUNICIPAL FUND ACCUMULATION PROGRAM, INC.

------------------------------------------
(Name of Registrants as Specified In Their Charters)

SAME AS ABOVE
------------------------------------------
(Name of Person(s) Filing Proxy Statement)
<PAGE>

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:

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

(2) Aggregate number of securities to which transaction applies:

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

(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:1 (Set forth the amount on which
the filing fee is calculated and state how it was determined.)

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

(4) Proposed maximum aggregate value of transaction:

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

[_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:

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

(2) Form, Schedule or Registration Statement No.:

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

(3) Filing Party:

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

(4) Date Filed:

2
<PAGE>

GLOBAL FINANCIAL SERVICES MASTER TRUST

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

NOTICE OF 2000 ANNUAL MEETINGS OF SHAREHOLDERS

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

TO BE HELD ON JULY 10, 2000
<PAGE>

To the Shareholders of:

Global Financial Services Master Trust

Master Internet Strategies Trust
Mercury Global Holdings, Inc.
Mercury Internet Strategies Fund, Inc.
Merrill Lynch Americas Income Fund, Inc.
Merrill Lynch Corporate Bond Fund, Inc.
Merrill Lynch Developing Capital Markets Fund, Inc.
Merrill Lynch Dragon Fund, Inc.
Merrill Lynch Eurofund
Merrill Lynch Global Allocation Fund, Inc.
Merrill Lynch Global Bond Fund For Investment and Retirement
Merrill Lynch Global Financial Services Fund, Inc.
Merrill Lynch Global Smallcap Fund, Inc.
Merrill Lynch Global Technology Fund, Inc.
Merrill Lynch Global Utility Fund, Inc.
Merrill Lynch Global Value Fund, Inc.
Merrill Lynch Healthcare Fund, Inc.
Merrill Lynch High Income Municipal Bond Fund, Inc.
Merrill Lynch International Equity Fund
Merrill Lynch Internet Strategies Fund, Inc.
Merrill Lynch Latin America Fund, Inc.
Merrill Lynch Municipal Bond Fund, Inc.
Merrill Lynch Municipal Intermediate Term Fund
of Merrill Lynch Municipal Series Trust
Merrill Lynch Municipal Strategy Fund, Inc.
Merrill Lynch Pacific Fund, Inc.
Merrill Lynch Senior Floating Rate Fund, Inc.
Merrill Lynch Senior Floating Rate Fund II, Inc.
Merrill Lynch Short-Term Global Income Fund, Inc.
Merrill Lynch Strategic Dividend Fund
Merrill Lynch U.S. High Yield Fund, Inc.
The Corporate Fund Accumulation Program, Inc.
The Municipal Fund Accumulation Program, Inc.

NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders (each a
"Meeting" and collectively, the "Meetings") of each of the above-listed
investment companies (each a "Fund" and collectively, the "Funds") will be held
at the offices of Merrill Lynch Asset Management, L.P., 800 Scudders Mill Road,
Plainsboro, New Jersey, on Monday, July 10, 2000 at the time specified in
Exhibit A to this Combined Proxy Statement for the following purposes:

(1) To elect the Board Members (which term as used herein refers to
both Directors and Trustees, as applicable) of each Fund until
their successors have been duly elected and qualified or until
their earlier resignation or removal;

The shareholders of Mercury Internet Strategies Fund, Inc. ("Mercury
Internet") and Merrill Lynch Internet Strategies Fund, Inc.
("Merrill Lynch Internet" and, together with Mercury Internet, the
"Internet Funds") will also vote in connection with the election of
the Board Members of Master Internet Strategies Trust (the "Internet
Trust"). The shareholders of Merrill Lynch Global Financial Services
Fund, Inc. ("Global Financial") will also vote in connection with
the election of the Board Members of Global Financial Services
Master Trust (the "Global Financial Trust").

2
<PAGE>

(2) To consider and act upon a proposal to ratify the selection of
independent auditors of each Fund for its current fiscal year;

The shareholders of the Internet Funds and Global Financial will
also vote in connection with the ratification of the selection of
independent auditors of the Internet Trust and the Global Financial
Trust, respectively.

(3) For all Funds except the Internet Funds, the Internet Trust,
Global Financial and the Global Financial Trust: To consider and
act upon a proposal to amend the Fund's charter to permit the
Board of Directors to reorganize the Fund into a master/feeder
structure;

Items 4 through 9 are for consideration only by the shareholders of
the Fund or Funds named in the specific proposal:

(4) To consider and act upon the proposed Investment Advisory and
Administration Agreements for Merrill Lynch Senior Floating Rate
Fund II, Inc., Merrill Lynch Strategic Dividend Fund and Merrill
Lynch U.S. High Yield Fund, Inc;

(5) To consider and act upon the proposal to amend the investment
objective and policies of Merrill Lynch Strategic Dividend Fund;

(6) To consider and act upon the proposal to amend the investment
objective of Merrill Lynch Americas Income Fund, Inc.;

(7) To consider and act upon the proposal to amend an investment
policy of Merrill Lynch Americas Income Fund, Inc.;

(8) To consider and act upon the proposal to amend an investment
policy of Merrill Lynch Healthcare Fund, Inc.;

(9) To consider and act upon the proposal to amend the investment
objective and policies of Merrill Lynch Developing Capital Markets
Fund, Inc.; and

(10) To transact such other business as may properly come before the
Meeting or any adjournment thereof.

The Board of Directors of each Fund has fixed the close of business on
May 12, 2000 as the record date for the determination of shareholders entitled
to notice of and to vote at the Meeting or any adjournment thereof.

Certain Funds are organized as Massachusetts business trusts* and will be
referred to in this paragraph individually as a "trust" and collectively as the
"trusts." As described in more detail below, shareholders of a trust may have
statutory appraisal rights for their shares if Item 3 is approved by the
trust's shareholders at the applicable Meeting and the trust reorganizes into a
master/feeder structure. In order for a shareholder of such a trust to exercise
his or her statutory appraisal rights, the shareholder must: (1) file with the
trust before the taking of the vote on Item 3 at the applicable Meeting a
written objection to the proposed master/feeder reorganization stating that he
or she intends to demand payment for his or her shares if the master/feeder
reorganization takes place, (2) not vote in favor of Item 3 at the applicable
Meeting and (3) demand payment for his or her shares and an appraisal of the
value thereof in writing from the trust within twenty days after the date of
mailing to the shareholder of notice from the trust that the master/feeder
reorganization has become effective.
- --------

*Merrill Lynch EuroFund

Merrill Lynch Global Bond Fund for Investment and Retirement

Merrill Lynch International Equity Fund

Merrill Lynch Municipal Intermediate Term Fund of Merrill Lynch Municipal
Series Trust

Merrill Lynch Strategic Dividend Fund

3
<PAGE>

Any trust effecting a reorganization and any such shareholders shall in
such cases have the rights and duties and shall follow the procedure set forth
in sections 88 to 98 inclusive, of chapter 156B of the General Laws of
Massachusetts. In the event that any shareholder elects to exercise his or her
statutory appraisal rights, it is the present intention of each trust to
petition a court of competent jurisdiction to determine whether such right of
appraisal has been superseded by the provisions of Rule 22c-1 under the
Investment Company Act of 1940, as amended, which generally requires mutual
funds to redeem their shares at prices based upon the then current net asset
value of such shares.

A complete list of the shareholders of each Fund entitled to vote at the
applicable Meeting will be available and open to the examination of any
shareholder of that Fund for any purpose germane to that Meeting during
ordinary business hours from and after June 26, 2000, at the office of each
Fund, 800 Scudders Mill Road, Plainsboro, New Jersey. You are cordially invited
to attend the Meeting for any Fund in which you may vote shares. 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 this purpose. If you have been provided with the opportunity on
your proxy card or voting instruction form to provide voting instructions via
telephone or the Internet, please take advantage of these prompt and efficient
voting options. The enclosed proxy is being solicited on behalf of the Board of
Directors of each Fund.

If you have any questions regarding the enclosed proxy material or need
assistance in voting your shares, please contact our proxy solicitor,
Shareholder Communications Corporation, at (800) 371-9115.

By Order of the Boards of Directors

Susan B. Baker

Secretary of Master Internet Strategies
Trust, Mercury Internet Strategies Fund,
Inc., Merrill Lynch Developing Capital
Markets Fund, Inc., Merrill Lynch Global
SmallCap Fund, Inc., Merrill Lynch
Internet Strategies Fund, Inc. and
Merrill Lynch Latin America Fund, Inc.

Phillip S. Gillespie
Secretary of Merrill Lynch Dragon Fund,
Inc. and Merrill Lynch Global Allocation
Fund, Inc.

Robert Harris
Secretary of Mercury Global Holdings,
Inc., Merrill Lynch Healthcare Fund, Inc.
and Merrill Lynch International Equity
Fund

Bradley J. Lucido
Secretary of Merrill Lynch Senior
Floating Rate Fund, Inc. and Merrill
Lynch Senior Floating Rate Fund II, Inc.

Lori Martin
Secretary of Merrill Lynch Global Value
Fund, Inc. and Merrill Lynch Pacific
Fund, Inc.

4
<PAGE>

Allan J. Oster
Secretary of Merrill Lynch Americas
Income Fund, Inc. and Merrill Lynch
Short-Term Global Income Fund, Inc.

Robert E. Putney, III
Secretary of Merrill Lynch EuroFund and
Merrill Lynch Global Technology Fund,
Inc.

Ira P. Shapiro

Secretary of Global Financial Services
Master Trust, Merrill Lynch Global Bond
Fund for Investment and Retirement,
Merrill Lynch Global Financial Services
Fund, Inc., Merrill Lynch Global
Utility Fund, Inc., Merrill Lynch
Strategic Dividend Fund and The
Corporate Fund Accumulation Program,
Inc.

William E. Zitelli, Jr.
Secretary of Merrill Lynch Corporate
Bond Fund, Inc., Merrill Lynch High
Income Municipal Bond Fund, Inc.,
Merrill Lynch Municipal Bond Fund,
Inc., Merrill Lynch Municipal
Intermediate Term Fund of Merrill Lynch
Municipal Series Trust, Merrill Lynch
Municipal Strategy Fund, Inc., Merrill
Lynch U.S. High Yield Fund, Inc. and
The Municipal Fund Accumulation
Program, Inc.

Plainsboro, New Jersey

Dated: May 26, 2000

5
<PAGE>

COMBINED PROXY STATEMENT

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

GLOBAL FINANCIAL SERVICES MASTER TRUST

MASTER INTERNET STRATEGIES TRUST

MERCURY GLOBAL HOLDINGS, INC.

MERCURY INTERNET STRATEGIES FUND, INC.

MERRILL LYNCH AMERICAS INCOME FUND, INC.

MERRILL LYNCH CORPORATE BOND FUND, INC.

MERRILL LYNCH DEVELOPING CAPITAL MARKETS FUND, INC.

MERRILL LYNCH DRAGON FUND, INC.

MERRILL LYNCH EUROFUND

MERRILL LYNCH GLOBAL ALLOCATION FUND, INC.

MERRILL LYNCH GLOBAL BOND FUND FOR INVESTMENT AND RETIREMENT

MERRILL LYNCH GLOBAL FINANCIAL SERVICES FUND, INC.

MERRILL LYNCH GLOBAL SMALLCAP FUND, INC.

MERRILL LYNCH GLOBAL TECHNOLOGY FUND, INC.

MERRILL LYNCH GLOBAL UTILITY FUND, INC.

MERRILL LYNCH GLOBAL VALUE FUND, INC.

MERRILL LYNCH HEALTHCARE FUND, INC.

MERRILL LYNCH HIGH INCOME MUNICIPAL BOND FUND, INC.

MERRILL LYNCH INTERNATIONAL EQUITY FUND

MERRILL LYNCH INTERNET STRATEGIES FUND, INC.

MERRILL LYNCH LATIN AMERICA FUND, INC.

MERRILL LYNCH MUNICIPAL BOND FUND, INC.

MERRILL LYNCH MUNICIPAL INTERMEDIATE TERM FUND
OF MERRILL LYNCH MUNICIPAL SERIES TRUST

MERRILL LYNCH MUNICIPAL STRATEGY FUND, INC.

MERRILL LYNCH PACIFIC FUND, INC.

MERRILL LYNCH SENIOR FLOATING RATE FUND, INC.

MERRILL LYNCH SENIOR FLOATING RATE FUND II, INC.

MERRILL LYNCH SHORT-TERM GLOBAL INCOME FUND, INC.

MERRILL LYNCH STRATEGIC DIVIDEND FUND

MERRILL LYNCH U.S. HIGH YIELD FUND, INC.

THE CORPORATE FUND ACCUMULATION PROGRAM, INC.

THE MUNICIPAL FUND ACCUMULATION PROGRAM, INC.
P.O. Box 9011
Princeton, New Jersey 08543-9011

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

2000 ANNUAL MEETINGS OF SHAREHOLDERS

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

July 10, 2000
<PAGE>

TABLE OF CONTENTS

<TABLE>
<CAPTION>
Page
----
<S> <C>
Introduction............................................................ 3
Item 1: Election of Board Members ...................................... 7
Item 2: Selection of Independent Auditors............................... 11
Item 3: Approval or Disapproval of Charter Amendment to Permit
Reorganization Into a Master/Feeder Structure................... 13
Item 4: Approval or Disapproval of the Proposed Investment Advisory and
Administration Agreements....................................... 14
Item 5: Proposal to Amend the Investment Objective and Policies of
Merrill Lynch Strategic Dividend Fund........................... 23
Item 6: Proposal to Amend the Investment Objective of Merrill Lynch
Americas Income Fund, Inc. ..................................... 24
Item 7: Proposal to Amend an Investment Policy of Merrill Lynch Americas
Income Fund, Inc. .............................................. 25
Item 8: Proposal to Amend an Investment Policy of Merrill Lynch
Healthcare Fund, Inc. .......................................... 26
Item 9: Proposal to Amend the Investment Objective and Policies of
Merrill Lynch Developing Capital Markets Fund, Inc. ............ 27
Additional Information.................................................. 28
Exhibit A--Information About the Funds.................................. A-1
Exhibit B--Proposed Charter Amendments.................................. B-1
Open-End Funds--Maryland Corporations
Open-End Funds--Massachusetts Business Trusts
Closed-End Funds--Maryland Corporations
Exhibit C--Form of Proposed Investment Advisory and Administration
Agreements for Merrill Lynch Senior Floating Rate Fund II, Inc. ....... C-1
Exhibit D--Form of Proposed Investment Advisory and Administration
Agreements for Merrill Lynch Strategic Dividend Fund................... D-1
Exhibit E--Form of Proposed Investment Advisory and Administration
Agreements for Merrill Lynch U.S. High Yield Fund, Inc. ............... E-1
</TABLE>

2
<PAGE>

INTRODUCTION

This Proxy Statement is furnished in connection with the solicitation of
proxies on behalf of the Boards of Directors (which term as used herein refers
to both Directors and Trustees, as applicable) of the above-listed Funds (each
a "Fund" and collectively, the "Funds") to be voted at the 2000 Annual Meetings
of Shareholders of the Funds (each a "Meeting" and collectively, the
"Meetings"), to be held at the offices of Merrill Lynch Asset Management, L.P.
("MLAM"), 800 Scudders Mill Road, Plainsboro, New Jersey, on Monday, July 10,
2000 at the times specified in Exhibit A hereto. The approximate mailing date
of this Combined Proxy Statement is May 30, 2000.

Each Fund is organized either as a Maryland corporation, a Massachusetts
business trust or a Delaware business trust. In each jurisdiction, nomenclature
varies. For ease and clarity of presentation, shares of common stock of a Fund,
shares of beneficial interest of a Fund or beneficial interests in a Fund are
referred to as "shares" or "Common Stock," holders of shares or Common Stock
are referred to as "shareholders," the Board of Directors or the Board of
Trustees of each of the Funds is referred to as the "Board," the directors or
trustees of each Fund are referred to as "Board Members," the investment
adviser or manager of each Fund is referred to as the "Investment Adviser" and
each Fund's Articles of Incorporation or Declaration of Trust is referred to as
its "charter." Please see Exhibit A to this Combined Proxy Statement for
certain information relating to the Funds.

All properly executed proxies received prior to a Fund's 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:

1) "FOR" the election of the Board Member nominees of each Fund;

The shareholders of the Internet Funds and Global Financial will
also vote in connection with the election of the Board Members of the
Internet Trust and the Global Financial Trust, respectively.

2) "FOR" the ratification of the selection of Deloitte & Touche LLP
("D&T"), as independent auditors;

The shareholders of the Internet Funds and Global Financial will
also vote in connection with the ratification of the selection of the
independent auditors of the Internet Trust and the Global Financial
Trust, respectively.

With respect to proxies submitted by the shareholders of each Fund except
the Internet Funds, the Internet Trust, Global Financial and the Global
Financial Trust:

3) "FOR" the approval of a charter amendment permitting the Board to
convert the Fund to a master/feeder structure;

With respect to Proposals 4, 5, 6, 7, 8 and 9, only proxies submitted by
the shareholders of the Fund or Funds named in the proposal will, unless
instructions to the contrary are marked, be voted:

4) "FOR" the approval of the Proposed Investment Advisory and
Administration Agreements for Merrill Lynch Senior Floating Rate Fund
II, Inc., Merrill Lynch Strategic Dividend Fund and Merrill Lynch
U.S. High Yield Fund, Inc.;

3
<PAGE>

5) "FOR" the proposal to amend the investment objective and policies of
Merrill Lynch Strategic Dividend Fund;

6) "FOR" the proposal to amend the investment objective of Merrill Lynch
Americas Income Fund, Inc.;

7) "FOR" the proposal to amend an investment policy of Merrill Lynch
Americas Income Fund, Inc.;

8) "FOR" the proposal to amend an investment policy of Merrill Lynch
Healthcare Fund, Inc.; and

9) "FOR" the proposal to amend the investment objective and policies of
Merrill Lynch Developing Capital Markets Fund, Inc.

Any proxy may be revoked at any time prior to the exercise thereof by
giving written notice to the Secretary of the applicable Fund at that Fund's
address indicated above or by voting in person at the Meeting.

The Board of each Fund has fixed the close of business on May 12, 2000 as
the record date (the "Record Date") for the determination of shareholders
entitled to notice of and to vote at the Meetings 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 the Record
Date, each Fund had outstanding the number of shares of Common Stock and, in
the case of Merrill Lynch Municipal Strategy Fund, Inc., the number of shares
of Common Stock and shares of auction market preferred stock ("AMPS"), as
indicated in Exhibit A hereto. Except as set forth in Exhibit A to this
Combined Proxy Statement, to the knowledge of each Fund, as of the Record Date,
no person is the beneficial owner of more than five percent of its outstanding
Common Stock or, in the case of Merrill Lynch Municipal Strategy Fund, Inc., of
its Common Stock or AMPS, at such date.

The Board Members of the applicable Fund know of no business other than
that mentioned in Items 1, 2, 3, 4, 5, 6, 7, 8 and 9 of the Notice of Meeting
that will be presented for consideration at the Meeting. If any other matter is
properly presented at the Meeting or any adjournment thereof, it is the
intention of the persons named on the enclosed proxy card to vote in accordance
with their best judgment.

4
<PAGE>

The shareholders solicited and entitled to vote on Items 1, 2 and 3 are
outlined in the following chart.

<TABLE>
<CAPTION>
Item 3.
Approval of a
Charter
Amendment to
Item 1. Permit the
----------------------- Item 2. Reorganization
Election of Ratification of of the Fund into
AMPS Election of Selection of a Master/
Board Board Independent Feeder
Fund Members Members Auditors Structure
- ---- ----------- ----------- --------------- ----------------
<S> <C> <C> <C> <C>
Global Financial
Services Master
Trust.................. No Yes Yes No
Master Internet
Strategies Trust....... No Yes Yes No
Mercury Global Holdings,
Inc.................... No Yes Yes Yes
Mercury Internet
Strategies Fund, Inc... No Yes* Yes* No
Merrill Lynch Americas
Income Fund, Inc....... No Yes Yes Yes
Merrill Lynch Corporate
Bond Fund, Inc......... No Yes Yes Yes
Merrill Lynch Developing
Capital Markets Fund,
Inc.................... No Yes Yes Yes
Merrill Lynch Dragon
Fund, Inc.............. No Yes Yes Yes
Merrill Lynch EuroFund.. No Yes Yes Yes
Merrill Lynch Global
Allocation Fund, Inc... No Yes Yes Yes
Merrill Lynch Global
Bond Fund for
Investment and
Retirement............. No Yes Yes Yes
Merrill Lynch Global
Financial Services
Fund, Inc.............. No Yes** Yes** No
Merrill Lynch Global
SmallCap Fund, Inc..... No Yes Yes Yes
Merrill Lynch Global
Technology Fund, Inc... No Yes Yes Yes
Merrill Lynch Global
Utility Fund, Inc...... No Yes Yes Yes
Merrill Lynch Global
Value Fund, Inc........ No Yes Yes Yes
Merrill Lynch Healthcare
Fund, Inc.............. No Yes Yes Yes
Merrill Lynch High
Income Municipal Bond
Fund, Inc.............. No Yes Yes Yes
Merrill Lynch
International Equity
Fund................... No Yes Yes Yes
Merrill Lynch Internet
Strategies Fund, Inc... No Yes* Yes* No
Merrill Lynch Latin
America Fund, Inc...... No Yes Yes Yes
Merrill Lynch Municipal
Bond Fund, Inc......... No Yes Yes Yes
Merrill Lynch Municipal
Intermediate Term Fund
of Merrill Lynch
Municipal Series
Trust.................. No Yes Yes Yes
Merrill Lynch Municipal
Strategy Fund, Inc..... Yes Yes Yes Yes
Merrill Lynch Pacific
Fund, Inc.............. No Yes Yes Yes
Merrill Lynch Senior
Floating Rate Fund,
Inc.................... No Yes Yes Yes
Merrill Lynch Senior
Floating Rate Fund II,
Inc.................... No Yes Yes Yes
Merrill Lynch Short-Term
Global Income Fund,
Inc.................... No Yes Yes Yes
Merrill Lynch Strategic
Dividend Fund.......... No Yes Yes Yes
Merrill Lynch U.S. High
Yield Fund, Inc.
(formerly Merrill Lynch
Corporate High Yield
Fund, Inc.)............ No Yes Yes Yes
The Corporate Fund
Accumulation Program,
Inc.................... No Yes Yes Yes
The Municipal Fund
Accumulation Program,
Inc.................... No Yes Yes Yes
</TABLE>
- -------

* The shareholders of the Internet Funds will also vote in connection with
the election of the Board Members and the ratification of the selection of
the independent auditors of the Internet Trust.

** The shareholders of Global Financial will also vote in connection with the
election of Board Members and the ratification of the selection of the
independent auditors of the Global Financial Trust.

5
<PAGE>

The shareholders solicited and entitled to vote on Items 4, 5, 6, 7, 8
and 9 are the shareholders of the Fund or Funds named in that Item.

<TABLE>
<C> <S>
Item 4. Merrill Lynch Senior Floating Rate Fund II, Inc., Merrill Lynch
Strategic Dividend Fund and Merrill Lynch U.S. High Yield Fund, Inc.
Item 5. Merrill Lynch Strategic Dividend Fund
Item 6. Merrill Lynch Americas Income Fund, Inc.
Item 7. Merrill Lynch Americas Income Fund, Inc.
Item 8. Merrill Lynch Healthcare Fund, Inc.
Item 9. Merrill Lynch Developing Capital Markets Fund, Inc.
</TABLE>

6
<PAGE>

ITEM 1: ELECTION OF BOARD MEMBERS

At the Meetings, the Board Member nominees of each Fund will be elected
to serve until their successors are elected and qualified or until their
earlier resignation or removal.

It is intended that all properly executed proxies will be voted (unless
such authority has been withheld in the proxy or properly revoked) "FOR" the
applicable nominees listed below. The nominees to be elected by each Fund
appear in the following chart. Certain biographical and other information
relating to the nominees appears after the chart.

<TABLE>
<CAPTION>
Fund Nominees
---- -----------------------------
<C> <S>
Merrill Lynch Municipal Strategy Fund, Inc... To be Elected by Holders of
AMPS, Voting Separately as a
Class:
Ronald W. Forbes
Charles C. Reilly
To be Elected by Holders of
Common Stock and AMPS, Voting
Together as a Single Class:
Terry K. Glenn
Cynthia A. Montgomery
Kevin A. Ryan
Roscoe S. Suddarth
Richard R. West
Arthur Zeikel
Edward D. Zinbarg
To be Elected by Holders of
All other Funds(1)........................... Common Stock:
Ronald W. Forbes
Terry K. Glenn
Cynthia A. Montgomery
Charles C. Reilly
Kevin A. Ryan
Roscoe S. Suddarth
Richard R. West
Arthur Zeikel
Edward D. Zinbarg
</TABLE>
- --------

(1) The shareholders of the Internet Funds and Global Financial will also vote
in connection with the election of the Board Members of the Internet Trust
and the Global Financial Trust, respectively.

7
<PAGE>

<TABLE>
<CAPTION>
Principal Occupation During Past
Name and Address Age Five Years and Public Directorships (1)
---------------- --- ---------------------------------------
<C> <C> <S>
Ronald W. Forbes(1)(2)............ 59 Professor of Finance, School of
1400 Washington Avenue Business, State University of New York
Albany, New York 12222 at Albany, since 1989; International
Consultant, Urban Institute,
Washington, D.C. from 1995 to 1999.
Terry K. Glenn(1)*................ 59 Executive Vice President of Fund Asset
P. O. Box 9011 Management, L.P. ("FAM") and Merrill
Princeton, New Jersey 08543-9011 Lynch Asset Management, L.P. ("MLAM")
(the terms FAM and MLAM, as used
herein, include their corporate
predecessors) since 1983; Executive
Vice President and Director of
Princeton Services, Inc. ("Princeton
Services") since 1993; President of
Princeton Funds Distributor, Inc.
("PFD") since 1986 and Director thereof
since 1991; President of Princeton
Administrators, L.P. since 1988.
Cynthia A. Montgomery(1)(2)....... 47 Professor, Harvard Business School
Harvard Business School since 1989; Associate Professor, J.L.
Soldiers Field Road Kellogg Graduate School of Management,
Boston, Massachusetts 02163 Northwestern University from 1985 to
1989; Assistant Professor, Graduate
School of Business Administration, The
University of Michigan from 1979 to
1985; Director, UNUM Provident
Corporation since 1990 and Director,
Newell Rubbermaid since 1995.
Charles C. Reilly(1)(2)........... 68 Self-employed financial consultant
9 Hampton Harbor Road since 1990; President and Chief
Hampton Bays, New York 11946 Investment Officer of Verus Capital,
Inc. from 1979 to 1990; Senior Vice
President of Arnhold and S.
Bleichroeder, Inc. from 1973 to 1990;
Adjunct Professor, Columbia University
Graduate School of Business from 1990
to 1991; Adjunct Professor, Wharton
School, The University of Pennsylvania
from 1989 to 1990; Partner, Small
Cities Cable Television from 1986 to
1997.
Kevin A. Ryan(1)(2)............... 67 Founder/Director Emeritus of The Boston
127 Commonwealth Avenue University Center for the Advancement
Chestnut Hill, of Ethics and Character and Director
Massachusetts 02167 thereof until 1999; Professor until
1999 and currently Professor Emeritus
of Education at Boston University since
1982; formerly taught on the faculties
of The University of Chicago, Stanford
University and Ohio State University.
Roscoe S. Suddarth(1)(2).......... 65 President, Middle East Institute, since
1761 N Street, N.W. 1995; Foreign Service Officer, United
Washington, D.C. 20036 States Foreign Service, from 1961 to
1995; Career Minister, from 1989 to
1995; U.S. Ambassador to the Hashemite
Kingdom of Jordan, from 1987 to 1990;
Deputy Inspector General, U.S.
Department of State, from 1991 to 1994.
Richard R. West(1)(2)............. 62 Professor of Finance since 1984, Dean
Box 604 from 1984 to 1993, and currently Dean
Genoa, Nevada 89411 Emeritus of New York University,
Leonard N. Stern School of Business
Administration; Director of Bowne &
Co., Inc., Vornado Realty Trust, Inc.,
Vornado Operating Company and
Alexander's Inc.
Arthur Zeikel(1)*................. 67 Chairman of FAM and MLAM from 1997 to
300 Woodland Avenue 1999; President of FAM and MLAM from
Westfield, New Jersey 07090 1977 to 1997; Chairman of Princeton
Services from 1997 to 1999, Director
thereof from 1993 to 1999 and President
from 1993 to 1997; Executive Vice
President of Merrill Lynch & Co., Inc.
("ML & Co.") from 1990 to 1999.
</TABLE>

8
<PAGE>

<TABLE>
<CAPTION>
Principal Occupation During Past
Name and Address Age Five Years and Public Directorships (1)
---------------- --- ---------------------------------------
<C> <C> <S>
Edward D. Zinbarg(1)(2)........... 65 Self-employed financial consultant
5 Hardwell Road since 1994; Executive Vice President of
Short Hills, New Jersey The Prudential Insurance Company of
07078-2117 America from 1988 to 1994; former
Director of Prudential Reinsurance
Company and former Trustee of the
Prudential Foundation.
</TABLE>

- --------
(1) Each of the nominees is a director, trustee or member of an advisory board
of one or more additional investment companies for which FAM, MLAM or their
affiliates act as investment adviser. See "Compensation of Board Members"
in Exhibit A hereto.
(2) Member of the Audit and Nominating Committee of each Fund on which he or
she currently serves as a Board Member and will serve on the Audit and
Nominating of each Fund to which he or she is elected as a Board Member.
Please see Exhibit A hereto.
* Interested person, as defined in the Investment Company Act of 1940, as
amended, of each of the Funds.

The Board of each Fund knows of no reason why any of the nominees listed
above 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
Board may recommend.

Committee and Board Meetings. The Board of each Fund has a standing Audit
and Nominating Committee (the "Committee"), which consists of Board Members who
are not "interested persons" of the Fund within the meaning of the Investment
Company Act of 1940, as amended (the "Investment Company Act"). The principal
purpose of the Committee is to review the scope of the annual audit conducted
by the Fund's independent auditors and the evaluation by such auditors of the
accounting procedures followed by the Fund. The Committee also reviews and
nominates candidates to serve as non-interested Board Members. The Committee
generally will not consider nominees recommended by shareholders of a Fund. The
non-interested Board Members have retained independent legal counsel to assist
them in connection with these duties.

During each Fund's most recently completed fiscal year, each of the Board
Members then in office attended at least 75% of the aggregate of the total
number of meetings of the Board of that Fund held during the fiscal year and,
if a member, of the total number of meetings of the Committee held during the
period for which he or she served. See Exhibit A to this Combined Proxy
Statement for further information about Committee and Board meetings.

Applicable only to Merrill Lynch Senior Floating Rate Fund, Inc., Merrill
Lynch Senior Floating Rate Fund II, Inc., Merrill Lynch High Income Municipal
Bond Fund, Inc. and Merrill Lynch Municipal Strategy Fund, Inc. (collectively
referred to herein as the "Closed-End Funds"). Compliance with Section 16(a) of
the Securities Exchange Act of 1934. Section 16(a) of the Securities Exchange
Act of 1934, as amended (the "Exchange Act"), requires the officers and Board
Members of each Closed-End Fund and persons who own more than ten percent of a
registered class of the Closed-End Fund's equity securities to file reports of
ownership and changes in ownership on Forms 3, 4 and 5 with the Securities and
Exchange Commission (the "SEC"). Officers, Board Members and greater than ten
percent shareholders are required by SEC regulations to furnish the Closed-End
Fund with copies of all Forms 3, 4 and 5 they file.

Based solely on each Closed-End Fund's review of the copies of such
forms, and amendments thereto, furnished to it during or with respect to its
most recent fiscal year, and written representations from reporting persons
that they were not required to file Form 5 with respect to the most recent
fiscal year, each Closed-End Fund believes that all of its officers, Board
Members, greater than ten percent beneficial owners and other persons subject
to Section 16 of the Exchange Act because of the requirements of Section 30 of
the Investment Company Act (i.e., any advisory board member, investment adviser
or affiliated person of the Closed-End Fund's Investment Adviser) have complied
with all filing requirements applicable to them with respect to

9
<PAGE>

transactions during the Closed-End Fund's most recent fiscal year, except that
Ronald W. Forbes inadvertently made a late Form 3 filing relating to his
initial statement of beneficial ownership with respect to Merrill Lynch Senior
Floating Rate Fund II, Inc.

Interested Persons. Each Fund considers Mr. Glenn and Mr. Zeikel to be
"interested persons" of the Fund within the meaning of Section 2(a)(19) of the
Investment Company Act because of the positions each holds or has held with the
Investment Adviser and its affiliates. Mr. Glenn is the President of each Fund.

Compensation of Board Members. The Investment Adviser of each Fund pays
all compensation to all officers of each Fund and all Board Members of each
Fund who are affiliated with ML & Co. or its subsidiaries. Each Fund pays each
Board Member not affiliated with the Investment Adviser (each a "non-affiliated
Board Member") an annual fee plus a fee for each meeting attended, and each
Fund also pays each member of its Committee, which consists of all of the non-
affiliated Board Members, an annual fee plus a fee for each meeting attended,
together with such Board Member's out-of-pocket expenses relating to attendance
at such meetings. The Chairman of the Committee of each Fund receives an
additional annual or per meeting fee. Information relating to the aggregate
fees and expenses paid by each Fund to its non-affiliated Board Members during
each Fund's most recently completed fiscal year is set forth in Exhibit A
hereto.

Officers of the Funds. Information relating to the officers of each Fund
is set forth in Exhibit A to this Combined Proxy Statement. Officers of the
Funds are elected and appointed by the Board and hold office until they resign,
are removed or are otherwise disqualified to serve.

Stock Ownership. Information relating to the number of shares of each
Fund owned by the Board Member nominees is set forth in Exhibit A to this
Combined Proxy Statement. As of the Record Date, the Board Members and officers
of each Fund as a group owned an aggregate of less than 1% of the Common Stock
of each Fund outstanding at such date. At such date, Mr. Glenn, President and a
Board Member of each Fund, and Mr. Zeikel, a Board Member of each Fund, and the
other officers of each Fund owned an aggregate of less than 1% of the
outstanding shares of common stock of ML & Co.

Each Board recommends that its respective shareholders vote FOR the
election of the applicable Board Member nominees.

10
<PAGE>

ITEM 2: SELECTION OF INDEPENDENT AUDITORS

The Board of each Fund, including a majority of the Board Members who are
not interested persons of the Fund, has selected D&T as the Fund's independent
auditors to examine the financial statements of the Fund for the Fund's current
fiscal year as set forth in the following chart. None of the Funds knows of any
direct or indirect financial interest of such auditors in any Fund. Such
appointment is subject to ratification or rejection by the shareholders of each
respective Fund. Unless a contrary specification is made, the accompanying
proxy will be voted in favor of ratifying the selection of such Fund's
auditors.

<TABLE>
<CAPTION>
Fund Fiscal Year Ending
- ---- ------------------
<S> <C>
Global Financial Services Master Trust..................... September 30, 2000
Master Internet Strategies Trust........................... January 31, 2001
Mercury Global Holdings, Inc. ............................. November 30, 2000
Mercury Internet Strategies Fund, Inc.+.................... January 31, 2001
Merrill Lynch Americas Income Fund, Inc. .................. December 31, 2000
Merrill Lynch Corporate Bond Fund, Inc. ................... September 30, 2000
Merrill Lynch Developing Capital Markets Fund, Inc. ....... June 30, 2001
Merrill Lynch Dragon Fund, Inc. ........................... December 31, 2000
Merrill Lynch EuroFund..................................... October 31, 2000
Merrill Lynch Global Allocation Fund, Inc. ................ October 31, 2000
Merrill Lynch Global Bond Fund for Investment and
Retirement................................................ December 31, 2000
Merrill Lynch Global Financial Services Fund, Inc.+........ September 30, 2000
Merrill Lynch Global SmallCap Fund, Inc. .................. June 30, 2001
Merrill Lynch Global Technology Fund, Inc. ................ March 31, 2001
Merrill Lynch Global Utility Fund, Inc. ................... November 30, 2000
Merrill Lynch Global Value Fund, Inc. ..................... December 31, 2000
Merrill Lynch Healthcare Fund, Inc. ....................... April 30, 2001
Merrill Lynch High Income Municipal Bond Fund, Inc. ....... August 31, 2000
Merrill Lynch International Equity Fund.................... May 31, 2001
Merrill Lynch Internet Strategies Fund, Inc.+.............. January 31, 2001
Merrill Lynch Latin America Fund, Inc. .................... November 30, 2000
Merrill Lynch Municipal Bond Fund, Inc. ................... June 30, 2001
Merrill Lynch Municipal Intermediate Term Fund of Merrill
Lynch Municipal Series Trust.............................. October 31, 2000
Merrill Lynch Municipal Strategy Fund, Inc. ............... October 31, 2000
Merrill Lynch Pacific Fund, Inc. .......................... December 31, 2000
Merrill Lynch Senior Floating Rate Fund, Inc. ............. August 31, 2000
Merrill Lynch Senior Floating Rate Fund II, Inc. .......... August 31, 2000
Merrill Lynch Short-Term Global Income Fund, Inc. ......... December 31, 2000
Merrill Lynch Strategic Dividend Fund...................... July 31, 2000
Merrill Lynch U.S. High Yield Fund, Inc. (formerly Merrill
Lynch Corporate High Yield Fund, Inc.).................... March 31, 2001
The Corporate Fund Accumulation Program, Inc. ............. December 31, 2000
The Municipal Fund Accumulation Program, Inc. ............. December 31, 2000
</TABLE>
- --------

+ The shareholders of the Internet Funds and Global Financial will also vote
in connection with the ratification of the selection of the independent
auditors of the Internet Trust and the Global Financial Trust, respectively.

11
<PAGE>

D&T also acts as independent auditors for ML & Co. and most of its
subsidiaries, including MLAM and FAM, and for most other investment companies
for which MLAM and FAM act 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 them from each applicable Fund. The Board of each Fund
considered the fact that D&T has been retained as the independent auditors for
ML & Co. and the other entities described above in its evaluation of the
independence of D&T with respect to each applicable Fund.

Representatives of D&T are expected to be present at the Meetings and
will have the opportunity to make a statement if they so desire and to respond
to questions from shareholders.

Each Board recommends that its respective shareholders vote FOR the
ratification of the selection of D&T as independent auditors for that Fund.

12
<PAGE>

ITEM 3: APPROVAL OR DISAPPROVAL OF CHARTER AMENDMENT TO PERMIT REORGANIZATION
INTO A MASTER/FEEDER STRUCTURE

The Board proposes to amend the charter of each Fund other than the
Internet Funds, the Internet Trust, Global Financial and the Global Financial
Trust to add a provision that would give the Board the express power to
transfer in the ordinary course of business and upon the affirmative vote of
the majority of the entire Board, all or substantially all of the assets of a
Fund to another entity known in the investment company industry as a master
fund in a "master/feeder" structure. By voting in favor of this provision,
shareholders are authorizing the Board to reorganize a Fund into a
"master/feeder" structure if the Board believes the structure is in the best
interests of the Fund and its shareholders. Copies of the forms of charter
amendment for the applicable Funds are attached to this Combined Proxy
Statement as Exhibit B.

Generally, the transfer of all or substantially all of the assets of a
Maryland corporation requires the approval of its shareholders. Maryland law
permits the transfer of all or substantially all of the assets of a corporation
to a wholly-owned subsidiary without the approval of the corporation's
shareholders. In certain circumstances, however, the Investment Adviser may
propose a master/feeder structure for Funds organized as Maryland corporations
where the master fund would not be a wholly-owned subsidiary of such Fund
immediately after the transfer of the Fund's assets to the master fund.
Therefore, the Funds organized as Maryland corporations are seeking shareholder
approval of a charter amendment that would permit such a transfer of assets to
a master fund in exchange for shares or other beneficial interests even if such
master fund is not a wholly-owned subsidiary of such Fund and would clarify the
manner in which such Funds will operate in a master/feeder structure.

The charters governing the Funds that are Massachusetts business trusts
generally require shareholder approval before a Fund transfers its assets to a
master fund in order to convert to a master/feeder arrangement. Accordingly,
the Funds that are organized as Massachusetts business trusts are seeking
shareholder approval of a charter amendment that would permit such a transfer
of assets to a master fund without shareholder approval in exchange for shares
or other beneficial interests and would clarify the manner in which such Funds
will operate in a master/feeder structure.

In a master/feeder structure, a fund (the "Feeder Fund") sells its shares
to public investors under the terms of its prospectus. Instead of investing the
money it obtains from such sales directly in securities and other investments,
however, it invests all of those assets in another fund (the "Master Fund")
with substantially the same investment objectives and policies in return for
shares in that Master Fund. The Master Fund then invests the assets in a
portfolio of securities and other investments. Because the shareholders of the
Feeder Fund own an indirect interest in the Master Fund, their investment has
the same performance as the Master Fund's portfolio. Since any number of Feeder
Funds can invest their assets in a single Master Fund, a master/feeder
structure permits greater pooling of assets than does a stand alone fund. This
ability to pool assets may, in turn, allow the Master Fund to achieve increased
economies of scale and efficiencies in portfolio management. The master/feeder
structure may also permit greater investor access to a single Master Fund
portfolio, since any number of separate Feeder Funds with separate identities,
management, fee structures and/or distribution channels can all invest in the
same Master Fund. An existing fund could convert to a Feeder Fund by (i)
selling all of its investments and then purchasing shares of a Master Fund, an
approach that involves brokerage and other transaction costs and the
realization of taxable gain or loss, or (ii) by contributing its assets to the
Master Fund in return for an interest therein and avoiding transaction costs
and, if proper procedures are followed, avoiding the realization of taxable
gain or loss. Approval of this Item 3 by the shareholders of a Fund would
permit the applicable Board to convert the Fund to a Feeder Fund by using
either alternative discussed in the preceding sentence. It is expected that
each Fund that converts to a Feeder Fund will do so by transferring its assets
to the applicable Master Fund in exchange for shares in such Master Fund.

The Investment Adviser believes that, generally, the larger the pool of
assets, the more efficiently and cost-effectively it can be managed. Because a
Master Fund pools the assets of multiple Feeder Funds, it

13
<PAGE>

provides an effective means of creating larger asset pools. Whether the Board
of a particular Fund exercises its discretionary authority to convert the Fund
to a master/feeder structure would depend upon the existence of appropriate
opportunities to pool the Fund's assets with those of other Feeder Funds. It is
currently anticipated that Merrill Lynch Senior Floating Rate Fund II, Inc.
("Senior Floating Rate II"), Merrill Lynch Strategic Dividend Fund ("Strategic
Dividend") and Merrill Lynch U.S. High Yield Fund, Inc. (formerly Merrill Lynch
Corporate High Yield Fund, Inc.) ("U.S. High Yield") will be converted to a
master/feeder structure as soon as practicable after shareholders approve the
charter amendment. There are no current plans to effect such a conversion for
any other Funds. As discussed above, the primary motivation for considering a
master/feeder structure would be to seek to achieve possible economies of scale
and efficiencies in portfolio management, while preserving separate identities,
management and distribution channels at the Feeder Fund level. The Board's
decision to convert a Fund into a Feeder Fund would be based upon the Board's
determination that it would be in the best interests of both the Fund and its
shareholders.

In the case of Merrill Lynch Senior Floating Rate Fund, Inc. ("Senior
Floating Rate"), Senior Floating Rate II and Merrill Lynch High Income
Municipal Bond Fund, Inc., the conversion of these Funds and their operation in
a master/feeder structure pursuant to the charter amendments will be viewed as
a "reorganization" for the purpose of the Fund's investment restrictions that
permit an investment in other investment companies in a reorganization
transaction. In the case of The Corporate Fund Accumulation Program, Inc. and
The Municipal Fund Accumulation Program, Inc., the conversion of these Funds
and their operation in a master/feeder structure pursuant to the charter
amendments will be viewed as a "merger, consolidation, purchase of assets or
similar transaction" for the purpose of the Fund's investment restrictions that
permit an investment in other investment companies in connection with these
types of transactions if approved by Fund shareholders.

Because investment advisory services are provided at the Master Fund
level, a Fund will no longer have an investment adviser if it converts to a
Feeder Fund. Each Master Fund will pay its investment adviser an investment
advisory fee based upon the net assets of that Master Fund. A Feeder Fund may
have its own administrator in a master/feeder structure. If a Fund converts to
a master/feeder fund structure, whenever the Master Fund holds a vote of its
Feeder Funds, the Fund will either pass the vote through to its own
shareholders or vote the shares of the Master Fund held by it in the same
proportion as the votes of all other Feeder Funds. If some of the Feeder Funds
are larger than the Fund, these other Feeder Funds would have more voting power
than the Fund over the operations of the Master Fund.

The Board of each Fund that is eligible to vote on Item 3 recommends that
the respective shareholders of each such Fund vote FOR the proposal to approve
the charter amendment to permit the reorganization of each such Fund into a
master/feeder structure.

Items 4 through 9 are for the consideration only by the shareholders of
the Fund or Funds named in the specific proposal.

ITEM 4: APPROVAL OR DISAPPROVAL OF THE PROPOSED INVESTMENT ADVISORY AND
ADMINISTRATION AGREEMENTS

Only shareholders of Strategic Dividend, U.S. High Yield Fund, and Senior
Floating Rate Fund II may vote with respect to this Item 4. Strategic Dividend,
U.S. High Yield and Senior Floating Rate II are individually referred to in
this Item 4 as a "Voting Fund" and collectively referred to in this Item 4 as
the "Voting Funds," as the context requires.

In anticipation of the above-referenced master/feeder reorganization of
each Voting Fund and in order to ensure the continuity of the investment
advisory and administrative services provided to each Voting Fund and each
Master Fund under such an arrangement, shareholders of each Voting Fund are
being asked to

14
<PAGE>

consider approval or disapproval of the proposed agreements applicable to that
Voting Fund as described below. Shareholders of a Voting Fund may only vote on
the proposed investment advisory and administration agreements applicable to
that Voting Fund as a group and not on each proposed agreement individually.

The aggregate annual rate of compensation payable under the current
agreements will remain the same under the proposed agreements. See
"Compensation and Expenses" below. The services to be provided to the Voting
Funds and the Master Funds under the proposed agreements will be identical to
the services provided to the Voting Funds under the current investment advisory
and administration agreements. See "Summary of Current Investment Advisory
Administration and Sub-Advisory Agreements and Proposed Investment Advisory and
Administration Agreements" below.

Summary of Current Investment Advisory, Administration and Sub-Advisory
Agreements and Proposed Investment Advisory and Administration Agreements

Certain information relating to the current investment advisory,
administration and sub-advisory arrangements is set forth below.

<TABLE>
<CAPTION>
Voting Investment
Fund Adviser Administrator Sub-Adviser
------ ---------- ------------- -----------
<S> <C> <C> <C>
Senior
Floating
Rate II MLAM MLAM Merrill Lynch Asset Management U.K. Limited
Strategic
Dividend MLAM N/A Merrill Lynch Asset Management U.K. Limited
U.S. High
Yield FAM N/A Merrill Lynch Asset Management U.K. Limited
</TABLE>

The current investment advisory agreements are collectively referred to
in this Item 4 as the "Current Investment Advisory Agreements." The
administration agreement between Senior Floating Rate II and MLAM is referred
to in this Item 4 as the "Senior Floating Rate II Administration Agreement."
The current sub-advisory agreements are collectively referred to in this Item 4
as the "Current Sub-Advisory Agreements." The Current Investment Advisory
Agreements, the Senior Floating Rate II Administration Agreement and the
Current Sub-Advisory Agreements are collectively referred to in this Item 4 as
the "Current Agreements." Certain information relating to the Current
Agreements is set forth below.

<TABLE>
<CAPTION>
Date Current Description of Board
Investment Advisory Action Taken with
Agreement Was Date of Senior Respect to Current
Date of Current Last Submitted to Floating Investment Advisory
Investment Shareholder Vote Date of Current Rate II Agreement During the
Advisory and Purpose of Sub-Advisory Administration Preceding
Voting Fund Agreement Such Submission Agreement Agreement Fiscal Year
- ----------- --------------- ------------------- ----------------- -------------- --------------------
<S> <C> <C> <C> <C> <C>
Senior Floating Rate March 22, 1999 March 26, 1999 March 22, 1999 March 22, 1999 Initial Approval
II.....................
(Initial Approval)
Strategic Dividend...... August 10, 1987 October 24, 1988 November 14, 1997 N/A Annual Renewal
(Approval)
U.S. High Yield......... April 28, 1998 April 28, 1998 April 28, 1998 N/A Annual Renewal
(Initial Approval)
</TABLE>

If the shareholders of a Voting Fund approve the amendment to its charter
described in Item 3 to this Combined Proxy Statement, it is expected that such
Voting Fund will transfer all of its assets to a corresponding Master Fund in
exchange for shares in that Master Fund. Simultaneously with these transfers,
each Master Fund will enter into a separate investment advisory agreement with
FAM (each a "Proposed Investment Advisory Agreement" and collectively, the
"Proposed Investment Advisory Agreements") and that each Voting Fund will enter
into a separate administration agreement with FAM (each a "Proposed
Administration Agreement" and collectively, the "Proposed Administration
Agreements"). Pursuant to the Proposed Investment Advisory Agreements, FAM will
provide investment advisory and administrative services to each Master Fund.
Pursuant to the Proposed Administration Agreements, FAM will provide
administrative services or arrange for the provision of such services to each
Voting Fund. It is not anticipated that FAM will

15
<PAGE>

enter into a new sub-advisory agreement with Merrill Lynch Asset Management
U.K. Limited ("MLAM U.K.") with respect to any Voting Fund. The Proposed
Investment Advisory Agreements and the Proposed Administration Agreements are
collectively referred to in this Item 4 as the "Proposed Agreements." FAM and
MLAM are collectively referred to in this Item 4 as the "Advisers."

The only material differences between the Proposed Agreements and the
Current Investment Advisory Agreements and the Current Administration
Agreements are: (i) the assets to be managed and administered will be held by
each Master Fund rather than by each Voting Fund, (ii) with respect to Senior
Floating Rate II, (a) instead of MLAM providing investment advisory services to
this Voting Fund, FAM will provide investment advisory and administrative
services to the applicable Master Fund pursuant to a separate investment
advisory agreement, and (b) instead of MLAM providing administrative services
to Senior Floating Rate II, FAM will provide administrative services to Senior
Floating Rate II pursuant to a separate administration agreement, (iii) with
respect to Strategic Dividend, instead of MLAM providing investment advisory
and administrative services to this Voting Fund pursuant to an investment
advisory agreement, FAM will: (a) provide investment advisory and
administrative services to the applicable Master Fund pursuant to a separate
investment advisory agreement, and (b) provide administrative services to
Strategic Dividend pursuant to a separate administration agreement, (iv) with
respect to U.S. High Yield, instead of FAM providing investment advisory and
administrative services to this Voting Fund pursuant to an investment advisory
agreement, FAM will: (a) provide investment advisory and administrative
services to the applicable Master Fund pursuant to a separate investment
advisory agreement and (b) provide administrative services to U.S. High Yield
pursuant to a separate administration agreement, and (v) FAM will not enter
into a sub-advisory agreement with MLAM U.K. with respect to any Voting Fund.
FAM and MLAM have common officers and employees and are both owned and
controlled by the same entities. FAM has advised the Board of Senior Floating
Rate II and Strategic Dividend that the change in the investment adviser will
not result in different portfolio management or day-to-day operations for the
Master Funds in which Senior Floating Rate II and Strategic Dividend will
invest all of their respective net assets.

The services to be provided by FAM to the Voting Funds and the Master
Funds under the Proposed Agreements, considered together, will be identical to
the services provided by the Advisers to the Voting Funds under the Current
Investment Advisory Agreements and the Current Administration Agreements. As
described below, the aggregate annual rate of compensation to be paid under the
Proposed Agreements is the same as the aggregate annual rate of compensation
payable under the Current Investment Advisory Agreements and the Current
Administration Agreements.

Terms of the Proposed Agreements

Copies of the forms of Proposed Investment Advisory Agreement and
Proposed Administration Agreement relating to each Voting Fund and each Master
Fund are attached hereto as Exhibit C (Senior Floating Rate II), Exhibit D
(Strategic Dividend) and Exhibit E (U.S. High Yield). Set forth below is a
description of the services to be provided under those agreements along with
certain other information relating to those agreements.

Description of Services to be Provided under the Proposed
Agreements. Under the Proposed Investment Advisory Agreements, FAM will provide
investment research and investment advice to the Master Funds. Subject to
certain restrictions, FAM will determine whether to purchase, sell or exchange
portfolio securities and will fix the relative asset allocations for each
Master Fund. FAM also will perform certain management and administrative
services necessary for the operation of the Master Funds. Under the Proposed
Administration Agreements, FAM will perform administrative services necessary
for the operation of the Voting Funds, including (i) preparing and filing
reports and other documents required by federal, state and other applicable
laws and regulations, (ii) preparing proxy materials, and (iii) overseeing the
performance of administrative and professional services rendered to the Voting
Funds by their respective service providers.

16
<PAGE>

Duration and Termination of the Proposed Agreements. If a Voting Fund's
shareholders approve the applicable Proposed Agreements at its Meeting, such
Proposed Agreements will commence on the date that a Voting Fund transfers its
assets to the corresponding Master Fund. Unless earlier terminated as described
below, such Proposed Agreements will remain in effect for a period of two years
from that date and thereafter will continue in effect from year to year if
approved annually (a) by a majority of the Board Members or by a majority of
the outstanding shares of a Voting Fund or a Master Fund, as applicable, and
(b) by a majority of the Board Members who are not parties to such contract or
interested persons (as defined in the Investment Company Act) of any such
party. Such contracts are not assignable and may be terminated without penalty
on 60 days' written notice at the option of either party or by vote of the
shareholders of a Master Fund or a Voting Fund, as applicable.

Compensation and Expenses

As stated above, the aggregate annual rate of compensation payable under
the Current Investment Advisory Agreements and the Current Administration
Agreements is the same as the aggregate annual rate of compensation to be paid
under the Proposed Agreements. In the event FAM seeks to increase the aggregate
annual rate of compensation to be paid under the Proposed Agreements in the
future, the Board of the affected Master Fund and the affected Voting Fund and
the shareholders of the affected Master Fund and the affected Voting Fund must
approve such increases.

Under the Current Investment Advisory Agreement applicable to Senior
Floating Rate II, MLAM receives a monthly fee for the provision of investment
advisory services at the annual rate of 0.95% of the average daily net assets
of Senior Floating Rate II. As compensation for MLAM's administrative services
to Senior Floating Rate II under the Senior Floating Rate II Administration
Agreement, MLAM receives a monthly fee at an annual rate of 0.40% of the
average daily net assets of that Fund. The combined investment advisory and
administration fees for Senior Floating Rate II are greater than those paid by
most funds, but are comparable to those paid by other continuously offered
closed-end funds investing primarily in corporate loans. Under the Current
Investment Advisory Agreement applicable to Strategic Dividend, MLAM receives a
monthly fee for the provision of investment advisory and administrative
services at the annual rate of 0.60% of the average daily net assets of
Strategic Dividend. As compensation for FAM's investment advisory and
administrative services to U.S. High Yield under the Current Investment
Advisory Agreement applicable to that Fund, MLAM receives a monthly fee at the
annual rate of 0.60% of the average daily net assets of U.S. High Yield.

Pursuant to the Proposed Investment Advisory Agreements, FAM will receive
a monthly fee for the provision of investment advisory and administrative
services to the Master Funds that hold the assets of Senior Floating Rate II,
Strategic Dividend and U.S. High Yield at an annual rate of 0.95%, 0.35% and
0.35% of the average daily net assets of the Master Funds that hold the assets
of Senior Floating Rate II, Strategic Dividend and U.S. High Yield,
respectively. As compensation for FAM's administrative services to Senior
Floating Rate II, Strategic Dividend and U.S. High Yield under the Proposed
Administration Agreements, FAM will receive a monthly fee for administrative
services at an annual rate of 0.40%, 0.25% and 0.25% of the average daily net
assets of Senior Floating Rate II, Strategic Dividend and U.S. High Yield,
respectively.

17
<PAGE>

Certain information relating to the investment advisory fees,
administration fees and sub-advisory fees payable by the Voting Funds under the
Current Agreements and the proposed investment advisory fees and administration
fees to be paid by the Voting Funds and the Master Funds, as applicable, under
the Proposed Agreements is set forth below.

<TABLE>
<CAPTION>
Current Fees Proposed Fees
--------------------------------------------------------------------- ----------------------------------------
Total Total
Investment Investment Investment Investment
Advisory Advisory and Advisory Advisory and
Fee as a Aggregate Administration Administration Fee as a Administration Administration
Percentage Amount of Fee as a Aggregate Fee as a Percentage Fee as a Fee as a
of Average Investment Percentage of Amount of Percentage of of Average Percentage of Percentage of
Daily Net Advisory Average Daily Administration Average Daily Daily Net Average Daily Average Daily
Voting Fund Assets Fee+ Net Assets Fee Net Assets Assets Net Assets Net Assets
----------- ---------- ---------- -------------- -------------- -------------- ---------- -------------- --------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Senior Floating
Rate II........ 0.95% $ 625,622# 0.40% $263,423# 1.35% 0.95% 0.40% 1.35%
Strategic
Dividend....... 0.60% $1,287,539## N/A N/A 0.60% 0.35% 0.25% 0.60%
U.S High Yield.. 0.60% $4,316,385### N/A N/A 0.60% 0.35% 0.25% 0.60%
</TABLE>
- --------

+ None of the Voting Funds paid any fees to MLAM U.K. under the Current Sub-
Advisory Agreements for the fiscal period March 26, 1999 to August 31, 1999
(Senior Floating Rate II), the fiscal year ended July 31, 1999 (Strategic
Dividend) and the fiscal year ended March 31, 2000 (U.S. High Yield).
# For the fiscal period March 26, 1999 (commencement of operations) to August
31, 1999. MLAM voluntarily waived $600,717 of the aggregate investment
advisory fee. MLAM also voluntarily reimbursed Senior Floating Rate II for
additional expenses of $201,640.
## For the fiscal year ended July 31, 1999.
### For the fiscal year ended March 31, 2000.

The Boards' Considerations

In their consideration of the Proposed Agreements, the Boards received
information relating to, among other things, alternatives to the present
agreements and the nature, quality and cost of the advisory and other services
to be provided by FAM to the Voting Funds and the Master Funds under the
Proposed Agreements. The non-interested Board Members also considered the
quality and experience of the personnel who would provide investment advisory
and administrative services to the Master Fund and the Voting Funds under the
Proposed Agreements, representations made by FAM and MLAM that there will be no
material adverse change in such services and the relative profitability of the
present agreements to the Advisers. The non-interested Board Members were
advised by their own counsel in connection with their review of the Proposed
Agreements.

Payments to Affiliates of FAM and MLAM by the Voting Funds

The Investment Adviser provides accounting services to each Voting Fund
at its cost and each Voting Fund reimburses the Investment Adviser for these
accounting services. After approval of the Proposed Agreements, FAM will
provide or arrange for the provision of these services to each Master Fund and
to each Voting Fund. Information relating to the amounts paid to the Investment
Adviser by each Voting Fund for accounting services is set forth below for the
most recently completed fiscal period of each Voting Fund.

<TABLE>
<CAPTION>
Amount Paid to the
Investment Adviser for
Voting Fund For the Fiscal Period Accounting Services
----------- ---------------------------------- ----------------------
<S> <C> <C>
Senior Floating Rate
II..................... March 26, 1999+ to August 31, 1999 $ 28,048
Strategic Dividend...... August 1, 1998 to July 31, 1999 $ 65,898
U.S. High Yield......... April 1, 1999 to March 31, 2000 $209,423
</TABLE>
- --------

+ Commencement of operations.

18
<PAGE>

Financial Data Services, Inc. ("FDS"), an affiliate of FAM and MLAM, acts
as the transfer agent for each Voting Fund pursuant to separate Transfer
Agency, Dividend Disbursing Agency and Shareholder Servicing Agency Agreements
(collectively, the "Transfer Agency Agreements"). Pursuant to the Transfer
Agency Agreements, FDS is responsible for the issuance, transfer and redemption
of shares and the opening and maintenance of shareholder accounts. After the
approval of the Proposed Agreements, FDS will provide or arrange for the
provision of these services to each Voting Fund. Information relating to the
transfer agency fees paid by each Voting Fund is set forth below for its most
recently completed fiscal period.

<TABLE>
<CAPTION>
Amount Paid
to FDS for
Transfer Agency
Voting Fund For the Fiscal Period Services
- ----------- --------------------- ---------------
<S> <C> <C>
Senior Floating Rate II..... March 26, 1999+ to August 31, 1999 $ 21,329
Strategic Dividend.......... August 1, 1998 to July 31, 1999 $277,177
U.S. High Yield............. April 1, 1999 to March 31, 2000 $495,201
</TABLE>
- --------

+ Commencement of operations.

Strategic Dividend and U.S. High Yield have adopted separate distribution
plans for their Class B, Class C and Class D shares pursuant to Rule 12b-1
under the Investment Company Act (collectively, the "Distribution Plans"). The
Distribution Plans provide for the payment of account maintenance fees and
distribution fees by Strategic Dividend and U.S. High Yield to Merrill Lynch
Funds Distributor, a division of Princeton Funds Distributor, Inc. (the
"Distributor"), to compensate the Distributor and Merrill Lynch, Pierce, Fenner
& Smith Incorporated ("MLPF&S") (pursuant to separate sub-agreements) for the
performance of certain account maintenance, shareholder and distribution
services. After approval of the Proposed Agreements, the Distributor and MLPF&S
will continue to provide the above described services to Strategic Dividend and
U.S. High Yield. Information relating to the fees paid to the Distributor and
the amounts paid by the Distributor to MLPF&S by Strategic Dividend and U.S.
High Yield pursuant to the Distribution Plans is set forth below for the most
recently completed fiscal year of each such Fund.

<TABLE>
<CAPTION>
Amount Paid
to Distributor Amount Paid
Under by Distributor to
Distribution MLPF&S Pursuant to
Voting Fund For the Fiscal Year Plans Distribution Plans
- ----------- ------------------- -------------- ------------------
<S> <C> <C> <C>
Strategic Dividend...... August 1, 1998 to July 31, 1999 $1,087,887 $1,087,887
U.S. High Yield......... April 1, 1999 to March 31, 2000 $5,007,524 $5,007,524
</TABLE>

19
<PAGE>

Shareholders of Strategic Dividend and U.S. High Yield pay sales charges
to the Distributor pursuant to an initial sales charge arrangement or a
deferred sales charge arrangement. Shareholders of Senior Floating Rate II pay
sales charges to the Distributor pursuant to a deferred sales charge
arrangement. These sales charges provide for the financing of the distribution
of the shares of each Voting Fund by the Distributor and MLPF&S, as a selected
dealer. After approval of the Proposed Agreements, the Distributor and MLPF&S
will continue to provide these distribution services to each Voting Fund.
Information relating to the sales charges paid by shareholders of each Voting
Fund to the Distributor and the amounts paid by the Distributor to MLPF&S
pursuant to the initial sales charge arrangements and the deferred sales charge
arrangements is set forth below for the most recently completed fiscal period
of each Voting Fund.

<TABLE>
<CAPTION>
Amount of
Aggregate Amount of Amount of Deferred Amount of
Amount of Initial Sales Initial Sales Sales Deferred Sales
Initial Sales Charges Charges Charges Charges Paid
For the Charges Retained By Paid to Received By by Distributor
Voting Fund Fiscal Period Collected Distributor MLPF&S Distributor to MLPF&S
- ----------- ------------- ------------- ------------- ------------- ----------- --------------
<S> <C> <C> <C> <C> <C> <C>
Senior Floating
Rate II.......... March 26, 1999+ to August 31, 1999 N/A* N/A* N/A* $ 30,210** None
Strategic
Dividend......... August 1, 1998 to July 31, 1999 $ 23,109 $ 1,568 $ 21,541 $ 111,920 $ 111,920
U.S. High Yield... April 1, 1999 to March 31, 2000 $148,143 $15,724 $132,419 $2,120,005 $2,120,005
</TABLE>
- --------
* With respect to Senior Floating Rate II, the Distributor compensates MLPF&S
or other selected dealers at a rate of 1.00% of amounts purchased. In
addition, the Distributor compensates MLPF&S or such dealers quarterly at an
annual rate equal to 0.75% of the value of shares of Senior Floating Rate II
that remain outstanding after one year from the date of their original
purchase sold by MLPF&S or such dealers. The foregoing payments made by the
Distributor are made from its own assets or the assets of an affiliate and
are not an expense that is borne by Senior Floating Rate II. For the fiscal
period March 26, 1999 (commencement of operations) to August 31, 1999, the
Distributor paid $1,565,514 to MLPF&S pursuant to the above described
payment arrangements.

** With respect to Senior Floating Rate II, an early withdrawal charge of
1.00% to recover distribution expenses incurred by the Distributor is
charged against a shareholder's investment account and paid to the
Distributor in connection with most Common Stock held for less than one
year that is repurchased pursuant to a tender offer. The early withdrawal
charge is imposed on those shares accepted for tender based on an amount
equal to the lesser of the then current net asset value or the cost of the
shares.

+ Commencement of operations.

MLPF&S is an affiliated person, as defined in the Investment Company Act,
of FAM and MLAM because MLPF&S, FAM and MLAM are under the common control of ML
& Co. Information relating to the brokerage commissions paid by each Voting
Fund, including commissions paid to MLPF&S, is set forth in the following table
for the most recently completed fiscal period of each Voting Fund.

<TABLE>
<CAPTION>
Percentage of
Aggregate
Aggregate Brokerage Brokerage
Brokerage Commissions Commissions
For the Commissions Paid Paid
Voting Fund Fiscal Period Paid to MLPF&S to MLPF&S
- ----------- ------------- ----------- ----------- -------------
<S> <C> <C> <C> <C>
Senior Floating Rate
II..................... March 26, 1999+ to August 31, 1999 None None --
Strategic Dividend...... August 1, 1998 to July 31, 1999 $114,279 $22,980 20.11%
U.S. High Yield......... April 1, 1999 to March 31, 2000 $ 5,938 $ 5,938 100.00%
</TABLE>
- --------

+ Commencement of operations.

20
<PAGE>

Information Relating to FAM, MLAM and MLAM U.K.

FAM and MLAM are each organized as limited partnerships. The general
partner of each of FAM and MLAM is Princeton Services, Inc. ("Princeton
Services"). The limited partner of each of FAM and MLAM is ML & Co. Princeton
Services is a wholly-owned subsidiary of Merrill Lynch Group, Inc. ("Merrill
Lynch Group"). Merrill Lynch Group is a wholly-owned subsidiary of ML & Co. ML
& Co. and Princeton Services control FAM and MLAM through their ownership of
the voting securities of FAM and MLAM and their power to exercise a controlling
influence over the management and policies of FAM and MLAM.

MLAM U.K., a corporation organized under the laws of the United Kingdom,
is an affiliate of FAM and MLAM. MLAM U.K. is a wholly-owned subsidiary of
Merrill Lynch Europe Limited ("Merrill Lynch Europe"). Merrill Lynch Europe is
a wholly-owned subsidiary of Merrill Lynch International Holdings, Inc.
("Merrill Lynch International Holdings"). Merrill Lynch International Holdings
is a wholly-owned subsidiary of Merrill Lynch International Incorporated
("Merrill Lynch International"). Merrill Lynch International is a wholly-owned
subsidiary of ML & Co. Merrill Lynch Europe, Merrill Lynch International
Holdings, Merrill Lynch International and ML & Co. control MLAM U.K. through
their power to exercise a controlling influence over the management and
policies of MLAM U.K.

Jeffrey M. Peek is the President of FAM and MLAM. Mr. Peek also serves as
President and Director of Princeton Services and Executive Vice President of ML
& Co. The address of Mr. Peek, FAM, MLAM and Princeton Services is P.O. Box
9011, Princeton, New Jersey 08543-9011. The address of ML & Co. and Merrill
Lynch Group is 4 World Financial Center, New York, New York 10080.

Terry K. Glenn is the Chairman and a Director of MLAM U.K. Mr. Glenn also
serves as Executive Vice President of FAM and MLAM, Executive Vice President
and Director of Princeton Services, President and Director of Princeton Funds
Distributor, Inc. and President of Princeton Administrators, L.P. Nicholas C.D.
Hall is a Director of MLAM U.K. Mr. Hall also serves as a Director of Mercury
Asset Management and the Institutional Liquidity Fund plc and as General
Counsel for Merrill Lynch Mercury Asset Management. James T. Stratford serves
as an Alternate Director of MLAM U.K. Mr. Stratford also serves as a Director
of Mercury Asset Management Group Ltd. and as Head of Compliance of Merrill
Lynch Mercury Asset Management. Carol Ann Langham serves as an Alternate
Director and Company Secretary for MLAM U.K. The address of MLAM U.K., Messrs.
Hall and Stratford and Ms. Langham is 33 King William Street, London EC4R 9AS,
England. The address of Mr. Glenn is P.O. Box 9011, Princeton, New Jersey
08543-9011.

The name of each officer or director of the Voting Funds who is an
officer, employee or director of FAM or MLAM or a former officer, employee or
director of FAM or MLAM is set forth in Exhibit A to this Combined Proxy
Statement.

21
<PAGE>

Information Relating to Similar Funds

FAM and MLAM are the investment advisers for other investment companies
that have investment objectives that are similar to the investment objectives
of certain of the Voting Funds (collectively, the "Similar Funds"). The
following table provides certain information relating to each Similar Fund for
its most recently completed fiscal period.

<TABLE>
<CAPTION>
Annual Rate of
Investment
Net Assets as Advisory or Annual Rate of
of March 31, Management Administration
Voting Fund Similar Fund 2000 Fee Fee
----------- ------------ -------------- -------------- --------------
<C> <S> <C> <C> <C>
Senior Floating Rate II.. Merrill Lynch Senior
Floating Rate Fund, Inc. $2,794,548,346 0.95%(a) 0.25%(a)
Strategic Dividend....... Merrill Lynch
Disciplined Equity Fund,
Inc. $ 83,785,380 0.65%(a) N/A
Corporate High Yield
U.S. High Yield.......... Fund, Inc. $ 265,846,186 0.50%(b) N/A
Corporate High Yield
U.S. High Yield.......... Fund II, Inc. $ 94,094,027 0.50%(b) N/A
Corporate High Yield
U.S. High Yield.......... Fund III, Inc. $ 403,160,614 0.60%(b) N/A
Debt Strategies Fund,
U.S. High Yield.......... Inc. $ 218,455,403 0.60%(b) N/A
Debt Strategies Fund II,
U.S. High Yield.......... Inc. $ 525,531,532 0.60%(b) N/A
Debt Strategies Fund
U.S. High Yield.......... III, Inc. $ 100,343,571 0.60%(b) N/A
U.S. High Yield.......... High Income Portfolio of
Merrill Lynch Corporate
Bond Fund, Inc. $3,969,799,236 0.41%(c) N/A
</TABLE>
- --------
(a) These Similar Funds pay a monthly fee at the applicable listed annual rate
based on their respective average daily net assets.
(b) These Similar Funds pay a monthly fee at the applicable listed annual rate
based on their respective average weekly net assets plus the proceeds of
any outstanding borrowings used for leverage.
(c) Merrill Lynch Corporate Bond Fund, Inc. ("Corporate Bond") is made up of
three Portfolios--the High Income Portfolio, the Investment Grade Portfolio
and the Intermediate Term Portfolio. Corporate Bond pays a monthly fee at
annual rates that decrease as the total assets of Corporate Bond's three
Portfolios increase above certain levels. The fee rates are applied to the
average daily net assets of each Portfolio, with the reduced rates
applicable to portions of the assets of each Portfolio to the extent that
the aggregate of the average daily net assets of the three combined
Portfolios exceeds $250 million, $500 million and $750 million. These
annual fee rates range from 0.55% to 0.40% for the High Income Portfolio.

The Boards of Senior Floating Rate II, Strategic Dividend and U.S. High
Yield recommend that the respective shareholders of those Funds vote FOR the
proposal to approve the proposed investment advisory and administration
agreements.

22
<PAGE>

ITEM 5: PROPOSAL TO AMEND THE INVESTMENT
OBJECTIVE AND POLICIES OF MERRILL LYNCH STRATEGIC DIVIDEND FUND

The current investment objective of Strategic Dividend is to seek long-
term total return by investing primarily in a diversified portfolio of
dividend-paying common stocks that yield more than the Standard & Poor's 500
Index ("S&P 500"). Consistent with this objective, Strategic Dividend currently
seeks to invest at least 65% of its assets in individual stocks whose dividend
yield exceeds the yield on the S&P 500.

To permit Strategic Dividend more flexibility in pursuing its goals, the
Investment Adviser has recommended, and the Board has approved, revising
Strategic Dividend's investment objective (i) to permit it to purchase
individual stocks without regard to whether their dividend yield exceeds that
of the S&P 500, and (ii) to affirmatively state that in addition to the
objective of long-term total return, Strategic Dividend's objective is also to
seek current income. However, Strategic Dividend's investments will emphasize
long-term total return more than current income. As revised, Strategic
Dividend's investment objective would be "to seek long-term total return and
current income." It will seek to achieve its objective by investing primarily
in a portfolio of equity securities. The investment objective of Strategic
Dividend is a fundamental policy that may be changed only by shareholder vote.

In connection with these changes to Strategic Dividend's investment
objective, the Board has adopted, subject to shareholder approval of this Item
5, a non-fundamental policy (i.e., one that can be changed without shareholder
approval) that will require Strategic Dividend's portfolio, in the aggregate,
to be structured in a manner designed to produce potential long-term capital
appreciation as well as a net portfolio yield in excess of the average of
mutual funds invested primarily in U.S. equities.

In recent years, the percentage of dividend-paying common stocks that
yield more than the S&P 500 have increasingly become concentrated in a few
market sectors that have produced relatively poor total return compared with
other market sectors. Moreover, a large number of common stocks that yield more
than the S&P 500 are in industries undergoing fundamental changes that may
threaten the ability of the issuers of these stocks to continue paying above-
average dividends in the future. The Board believes that the flexibility to
choose among a greater variety of stocks will enhance the Investment Adviser's
ability to structure a portfolio that has greater potential to produce long-
term capital appreciation while still maintaining a relatively high net
portfolio yield.

If this Item 5 is approved, Strategic Dividend will change its name to
"Merrill Lynch Equity Income Fund". The proposed name change corresponds to the
change in investment objective and policies as Strategic Dividend will no
longer seek a "strategic" yield greater than the yield on the S&P 500, but
rather will seek to purchase a portfolio of common stocks (equity) that in the
aggregate will produce both long-term capital appreciation and income.

If the proposed change to the investment objective and policies of
Strategic Dividend is approved by its shareholders at the Meeting, Strategic
Dividend's prospectus and statement of additional information will be revised,
as appropriate, to reflect this change.

The Board of Strategic Dividend recommends that the Fund's shareholders
vote FOR the proposal to amend the Fund's investment objective and policies.

23
<PAGE>

ITEM 6: PROPOSAL TO AMEND THE INVESTMENT OBJECTIVE

OF MERRILL LYNCH AMERICAS INCOME FUND, INC.

The Board of Merrill Lynch Americas Income Fund, Inc. ("Americas Income")
proposes that Americas Income amend its investment objective to the following:

To seek high current income with a secondary objective of capital
appreciation.

The current investment objective of Americas Income is as follows:

To seek a high level of current income by investing primarily in
debt securities denominated in a currency of a country located in
the Western Hemisphere (North, South and Central America and the
surrounding waters).

The investment objective of Americas Income is a fundamental policy that
may be changed only by shareholder vote.

If shareholders of Americas Income approve the proposed amendment to its
investment objective, Americas Income will become a worldwide emerging markets
debt fund that seeks to achieve its investment objective by investing in debt
obligations of issuers located in emerging market countries.

If the amendment to its investment objective is approved, Americas Income
will pursue the investment strategy described below. Americas Income will seek
to achieve its revised investment objective by investing, under normal market
conditions, at least 65% of its total assets in debt obligations of issuers in
emerging market countries. Americas Income will consider emerging market
countries to include those nations included in the Morgan Stanley Capital
International Emerging Markets Free Index. Debt obligations will include fixed
or floating rate bonds, notes, debentures, commercial paper, corporate loans,
Brady Bonds, and other debt securities issued or guaranteed by governments,
agencies, or instrumentalities, central banks, commercial banks or private
issuers, including repurchase agreements. Debt obligations will also include
convertible securities, which have characteristics of both debt and equity
investments. Under normal circumstances, 65% of Americas Income's total assets
are expected to be denominated in U.S. dollars, and Americas Income will not
usually attempt to cushion the impact of foreign currency fluctuations on the
dollar. Americas Income will be permitted to invest up to 40% of its assets in
issuers domiciled in any one country.

The strategy outlined above modifies certain of Americas Income's current
investment policies. In particular, Americas Income would no longer be subject
to the limitation that at least 80% of its assets be invested in debt
securities denominated in a currency of a country located in the Western
Hemisphere. Americas Income's current policies require the Fund to invest in at
least three currencies and provide that Americas Income expects to maintain a
minimum of 25% of its total assets in securities denominated in the U.S.
dollar. Approval of the proposed new investment objective and policies would
eliminate the currency requirements and increase Americas Income's minimum
investment in U.S. dollar denominated securities to 65% of its total assets. In
addition, Americas Income currently does not invest more than 10% of its assets
in any country other than the United States, Canada, Mexico, Argentina, Brazil,
Chile, Colombia, Ecuador, Panama, Peru and Venezuela. The new policies,
however, will permit the Fund to invest up to 40% of its assets in issuers
domiciled in any country. As a result, Americas Income may be more exposed to
risks affecting issuers domiciled in a single country than an emerging markets
debt fund that invests more widely.

Other than as outlined above, the amendments to Americas Income's
investment objective and policies will not materially change the manner in
which the Fund is managed. The main risks of investing in Americas Income will
not change substantially due to these amendments. In addition, the new policy
of maintaining at least 65% of Americas Income's assets in U.S. dollar
denominated securities should increase its exposure to the U.S. dollar and
reduce the Fund's exposure to foreign currency risks. Fund management expects
that the amendments to the investment objective and policies of Americas Income
will provide greater flexibility in

24
<PAGE>

portfolio management by expanding the range of investments the Fund may make
and the markets in which it may invest. These amendments are expected to
provide Americas Income with greater flexibility to take advantage of and
respond to market developments and trends throughout the world.

If this Item 6 is approved, Americas Income will change its name to
"Merrill Lynch Emerging Markets Debt Fund, Inc." The proposed name change
corresponds to the change in investment objective and policies as Americas
Income will no longer seek high current income by investing primarily in debt
securities denominated in a currency of a country located in the Western
Hemisphere, but rather will seek high current income by investing primarily in
debt securities of issuers located in emerging market countries.

If the shareholders of Americas Income approve this Item 6 but do not
also approve Item 7 discussed below, Americas Income will not amend its
investment objective as described in this Item 6.

If the proposed amendment to the investment objective of Americas Income
is approved by its shareholders at the Meeting, the prospectus and statement of
additional information of Americas Income will be revised, as appropriate, to
reflect this change.

The Board of Americas Income recommends that the Fund's shareholders vote
FOR the proposal to amend the Fund's investment objective.

ITEM 7: PROPOSAL TO AMEND AN INVESTMENT POLICY OF MERRILL LYNCH

AMERICAS INCOME FUND, INC.

The Board of Americas Income proposes that Americas Income amend a
fundamental investment policy to provide that Americas Income will no longer
concentrate in the financial services industry. Consequently, Americas Income
will no longer invest more than 25% of its total assets in the securities of
issuers in the financial services sector. The Board of Americas Income also
proposes to amend the same fundamental investment policy to delete the
reference to investing more than 25% of Americas Income's total assets in the
securities of Western Hemisphere governmental entities and replace it with the
more conventional reference to the U.S. Government and its agencies and
instrumentalities. The proposed investment restriction relating to
concentration will read as follows:

The Fund may not invest more than 25% of its total assets, taken
at market value at the time of each investment, in securities of
issuers in any particular industry (excluding the U.S. Government
and its agencies and instrumentalities).

This investment policy of Americas Income is a fundamental policy that
may be changed only by shareholder vote.

The main risks of investing in Americas Income will not change
substantially due to this amendment, except that by eliminating the requirement
that Americas Income invest more than 25% of the its total assets in the
financial services sector, Americas Income will be less exposed to the risks
associated with concentrating in that sector. Also, by eliminating the ability
of Americas Income to invest more than 25% of its total assets in Western
Hemisphere governmental entities, Americas Income will be less exposed to the
risks associated with concentrating in these governmental entities.

These changes to Americas Income's concentration policy are consistent
with the proposed change in Americas Income's investment objective and policies
discussed in Item 6 above. When Americas Income originally commenced operations
in 1993, issuers in the financial services industry constituted a substantial
portion of the available investments in the countries in which Americas Income
primarily invested. Consequently, a policy of concentrating in the financial
services sector was desirable at that time. As a result of

25
<PAGE>

the proposed change in the investment objective and policies of Americas Income
discussed in Item 6 above and developments in global debt markets, the current
concentration policy of Americas Income relating to the financial services
sector and Western Hemisphere governmental entities is no longer necessary or
desirable.

If the proposed amendment to the investment policy of Americas Income is
approved by its shareholders at the Meeting, the prospectus and statement of
additional information of Americas Income will be revised, as appropriate, to
reflect this change.

The Board of Americas Income recommends that the Fund's shareholders vote
FOR the proposal to amend an investment policy of the Fund.

ITEM 8: PROPOSAL TO AMEND AN INVESTMENT POLICY
OF MERRILL LYNCH HEALTHCARE FUND, INC.

The Board of Merrill Lynch Healthcare Fund, Inc. ("Healthcare") proposes
that Healthcare adopt a fundamental investment policy to provide that
Healthcare will concentrate in the pharmaceutical industry. Consequently,
Healthcare will invest at least 25% of its assets in the pharmaceutical
industry. As a result, it is also proposed that Healthcare's investment
restriction relating to concentration will be revised to read as follows:

The Fund will not invest more than 25% of its assets, taken at
market value at the time of purchase, in the securities of issuers
in any particular industry (excluding issuers in the
pharmaceutical industry and the U.S. Government and its agencies
and instrumentalities) [added language shown in boldface type].

This investment policy of Healthcare will be a fundamental policy that
may be changed only by shareholder vote.

Other than as described below, the change in investment policy will not
materially change the manner in which Healthcare is managed.

Healthcare invests at least 65% of its total assets in healthcare
companies under normal conditions. Within the healthcare sector, the Fund's
greatest weighting is and will continue to be in pharmaceuticals. Until
recently, Healthcare has sought to identify discrete industries operating
within the pharmaceuticals sector. As a result of industrywide consolidations,
however, companies that were once focused in a particular area are becoming
more generalized. Since it is becoming harder to distinguish between different
types of companies in the general pharmaceutical area, Fund management believes
it is more appropriate to treat the entire pharmaceutical area as one industry.
Healthcare will consider the pharmaceutical industry to be comprised of
companies whose primary business is involved in the research, development,
manufacturing and/or marketing of prescription drugs or ethically promoted
over-the-counter products.

Other than the risks associated with potentially greater exposure to the
pharmaceutical industry, the principal risks of investing in Healthcare will
not be changed substantially by this change in investment policy. By
concentrating in one industry, Healthcare will be affected by share price
movements of companies in that industry more than a more broadly diversified
mutual fund and is subject to the risk that it will perform poorly during a
downturn in that industry. While rapid changes in pharmaceuticals present
attractive opportunities for investment in companies in this field, such
companies may face the risk that their products or services may prove to be
commercially unsuccessful or may be rendered obsolete by further scientific and
technological developments. If Healthcare has invested in companies whose
products are commercially unsuccessful or are rendered obsolete, the value of
Healthcare's investment may decrease substantially. In addition, many of these
companies may offer products or services that are subject to governmental
regulation and may, therefore, be affected adversely by actual or anticipated
governmental policies.

26
<PAGE>

If the proposed investment policy for Healthcare is approved by its
shareholders at the Meeting, the prospectus and statement of additional
information of Healthcare will be revised, as appropriate, to reflect this
change.

The Board of Healthcare recommends that the Fund's shareholders vote FOR
the proposal to amend an investment policy of the Fund.

ITEM 9: PROPOSAL TO AMEND THE INVESTMENT OBJECTIVE AND POLICIES
OF MERRILL LYNCH DEVELOPING CAPITAL MARKETS FUND, INC.

The Board of Merrill Lynch Developing Capital Markets Fund, Inc.
("Developing Capital Markets") proposes that Developing Capital Markets change
its investment objective by deleting the reference to "smaller capital markets"
and by providing that Developing Capital Markets will seek to achieve its
objective through a policy of investing primarily in issuers located in
developing capital markets. The proposed investment objective and policies will
read as follows:

The investment objective of Developing Capital Markets is to seek
long term capital appreciation. Developing Capital Markets will
seek to achieve its objective by investing in securities,
principally equities, of issuers in countries having developing
capital markets. The term "developing capital markets" is defined
to mean those countries included within the Morgan Stanley Capital
International (MSCI) Emerging Markets Free Index.

The current investment objective of Developing Capital Markets is as
follows:

To seek long term capital appreciation by investing in securities,
principally equities of issuers in countries having smaller
capital markets. The term "smaller capital markets" is defined as
all markets other than the four largest in equity capitalization.

The investment objective of Developing Capital Markets is a fundamental
policy that may be changed only by shareholder vote. The policy of investing in
issuers located in developing capital markets will be a non-fundamental policy
that can be changed by the Board of Developing Capital Markets.

Other than as described below, the change in investment objective and
policies will not materially change the manner in which Developing Capital
Markets is managed.

The current definition of "smaller capital markets" effectively means
that the current investment universe of Developing Capital Markets includes all
countries except the United States, the United Kingdom, Germany and Japan,
which collectively are the four largest markets in terms of equity
capitalization. Fund management has determined that the investment universe of
Developing Capital Markets should be more narrowly defined to reflect those
markets that are truly emerging, as opposed to those that, although not among
the four largest, are well developed. The change in investment objective and
policies from investment in "smaller capital markets" to investment in
"developing capital markets" will align Developing Capital Markets' investment
objective and policies with its benchmark index, the MSCI Emerging Markets Free
Index. The amended investment objective and policies are not expected to result
in a substantial change in the actual portfolio management of Developing
Capital Markets and will better reflect its actual portfolio holdings.

The main risks of investing in Developing Capital Markets will not be
changed substantially by this change in investment objective and policies.

If the proposed amendment to the investment objective and policies of
Developing Capital Markets is approved by its shareholders at the Meeting, the
prospectus and statement of additional information of Developing Capital
Markets will be revised, as appropriate, to reflect this change.

The Board of Developing Capital Markets recommends that the Fund's
shareholders vote FOR the proposal to amend the Fund's investment objective and
policies.

27
<PAGE>

ADDITIONAL INFORMATION

The expenses of preparation, printing and mailing of the enclosed forms
of proxy and accompanying Notice and Combined Proxy Statement will be borne by
the Funds in proportion to their relative net assets. The Funds will reimburse
banks, brokers and others for their reasonable expenses in forwarding proxy
solicitation materials to the beneficial owners of the shares of the Funds.

For the Funds listed below, a quorum consists of a majority of the shares
entitled to vote at the meetings, present in person or by proxy.

. Mercury Global Holdings, Inc.

. Merrill Lynch Corporate Bond Fund, Inc.

. Merrill Lynch Developing Capital Markets Fund, Inc.

. Merrill Lynch Global Allocation Fund, Inc.

. Merrill Lynch Global Utility Fund, Inc.

. Merrill Lynch Healthcare Fund, Inc.

. Merrill Lynch High Income Municipal Bond Fund, Inc.

. Merrill Lynch Latin America Fund, Inc.

. Merrill Lynch Municipal Bond Fund, Inc.

. Merrill Lynch Municipal Strategy Fund, Inc.

. Merrill Lynch Pacific Fund, Inc.

. Merrill Lynch Senior Floating Rate Fund, Inc.

. Merrill Lynch Short-Term Global Income Fund, Inc.

For the Funds listed below, a quorum consists of one-third of the shares
entitled to vote at the meetings, present in person or by proxy.

. Global Financial Services Master Trust

. Master Internet Strategies Trust

. Mercury Internet Strategies Fund, Inc.

. Merrill Lynch Americas Income Fund, Inc.

. Merrill Lynch Dragon Fund, Inc.

. Merrill Lynch EuroFund

. Merrill Lynch Global Bond Fund for Investment and Retirement

. Merrill Lynch Global Financial Services Fund, Inc.

. Merrill Lynch Global SmallCap Fund, Inc.

. Merrill Lynch Global Technology Fund, Inc.

. Merrill Lynch Global Value Fund, Inc.

. Merrill Lynch International Equity Fund

. Merrill Lynch Internet Strategies Fund, Inc.

. Merrill Lynch Municipal Intermediate Term Fund of Merrill Lynch
Municipal Series Trust

. Merrill Lynch Senior Floating Rate Fund II, Inc.

. Merrill Lynch Strategic Dividend Fund

. Merrill Lynch U.S. High Yield Fund, Inc.

. The Corporate Fund Accumulation Program, Inc.

. The Municipal Fund Accumulation Program, Inc.

If, by the time scheduled for the Meetings, a quorum of the shareholders
is not present or if a quorum is present but sufficient votes to act upon the
proposals are not received from the shareholders, the persons named as proxies
may propose one or more adjournments of the Meetings to permit further
solicitation of proxies from shareholders. Any such adjournment will require
the affirmative vote of a majority of the shares of the Fund present in person
or by proxy and entitled to vote at the session of the Meeting to be adjourned.

28
<PAGE>

The persons named as proxies will vote in favor of any such adjournment if
they determine that adjournment and additional solicitation are reasonable and
in the best interests of the Fund's shareholders.

All shares represented by properly executed proxies, unless such proxies
have previously been revoked, will be voted at the Meetings or any adjournment
thereof in accordance with the directions on the proxies; if no direction is
indicated, the shares will be voted:

1)"FOR" the election of the Fund's Board Member nominees;

The shareholders of the Internet Funds and Global Financial
will also vote in connection with the election of the Board Members
of the Internet Trust and the Global Financial Trust, respectively.

2)"FOR" the ratification of the selection of Deloitte & Touche LLP, as
independent auditors;

The shareholders of the Internet Funds and Global Financial
will also vote in connection with the ratification of the selection
of the independent auditors of the Internet Trust and the Global
Financial Trust, respectively.

With respect to proxies submitted by the shareholders of all of the Funds
except the Internet Funds, the Internet Trust, Global Financial and the Global
Financial Trust:

3)"FOR" the approval of a charter amendment permitting the Board to
reorganize the Fund into a master/feeder structure;

With respect to Proposals 4, 5, 6, 7, 8 and 9, proxies submitted by the
shareholders of the Fund or Funds named in the proposal:

4)"FOR" the approval of the Proposed Investment Advisory and
Administration Agreements for Merrill Lynch Senior Floating Rate Fund II,
Inc., Merrill Lynch Strategic Dividend Fund and Merrill Lynch U.S. High Yield
Fund, Inc.;

5)"FOR" the proposal to amend the investment objective and policies of
Merrill Lynch Strategic Dividend Fund;

6)"FOR" the proposal to amend the investment objective of Merrill Lynch
Americas Income Fund, Inc.;

7)"FOR" the proposal to amend an investment policy of Merrill Lynch
Americas Income Fund, Inc.;

8)"FOR" the proposal to amend an investment policy of Merrill Lynch
Healthcare Fund, Inc.; and

9)"FOR" the proposal to amend the investment objective and policies of
Merrill Lynch Developing Capital Markets Fund, Inc.

29
<PAGE>

The shareholders solicited and entitled to vote on Items 1, 2 and 3 are
outlined in the following chart. With respect to Items 1, 2 and 3, assuming a
quorum is present, approval of Items 1, 2 and 3 will require the affirmative
vote of shareholders holding the percentage of shares indicated in the chart
below. For purposes of Item 1, a "plurality of the votes" means the candidate
must receive more votes than any other candidate for the same position, but not
necessarily a majority of the votes cast.

<TABLE>
<CAPTION>
Item 1. Item 2. Item 3.
----------------------------------------------------------------------------------------
Approval of
a Charter
Amendment to
Permit the
Election of Ratification of Reorganization of
AMPS Selection of the Fund into a
Board Election of Independent Master/ Feeder
Fund Members Board Members Auditors Structure
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Global Financial Not Voting Affirmative vote of a Affirmative vote of a Not Voting
Services Master Trust.. majority of the shares majority of the shares
represented at the Meeting represented at the Meeting
- ------------------------------------------------------------------------------------------------------------------
Master Internet Not Voting Affirmative vote of a Affirmative vote of a Not Voting
Strategies Trust....... majority of the shares majority of the shares
represented at the Meeting represented at the Meeting
- ------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------
Mercury Global Holdings, Not Voting Affirmative vote of a Affirmative vote of a Affirmative vote
Inc.................... majority of votes cast majority of votes cast of two-thirds of votes
entitled to be cast
Mercury Internet Not Voting Affirmative vote of a Affirmative vote of a Not Voting
Strategies Fund, Inc... plurality of votes cast majority of votes cast
- ------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------
Merrill Lynch Americas Not Voting Affirmative vote of a Affirmative vote of a Affirmative vote of
Income Fund, Inc....... plurality of votes cast majority of votes cast a majority of votes
entitled to be cast
- ------------------------------------------------------------------------------------------------------------------
Merrill Lynch Corporate Not Voting Affirmative vote of a Affirmative vote of a Affirmative vote of
Bond Fund, Inc......... plurality of votes cast majority of votes cast two-thirds of votes
entitled to be cast
- ------------------------------------------------------------------------------------------------------------------
Merrill Lynch Developing
Capital Not Voting Affirmative vote of a Affirmative vote of a Affirmative vote of
Markets Fund, Inc...... majority of votes cast majority of votes cast a majority of votes
entitled to be cast
- ------------------------------------------------------------------------------------------------------------------
Merrill Lynch Dragon Not Voting Affirmative vote of a Affirmative vote of a Affirmative vote of
Fund, Inc.............. plurality of votes cast majority of votes cast a majority of votes
entitled to be cast
- ------------------------------------------------------------------------------------------------------------------
Merrill Lynch EuroFund.. Not Voting Affirmative vote of a Affirmative vote of a Affirmative vote of
majority of the shares majority of the shares two-thirds of votes
represented at the Meeting represented at the Meeting entitled to be cast
- ------------------------------------------------------------------------------------------------------------------
Merrill Lynch Global
Allocation Fund, Inc... Not Voting Affirmative vote of a Affirmative vote of a Affirmative vote of
majority of votes cast majority of votes cast a majority of votes
entitled to be cast
- ------------------------------------------------------------------------------------------------------------------
Merrill Lynch Global
Bond Fund for Not Voting Affirmative vote of a Affirmative vote of a Affirmative vote of
Investment and majority of the shares majority of the shares two-thirds of votes
Retirement............. represented at the Meeting represented at the Meeting entitled to be cast
Merrill Lynch Global
Financial Services Not Voting Affirmative vote of a Affirmative vote of a Not Voting
Fund, Inc.............. plurality of votes cast majority of votes cast
</TABLE>

30
<PAGE>

<TABLE>
<CAPTION>
Item 1. Item 2. Item 3.
--------------------------------------------------------------
Approval of
a Charter
Amendment to
Ratification Permit the
Election of of Reorganization of
AMPS Election of Selection of the Fund into a
Board Board Independent Master/ Feeder
Fund Members Members Auditors Structure
- -----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Merrill Lynch Global Not Voting Affirmative Affirmative
SmallCap Fund, Inc..... vote of a vote of a Affirmative vote of
plurality of majority of a majority of votes
votes cast votes cast entitled to be cast
- -----------------------------------------------------------------------------------------
Merrill Lynch Global Not Voting Affirmative Affirmative
Technology Fund, Inc... vote of a vote of a Affirmative vote of
plurality of majority of a majority of votes
votes cast votes cast entitled to be cast
- -----------------------------------------------------------------------------------------
Merrill Lynch Global Not Voting Affirmative Affirmative
Utility Fund, Inc...... vote of a vote of a Affirmative vote of
majority of majority of a majority of votes
votes cast votes cast entitled to be cast
- -----------------------------------------------------------------------------------------
Merrill Lynch Global Not Voting Affirmative Affirmative
Value Fund, Inc........ vote of a vote of a Affirmative vote of
plurality of majority of a majority of votes
votes cast votes cast entitled to be cast
- -----------------------------------------------------------------------------------------
Merrill Lynch Healthcare Not Voting Affirmative Affirmative
Fund, Inc.............. vote of a vote of a Affirmative vote of
majority of majority of two-thirds of votes
votes cast votes cast entitled to be cast
- -----------------------------------------------------------------------------------------
Merrill Lynch High
Income Municipal Not Voting Affirmative Affirmative
Bond Fund, Inc......... vote of a vote of a Affirmative vote of
majority of majority of a majority of votes
votes cast votes cast entitled to be cast
- -----------------------------------------------------------------------------------------
Merrill Lynch Not Voting Affirmative Affirmative
International Equity vote of a vote of a
Fund................... majority of majority of
the shares the shares Affirmative vote of
represented at represented at a majority of votes
the Meeting the Meeting entitled to be cast
- -----------------------------------------------------------------------------------------
Merrill Lynch Internet Not Voting Affirmative Affirmative Not Voting
Strategies Fund, Inc... vote of a vote of a
plurality of majority of
votes cast votes cast
- -----------------------------------------------------------------------------------------
Merrill Lynch Latin Not Voting Affirmative Affirmative Affirmative vote of a
America Fund, Inc...... vote of a vote of a majority of votes
majority of majority of entitled to be cast
votes cast votes cast
- -----------------------------------------------------------------------------------------
Merrill Lynch Municipal Not Voting Affirmative Affirmative Affirmative vote of
Bond Fund, Inc......... vote of a vote of a two-thirds of votes
plurality of majority of entitled to be cast
votes cast votes cast
- -----------------------------------------------------------------------------------------
Merrill Lynch Municipal
Intermediate
Term Fund of Merrill Not Voting Affirmative Affirmative Affirmative vote of
Lynch Municipal vote of a vote of a two-thirds of votes
Series Trust........... majority of majority of entitled to be cast
the shares the shares
represented at represented at
the the
Meeting Meeting
</TABLE>

31
<PAGE>

<TABLE>
<CAPTION>
Item 1. Item 2. Item 3.
------------------------------------------------------------------------------------------
Approval of
a Charter
Amendment to
Permit the
Election of Ratification of Reorganization of
AMPS Selection of the Fund into a
Board Election of Board Independent Master/ Feeder
Fund Members Members Auditors Structure
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Merrill Lynch Municipal
Strategy Fund, Inc..... Affirmative vote Affirmative vote of a Affirmative vote of a Affirmative vote of a
of a plurality of plurality of votes cast majority of votes cast majority of votes
votes cast by the by the holders of entitled to be cast
holders of AMPS Common Stock and
AMPS
- ---------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------
Merrill Lynch Pacific Not Voting Affirmative vote of a Affirmative vote of a Affirmative vote of
Fund, Inc.............. majority of votes cast majority of votes cast two-thirds of votes
entitled to be cast
- ---------------------------------------------------------------------------------------------------------------------
Merrill Lynch Senior
Floating Rate Not Voting Affirmative vote of a Affirmative vote of a Affirmative vote of a
Fund, Inc.............. majority of votes cast majority of votes cast majority of votes entitled
to be cast
- ---------------------------------------------------------------------------------------------------------------------
Merrill Lynch Senior
Floating Rate Not Voting Affirmative vote of a Affirmative vote of a Affirmative vote of a
Fund II, Inc........... plurality of votes cast majority of votes cast majority of votes
entitled to be cast
- ---------------------------------------------------------------------------------------------------------------------
Merrill Lynch Short-Term
Global Income Not Voting Affirmative vote of a Affirmative vote of a Affirmative vote of a
Fund, Inc.............. majority of votes cast majority of votes cast majority of votes entitled
to be cast
Merrill Lynch Strategic Not Voting Affirmative vote of a Affirmative vote of a Affirmative vote of
Dividend Fund.......... majority of the shares majority of the shares two-thirds of votes
represented at the represented at the entitled to be cast
Meeting Meeting
- ---------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------
Merrill Lynch U.S. High
Yield Fund, Inc.
(formerly Merrill Lynch Not Voting Affirmative vote of a Affirmative vote of a Affirmative vote of a
Corporate High Yield plurality of votes cast majority of votes cast majority of votes
Fund, Inc.)............ entitled to be cast
- ---------------------------------------------------------------------------------------------------------------------
The Corporate Fund
Accumulation Not Voting Affirmative vote of a Affirmative vote of a Affirmative vote of a
Program, Inc........... plurality of votes cast majority of votes cast majority of votes
entitled to be cast
The Municipal Fund
Accumulation Not Voting Affirmative vote of a Affirmative vote of a Affirmative vote of a
Program, Inc........... plurality of votes cast majority of votes cast majority of votes
entitled to be cast
</TABLE>

Only the shareholders of Senior Floating Rate II, Strategic Dividend and
U.S. High Yield are entitled to vote on Item 4. Only the shareholders of
Strategic Dividend, Americas Income, Americas Income, Healthcare and Developing
Capital Markets are entitled to vote on Items 5, 6, 7, 8 and 9, respectively.
With respect to Items 4, 5, 6, 7, 8 and 9, assuming a quorum is present at the
Meeting of the applicable Fund's shareholders, approval of each such Item by
each such Fund will require the affirmative vote of the lesser of (i) 67% of
the shares represented at the Meeting at which more than 50% of the applicable
Fund's outstanding shares are represented or (ii) more than 50% of the
applicable Fund's outstanding shares.

32
<PAGE>

In order to obtain the necessary quorum at the Meetings, supplementary
solicitations may be made by mail, telephone, telegraph or personal interview
by officers of the Funds. The Funds have retained Shareholder Communications
Corporation, 17 State Street, New York, New York 10004 to aid in the
solicitation of proxies, at an aggregate cost to be allocated among the Funds
of approximately $250,000, plus out-of-pocket expenses.

Broker-dealer firms, including MLPF&S, holding shares of each Fund 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 each
Item before the Meeting. The Funds understand 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 Board Members (Item 1), the ratification of the selection of
independent auditors (Item 2), the proposed charter amendment (Item 3), the
proposed advisory and administration agreements (Item 4), if no instructions
have been received prior to the date specified in the broker-dealer firm's
request for voting instructions. Broker-dealer firms, including MLPF&S, will
not be permitted to grant voting authority without instructions with respect to
Items 5, 6, 7, 8 and 9. 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 shares present for purposes of determining whether the
necessary quorum of shareholders exists. Proxies that are returned but that are
marked "abstain" or on which a broker-dealer has declined to vote on any
proposal ("broker non-votes") will be counted as present for the purposes of a
quorum. MLPF&S has advised each Fund that it intends to vote shares held in its
name for which no instructions have been received except as limited by
agreement or applicable law, on Item 1, Item 2, Item 3 and Item 4 in the same
proportion as the votes received from beneficial owners of those shares for
which instructions have been received, whether or not held in nominee name.
Abstentions and broker non-votes will not be counted as votes cast. Therefore,
abstentions and broker non-votes will not have an effect on the vote on Item 1
and Item 2 (for Maryland corporations). Abstentions and broker non-votes will
have the same effect as a vote against Items 3, 4, 6, 7, 8 and 9 (for Maryland
corporations), Items 1, 2, 3, 4 and 5 (for Massachusetts business trusts) and
Items 1 and 2 (for Delaware business trusts).

Any trust effecting a reorganization and any such shareholders shall in
such cases have the rights and duties and shall follow the procedure set forth
in sections 88 to 98 inclusive, of chapter 156B of the General Laws of
Massachusetts. In the event that any shareholder elects to exercise his or her
statutory right of appraisal under Massachusetts law, it is the present
intention of each trust to petition a court of competent jurisdiction to
determine whether such right of appraisal has been superseded by the provisions
of Rule 22c-1 under the Investment Company Act, which generally requires mutual
funds to redeem their shares at prices based upon the then current net asset
value of such shares.

- --------

* Merrill Lynch EuroFund

Merrill Lynch Global Bond Fund for Investment and Retirement

Merrill Lynch International Equity Fund

Merrill Lynch Municipal Intermediate Term Fund of Merrill Lynch Municipal
Series Trust

Merrill Lynch Strategic Dividend Fund

33
<PAGE>

Address of Investment Adviser

The principal office of each Fund's Investment Adviser is located at 800
Scudders Mill Road, Plainsboro, New Jersey 08536.

Annual Report Delivery

Each Fund will furnish, without charge, a copy of its annual report for
the Fund's last fiscal year and a copy of its most recent semi-annual report to
any shareholder upon request. Such requests should be directed to the attention
of the Secretary of the applicable Fund, P.O. Box 9011, Princeton, New Jersey
08543-9011, or to 1-800-456-4587 ext. 123.

The charters of the Funds do not require that the Funds hold annual
meetings of shareholders. Each Fund will be required, however, to call special
meetings of shareholders in accordance with the requirements of the Investment
Company Act to seek approval of new management and advisory arrangements or of
a change in the fundamental policies, objectives or restrictions of the Fund.
Each Fund also would be required to hold a special shareholders' meeting to
elect new Board Members at such time as less than a majority of the Board
Members holding office have been elected by shareholders. The charter or by-
laws provide that a shareholders' meeting may be called at the request of a
majority of the Board Members or of 10% of the outstanding shares of Global
Financial Services Master Trust, Master Internet Strategies Trust, Merrill
Lynch Americas Income Fund, Inc., Merrill Lynch Corporate Bond Fund, Inc.,
Merrill Lynch Developing Capital Markets Fund, Inc., Merrill Lynch Dragon Fund,
Inc., Merrill Lynch EuroFund, Merrill Lynch Global Allocation Fund, Inc.,
Merrill Lynch Global Bond Fund for Investment and Retirement, Merrill Lynch
Global Financial Services Fund, Inc., Merrill Lynch Global SmallCap Fund, Inc.,
Merrill Lynch Global Value Fund, Inc., Merrill Lynch High Income Municipal Bond
Fund, Inc., Merrill Lynch International Equity Fund, Merrill Lynch Internet
Strategies Fund, Inc., Merrill Lynch Latin America Fund, Inc., Merrill Lynch
Municipal Bond Fund, Inc., Merrill Lynch Municipal Intermediate Term Fund of
Merrill Lynch Municipal Series Trust, Merrill Lynch Senior Floating Rate Fund,
Inc., Merrill Lynch Senior Floating Rate Fund II, Inc., Merrill Lynch Strategic
Dividend Fund, Merrill Lynch U.S. High Yield Fund, Inc., The Corporate Fund
Accumulation Program, Inc. and The Municipal Fund Accumulation Program, Inc. or
25% of the outstanding shares of Mercury Global Holdings, Inc., Merrill Lynch
Global Technology Fund, Inc., Merrill Lynch Global Utility Fund, Inc., Merrill
Lynch Healthcare Fund, Inc., Merrill Lynch Pacific Fund, Inc. and Merrill Lynch
Short-Term Global Income Fund, Inc. entitled to vote at such meeting.

34
<PAGE>

Shareholder Proposals

A stockholder proposal intended to be presented at any subsequent
meetings of stockholders of the Funds must be received by that Fund in a
reasonable time before the Board's solicitation relating to such meeting is to
be made in order to be considered in that Fund's proxy statement and form of
proxy relating to such meeting.

By Order of the Boards of Directors

Global Financial Services Master Trust

Master Internet Strategies Trust
Mercury Global Holdings, Inc.
Mercury Internet Strategies Fund, Inc.
Merrill Lynch Americas Income Fund, Inc.
Merrill Lynch Corporate Bond Fund, Inc.
Merrill Lynch Developing Capital Markets
Fund, Inc.
Merrill Lynch Dragon Fund, Inc.
Merrill Lynch EuroFund
Merrill Lynch Global Allocation Fund, Inc.
Merrill Lynch Global Bond Fund for Investment
and Retirement
Merrill Lynch Global Financial Services Fund,
Inc.
Merrill Lynch Global SmallCap Fund, Inc.
Merrill Lynch Global Technology Fund, Inc.
Merrill Lynch Global Utility Fund, Inc.
Merrill Lynch Global Value Fund, Inc.
Merrill Lynch Healthcare Fund, Inc.
Merrill Lynch High Income Municipal Bond
Merrill Lynch International Equity Fund
Merrill Lynch Internet Strategies Fund, Inc.
Merrill Lynch Latin America Fund, Inc.
Merrill Lynch Municipal Bond Fund, Inc.
Merrill Lynch Municipal Intermediate Term
Fund ofMerrill Lynch Municipal Series Trust
Merrill Lynch Municipal Strategy Fund, Inc.
Merrill Lynch Pacific Fund, Inc.
Merrill Lynch Senior Floating Rate Fund, Inc.
Merrill Lynch Senior Floating Rate Fund II,
Inc.
Merrill Lynch Short-Term Global Income Fund,
Inc.
Merrill Lynch Strategic Dividend Fund
Merrill Lynch U.S. High Yield Fund, Inc.
The Corporate Fund Accumulation Program, Inc.
The Municipal Fund Accumulation Program, Inc.

Dated: May 26, 2000

35
<PAGE>

EXHIBIT A

INFORMATION PERTAINING TO EACH FUND

General Information Pertaining to the Funds

<TABLE>
<CAPTION>
Defined Term Fiscal
Used in this Year State of Meeting
Fund Exhibit A End Organization Time
- ---- ------------- ------ ------------ ---------
<S> <C> <C> <C> <C>
Global Financial Services Master
Trust............................ Mst Gl Fin 9/30 DE 9:00a.m.
Master Internet Strategies Trust.. Mst Inter Tst 1/31 DE 9:15a.m.
Mercury Global Holdings, Inc...... Mer Gl Hold 11/30 MD 9:30a.m.
Mercury Internet Strategies Fund,
Inc.............................. Internet 1/31 MD 9:45a.m.
Merrill Lynch Americas Income
Fund, Inc........................ Am Inc 12/31 MD 10:00a.m.
Merrill Lynch Corporate Bond Fund,
Inc.............................. Corp Bond 9/30 MD 10:15a.m.
Merrill Lynch Developing Capital
Markets Fund, Inc................ Dev Cap 6/30 MD 10:30a.m.
Merrill Lynch Dragon Fund, Inc.... Dragon 12/31 MD 10:45a.m.
Merrill Lynch EuroFund............ Euro 10/31 MA 11:00a.m.
Merrill Lynch Global Allocation
Fund, Inc........................ Gl Al 10/31 MD 11:15a.m.
Merrill Lynch Global Bond Fund for
Investment and Retirement........ Gl Bond 10/31 MA 11:45a.m.
Merrill Lynch Global Financial
Services Fund, Inc............... Gl Fin 9/30 MD 12:00p.m.
Merrill Lynch Global SmallCap
Fund, Inc........................ Gl Small 6/30 MD 12:15p.m.
Merrill Lynch Global Technology
Fund, Inc........................ Gl Tech 3/31 MD 12:30p.m.
Merrill Lynch Global Utility Fund,
Inc.............................. Gl Utility 11/30 MD 12:45p.m.
Merrill Lynch Global Value Fund,
Inc. ............................ Gl Val 12/31 MD 1:00p.m.
Merrill Lynch Healthcare Fund,
Inc.............................. Healthcare 4/30 MD 1:15p.m.
Merrill Lynch High Income
Municipal Bond Fund.............. High Income 8/31 MA 1:30p.m.
Merrill Lynch International Equity
Fund............................. Int'l Eq 5/31 MA 1:45p.m.
Merrill Lynch Internet Strategies
Fund, Inc........................ ML Internet 1/31 MD 2:00p.m.
Merrill Lynch Latin America Fund,
Inc.............................. Latin 11/30 MD 2:15p.m.
Merrill Lynch Municipal Bond Fund,
Inc.............................. Muni Bond 12/31 MD 2:30p.m.
Merrill Lynch Municipal
Intermediate Term Fund of Merrill
Lynch Municipal Series Trust..... Muni Interm 10/31 MA 2:45p.m.
Merrill Lynch Municipal Strategy
Fund, Inc........................ Muni Strat 10/31 MD 3:00p.m.
Merrill Lynch Pacific Fund, Inc... Pacific 12/31 MD 3:15p.m.
Merrill Lynch Senior Floating Rate
Fund, Inc........................ Sr Float 8/31 MD 3:30p.m.
Merrill Lynch Senior Floating Rate
Fund II, Inc..................... Sr Float II 8/31 MD 3:45p.m.
Merrill Lynch Short-Term Global
Income Fund, Inc................. Short Gl Inc 12/31 MD 4:00p.m.
Merrill Lynch Strategic Dividend
Fund............................. Strat Div 7/31 MA 4:15p.m.
Merrill Lynch U.S. High Yield
Fund, Inc. (formerly Merrill
Lynch Corporate High Yield Fund,
Inc.)............................ U.S. Hi Yield 12/31 MD 4:30p.m.
The Corporate Fund Investment
Accumulation Program, Inc........ Corp Acc 12/31 MD 4:45p.m.
The Municipal Fund Investment
Accumulation Program, Inc........ Muni Acc 12/31 MD 5:00p.m.
</TABLE>

A-1
<PAGE>

<TABLE>
<CAPTION>
Common Stock
Outstanding as of
Fund the Record Date
- ---- -----------------
<S> <C>
Mst Gl Fin.................................................... 6,709,758
Mst Inter Tst................................................. 118,930,716
Mer Gl Hold................................................... 21,510,345
Internet...................................................... 10,030
Am Inc........................................................ 4,668,221
Corp Bond..................................................... 746,051,647
Dev Cap....................................................... 14,824,756
Dragon........................................................ 30,972,687
Euro.......................................................... 102,688,647
Gl Al......................................................... 497,908,532
Gl Bond....................................................... 12,058,282
Gl Fin........................................................ 6,698,824
Gl Small...................................................... 8,935,728
Gl Tech....................................................... 139,625,292
Gl Utility.................................................... 17,684,972
Gl Val........................................................ 172,191,256
Healthcare.................................................... 96,708,218
High Income................................................... 17,622,314
Int'l Eq...................................................... 24,065,977
ML Internet................................................... 118,664,471
Latin......................................................... 16,165,559
Muni Bond..................................................... 332,029,819
Muni Interm................................................... 14,438,028
Muni Strat*................................................... 10,744,585
Pacific....................................................... 66,759,808
Sr Float...................................................... 272,152,639
Sr Float II................................................... 41,751,834
Short Gl Inc.................................................. 10,701,664
Strat Div..................................................... 13,576,917
U.S. High Yield............................................... 75,586,079
Corp Acc...................................................... 4,546,154
Muni Acc...................................................... 37,671,141
</TABLE>
- --------

* As of the Record Date, Muni Strat had 2,320 shares of AMPS outstanding.

Except as set forth below, as of the Record Date, no person is beneficial
owner of more than five percent of the shares of any Fund.

<TABLE>
<CAPTION>
Shares of Common Stock
Beneficially Owned as of
the Record Date
------------------------
Name of Name and Address of
Fund Beneficial Owner Number Percent of Total
------- ---------------------------- ------- ----------------
<C> <S> <C> <C>
Am Inc Bio-Technology General Corp. 307,985 6.6%
Attn: Janice Polites
70 Wood Ave. S.
Iselin, NJ 08830

Internet Fund Asset Management, L.P. 10,000 99.7%
Attn: Donald C. Burke
P.O. Box 9011
Princeton, NJ 08543-9011
</TABLE>

A-2
<PAGE>

Information Pertaining to Board Member Nominees

As of the Record Date, none of the nominees held shares of the Funds
except as set forth in the table below:

<TABLE>
<CAPTION>
Fund and Class
Nominee (As Applicable) No. of Shares Held
------- --------------- ------------------
<S> <C> <C>
Ronald W. Forbes........................ Corp Bond-A 1,678
Ronald W. Forbes........................ Corp Bond-D 3,383
Ronald W. Forbes........................ G1 A1-A 228
Ronald W. Forbes........................ G1 Val-A 390
Ronald W. Forbes........................ High Income 546
Ronald W. Forbes........................ ML Internet-B 300
Ronald W. Forbes........................ Muni Bond-A 371
Ronald W. Forbes........................ Muni Strat 258
Ronald W. Forbes........................ Sr Float 273
Ronald W. Forbes........................ Stat Div-A 263
Ronald W. Forbes........................ Stat Div-D 260
Ronald W. Forbes........................ U.S. Hi Yield-A 596
Terry K. Glenn.......................... Euro-A 5,323
Terry K. Glenn.......................... G1 A1-A 3,991
Terry K. Glenn.......................... G1 A1-A 16,334
Terry K. Glenn.......................... High Income 10,562
Terry K. Glenn.......................... Int'l Eq-D 3,072
Terry K. Glenn.......................... Latin-A 4,763
Terry K. Glenn.......................... G1 Tech-A 5,634
Terry K. Glenn.......................... Corp Bond-A 20,377
Terry K. Glenn.......................... Pacific-A 2,122
Charles C. Reilly....................... Corp Bond-A 24,544
Charles C. Reilly....................... G1 A1-A 37,514
Charles C. Reilly....................... G1 Val-A 18,031
Kevin A. Ryan........................... Corp Bond-A 14
Kevin A. Ryan........................... Euro-A 1,738
Kevin A. Ryan........................... G1 Fin 1,956
Kevin A. Ryan........................... G1 Tech-A 1,115
Kevin A. Ryan........................... G1 Tech-A 500
Kevin A. Ryan........................... G1 Val-A 1,827
Kevin A. Ryan........................... ML Internet-A 1,000
Kevin A. Ryan........................... Int'l Eq-A 2,219
Kevin A. Ryan........................... Pacific-A 888
Kevin A. Ryan........................... U.S. Hi Yield-A 8,514
Roscoe S. Suddarth...................... G1 A1-B 615
Roscoe S. Suddarth...................... G1 Tech-A 140
Roscoe S. Suddarth...................... G1 Tech-A 185
Roscoe S. Suddarth...................... Sr Float 413
Arthur Zeikel........................... Healthcare-A 1,238
Arthur Zeikel........................... Euro-A 54,754
Arthur Zeikel........................... Strat Div-A 10,306
Arthur Zeikel........................... G1 A1-A 587
Arthur Zeikel........................... G1 Utility-A 346
Arthur Zeikel........................... Latin-D 5,056
Arthur Zeikel........................... Euro-D 204
Arthur Zeikel........................... Euro-D 5,975
Arthur Zeikel........................... Strat Div-D 806
Arthur Zeikel........................... G1 Small-D 12,081
Arthur Zeikel........................... G1 Tech-A 592
Arthur Zeikel........................... Corp Bond-A 1,184
Arthur Zeikel........................... Muni Inter 66,611
</TABLE>

A-3
<PAGE>

Set forth below is information about when each nominee became a Board
member for the Funds on whose Board he or she serves.

<TABLE>
<CAPTION>
Fund Forbes Glenn Montgomery Reilly Ryan Suddarth West Zeikel Zinbarg
- ---- ------ ----- ---------- ------ ---- -------- ---- ------ -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Mst Gl Fin.............. 1999 1999 1999 1999 1999 n/a 1999 1999 n/a
Mst Inter Tst........... n/a 2000 n/a 2000 n/a 2000 2000 2000 2000
Mer Gl Hold............. n/a 1999 n/a 1990 n/a n/a 1984 1984 1994
Internet................ n/a 2000 n/a 2000 n/a 2000 2000 2000 2000
Am Inc.................. n/a 1999 n/a 1993 n/a n/a 1993 1993 1994
Corp Bond............... 1977 1999 1994 1990 1992 n/a 1981 1977 n/a
Dev Cap................. n/a 1999 n/a 1990 n/a n/a 1989 1989 1994
Dragon.................. n/a 1999 n/a 1992 n/a n/a 1992 1992 1994
Euro.................... n/a 1999 n/a 1990 n/a n/a 1986 1986 1994
Gl Al................... n/a 1999 n/a 1990 n/a n/a 1988 1988 1994
Gl Bond................. n/a 1999 n/a 1990 n/a n/a 1991 1991 1994
Gl Fin.................. 1999 1999 1999 1999 1999 n/a 1999 1999 n/a
Gl Small................ n/a 1999 n/a 1994 n/a n/a 1994 1994 1994
Gl Tech................. n/a 1999 n/a 1998 n/a 2000 1998 1998 1998
Gl Utility.............. 1990 1999 1994 1990 1992 n/a 1990 1990 n/a
Gl Val.................. n/a 1999 n/a 1996 n/a 2000 1996 1996 1996
Healthcare.............. n/a 1999 n/a 1990 n/a n/a 1983 1983 1994
High Income............. 1997 1999 1997 1997 1997 n/a 1997 1997 n/a
Int'l Eq................ n/a 1999 n/a 1993 n/a n/a 1993 1993 1994
ML Internet............. n/a 2000 n/a 2000 n/a 2000 2000 2000 2000
Latin................... n/a 1999 n/a 1991 n/a n/a 1991 1991 1994
Muni Bond............... 1977 1999 1994 1990 1992 n/a 1981 1977 n/a
Muni Interm............. 1986 1999 1994 1990 1992 n/a 1986 1986 n/a
Muni Strat.............. 1996 1999 1996 1996 1996 n/a 1996 1996 n/a
Pacific................. n/a 1999 n/a 1991 n/a n/a 1991 1980 1994
Sr Float................ 1989 1999 1994 1990 1992 n/a 1989 1989 n/a
Sr Float II............. 1999 1999 1999 1999 1999 n/a 1999 1999 n/a
Short Gl Inc............ n/a 1999 n/a 1990 n/a n/a 1990 1990 1994
Strat Div............... 1987 1999 1994 1990 1992 n/a 1987 1987 n/a
U.S. High Yield......... 1998 1999 1998 1998 1998 n/a 1998 1998 n/a
Corp Acc................ 1977 1999 1993 1991 1992 n/a 1981 1977 n/a
Muni Acc................ 1977 1999 1993 1991 1992 n/a 1981 1977 n/a
</TABLE>

A-4
<PAGE>

Set forth in the table below is information regarding Board and committee
meetings held, and the aggregate fees and expenses paid by each Fund to non-
affiliated Board Members during each Fund's most recently completed fiscal year
or fiscal period.

<TABLE>
<CAPTION>
Board Audit Committee
---------------------------- ---------------------------------------------------
Number of Number of Chairman Aggregate
Meetings Annual Per Meeting Meetings Annual Per Meeting Chairman Per Meeting Fees and
Fund Held* Fee Fee** Held Fee Fee** Annual Fee Fee Expenses
- ---- --------- ------ ----------- --------- ------ ----------- ---------- ----------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Mst G1 Fin+............. n/a n/a n/a n/a n/a none n/a none n/a
Mst Inter Tst+.......... n/a n/a n/a n/a none n/a none n/a n/a
Mer Gl Hold............. 6 $3,500 $500 4 none $500 none $250 $44,867
Internet+............... n/a none none n/a none none none none n/a
Am Inc.................. 7 $3,500 $500 4 none $500 none $250 $45,002
Corp Bond............... 4 $4,500 $300 4 $1,400 none $1,000 none $37,165
Dev Cap................. 5 $3,500 $500 4 none $500 none $250 $44,243
Dragon.................. 7 $3,500 $500 4 none $500 none $250 $45,037
Euro.................... 7 $3,500 $500 4 none $500 none $250 $19,612
Gl Al................... 8 $3,500 $500 4 none $500 none $250 $45,537
Gl Bond................. 7 $3,500 $500 4 none $500 none $250 $45,203
Gl Fin+................. n/a none none n/a none none none none n/a
Gl Small................ 5 $3,500 $500 4 none $500 none $250 $43,101
Gl Tech................. 9 $3,500 $500 4 none $500 none $250 $44,734
Gl Utility.............. 4 $2,000 $400 4 $ 900 none $1,000 none $21,447
Gl Val.................. 7 $3,500 $500 4 none $500 none $250 $45,057
Healthcare.............. 7 $3,500 $500 4 none $500 none $250 $36,477
High Income............. 7 $3,000 $300 4 $ 900 none $1,000 none $27,231
Int'l Eq................ 6 $3,500 $500 4 none $500 none $250 $40,336
ML Internet+............ n/a none none n/a none none none none n/a
Latin................... 6 $3,500 $500 4 none $500 none $250 $44,787
Muni Bond............... 4 $3,000 $400 4 $2,900 none $1,000 none $37,747
Muni Interm............. 7 $ 800 $100 4 $ 300 none $1,000 none $ 8,989
Muni Strat.............. 7 $3,000 $300 4 $ 900 none $1,000 none $13,651
Pacific................. 7 $3,500 $500 4 none $500 none $250 $45,236
Sr Float................ 9 $3,000 $300 4 $ 900 none $1,000 none $14,249
Sr Float II............. 3 $3,000 $300 4 $ 900 none $1,000 none $12,050
Short Gl Inc............ 6 $3,500 $500 4 none $500 none $250 $45,481
Strat Div............... 4 $2,000 $400 4 $ 900 none $1,000 none $11,888
U.S. High Yield......... 4 $3,000 $300 4 $ 900 none $1,000 none $27,003
Corp Acc................ 4 $ 800 $100 4 $ 300 none $1,000 none $ 9,114
Muni Acc................ 4 $ 800 $100 4 $ 300 none $1,000 none $ 8,929
</TABLE>
- --------

* Includes meetings held via teleconferencing equipment.
** The fee is payable for each meeting attended in person. No fee is paid for
telephonic meetings.

+ Such Fund recently commenced operations and has not completed a fiscal
period.

A-5
<PAGE>

Set forth in the table below is information regarding compensation paid
by each Fund to the non-affiliated Board Members during each Fund's most
recently completed fiscal year or fiscal period.

<TABLE>
<CAPTION>
Compensation Paid by Each Fund*
--------------------------------------------------------
Fund Forbes Montgomery Reilly Ryan Suddarth West Zinbarg
- ---- ------ ---------- ------ ------ -------- ------ -------
<S> <C> <C> <C> <C> <C> <C> <C>
Mst Gl Fin**............ n/a n/a n/a n/a n/a n/a n/a
Mst Inter Tst**......... n/a n/a n/a n/a n/a n/a n/a
Mer Gl Hold............. n/a n/a n/a n/a n/a $7,500 $7,500
Internet**.............. n/a n/a n/a n/a n/a n/a n/a
Am Inc.................. n/a n/a $7,500 n/a n/a $7,500 $7,500
Corp Bond............... $7,100 $7,100 $8,100 $7,100 n/a $7,100 n/a
Dev Cap................. n/a n/a $7,500 n/a n/a $7,500 $7,500
Dragon.................. n/a n/a n/a n/a n/a $7,500 $7,500
Euro.................... n/a n/a n/a n/a n/a $7,500 $7,500
Gl Al................... n/a n/a n/a n/a n/a $7,500 $7,500
Gl Bond................. n/a n/a n/a n/a n/a $7,500 $7,500
Gl Fin**................ n/a n/a n/a n/a n/a n/a n/a
Gl Small................ n/a n/a $7,500 n/a n/a $7,500 $7,500
Gl Tech................. n/a n/a $7,500 n/a n/a*** $7,500 $7,500
Gl Utility.............. $4,500 $4,500 $5,500 $4,500 n/a $4,500 n/a
Gl Val.................. n/a n/a n/a n/a n/a*** $7,500 $7,500
Healthcare.............. n/a n/a n/a n/a n/a $7,500 $7,500
High Income............. $5,100 $5,100 $6,100 $5,100 n/a $5,100 n/a
Int'l Eq................ n/a n/a n/a n/a n/a $7,500 $7,500
ML Internet**........... n/a n/a n/a n/a n/a n/a n/a
Latin................... n/a n/a n/a n/a n/a $7,500 $7,500
Muni Bond............... $7,500 $7,500 $8,500 $7,500 n/a $7,500 n/a
Muni Interm............. $1,500 $1,500 $2,500 $1,500 n/a $1,500 n/a
Muni Strat.............. $5,100 $5,100 $6,100 $5,100 n/a $5,100 n/a
Pacific................. n/a n/a n/a n/a n/a $7,500 $7,500
Sr Float................ $5,100 $4,800 $6,100 $5,100 n/a $5,100 n/a
Sr Float II............. $4,800 $5,100 $5,800 $4,800 n/a $4,800 n/a
Short Gl Inc............ n/a n/a $7,500 n/a n/a $7,500 $7,500
Strat Div............... $4,500 $4,500 $5,500 $4,500 n/a $4,500 n/a
U.S. High Yield......... $5,100 $5,100 $6,100 $5,100 n/a $5,100 n/a
Corp Acc................ $1,500 $1,500 $2,500 $1,500 n/a $1,500 n/a
Muni Acc................ $1,500 $1,500 $2,500 $1,500 n/a $1,500 n/a
</TABLE>
- --------

* No pension or retirement benefits are accrued as part of Fund expenses.

** Such Fund recently commenced operations and has not completed a fiscal
period.

*** Mr. Suddarth was appointed to the Board of this Fund on January 20, 2000.

A-6
<PAGE>

Set forth in the table below is information regarding the aggregate
compensation paid by all registered investment companies, which are advised by
FAM and its affiliate, MLAM, including the Funds ("FAM/MLAM Advised Funds"), to
the non-affiliated Board Members for the year ended December 31, 1999.

<TABLE>
<CAPTION>
Aggregate Compensation
Paid to Board Members by
Name of Board Member FAM/MLAM Advised Funds(1)
- -------------------- -------------------------
<S> <C>
Ronald W. Forbes...................................... $213,900
Cynthia A. Montgomery................................. $213,900
Charles C. Reilly..................................... $400,025
Kevin A. Ryan......................................... $213,900
Roscoe S. Suddarth.................................... None(2)
Richard R. West....................................... $388,775
Edward D. Zinbarg..................................... $140,875
</TABLE>
- --------

(1) The Board Members serve on the boards of FAM/MLAM-advised funds as follows:
Mr. Forbes (36 registered investment companies consisting of 49
portfolios); Ms. Montgomery (36 registered investment companies consisting
of 49 portfolios); Mr. Reilly (57 registered investment companies
consisting of 68 portfolios); Mr. Ryan (36 registered investment companies
consisting of 49 portfolios); Mr. Suddarth (6 registered investment
companies consisting of 4 portfolios); Mr. West (67 registered investment
companies consisting of 72 portfolios); and Mr. Zinbarg (21 registered
investment companies consisting of 19 portfolios).

(2) Mr. Suddarth was appointed a Board Member of certain FAM/MLAM-Advised Funds
on January 20, 2000.

A-7
<PAGE>

Information Pertaining to Officers

<TABLE>
<CAPTION>
Name Age Principal Occupation During Past Five Years
---- --- -------------------------------------------
<C> <C> <S>
Terry K. Glenn............ 59 Executive Vice President of MLAM and FAM since
1983; Executive Vice President and Director of
Princeton Services since 1993; President of
Princeton Funds Distributor, Inc. ("PFD") since
1986 and Director thereof since 1991; President
of Princeton Administrators, L.P. since 1988.
Robert C. Doll, Jr........ 45 Senior Vice President of MLAM and FAM since
1999; Senior Vice President of Princeton
Services since 1999; Chief Investment Officer
of Oppenheimer Funds, Inc. in 1999 and
Executive Vice President thereof from 1991 to
1999.
Vincent R. Giordano....... 54 Senior Vice President of FAM and MLAM since
1984; Portfolio Manager of FAM and MLAM since
1977; Senior Vice President of Princeton
Services since 1993.
Joseph T. Monagle, Jr. ... 52 Senior Vice President of MLAM and FAM since
1990; Department Head of the Global Fixed
Income Division of MLAM and FAM since 1997;
Senior Vice President of Princeton Services
since 1993.
Donald C. Burke........... 39 Senior Vice President and Treasurer of MLAM and
FAM since 1999; Senior Vice President and
Treasurer of Princeton Services since 1999;
Vice President of PFD since 1999; First Vice
President of MLAM from 1997 to 1999; Vice
President of MLAM from 1990 to 1997; Director
of Taxation of MLAM since 1990.
Christopher G. Ayoub...... 44 First Vice President of MLAM since 1997; Vice
President of MLAM from 1985 to 1997; Assistant
Vice President of MLAM from 1984 to 1985.
Kenneth L. Chiang......... 37 First Vice President of MLAM since 1998;
Managing Partner of Samuel Asset Management
from 1997 to 1998; Vice President and Portfolio
Manager of MLAM from 1993 to 1997.
James Ellman.............. 31 First Vice President of MLAM since 1999;
Portfolio Manager with AIM Advisors, Inc. and
its predecessors from 1995 and 1999.
Lawrence R. Fuller........ 58 First Vice President of MLAM since 1997 and
Vice President of MLAM from 1992 to 1997.
Bryan N. Ison............. 44 First Vice President of MLAM since 1997. Vice
President of MLAM from 1985 to 1997; Portfolio
Manager of MLAM since 1984.
Clive D. Lang............. 49 Vice President of MLAM since 1997; associated
with Merrill Lynch Asset Management U.K.
Limited ("MLAM U.K.") since 1997 and prior to
that was the Chief Investment Officer of
Panagora Asset Management Limited.
Vincent T. Lathbury, III.. 59 First Vice President of MLAM since 1997; Vice
President of MLAM from 1982 to 1997; Portfolio
Manager of MLAM since 1982.
Paul Gerard Meeks......... 37 First Vice President and Portfolio Manager of
MLAM since May 1998; various positions with
Jurika & Voyles, L.P. from 1994 to 1998,
including technology analyst from 1994 to 1998,
director of research from 1995 to 1998,
principal from 1996 to 1998 and portfolio
manager of the Jurika & Voyles Mini-Cap Fund
from 1997 to 1998.
A. Grace Pineda........... 43 First Vice President of MLAM since 1997; Senior
Portfolio Manager of MLAM since 1987; Vice
President of MLAM from 1989 to 1997.
</TABLE>

A-8
<PAGE>

<TABLE>
<CAPTION>
Name Age Principal Occupation During Past Five Years
---- --- -------------------------------------------
<C> <C> <S>
Walter D. Rogers........ 57 First Vice President of MLAM since 1997; Vice
President of MLAM since 1987.
Jordan C. Schreiber..... 69 First Vice President of MLAM since 1997; Vice
President of MLAM from 1983 to 1997; Portfolio
Manager with MLAM since 1983.
Stephen I. Silverman.... 49 First Vice President of MLAM since 1997 and
Portfolio Manager of MLAM since 1983; Vice
President of MLAM from 1993 to 1997.
Kara W.Y. Tan Bhala..... 40 First Vice President of MLAM since 1997; Vice
President of MLAM from 1992 to 1997; Senior
Portfolio Manager of MLAM and FAM since 1992.
Hubertus Aarts.......... 36 Vice President and Portfolio Manager of MLAM UK
since 1995; Portfolio Manager with Mees Pierson
from 1993 to 1995 and with its predecessor,
Pierson Heldring & Pierson, from 1990 to 1993.
William R. Bock......... 63 Vice President of MLAM since 1989.
Robert A. DiMella, CFA.. 32 Vice President of MLAM since 1997; Assistant Vice
President of MLAM from 1995 to 1997; Assistant
Portfolio Manager of MLAM from 1993 to 1995.
Harry J. Escobar........ 54 Director (Global Fixed Income) of MLAM since
1998; Senior Vice President in the Fixed Income
Group at Lehman Brothers, Inc. from 1991 to 1998.
Edward F. Gobora........ 34 Vice President and Portfolio Manager with MLAM
since 1993.
Kenneth A. Jacob........ 48 First Vice President of MLAM since 1997; Vice
President of MLAM from 1984 to 1997; Vice
President of FAM since 1984.
Richard C. Kilbride..... 44 First Vice President of MLAM since 1999; Managing
Director of Merrill Lynch Mercury Asset
Management and Hotchkis and Wiley from 1997 to
1999; Managing Director of Global Fixed Income at
Merrill Lynch Global Asset Management, Ltd., from
1995 to 1997; Vice President of MLAM from 1990 to
1995.
John Loffredo, CFA...... 35 Vice President of MLAM since 1991.
Gilles Marchand......... 36 Vice President of MLAM since 1997; Credit Analyst
at MLAM from 1996 to 1997; Security Analyst at
Massachusetts Mutual Insurance Company from 1990
to 1996.
Walter O'Connor......... 37 Director (Municipal Tax-Exempt) of MLAM since
1997; Vice President of MLAM from 1993 to 1997.
Roberto W. Roffo........ 33 Vice President of MLAM since 1996; Portfolio
Manager with MLAM since 1992.
Romualdo Roldan......... 53 Vice President of MLAM since 1998; Senior Vice
President of Santander Investment Securities from
1995 to 1998.
James E. Russell........ 46 First Vice President of MLAM since 1997; Vice
President of MLAM from 1992 to 1997.
Dennis Stattman......... 48 First Vice President of MLAM since 1998; Vice
President of MLAM from 1989 to 1998.
Peter J. Hayes.......... 40 First Vice President of MLAM since 1997; Vice
President of MLAM from 1988 to 1997.
</TABLE>

A-9
<PAGE>

<TABLE>
<CAPTION>
Name Age Principal Occupation During Past Five Years
---- --- -------------------------------------------
<C> <C> <S>
Theodore R. Jaeckel.... 38 Director (Municipal Tax-Exempt Fund Management) of
MLAM since 1997; Vice President of MLAM since
1991.
Aldona Schwartz........ 50 Vice President of MLAM since 1980.
Susan B. Baker......... 42 Director (Legal Advisory) of MLAM since 1999; Vice
President of MLAM from 1993 to 1999; attorney
associated with MLAM since 1987.
Phillip S. Gillespie... 36 Director (Legal Advisory) of MLAM since 2000;
attorney associated with MLAM and FAM from 1998 to
2000; Assistant General Counsel of Chancellor LGT
Asset Management Inc. from 1997 to 1998; Senior
Counsel and Attorney in the Division of Investment
Management and the Office of General Counsel at
the U.S. Securities and Exchange Commission from
1993 to 1997.
Robert Harris.......... 47 First Vice President of MLAM since 1997; Vice
President of MLAM from 1984 to 1997; attorney
associated with MLAM since 1980; Secretary of PFD
since 1982.
Bradley J. Lucido...... 34 Vice President of MLAM since 1999; attorney with
MLAM since 1995; attorney in private practice from
1991 to 1995.
Lori A. Martin......... 37 Director (Legal Advisory) of MLAM since 2000; Vice
President of MLAM from 1998 to 2000; attorney in
private practice from 1989 to 1998.
Allan J. Oster......... 37 Vice President of MLAM since 2000; attorney with
MLAM from 1999 to 2000; associate with Drinker,
Biddle & Reath LLP from 1996 to 1999; Senior
Counsel with the U.S. Securities and Exchange
Commission from 1991 to 1996.
Robert E. Putney, III.. 39 Director (Legal Advisory) of MLAM and Princeton
Adminstrators, L.P. since 1997; Vice President of
MLAM from 1994 to 1997; Vice President of
Princeton Administrators, L.P. from 1996 to 1997;
attorney with MLAM from 1991 to 1994.
Ira P. Shapiro......... 36 First Vice President of MLAM since 1998; Director
(Legal Advisory) of MLAM from 1997 to 1998; Vice
President of MLAM from 1996 to 1997; attorney with
MLAM and FAM from 1993 to 1996.
William E. Zitelli..... 31 Vice President of MLAM since 2000; attorney with
MLAM since 1998; attorney associated with Pepper
Hamilton LLP from 1997 to 1998; attorney
associated with Reboul, MacMurray, Hewitt, Maynard
& Kristol from 1994 to 1997.
</TABLE>

A-10
<PAGE>

Set forth in the table below are the names of the officers of each of the
Funds, and the years in which they were first elected to their respective
offices.

<TABLE>
<CAPTION>
Mst Mst Mer Am Corp Dev Gl Gl Gl Gl
Name Office Gl Fin Inter Tst Gl Hold Internet Inc Bond Cap Dragon Euro Al Bond Fin Small
---- ------ ------ --------- ------- -------- ---- ---- ---- ------ ---- ---- ---- ---- -----
<C> <S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Terry K. Glenn........... President 1999 2000 1999 2000 1999 1999 1999 1999 1999 1999 1999 1999 1999
Executive Vice -- -- 1984 -- 1993 1986 1989 1992 1986 1988 1986 -- 1994
President
Robert C. Doll, Jr....... Senior Vice 1999 2000 1999 2000 -- -- 1999 1999 1999 1999 -- 1999 1999
President
Joseph T. Monagle, Jr.... Senior Vice -- -- -- -- 1993 1997 -- -- -- -- 1997 -- --
President
Donald C. Burke.......... Vice President 1999 2000 1996 2000 1993 1993 1994 1993 1993 1995 1995 1999 1994
Treasurer 1999 2000 1999 2000 1999 1999 1999 1999 1999 1999 1999 1999 1999
Christopher L. Ayoub..... Senior Vice -- -- -- -- -- 1998 -- -- -- -- -- -- --
President and
Portfolio
Manager
Kenneth L. Chiang........ Senior Vice -- -- -- -- -- -- -- -- -- -- -- -- 1994
President -- -- -- -- -- -- -- -- -- -- -- -- 1996
Vice President
James Ellman............. Senior Vice 1999 -- -- -- -- -- -- -- -- -- -- 1999 --
President and
Portfolio
Manager
Lawrence R. Fuller....... Senior Vice -- -- 1998 -- -- -- -- -- -- -- -- -- --
President
Bryan N. Ison............ Senior Vice -- -- -- -- -- -- -- -- -- 1997 -- -- --
President -- -- -- -- -- -- -- -- -- 1988 -- -- --
Vice President
Vincent T. Lathbury III.. Senior Vice -- -- -- -- -- 1998 -- -- -- -- -- -- --
President and
Portfolio
Manager
Paul G. Meeks............ Senior Vice -- 2000 -- 2000 -- -- -- -- -- -- -- -- --
President
A. Grace Pineda.......... Senior Vice -- -- -- -- -- -- 1997 -- -- -- -- -- --
President; -- -- -- -- -- -- 1989 -- -- -- -- -- --
Vice President
Walter D. Rogers......... Senior Vice -- -- -- -- -- -- -- -- -- -- -- -- --
President and
Portfolio
Manager
Jordan C. Schreiber...... Senior Vice -- -- -- -- -- -- -- -- -- -- -- -- --
President
Stephen I. Silverman..... Senior Vice -- -- -- -- -- -- -- -- -- -- -- -- --
President -- -- -- -- -- -- -- -- -- -- -- -- --
Vice President
Kara W.Y. Tan Bhala...... Senior Vice -- -- -- -- -- -- -- 1998 -- -- -- -- --
President -- -- -- -- -- -- -- 1996 -- -- -- -- --
Vice President
Hubertus Aarts........... Vice President -- -- -- -- -- -- -- -- -- -- -- -- 1997
Harry J. Escobar......... Vice President -- -- -- -- -- -- -- -- -- -- 1999 -- --
Romualdo Roldan.......... Vice President -- -- -- -- 1999 -- -- -- -- -- -- -- --
Susan B. Baker........... Secretary -- 2000 -- -- -- -- 1999 -- -- -- -- -- --
<CAPTION>
Gl Gl Gl
Tech Utility Val Healthcare
---- ---- ------- ---- ----------
<C> <C> <C> <C>
1999 1999 1999 1999
1998 1991 1996 1983
1999 1999 1999 1999
-- -- -- --
1999 1995 1996 1993
1999 1999 1999 1999
-- -- -- --
-- -- -- --
-- -- -- --
-- -- -- --
-- -- -- --
-- -- -- --
-- -- -- --
-- -- -- --
1998 -- -- --
-- -- -- --
-- -- -- --
-- 1997 -- --
-- -- -- 1998
-- -- 1997 --
-- -- 1996 --
-- -- -- --
-- -- -- --
-- -- -- --
-- -- -- --
-- -- -- --
-- -- -- --
</TABLE>

A-11
<PAGE>

A-12
<PAGE>

<TABLE>
<CAPTION>
High Int'l ML Muni Muni Muni Sr Sr Short
Name Office Income Eq Internet Latin Bond Strat Interm Pacific Float Float II Gl Inc
---- ------ ------ ----- -------- ----- ---- ----- ------ ------- ----- -------- ------
<C> <S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Terry K. Glenn........... President 1999 1999 2000 1999 1999 1999 1999 1999 1999 1999 1999
Executive Vice 1990 1994 -- 1991 1983 1995 1986 1986 1989 1999 1990
President
Robert C. Doll, Jr....... Senior Vice President -- 1999 2000 1999 -- -- -- 1999 -- -- --
Vincent R. Giordano...... Senior Vice President 1993 -- -- -- 1981 1995 1986 -- -- -- --
Joseph T. Monagle, Jr.... Senior Vice President -- -- -- -- -- -- -- -- 1996 1999 1993
Donald C. Burke.......... Vice President 1994 1994 2000 1995 1993 1995 1993 1993 1993 1999 1993
Treasurer 1999 1999 2000 1999 1999 1999 1999 1999 1999 1999 1999
Christopher L. Ayoub..... Senior Vice -- -- -- -- -- -- -- -- -- -- --
President and
Portfolio
Manager
Clive D. Lang............ Senior Vice -- 1998 -- -- -- -- -- -- -- -- --
President
Vincent T. Lathbury III.. Senior Vice -- -- -- -- -- -- -- -- -- -- --
President and
Portfolio
Manager
Paul G. Meeks............ Senior Vice -- -- 2000 -- -- -- -- -- -- -- --
President
A. Grace Pineda.......... Senior Vice -- -- -- 1998 -- -- -- -- -- -- --
President -- -- -- 1991 -- -- -- -- -- -- --
Vice President
Walter D. Rogers......... Senior Vice -- -- -- -- -- -- -- -- -- -- --
President and
Portfolio
Manager
Stephen I. Silverman..... Senior Vice -- -- -- -- -- -- -- 1997 -- -- --
President -- -- -- -- -- -- -- 1986 -- -- --
Vice President
William R. Bock.......... Vice President -- -- -- -- -- -- 1997 -- -- -- --
Robert A. DiMella........ Vice President -- -- -- -- -- 1997 -- -- -- -- --
Edward F. Gobora......... Vice President -- -- -- -- -- -- -- -- -- -- 1993
Kenneth A. Jacob......... Vice President 1990 -- -- -- 1983 1995 1987 -- -- -- --
Richard C. Kilbride...... Vice President -- -- -- -- -- -- -- -- 1999 1999 --
John Loffredo............ Vice President 1997 -- -- -- -- 1995 -- -- -- -- --
Gilles Marchand.......... Vice President -- -- -- -- -- -- -- -- 1999 1999 --
Walter O'Connor.......... Vice President -- -- -- -- 1996 -- -- -- -- -- --
Roberto W. Roffo......... Vice President -- -- -- -- -- -- -- -- -- -- --
<CAPTION>
Strat U.S. Corp Muni
Div HiYield Acc Acc
---- ----- ------- ---- ----
<C> <C> <C> <C>
1999 1999 1999 1999
1987 1998 1986 1986
1999 -- -- --
-- -- -- 1993
-- 1998 1997 --
1995 1998 1993 1993
1999 1999 1999 1999
-- -- 1998 --
-- -- -- --
-- 1998 -- --
-- -- -- --
-- -- -- --
-- -- -- --
1997 -- -- --
-- -- -- --
-- -- -- --
-- -- -- --
-- -- -- --
-- -- -- --
-- -- -- 1995
-- -- -- --
-- -- -- --
-- -- -- --
-- -- -- --
-- -- -- 1996
</TABLE>

A-13
<PAGE>

<TABLE>
<CAPTION>
High Int'l ML Muni Muni Muni Sr Sr Short Strat
Name Office Income Eq Internet Latin Bond Strat Interm Pacific Float Float II Gl Inc Div
---- ------ ------ ----- -------- ----- ---- ----- ------ ------- ----- -------- ------ -----
<C> <S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Peter S. Hayes............. Vice President -- -- -- -- 1996 -- -- -- -- -- -- --
and Portfolio
Manager
Theodore R. Jaeckel, Jr. .. Vice President 1995 -- -- -- -- -- -- -- -- -- -- --
and Portfolio
Manager
Aldona Schwartz............ Vice President -- -- -- -- -- -- -- -- -- -- -- --
and Portfolio
Manager
Susan B. Baker............. Secretary -- -- 2000 1999 -- -- -- -- -- -- -- --
Robert Harris.............. Secretary -- 1999 -- -- -- -- -- -- -- -- -- --
Bradley J. Lucido.......... Secretary -- -- -- -- -- -- -- -- 1999 1999 -- --
Lori A. Martin............. Secretary -- -- -- -- -- -- -- 1999 -- -- -- --
Allan J. Oster............. Secretary -- -- -- -- -- -- -- -- -- -- 2000 --
Ira P. Shapiro............. Secretary -- -- -- -- -- -- -- -- -- -- -- 1999
William E. Zitelli, Jr. ... Secretary 1999 -- -- -- 1999 1999 1999 -- -- -- -- --
<CAPTION>
U.S. Corp Muni
HiYield Acc Acc
---- ------- ---- ----
<C> <C> <C>
-- -- --
-- -- --
1998 -- --
-- -- --
-- -- --
-- -- --
-- -- --
-- -- --
-- 1999 --
1999 -- 1999
</TABLE>

A-14
<PAGE>

EXHIBIT B

OPEN-END FUNDS
MARYLAND CORPORATIONS

[Name of Fund]

ARTICLES OF AMENDMENT TO THE ARTICLES OF INCORPORATION

[Name of Fund], a Maryland corporation (the "Corporation"), does hereby
certify to the State Department of Assessments and Taxation of Maryland that:

First: The charter of the Corporation is hereby amended by deleting
Article II, Section (2) in its entirety and inserting the following in lieu
thereof:

"(2) To hold, invest and reinvest its assets in securities, and in
connection therewith, without limiting the foregoing, to hold part or
all of its assets (a) in cash and/or (b) in shares of another
corporation known in the investment company industry as a master fund in
a master/feeder structure, which corporation holds securities and other
assets for investment purposes (the "Master Fund")."

Second: The charter of the Corporation is hereby further amended by
adding the following provision as Article II, Section (5), and renumbering
Article II, Section (5) thereof as Article II, Section (6):

"(5) To transfer all or substantially all the assets of the
Corporation (or the assets of any series thereof) to the Master Fund, in
exchange for shares in the Master Fund or for such other consideration
as permitted by the General Laws of the State of Maryland and the
Investment Company Act of 1940, as amended (all without the vote or
consent of the stockholders of the Corporation), and all such actions,
regardless of the frequency with which they are pursued, shall be deemed
in furtherance of the ordinary, usual and customary business of the
Corporation."

Third: The charter of the Corporation is hereby further amended by
deleting Article IV, Section (5) in its entirety and inserting the following in
lieu thereof:

"(5) Unless otherwise expressly provided in the charter of the
Corporation, including those matters set forth in Article II, Sections
(2), (4) and (5) hereof and including any Articles Supplementary
creating any class or series of capital stock, on each matter submitted
to a vote of stockholders, each holder of a share of capital stock of
the Corporation shall be entitled to one vote for each share standing in
such holder's name on the books of the Corporation, irrespective of the
class or series thereof, and all shares of all classes and series shall
vote together as a single class; provided, however, that (a) as to any
matter with respect to which a separate vote of any class or series is
required by the Investment Company Act of 1940, as amended, and in
effect from time to time, or any rules, regulations or orders issued
thereunder, or by the Maryland General Corporation Law, such requirement
as to a separate vote by that class or series shall apply in lieu of a
general vote of all classes and series as described above, (b) in the
event that the separate vote requirements referred to in (a) above apply
with respect to one or more classes or series, then, subject to
paragraph (c) below, the shares of all other classes and series not
entitled to a separate class vote shall vote as a single class, (c) as
to any matter which does not affect the interest of a particular class
or series, such class or series shall not be entitled to any vote and
only the holders of shares of the affected classes and series, if any,
shall be entitled to vote and (d) the shares of capital stock of the
Corporation shall have no voting rights in connection with the transfer
of all or substantially all the assets of the Corporation (or the assets
of any series thereof) to the Master Fund in exchange for shares in such
Master Fund or for

B-1
<PAGE>

such other consideration as permitted by Maryland General Corporation Law
and the Investment Company Act of 1940, as amended."

Fourth: The charter of the Corporation is hereby further amended by
adding the following provision as Article V, Section (8):

"(8) Notwithstanding any other provision of these Articles of
Incorporation or the By-Laws of the Corporation, or the General Laws of
the State of Maryland, the transfer of all or substantially all of the
assets of the Corporation (or the assets of any series thereof) to the
Master Fund shall be deemed to be in the ordinary course of business of
the Corporation, and the Board of Directors of the Corporation is vested
with the sole power, to the exclusion of the stockholders, upon the
affirmative vote of the majority of the entire Board of Directors, to
transfer all or substantially all the assets of the Corporation (or the
assets of any series thereof) to the Master Fund in exchange for shares
in such Master Fund or for such other consideration as permitted by the
General Laws of the State of Maryland and the Investment Company Act of
1940, as amended."

Fifth: These Articles of Amendment have been advised by a majority of the
entire Board of Directors of the Corporation and approved by more than two-
thirds of the stockholders of the Corporation.

Sixth: The authorized capital stock of the Corporation has not been
increased by these Articles of Amendment.

Seventh: Except as amended hereby, the Corporation's charter shall remain
in full force and effect.

In Witness Whereof, [Name of Fund] has caused these Articles of Amendment
to be signed in its name and on its behalf by its Vice President and attested
by its Secretary on , 2000.

[Name of Fund]

By: ____________________________________

Attest:

_____________________

The Undersigned, Vice President of [Name of Fund], who executed on behalf
of said Corporation the foregoing Articles of Amendment, of which this
certificate is made a part, hereby acknowledges, in the name and on behalf of
said Corporation, the foregoing Articles of Amendment to be the corporate act
of said Corporation and further certifies that, to the best of his knowledge,
information and belief, the matters and facts set forth therein with respect
to the authorization and approval thereof are true in all material respects,
and that this statement is made under the penalties for perjury.

______________________________________

B-2
<PAGE>

OPEN-END FUNDS
MASSACHUSETTS BUSINESS TRUSTS

[Name of Fund]

CERTIFICATION OF AMENDMENT TO DECLARATION OF TRUST

The undersigned, constituting at least a [majority] [two thirds] of the
Trustees of [Name of Fund] (the "Trust"), a business trust organized under the
laws of Massachusetts, pursuant to the Declaration of Trust of the Trust dated
the day of , , as amended (the "Declaration"), do hereby certify
that the Trustees of the Trust have duly adopted the following amendment, as
approved by the holders of at least [two-thirds] [majority] of the outstanding
shares of the Trust, to the Declaration:

Voted: That Section 3.2 of Article III of the Declaration be, and it
hereby is amended so that, as amended, it shall read as follows:

3.2. Investments. The Trustees shall have power, subject to the
Fundamental Policies, to:

(a) conduct, operate and carry on the business of an
investment company;

(b) subscribe for, invest in, reinvest in, purchase or
otherwise acquire, hold, pledge, sell, assign, transfer, exchange,
distribute or otherwise deal in or dispose of negotiable or non-
negotiable instruments, obligations, evidences of indebtedness,
certificates of deposit or indebtedness, commercial paper,
repurchase agreements, reverse repurchase agreements, options,
futures contracts, options on futures contracts and other
investments, including, without limitation, those issued,
guaranteed or sponsored by any state, territory or possession of
the United States and the District of Columbia and their political
subdivisions, agencies and instrumentalities, or by the United
States Government or its agencies or instrumentalities, or
international instrumentalities, or by any bank, savings
institution, corporation or other business entity organized under
the laws of the United States and, to the extent provided in the
Prospectus and not prohibited by the Fundamental Policies,
organized under foreign laws; and to exercise any and all rights,
powers and privileges of ownership or interest in respect of any
and all such investments of every kind and description, including,
without limitation, the right to consent and otherwise act with
respect thereto, with power to designate one or more persons,
firms, associations or corporations to exercise any of said
rights, powers and privileges in respect of any of said
instruments; and the Trustees shall be deemed to have the
foregoing powers with respect to any additional securities in
which [the Trust] [any series of the Trust] may invest should the
investment policies set forth in the Prospectus or the Fundamental
Policies be amended.

(c) The Trustees shall not be limited to investing in
obligations maturing before the possible termination of the Trust,
nor shall the Trustees be limited by any law limiting the
investments which may be made by fiduciaries.

(d) Notwithstanding any other provision of this Declaration
to the contrary, the Trustees shall have the power in their
discretion without any requirement of approval by Shareholders to
either invest all or a portion of the Trust Property in, sell all
or a portion of the Trust Property and invest the proceeds of such
sales in, or transfer all or a portion of the Trust Property to
one or more investment companies to the extent not prohibited by
the 1940 Act and any exemptive orders granted under the 1940 Act.

B-3
<PAGE>

In Witness Whereof, the undersigned have executed this Amendment this
day of , 2000.

_________________________ _________________________
[Name] [Name]

The Declaration, a copy of which is on file in the office of the
Secretary of the Commonwealth of Massachusetts, provides that the name "[Name
of 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 Trust shall be held to any personal
liability, nor shall resort be had to their private property for the
satisfaction of any obligation or claim or otherwise in connection with the
affairs of the Trust but the Trust Property only shall be liable.

B-4
<PAGE>

CLOSED-END FUNDS
MARYLAND CORPORATIONS

[Name of Fund]

ARTICLES OF AMENDMENT TO THE ARTICLES OF INCORPORATION

[Name of Fund], a Maryland corporation (the "Corporation"), does hereby
certify to the State Department of Assessments and Taxation of Maryland that:

First: The charter of the Corporation is hereby amended by deleting
Article II in its entirety and inserting the following in lieu thereof:

"ARTICLE II.

Purposes and Powers

The purpose or purposes for which the Corporation is formed are as
follows:

(1) To act as a closed-end, management investment company under
the federal Investment Company Act of 1940, as amended, and in effect
from time to time (the "Investment Company Act").

(2) To hold, invest and reinvest its assets in securities, and in
connection therewith, without limiting the foregoing, to hold part or
all of its assets (a) in cash and/or (b) in shares of another
corporation known in the investment company industry as a master fund in
a master/feeder structure, which corporation holds securities and other
assets for investment purposes (the "Master Fund").

(3) To transfer all or substantially all the assets of the
Corporation (or the assets of any series thereof) to the Master Fund, in
exchange for shares in the Master Fund or for such other consideration
as permitted by the General Laws of the State of Maryland and the
Investment Company Act (all without the vote or consent of the
stockholders of the Corporation), and all such actions, regardless of
the frequency with which they are pursued, shall be deemed in
furtherance of the ordinary, usual and customary business of the
Corporation.

(4) To do any and all such further acts or things and to exercise
any and all such further powers or rights as may be necessary,
incidental, relative, conducive, appropriate or desirable for the
accomplishment, carrying out or attainment of all or any of the
foregoing purposes or objects.

The Corporation shall be authorized to exercise and enjoy all of the
powers, rights and privileges granted to, or conferred upon, corporations by
the General Laws of the State of Maryland now or hereafter in force, and the
enumeration of the foregoing shall not be deemed to exclude any powers, rights
or privileges so granted or conferred."

Second: The charter of the Corporation is hereby further amended by
deleting Article IV, Section (4) in its entirety and inserting the following in
lieu thereof:

"(4) Unless otherwise expressly provided in the charter of the
Corporation, including those matters set forth in Article II, Sections
(2) and (3) hereof and including any Articles Supplementary creating any
class or series of capital stock, on each matter submitted to a vote of
stockholders, each holder of a share of capital stock of the Corporation
shall be entitled to one vote for each share standing in such holder's
name on the books of the Corporation, irrespective of the class or
series thereof, and all shares of all classes and series shall vote
together as a single class; provided, however,

B-5
<PAGE>

that (a) as to any matter with respect to which a separate vote of any
class or series is required by the Investment Company Act, or any rules,
regulations or orders issued thereunder, or by the Maryland General
Corporation Law, such requirement as to a separate vote by that class or
series shall apply in lieu of a general vote of all classes and series
as described above, (b) in the event that the separate vote requirements
referred to in (a) above apply with respect to one or more classes or
series, then, subject to paragraph (c) below, the shares of all other
classes and series not entitled to a separate class vote shall vote as a
single class, (c) as to any matter which does not affect the interest of
a particular class or series, such class or series shall not be entitled
to any vote and only the holders of shares of the affected classes and
series, if any, shall be entitled to vote and (d) the shares of capital
stock of the Corporation shall have no voting rights in connection with
the transfer of all or substantially all the assets of the Corporation
(or the assets of any series thereof) to the Master Fund in exchange for
shares in such Master Fund or for such other consideration as permitted
by Maryland General Corporation Law and the Investment Company Act."

Third: The charter of the Corporation is hereby further amended by
adding the following provision as Article V, Section (9):

"(9) Notwithstanding any other provision of these Articles of
Incorporation or the By-Laws of the Corporation, or the General Laws of
the State of Maryland, the transfer of all or substantially all of the
assets of the Corporation (or the assets of any series thereof) to the
Master Fund shall be deemed to be in the ordinary course of business of
the Corporation, and the Board of Directors of the Corporation is vested
with the sole power, to the exclusion of the stockholders, upon the
affirmative vote of the majority of the entire Board of Directors, to
transfer all or substantially all the assets of the Corporation (or the
assets of any series thereof) to the Master Fund in exchange for shares
in such Master Fund or for such other consideration as permitted by the
General Laws of the State of Maryland and the Investment Company Act."

Fourth: These Articles of Amendment have been advised by a majority of
the entire Board of Directors of the Corporation and approved by more than
two-thirds of the stockholders of the Corporation.

Fifth: The authorized capital stock of the Corporation has not been
increased by these Articles of Amendment.

Sixth: Except as amended hereby, the Corporation's charter shall remain
in full force and effect.

B-6
<PAGE>

In Witness Whereof, [Name of Fund] has caused these Articles of Amendment
to be signed in its name and on its behalf by its Vice President and attested
by its Secretary on , 2000.

[Name of Fund]

By: _________________________________

Attest:

_______________________

The Undersigned, Vice President of [Name of Fund], who executed on behalf
of said Corporation the foregoing Articles of Amendment, of which this
certificate is made a part, hereby acknowledges, in the name and on behalf of
said Corporation, the foregoing Articles of Amendment to be the corporate act
of said Corporation and further certifies that, to the best of his knowledge,
information and belief, the matters and facts set forth therein with respect to
the authorization and approval thereof are true in all material respects, and
that this statement is made under the penalties for perjury.

___________________________________

B-7
<PAGE>

EXHIBIT C

INVESTMENT ADVISORY AGREEMENT

Agreement, made as of the day of , 2000, by and between Master SFR
Trust, a Delaware business trust (hereinafter referred to as the "Trust"), and
Fund Asset Management, L.P., a Delaware limited partnership (the "Investment
Adviser").

W I T N E S S E T H:

Whereas, the Trust intends to engage in business as a closed-end, non-
diversified, management investment company and is registered as such under the
Investment Company Act of 1940, as amended (the "Investment Company Act"); and

Whereas, the Investment Adviser is engaged principally in rendering
management and investment advisory services and is registered as an investment
adviser under the Investment Adviser's Act of 1940, as amended; and

Whereas, the Trust desires to retain the Investment Adviser to provide
management and investment advisory services to the Trust in the manner and on
the terms hereinafter set forth; and

Whereas, the Investment Adviser is willing to provide management and
investment advisory services to the Trust on the terms and conditions
hereinafter set forth; and

Whereas, the Trust serves as the "master" portfolio for one or more
"feeder" funds that invest all of their assets in the Trust and that have the
same investment objective and policies as the Trust.

Now, Therefore, in consideration of the premises and the covenants
hereinafter contained, the Trust and the Investment Adviser hereby agree as
follows:

ARTICLE I

Duties of the Investment Adviser

The Trust hereby employs the Investment Adviser to act as a manager and
investment adviser of the Trust and to furnish, or arrange for affiliates to
furnish, the management and investment advisory services described below,
subject to the policies of, review by and overall control of the Board of
Trustees of the Trust, for the period and on the terms and conditions set forth
in this Agreement. The Investment Adviser hereby accepts such employment and
agrees during such period, at its own expense, to render, or arrange for the
rendering of, such services and to assume the obligations herein set forth for
the compensation provided for herein. The Investment Adviser and its affiliates
shall for all purposes herein be deemed to be independent contractors and
shall, unless otherwise expressly provided or authorized, have no authority to
act for or represent the Trust in any way or otherwise be deemed agents of the
Trust.

(a) Management Services. The Investment Adviser shall perform (or arrange
for the performance by affiliates of) the management and administrative
services necessary for the operation of the Trust including administering
shareholder accounts and handling shareholder relations for the Trust. It is
understood that the Investment Adviser or its affiliates may enter into
separate agreements with each Fund for the provision of management and
administrative services necessary for the operation of each Fund. The
Investment Adviser shall provide the Trust with office space, facilities,
equipment and necessary personnel and such other services

C-1
<PAGE>

as the Investment Adviser, subject to review by the Board of Trustees, shall
from time to time determine to be necessary or useful to perform its
obligations under this Agreement. The Investment Adviser shall also, on behalf
of the Trust, conduct relations with custodians, depositories, transfer agents,
dividend disbursing agents, other shareholder servicing agents, pricing agents,
accountants, attorneys, underwriters, brokers and dealers, corporate
fiduciaries, insurers, banks and such other persons in any such other capacity
deemed to be necessary or desirable. The Investment Adviser shall generally
monitor the Trust's compliance with investment policies and restrictions as set
forth in the current registration statement relating to the Trust under the
Investment Company Act or in other filings made by the Trust under Federal
securities laws (together, the "Registration Statement"). The Investment
Adviser shall make reports to the Board of Trustees of its performance of
obligations here under and furnish advice and recommendations with respect to
such other aspects of the business and affairs of the Trust as it shall
determine to be desirable.

(b) Investment Advisory Services. The Investment Adviser shall provide
the Trust with such investment research, advice and supervision as the latter
may from time to time consider necessary for the proper supervision of the
assets of the Trust, shall furnish continuously an investment program for the
Trust and shall determine from time to time which securities shall be
purchased, sold or exchanged and what portion of the assets of the Trust shall
be held in the various securities in which the Trust invests or cash, subject
always to the restrictions of the Declaration of Trust and the By-Laws of the
Trust, as amended from time to time, the provisions of the Investment Company
Act and the statements relating to the Trust's investment objectives,
investment policies and investment restrictions as the same are set forth in
the Registration Statement. The Investment Adviser shall make decisions for the
Trust as to the manner in which voting rights, rights to consent to corporate
action and any other rights pertaining to the Trust's portfolio securities
shall be exercised. Should the Board of Trustees at any time, however, make any
definite determination as to investment policy and notify the Investment
Adviser thereof in writing, the Investment Adviser shall be bound by such
determination for the period, if any, specified in such notice or until
similarly notified that such determination has been revoked. The Investment
Adviser shall take, on behalf of the Trust, all actions which it deems
necessary to implement the investment policies determined as provided above
and, in particular, to place all orders for the purchase or sale of portfolio
securities for the Trust's account with brokers or dealers selected by it, and
to that end, the Investment Adviser is authorized as the agent of the Trust to
give instructions to the Custodian of the Trust as to deliveries of securities
and payments of cash for the account of the Trust. In connection with the
selection of such brokers or dealers and the placing of such orders with
respect to assets of the Trust, the Investment Adviser is directed at all times
to seek to obtain execution and prices within the policy guidelines determined
by the Board of Trustees and set forth in the Registration Statement. Subject
to this requirement and the provisions of the Investment Company Act, the
Securities Exchange Act of 1934, as amended, and other applicable provisions of
law, the Investment Adviser may select brokers or dealers with which it or the
Trust is affiliated.

(c) Affiliated Sub-Advisers. In carrying out its responsibilities
hereunder, the Investment Adviser may employ, retain or otherwise avail itself
of the services of other persons or entities including without limitation,
affiliates of the Investment Adviser, on such terms as the Investment Adviser
shall determine to be necessary, desirable or appropriate. However, if the
Investment Adviser chooses to retain or avail itself of the services of another
person or entity to manage assets of the Trust, such other person or entity
must be (i) an affiliate of the Investment Adviser, (ii) retained at the
Investment Adviser's own cost and expense, and (iii) retained subject to the
requirements of Section 15 of the Investment Company Act. Retention of one or
more affiliated sub-advisers, or the employment or retention of other persons
or entities to perform services, shall in no way reduce the responsibilities or
obligations of the Investment Adviser under this Agreement and the Investment
Adviser shall be responsible for all acts and omissions of such affiliated sub-
advisers, or other persons or entities, in connection with the performance of
the Investment Adviser's duties hereunder.

(d) Notice Upon Change in Partners of the Investment Adviser. The
Investment Adviser is a limited partnership and its limited partner is Merrill
Lynch & Co., Inc. and its general partner is Princeton Services, Inc. The
Investment Adviser will notify the Trust of any change in the membership of the
partnership within a reasonable time after such change.

C-2
<PAGE>

ARTICLE II

Allocation of Charges and Expenses

(a) The Investment Adviser. The Investment Adviser assumes and shall pay
for maintaining the staff and personnel necessary to perform its obligations
under this Agreement, and shall at its own expense, provide the office space,
facilities, equipment and necessary personnel which it is obligated to provide
under Article I hereof, and shall pay all compensation of officers of the Trust
and all Trustees of the Trust who are affiliated persons of the Investment
Adviser.

(b) The Trust. The Trust assumes and shall pay or cause to be paid all
other expenses of the Trust including, without limitation: taxes, expenses for
legal and auditing services, costs of printing proxies, stock certificates,
shareholder reports, Registration Statements, charges of the custodian, any
sub-custodian and transfer agent, expenses of portfolio transactions,
Securities and Exchange Commission fees, expenses of registering the shares
under Federal, state and foreign laws, fees and actual out-of-pocket expenses
of all Trustees of the Trust who are not affiliated persons of the Investment
Adviser, accounting and pricing costs (including the calculation of the net
asset value), insurance, interest, brokerage costs, litigation and other
extraordinary or non-recurring expenses, and other expenses properly payable by
the Trust. It also is understood that the Trust will reimburse the Investment
Adviser for its costs incurred in providing accounting services to the Trust.

ARTICLE III

Compensation of the Investment Adviser

(a) Investment Advisory Fee. For the services rendered, the facilities
furnished and expenses assumed by the Investment Adviser, the Trust shall pay
to the Investment Adviser at the end of each calendar month a fee based on the
average daily value of the net assets of the Trust at the annual rate of .95 of
1.0% of the Trust's average daily net assets (i.e., the average daily value of
the total assets of the Trust, minus the sum of accrued liabilities of the
Trust and accumulated dividends on shares of outstanding preferred stock, if
any). It is understood that the liquidation preference of any outstanding
preferred stock (other than accumulated dividends) is not considered a
liability in determining the Trust's average daily net assets. For purposes of
this calculation, average daily net assets is determined at the end of each
month on the basis of the average net assets of the Trust for each day during
the month. If this Agreement becomes effective subsequent to the first day of a
month or shall terminate before the last day of a month, compensation for that
part of the month this Agreement is in effect shall be prorated in a manner
consistent with the calculation of the fee as set forth above. Subject to the
provisions of subsection (b) hereof, payment of the Investment Adviser's
compensation for the preceding month shall be made as promptly as possible
after completion of the computations contemplated by subsection (b) hereof.
During any period when the determination of net asset value is suspended by the
Board of Trustees, the average net asset value of a share for the day prior to
such suspension shall for this purpose be deemed to be the net asset value each
succeeding day until it is again determined.

(b) Expense Limitations. In the event the operating expenses of the
Trust, including amounts payable to the Investment Adviser pursuant to
subsection (a) hereof, for any fiscal year ending on a date on which this
Agreement is in effect exceed the expense limitations applicable to the Trust
imposed by applicable state securities laws or regulations thereunder, as such
limitations may be raised, lowered or waived from time to time, the Investment
Adviser shall reduce its management and investment advisory fee by the extent
of such excess and, if required pursuant to any such laws or regulations, will
reimburse the Trust in the amount of such excess; provided, however, to the
extent permitted by law, there shall be excluded from such expenses the amount
of any interest, taxes, brokerage commissions and extraordinary expenses
(including but not limited to legal claims and liabilities and litigation costs
and any indemnification related thereto) paid or payable by the Trust. Whenever
the expenses of the Trust exceed a pro rata portion of the applicable annual
expense

C-3
<PAGE>

limitations, the estimated amount of reimbursement under such limitations shall
be applicable as an offset against the monthly payment of the fee due to the
Investment Adviser. Should two or more such expense limitations be applicable
as at the end of the last business day of the month, that expense limitation
which results in the largest reduction in the Investment Adviser's fee shall be
applicable.

ARTICLE IV

Limitation of Liability of the Investment Adviser

The Investment Adviser shall not be liable for any error of judgment or
mistake of law or for any loss arising out of any investment or for any act or
omission in the management of the Trust, except for willful misfeasance, bad
faith or gross negligence in the performance of its duties, or by reason of
reckless disregard of its obligations and duties hereunder. As used in this
Article IV, the term "Investment Adviser" shall include any affiliates of the
Investment Adviser performing services for the Trust contemplated hereby and
directors, officers and employees of the Investment Adviser and such
affiliates.

ARTICLE V

Activities of the Investment Adviser

The services of the Investment Adviser to the Trust are not to be deemed
to be exclusive: the Investment Adviser and any person controlled by or under
common control with the Investment Adviser (for purposes of this Article V
referred to as "affiliates") are free to render services to others. It is
understood that the Board of Trustees of the Trust, officers, employees and
shareholders of the Trust are or may become interested in the Investment
Adviser and its affiliates, as directors, officers, employees, partners, and
shareholders or otherwise and that directors, officers, employees, partners,
and shareholders of the Investment Adviser and its affiliates are or may become
similarly interested in the Trust, and that the Investment Adviser and
directors, officers, employees, partners, and shareholders of its affiliates
may become interested in the Trust as shareholders or otherwise.

ARTICLE VI

Duration and Termination of this Agreement

This Agreement shall become effective as of the date first above written
and shall remain in force for a period of two years thereafter and thereafter
continue from year to year, but only so long as such continuance is
specifically approved at least annually by (i) the Board of Trustees of the
Trust, or by the vote of a majority of the outstanding voting securities of the
Trust, and (ii) a majority of those Trustees who are not parties to this
Agreement or interested persons of any such party cast in person at a meeting
called for the purpose of voting on such approval.

This Agreement may be terminated at any time, without the payment of any
penalty, by the Board of Trustees or by vote of a majority of the outstanding
voting securities of the Trust, or by the Investment Adviser, on sixty days'
written notice to the other party. This Agreement shall automatically terminate
in the event of its assignment.

C-4
<PAGE>

ARTICLE VII

Amendments of this Agreement

This Agreement may be amended by the parties only if such amendment is
specifically approved by the vote of the Trustees of the trust, including a
majority of those Trustees who are not parties to this Agreement or interested
persons of any such party cast in person at a meeting called for the purpose of
voting on such approval and, where required by he Investment Company Act, by
the vote of a majority of the outstanding voting securities of the Trust.

ARTICLE VIII

Definitions of Certain Terms

The terms "vote of a majority of the outstanding voting securities,"
"assignment," "affiliated person" and "interested person", when used in this
Agreement, shall have the respective meanings specified in the Investment
Company Act and the rules and regulations thereunder, subject, however, to such
exemptions as may be granted by the Securities and Exchange Commission under
said Act.

ARTICLE IX

Governing Law

This Agreement shall be construed in accordance with laws of the State of
New York and the applicable provisions of the Investment Company Act. To the
extent that the applicable laws of the State of New York, or any of the
provisions herein, conflict with the applicable provisions of the Investment
Company Act, the latter shall control.

In Witness Whereof, the parties hereto have executed and delivered this
Agreement as of the date first above written.

Master SFR Trust

By :___________________________
Title:

Fund Asset Management, L.P.

By : Princeton Services, Inc.,

General Partner

By :___________________________
Title:

C-5
<PAGE>

ADMINISTRATION AGREEMENT

Agreement made as of the day of , 2000, by and between Merrill Lynch
Senior Floating Rate Fund II, Inc., a Maryland corporation (the "Fund"), and
Fund Asset Management, L.P., a Delaware limited partnership ("FAM" or the
"Administrator").

WITNESSETH:

Whereas, the Fund is engaged in business as a closed-end, non-
diversified, management investment company and is registered as such under the
Investment Company Act of 1940 as amended (the "Investment Company Act"); and

Whereas, the Fund desires to retain FAM to render administrative services
in the manner and on the terms and conditions hereafter set forth; and

Whereas, FAM desires to be retained to perform administrative services on
said terms and conditions; and

Whereas, the Fund is a "feeder" fund for and invests all of its assets in
Master SFR Trust, a Delaware business Trust, that has the same investment
objective and policies as the Fund; and

Now, Therefore, in consideration of the premises and the mutual covenants
hereinafter contained, the Fund and FAM hereby agree as follows:

1. Duties of the Administrator. The Fund hereby retains FAM to act as
administrator of the Fund, subject to the supervision and direction of the
Board of Directors of the Fund, as hereinafter set forth. FAM shall perform, or
arrange for its affiliates to perform, the administrative services (i.e.,
services other than investment advise and related portfolio activities)
necessary for the operation of the Fund and, without limiting the generality of
the foregoing, shall (i) prepare and file reports and other documents required
by U.S. Federal, state and other applicable laws and regulations; (ii) prepare
proxy materials and periodic reports to Fund shareholders; (iii) respond to
inquiries from Fund shareholders; (iv) calculate, or arrange for the
calculation of, the net asset value of the Fund's shares (it being understood
that the Fund will reimburse the Administrator for its costs in providing such
accounting services to the Fund); (v) oversee the performance of administrative
and professional services rendered to the Fund by others, including its
custodian, transfer agent, dividend disbursing agent and shareholder servicing
agent, as well as accounting, auditing and other services; (vi) provide the
Fund with the services of persons competent to perform such administrative and
clerical functions as are necessary to provide effective operation of the Fund,
(vii) coordinate tender offers for the Fund's shares, and (viii) provide the
Fund with administrative office and data processing facilities.

2. (a) Expenses of the Administrator. FAM shall provide the staff and
personnel necessary to perform its obligations under this Agreement, shall
assume and pay or cause to be paid all expenses incurred in connection with the
maintenance of such staff and personnel, and, at its own expense, shall provide
the office space, facilities, equipment and necessary personnel which it is
obligated to provide under paragraph 1 hereof, except that the Fund shall pay
the expenses of legal counsel retained by FAM as may be necessary or
appropriate for FAM's performance of its duties and responsibilities under this
Agreement. FAM shall pay, or cause its affiliates to pay, compensation of all
officers of the Fund and all Directors of the Fund who are affiliated persons
of FAM or an affiliate of FAM.

(b) Expenses of the Fund. The Fund assumes and shall pay or cause to be
paid all other expenses of the Fund (except for the expenses paid by the
distributor of the Fund's shares (the "Distributor")), including, without
limitation: taxes, expenses for legal and auditing services, costs of printing
proxies, shareholder reports, prospectuses and statements of additional
information, charges of the custodian, any sub-custodian and transfer agent,
expenses of portfolio transactions, expenses of redemption of shares,
Securities and Exchange

C-6
<PAGE>

Commission fees, expenses of registering the shares under Federal, state and
foreign laws, fees and actual out-of-pocket expenses of Directors who are not
affiliated persons of FAM, or of an affiliate of FAM, accounting and pricing
costs (including the daily calculation of the net asset value), insurance,
interest, brokerage costs, litigation and other extraordinary or non-recurring
expenses, and other expenses properly payable by the Fund. It also is
understood that the Fund will reimburse FAM for its costs in providing
accounting services to the Fund. The Distributor will pay certain of the
expenses of the Fund incurred in connection with the continuous offering of
shares of common stock in the Fund.

3. Compensation of the Administrator. For the services rendered to the
Fund by FAM pursuant to this Agreement, the Fund shall pay to the Administrator
a monthly fee at an annual rate of .40 of 1% of the Fund's average daily net
assets (i.e., the average daily value of the total assets of the Fund, minus
the sum of accrued liabilities of the Fund and accumulated dividends on shares
of outstanding preferred stock, if any). It is understood that the liquidation
preference of any outstanding preferred stock (other than accumulated
dividends) is not considered a liability in determining the Fund's average
daily net assets. For purposes of this calculation, average daily net assets is
determined at the end of each month on the basis of the average net assets of
the Fund for each day during the month. If this Agreement becomes effective
subsequent to the first day of a month or shall terminate before the last day
of a month, compensation for the part of the month this Agreement is in effect
shall be prorated in a manner consistent with the calculation of the fee as set
forth above. Payment of the Administrator's compensation shall be payable in
arrears on the last day of each calendar month for services performed hereunder
during such month. During any period when the determination of net asset value
is suspended by the Board of Directors, the average net asset value of a share
for the last day prior to such suspension for this purpose shall be deemed to
be the net asset value at the close of each succeeding day until it is again
determined.

4. Limitation of Liability of the Administrator; Indemnification.

(a) The Administrator shall not be liable to the Fund for any error of
judgment or mistake of law or for any loss arising out of any act or omission
by the Administrator in the performance of its duties hereunder. Nothing herein
contained shall be construed to protect the administrator against any liability
to the Fund, its shareholders or any sub-investment adviser to which the
Administrator shall otherwise be subject by reasons of willful misfeasance, bad
faith, or gross negligence in the performance of its duties, or by reckless
disregard of its obligations and duties hereunder.

(b) The Administrator may, with respect to questions of law, apply for
and obtain the advice and opinion of counsel to the Fund or of its own counsel,
at the expense of the Fund, and shall be fully protected with respect to any
action taken or omitted by it in good faith in conformity with such advice or
opinion.

(c) The Fund agrees to indemnify and hold harmless the Administrator from
and against all charges, claims, expenses (including legal fees) and
liabilities reasonably incurred by the Administrator in connection with the
performance of its duties hereunder, except such as may arise from the
Administrator's willful misfeasance, bad faith, gross negligence in the
performance of its duties or by reckless disregard of its obligations and
duties hereunder. Such expenses shall be paid by the Fund in advance of the
final disposition of such matter upon invoice by the Administrator and receipt
by the Fund of an undertaking from the Administrator to repay such amounts if
it shall ultimately be established that the Administrator is not entitled to
indemnification hereunder by virtue of the Administrator's willful misfeasance,
bad faith, gross negligence in the performance of its duties or by reckless
disregard of its obligations and duties hereunder.

(d) As used in this paragraph 4, the term "Administrator" shall include
any affiliates of the Administrator performing services for the Fund
contemplated hereby and directors, officers, agents and employees of the
Administrator and such affiliates.

C-7
<PAGE>

5. Activities of the Administrator. The services of the Administrator
under this Agreement are not to be deemed exclusive, and the Administrator and
any person controlled by or under common control with the Administrator shall
be free to render similar services to others.

6. Duration and Termination of this Agreement. This Agreement shall
become effective as of the date first above written and shall remain in force
for a period of two years thereafter and thereafter from year to year, but only
so long as such continuance specifically is approved at least annually by (i)
the Board of Directors of the Fund, or by the vote of a majority of the
outstanding voting securities of the Fund, and (ii) by the vote of a majority
of those Directors who are not parties to this Agreement or interested persons
of any such party cast in person at a meeting called for the purpose of voting
on such approval.

This Agreement may be terminated at any time, without the payment of any
penalty, by the Board of Directors or by vote of a majority of the outstanding
voting securities of the Fund, or by the Investment Adviser, on sixty days'
written notice to the other party. In the event of its assignment, this
Agreement shall automatically terminate.

The terms "vote of a majority of the outstanding voting securities,"
"assignment," "affiliated person" and "interested person," when used in this
Agreement, shall have the respective meanings specified in the Investment
Company Act.

7. Amendments to this Agreement. This Agreement may be amended by the
parties hereto only if such amendment is specifically approved by the Board of
Directors of the Fund and such amendment is set forth in a written instrument
executed by each of the parties hereto.

8. Governing Law. The provisions of this Agreement shall be construed and
interpreted in accordance with the laws of the State of New York as at the time
in effect and the applicable provisions of the Investment Company Act. To the
extent that the applicable law of the State of New York, or any of the
provisions herein, conflict with the applicable provisions of the Investment
Company Act, the latter shall control.

9. Counterparts. This Agreement may be executed by the parties hereto in
counterparts and if executed in more than one counterpart the separate
instruments shall constitute one agreement.

In Witness Whereof, the parties hereto have executed and delivered this
Agreement as of the day and year first above written.

Merrill Lynch Senior Floating Rate
Fund II, Inc.

By: _________________________________
Title:

Fund Asset Management, L.P.

By: Princeton Services, Inc.,

General Partner

By: _________________________________
Title:

C-8
<PAGE>

EXHIBIT D

INVESTMENT ADVISORY AGREEMENT

Agreement, made as of the day of , 2000, by and between Master
Strategic Dividend Trust, a Delaware business trust (hereinafter referred to as
the "Trust"), and Fund Asset Management, L.P., a Delaware limited partnership
(the "Investment Adviser").

W I T N E S S E T H:

Whereas, the Trust intends to engage in business an open-end diversified
management investment company and is registered as such under the Investment
Company Act of 1940, as amended (the "Investment Company Act"); and

Whereas, the Trust desires to retain the Investment Adviser to render
management and investment advisory services to the Trust in the manner and on
the terms hereinafter set forth; and

Whereas, the Investment Adviser is willing to provide management and
investment advisory services to the Trust on the terms and conditions
hereinafter set forth; and

Whereas, the Trust serves as the "master" portfolio for one or more
"feeder" funds (each, a "Fund") that invest all of their assets in the Trust
and that have the same investment objective and policies as the Trust.

Now, Therefore, in consideration of the promises and the covenants
hereinafter contained, the Trust and the Investment Adviser hereby agree as
follows:

ARTICLE I

Duties of the Investment Adviser

(a) Management Services. The Investment Adviser shall perform (or arrange
for the performance by affiliates of) the management and administrative
services necessary for the operation of the Trust. It is understood that the
Investment Adviser or its affiliates may enter into separate agreements with
each Fund for the provision of management and administrative services necessary
for the operation of each Fund. The Investment Adviser shall provide the Trust
with office space, facilities, equipment and necessary personnel and such other
services as the Investment Adviser, subject to review by the Board of Trustees,
shall from time to time determine to be necessary or useful to perform its
obligations under this Agreement. The Investment

D-1
<PAGE>

Adviser shall also, on behalf of the Trust, conduct relations with custodians,
depositories, transfer agents, dividend disbursing agents, other shareholder
servicing agents, pricing agents, accountants, attorneys, underwriters, brokers
and dealers, corporate fiduciaries, insurers, banks and such other persons in
any such other capacity deemed to be necessary or desirable. The Investment
Adviser shall generally monitor the Trust's compliance with investment policies
and restrictions as set forth in the current registration statement relating to
the Trust under the Investment Company Act (the "Registration Statement"). The
Investment Adviser shall make reports to the Board of Trustees of its
performance of obligations here under and furnish advice and recommendations
with respect to such other aspects of the business and affairs of the Trust as
it shall determine to be desirable.

(b) Investment Advisory Services. The Investment Adviser shall provide
(or arrange for the provision by affiliates of) the Trust with such investment
research, advice and supervision as the latter may from time to time consider
necessary for the proper supervision of the assets of the Trust, shall furnish
continuously an investment program for the Trust and shall determine from time
to time which securities shall be purchased, sold or exchanged and what portion
of the assets of the Trust shall be held in the various securities and other
financial instruments in which the Trust invests and the portion of the assets
of the Trust that shall be held in cash, subject always to the restrictions set
forth in the Declaration of Trust and the By-Laws of the Trust, as amended from
time to time, the provisions of the Investment Company Act and the statements
relating to the Trust's investment objectives, investment policies and
investment restrictions as the same are set forth in the Registration
Statement. The Investment Adviser shall make decisions for the Trust as to the
manner in which voting rights, rights to consent to corporate action and any
other rights pertaining to the Trust's portfolio securities shall be exercised.
Should the Board of Trustees at any time, however, make any definite
determination as to investment policy and notify the Investment Adviser thereof
in writing, the Investment Adviser shall be bound by such determination for the
period, if any, specified in such notice or until similarly notified that such
determination has been revoked. The Investment Adviser shall take, on behalf of
the Trust, all actions which it deems necessary to implement the investment
policies determined as provided above and, in particular, to place all orders
for the purchase or sale of portfolio securities for the Trust's account with
brokers or dealers selected by it, and to that end, the Investment Adviser is
authorized as the agent of the Trust to give instructions to the Custodian of
the Trust as to deliveries of securities and payments of cash for the account
of the Trust. In connection with the selection of such brokers or dealers and
the placing of such orders with respect to assets of the Trust, the Investment
Adviser is directed at all times to seek to obtain execution and prices within
the policy guidelines determined by the Board of Trustees as set forth in the
Registration Statement. Subject to this requirement and the provisions of the
Investment Company Act, the Securities Exchange Act of 1934, as amended, and
other applicable provisions of law, the Investment Adviser may select brokers
or dealers with which it or the Trust is affiliated.

D-2
<PAGE>

ARTICLE II

Allocation of Charges and Expenses

(a) The Investment Adviser. The Investment Adviser assumes and shall pay,
or cause its affiliate to pay, for maintaining the staff and personnel
necessary to perform its obligations under this Agreement, and shall at its own
expense, provide the office space, facilities, equipment and necessary
personnel which it is obligated to provide under Article I hereof. The
Investment Adviser shall pay, or cause its affiliates to pay, compensation of
all officers of the Trust and all Trustees of the Trust who are affiliated
persons of the Investment Adviser or any sub-adviser, or an affiliate of the
Investment Adviser or any sub-adviser.

(b) The Trust. The Trust assumes and shall pay or cause to be paid all
other expenses of the Trust including, without limitation: taxes, expenses for
legal and auditing services, costs of printing proxies, stock certificates,
shareholder reports, Registration Statements, charges of the custodian, any
sub-custodian and transfer agent, expenses of portfolio transactions, expenses
of redemption of shares, Securities and Exchange Commission fees, expenses of
registering the shares under Federal, state and foreign laws, fees and actual
out-of-pocket expenses of all Trustees of the Trust who are not affiliated
persons of the Investment Adviser or any sub-adviser or of an affiliate of the
Investment Adviser or any sub-adviser, accounting and pricing costs (including
the daily calculation of the net asset value), insurance, interest, brokerage
costs, litigation and other extraordinary or non-recurring expenses, and other
expenses properly payable by the Trust. It also is understood that the Trust
will reimburse the Investment Adviser for its costs incurred in providing
accounting services to the Trust.

ARTICLE III

Compensation of the Investment Adviser

(a) Investment Advisory Fee. For the services rendered, the facilities
furnished and expenses assumed by the Investment Adviser, the Trust shall pay
to the Investment Adviser at the end of each calendar month a fee based on the
average daily value of the net assets of the Trust at the annual rate of .35 of
1.0% of the average daily net assets of the Trust commencing on the day
following effectiveness hereof, as determined and computed in accordance with
the description of the determination of net asset value contained in the
Prospectus and Statement of Additional Information of the Trust. If this
Agreement becomes effective subsequent to the first day of a month or shall
terminate before the last day of a month, compensation for that part of the
month this Agreement is in effect shall be prorated in a manner consistent with
the calculation of the fee as set forth above. Subject to the provisions of
subsection (b) hereof, payment of the Investment Adviser's compensation for the
preceding month shall be made as promptly as possible after completion of the
computations contemplated herein. During any period when the determination of
net asset value is suspended by the Board of Trustees, the net asset value of a
share as of the last business day prior to such suspension shall for this
purpose be deemed to be the net asset value at the close of each succeeding
business day until it is again determined.

(b) Expense Limitations. In the event the operating expenses of the
Trust, including amounts payable to the Investment Adviser pursuant to
subsection (a) hereof, for any fiscal year ending on a date on which this
Agreement is in effect exceed the expense limitations applicable to the Trust
imposed by applicable state securities laws or regulations thereunder, as such
limitations may be raised, lowered or waived from time to time, the Investment
Adviser shall reduce its management and investment advisory fee by the extent
of such excess and, if required pursuant to any such laws or regulations, will
reimburse the Trust in the amount of such excess; provided, however, to the
extent permitted by law, there shall be excluded from such expenses the amount
of any interest, taxes, brokerage fees and commissions, distribution fees and
extraordinary expenses (including but not limited to legal claims and
liabilities and litigation costs and any indemnification related thereto) paid
or payable by the Trust. Whenever the expenses of the Trust exceed a pro rata
portion of the applicable annual expense limitations, the estimated amount of
reimbursement under such limitations shall be

D-3
<PAGE>

applicable as an offset against the monthly payment of the fee due to the
Investment Adviser. Should two or more such expense limitations be applicable
as at the end of the last business day of the month, that expense limitation
which results in the largest reduction in the Investment Adviser's fee shall be
applicable.

ARTICLE IV

Limitation of Liability of the Investment Adviser

The Investment Adviser shall not be liable for any error of judgment or
mistake of law or for any loss arising out of any investment or for any act or
omission in the management of the Trust, except for willful misfeasance, bad
faith or gross negligence in the performance of its duties, or by reason of
reckless disregard of its obligations and duties hereunder. As used in this
Article IV, the term "Investment Adviser" shall include any affiliates of the
Investment Adviser performing services for the Trust contemplated hereby and
the partners, directors, officers and employees of the Investment Adviser and
such affiliates.

ARTICLE V

Activities of the Investment Adviser

The services of the Investment Adviser to the Trust are not to be deemed
to be exclusive: the Investment Adviser and any person controlled by or under
common control with the Investment Adviser (for purposes of this Article V
referred to as "affiliates") are free to render services to others. It is
understood that the Board of Trustees, officers, employees and shareholders of
the Trust are or may become interested in the Investment Adviser and its
affiliates, as directors, officers, employees, partners, and shareholders or
otherwise and that directors, officers, employees, partners, and shareholders
of the Investment Adviser and its affiliates are or may become similarly
interested in the Trust, and that the Investment Adviser and directors,
officers, employees, partners, and shareholders of its affiliates may become
interested in the Trust as shareholders or otherwise.

ARTICLE VI

Duration and Termination of this Agreement

D-4
<PAGE>

ARTICLE VII

Amendments of this Agreement

This Agreement may be amended by the parties only if such amendment is
specifically approved by the vote of the Trustees of the Trust, including a
majority of those Trustees who are not parties to this Agreement or interested
persons of any such party cast in person at a meeting called for the purpose of
voting on such approval and, where required by the Investment Company Act, by
the vote of a majority of the outstanding voting securities of the Trust.

ARTICLE VIII

Definitions of Certain Terms

ARTICLE IX

Governing Law

In Witness Whereof, the parties hereto have executed and delivered this
Agreement as of the date first above written.

Master Strategic Dividend Trust

By __________________________________
Title:

Fund Asset Management, L.P.

By: Princeton Services, Inc.,

General Partner

By __________________________________
Title:

D-5
<PAGE>

ADMINISTRATION AGREEMENT

Agreement made as of , 2000, by and between Merrill Lynch Strategic
Dividend Fund, a Massachusetts business trust (the "Fund") and Fund Asset
Management, L.P., a Delaware limited partnership (the "Administrator").

W I T N E S S E T H:

Whereas, the Fund is engaged in business as an open-end diversified
management investment company and is registered as such under the Investment
Company Act of 1940, as amended (the "Investment Company Act"); and

Whereas, the Fund desires to retain the Administrator to provide
management and administrative services to the Fund in the manner and on the
terms hereinafter set forth; and

Whereas, the Administrator is willing to provide management and
administrative services to the Fund on the terms and conditions hereafter set
forth; and

Whereas, the Fund is one of the "feeder" funds for and invests all of its
assets in Master Strategic Dividend Trust, which serves as the "master"
portfolio and has the same investment objective and policies as the Fund;

Now, Therefore, in consideration of the premises and the covenants
hereinafter contained, the Fund and the Administrator hereby agree as follows:

ARTICLE I

Duties of the Administrator

The Fund hereby employs the Administrator to act as a manager and
administrator and to furnish, or arrange for affiliates to furnish, the
management and administrative services described below, subject to review by
and the overall control of the Board of Trustees of the Fund (the "Trustees"),
for the period and on the terms and conditions set forth in this Agreement. The
Administrator hereby accepts such employment and agrees during such period, at
its own expense, to render, or arrange for the rendering of, such services and
to assume the obligations herein set forth for the compensation provided for
herein. The Administrator and its affiliates shall for all purposes herein be
deemed to be independent contractors and shall, unless otherwise expressly
provided or authorized, have no authority to act for or represent the Fund in
any way or otherwise be deemed agents of the Fund.

Management Services. The Administrator shall perform (or arrange for the
performance by affiliates of) the management and administrative services
necessary for the operation of the Fund including administering shareholder
accounts and handling shareholder relations. The Administrator shall provide
the Fund with office space, facilities, equipment and necessary personnel and
such other services as the Administrator, subject to review by the Trustees,
shall from time to time determine to be necessary or useful to perform its
obligations under this Agreement. The Administrator shall also, on behalf of
the Fund, conduct relations with custodians, depositories, transfer agents,
dividend disbursing agents, other shareholder servicing agents, accountants,
attorneys, underwriters, brokers and dealers, corporate fiduciaries, insurers,
banks and such other persons in any such other capacity deemed to be necessary
or desirable. The Administrator shall make reports to the Trustees of its
performance of obligations hereunder and furnish advice and recommendations
with respect to such other aspects of the business and affairs of the Fund as
it shall determine to be desirable.

D-6
<PAGE>

ARTICLE II

Allocation of Charges and Expenses

(a) The Administrator. The Administrator assumes and shall pay, or cause
its affiliate to pay, for maintaining the staff and personnel necessary to
perform its obligations under this Agreement, and shall, at its own expense,
provide the office space, facilities and necessary personnel which it is
obligated to provided under Article I hereof. The Administrator shall pay, or
cause its affiliate to pay, compensation of all officers of the Fund and all
Trustees of the Fund who are affiliated persons of the Administrator or of an
affiliate of the Administrator.

(b) The Fund. The Fund assumes and shall pay or cause to be paid all
other expenses of the Fund (except for the expenses paid by the distributor of
the Fund's shares (the "Distributor")), including, without limitation: taxes,
expenses for legal and auditing services, costs of printing proxies,
shareholder reports, prospectuses and statements of additional information,
charges of the custodian, any sub-custodian and transfer agent, expenses of
portfolio transactions, expenses of redemption of shares, Securities and
Exchange Commission fees, expenses of registering the shares under Federal,
state and foreign laws, fees and actual out-of-pocket expenses of Trustees who
are not affiliated persons of the Administrator, or of an affiliate of the
Administrator, accounting and pricing costs (including the daily calculation of
the net asset value), insurance, interest, brokerage costs, litigation and
other extraordinary or non-recurring expenses, and other expenses properly
payable by the Fund. It also is understood that the Fund will reimburse the
Administrator for its costs in providing accounting services to the Fund. The
Distributor will pay certain of the expenses of the Fund incurred in connection
with the continuous offering of shares of beneficial interest in the Fund.

ARTICLE III

Compensation of the Administrator

Administrative Fees. For the services rendered, the facilities furnished
and expenses assumed by the Administrator, the Fund shall pay to the
Administrator at the end of each calendar month a fee based upon the average
daily value of the net assets of the Fund, as determined and computed in
accordance with the description of the determination of net asset value
contained in the prospectus and statement of additional information of the
Fund, at the annual rate of 0.25% of the average daily net assets of the Fund,
commencing on the day following effectiveness hereof. If this Agreement becomes
effective subsequent to the first day of a month or shall terminate before the
last day of a month, compensation for that part of the month this Agreement is
in effect shall be prorated in a manner consistent with the calculation of the
fee as set forth above. Payment of the Administrator's compensation for the
preceding month shall be made as promptly as possible after completion of the
computations contemplated above. During any period when the determination of
net asset value is suspended by the Trustees, the net asset value of a share as
of the last business day prior to such suspension shall for this purpose be
deemed to be the net asset value at the close of each succeeding business day
until it is again determined.

ARTICLE IV

Limitation of Liability of the Administrator

The Administrator shall not be liable for any error of judgment or
mistake of law or for any loss arising out of any act or omission in the
management and administration of the Fund, except for willful misfeasance, bad
faith or gross negligence in the performance of its duties, or by reason of
reckless disregard of its obligations and duties hereunder. As used in this
Article IV, the term "Administrator" shall include any affiliates of the
Administrator performing services for the Fund contemplated hereby and
partners, shareholders, directors, officers and employees of the Administrator
and such affiliates.

D-7
<PAGE>

ARTICLE V

Activities of the Administrator

The services of the Administrator to the Fund are not to be deemed to be
exclusive, and the Administrator and each affiliate is free to render services
to others. It is understood that Trustees, officers, employees and shareholders
of the Fund are or may become interested in the Administrator and its
affiliates, as directors, officers, employees, partners and shareholders or
otherwise, and that the Administrator and directors, officers, employees,
partners and shareholders of the Administrator and its affiliates are or may
become similarly interested in the Fund as shareholders or otherwise.

ARTICLE VI

Duration and Termination of this Agreement

This Agreement shall become effective as of the date first above written
and shall remain in force for two years thereafter and thereafter continue from
year to year, but only so long as such continuance is specifically approved at
least annually by (i) the Trustees of the Fund, or by the vote of a majority of
the outstanding voting securities of the Fund, and (ii) a majority of those
Trustees who are not parties to this Agreement or interested persons of any
such party cast in person at a meeting called for the purpose of voting on such
approval.

This Agreement may be terminated at any time, without the payment of any
penalty, by the Trustees or by the vote of a majority of the outstanding voting
securities of the Fund, or by the Administrator, on sixty days' written notice
to the other party. This Agreement shall automatically terminate in the event
of its assignment.

ARTICLE VII

Amendments of this Agreement

This Agreement may be amended by the parties only if such amendment is
specifically approved by a majority of those Trustees who are not parties to
this Agreement or interested persons of any such party cast in person at a
meeting called for the purpose of voting on such approval.

ARTICLE VIII

Definitions of Certain Terms

The terms "vote of majority of the outstanding voting securities,"
"assignment," "affiliated person" and "interested person," when used in this
Agreement, shall have the respective meanings specified in the Investment
Company Act and the Rules and Regulations thereunder, subject, however, to such
exemptions as may be granted by the Securities and Exchange Commission under
said Act.

ARTICLE IX

Governing Law

D-8
<PAGE>

ARTICLE X

Personal Liability

The Declaration of Trust establishing Merrill Lynch Strategic Dividend
Fund, dated May 14, 1987, 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 "Merrill Lynch Strategic
Dividend 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 Merrill Lynch Strategic Dividend 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 or otherwise in
connection with the affairs of said Merrill Lynch Strategic Dividend Fund, but
the "Trust Property" only shall be liable.

In Witness Whereof, the parties hereto have executed and delivered this
Agreement as of the date first above written.

Merrill Lynch Strategic Dividend
Fund

By: _________________________________
Name:
Title:

Fund Asset Management, L.P.

By: Princeton Services, Inc.,

General Partner

By: _________________________________
Name:
Title

D-9
<PAGE>

EXHIBIT E

INVESTMENT ADVISORY AGREEMENT

Agreement, made as of the day of , 2000, by and between Master U.S.
High Yield Trust, a Delaware business trust (hereinafter referred to as the
"Trust"), and Fund Asset Management, L.P., a Delaware limited partnership (the
"Investment Adviser").

W I T N E S S E T H:

Whereas, the Trust desires to retain the Investment Adviser to render
management and investment advisory services to the Trust in the manner and on
the terms hereinafter set forth; and

Whereas, the Investment Adviser is willing to provide management and
investment advisory services to the Trust on the terms and conditions
hereinafter set forth; and

Now, Therefore, in consideration of the promises and the covenants
hereinafter contained, the Trust and the Investment Adviser hereby agree as
follows:

ARTICLE I

Duties of the Investment Adviser

(a) Management Services. The Investment Adviser shall perform (or arrange
for the performance by affiliates of) the management and administrative
services necessary for the operation of the Trust. It is understood that the
Investment Adviser or its affiliates may enter into separate agreements with
each Fund for the provision of management and administrative services necessary
for the operation of each Fund. The Investment Adviser shall provide the Trust
with office space, facilities, equipment and necessary personnel and such other
services as the Investment Adviser, subject to review by the Board of Trustees,
shall from time to

E-1
<PAGE>

time determine to be necessary or useful to perform its obligations under this
Agreement. The Investment Adviser shall also, on behalf of the Trust, conduct
relations with custodians, depositories, transfer agents, dividend disbursing
agents, other shareholder servicing agents, pricing agents, accountants,
attorneys, underwriters, brokers and dealers, corporate fiduciaries, insurers,
banks and such other persons in any such other capacity deemed to be necessary
or desirable. The Investment Adviser shall generally monitor the Trust's
compliance with investment policies and restrictions as set forth in the
current registration statement relating to the Trust under the Investment
Company Act (the "Registration Statement"). The Investment Adviser shall make
reports to the Board of Trustees of its performance of obligations here under
and furnish advice and recommendations with respect to such other aspects of
the business and affairs of the Trust as it shall determine to be desirable.

E-2
<PAGE>

ARTICLE II

Allocation of Charges and Expenses

(a) The Investment Adviser. The Investment Adviser assumes and shall pay,
or cause its affiliate to pay, for maintaining the staff and personnel
necessary to perform its obligations under this Agreement, and shall at its own
expense, provide the office space, facilities, equipment and necessary
personnel which it is obligated to provide under Article I hereof. The
Investment Adviser shall pay, or cause its affiliates to pay compensation of
all officers of the Trust and all Trustees of the Trust who are affiliated
persons of the Investment Adviser, or any sub-adviser, or an affiliate of the
Investment Adviser or sub-adviser.

(b) The Trust. The Trust assumes and shall pay or cause to be paid all
other expenses of the Trust including, without limitation: taxes, expenses for
legal and auditing services, costs of printing proxies, stock certificates,
shareholder reports, Registration Statements, charges of the custodian, any
sub-custodian and transfer agent, expenses of portfolio transactions, expenses
of redemption of shares, Securities and Exchange Commission fees, expenses of
registering the shares under Federal, state and foreign laws, fees and actual
out-of-pocket expenses of all Trustees of the Trust who are not affiliated
persons of the Investment Adviser or any sub-adviser or of an affiliate of the
Investment Adviser or any sub-adviser, accounting and pricing costs (including
the daily calculation of the net asset value), insurance, interest, brokerage
costs, litigation and other extraordinary or non-recurring expenses, and other
expenses properly payable by the Trust. It also is understood that the Trust
will reimburse the Investment Adviser for its costs incurred in providing
accounting services to the Trust.

ARTICLE III

Compensation of the Investment Adviser

(a) Investment Advisory Fee. For the services rendered, the facilities
furnished and expenses assumed by the Investment Adviser, the Trust shall pay
to the Investment Adviser at the end of each calendar month a fee based on the
average daily value of the net assets of the Trust at the annual rate of .35 of
1.0% of the average daily net assets of the Trust commencing on the day
following effectiveness hereof, as determined and computed in accordance with
the description of the determination of net asset value contained in the
Prospectus and Statement of Additional Information of the Trust. If this
Agreement becomes effective subsequent to the first day of a month or shall
terminate before the last day of a month, compensation for that part of the
month this Agreement is in effect shall be prorated in a manner consistent with
the calculation of the fee as set forth above. Subject to the provisions of
subsection (b) hereof, payment of the Investment Adviser's compensation for the
preceding month shall be made as promptly as possible after completion of the
computations contemplated herein. During any period when the determination of
net asset value is suspended by the Board of Trustees, the average net asset
value of a share as of the last business day prior to such suspension shall for
this purpose be deemed to be the net asset value at the close of each
succeeding business day until it is again determined.

(b) Expense Limitations. In the event the operating expenses of the
Trust, including amounts payable to the Investment Adviser pursuant to
subsection (a) hereof, for any fiscal year ending on a date on which this
Agreement is in effect exceed the expense limitations applicable to the Trust
imposed by applicable state securities laws or regulations thereunder, as such
limitations may be raised, lowered or waived from time to time, the Investment
Adviser shall reduce its management and investment advisory fee by the extent
of such excess and, if required pursuant to any such laws or regulations, will
reimburse the Trust in the amount of such excess; provided, however, to the
extent permitted by law, there shall be excluded from such expenses the amount
of any interest, taxes, brokerage fees and commissions, distribution fees and
extraordinary expenses (including but not limited to legal claims and
liabilities and litigation costs and any indemnification related thereto) paid
or payable by the Trust. Whenever the expenses of the Trust exceed a pro rata
portion of the applicable annual expense limitations, the estimated amount of
reimbursement under such limitations shall be

E-3
<PAGE>

ARTICLE IV

Limitation of Liability of the Investment Adviser

The Investment Adviser shall not be liable for any error of judgment or
mistake of law or for any loss arising out of any investment or for any act or
omission in the management of the Trust, except for willful misfeasance, bad
faith or gross negligence in the performance of its duties, or by reason of
reckless disregard of its obligations and duties hereunder. As used in this
Article IV, the term "Investment Adviser" shall include any affiliates of the
Investment Adviser performing services for the Trust contemplated hereby and
the partners, directors, officers and employees of the Investment Adviser and
such affiliates.

ARTICLE V

Activities of the Investment Adviser

The services of the Investment Adviser to the Trust are not to be deemed
to be exclusive: the Investment Adviser and any person controlled by or under
common control with the Investment Adviser (for purposes of this Article V
referred to as "affiliates") are free to render services to others. It is
understood that the Board of Trustees, officers, employees and shareholders of
the Trust are or may become interested in the Investment Adviser and its
affiliates, as directors, officers, employees, partners, and shareholders or
otherwise and that directors, officers, employees, partners, and shareholders
of the Investment Adviser and its affiliates are or may become similarly
interested in the Trust, and that the Investment Adviser and directors,
officers, employees, partners, and shareholders of its affiliates may become
interested in the Trust as shareholders or otherwise.

ARTICLE VI

Duration and Termination of this Agreement

ARTICLE VII

Amendments of this Agreement

E-4
<PAGE>

on such approval and, where required by the Investment Company Act, by the vote
of a majority of the outstanding voting securities of the Trust.

ARTICLE VIII

Definitions of Certain Terms

ARTICLE IX

Governing Law

In Witness Whereof, the parties hereto have executed and delivered this
Agreement as of the date first above written.

Master U.S. High Yield Trust

By __________________________________
Title:

Fund Asset Management, L.P.

By: Princeton Services, Inc.,

General Partner

By __________________________________
Title:

E-5
<PAGE>

ADMINISTRATION AGREEMENT

Agreement made as of , 2000, by and between Merrill Lynch U.S. High
Yield Fund, Inc., a Maryland corporation (the "Fund") and Fund Asset
Management, L.P., a Delaware limited partnership (the "Administrator").

W I T N E S S E T H:

Whereas, the Fund desires to retain the Administrator to provide
management and administrative services to the Fund in the manner and on the
terms hereinafter set forth; and

Whereas, the Administrator is willing to provide management and
administrative services to the Fund on the terms and conditions hereafter set
forth; and

Whereas, the Fund is one of the "feeder" funds for and invests all of its
assets in Master U.S. High Yield Trust, which serves as the "master" portfolio
and has the same investment objective and policies as the Fund;

Now, Therefore, in consideration of the premises and the covenants
hereinafter contained, the Fund and the Administrator hereby agree as follows:

ARTICLE I

Duties of the Administrator

The Fund hereby employs the Administrator to act as a manager and
administrator and to furnish, or arrange for affiliates to furnish, the
management and administrative services described below, subject to review by
and the overall control of the Board of Directors of the Fund (the
"Directors"), for the period and on the terms and conditions set forth in this
Agreement. The Administrator hereby accepts such employment and agrees during
such period, at its own expense, to render, or arrange for the rendering of,
such services and to assume the obligations herein set forth for the
compensation provided for herein. The Administrator and its affiliates shall
for all purposes herein be deemed to be independent contractors and shall,
unless otherwise expressly provided or authorized, have no authority to act for
or represent the Fund in any way or otherwise be deemed agents of the Fund.

Management Services. The Administrator shall perform (or arrange for the
performance by affiliates of) the management and administrative services
necessary for the operation of the Fund including administering shareholder
accounts and handling shareholder relations. The Administrator shall provide
the Fund with office space, facilities, equipment and necessary personnel and
such other services as the Administrator, subject to review by the Directors,
shall from time to time determine to be necessary or useful to perform its
obligations under this Agreement. The Administrator shall also, on behalf of
the Fund, conduct relations with custodians, depositories, transfer agents,
dividend disbursing agents, other shareholder servicing agents, accountants,
attorneys, underwriters, brokers and dealers, corporate fiduciaries, insurers,
banks and such other persons in any such other capacity deemed to be necessary
or desirable. The Administrator shall make reports to the Directors of its
performance of obligations hereunder and furnish advice and recommendations
with respect to such other aspects of the business and affairs of the Fund as
it shall determine to be desirable.

E-6
<PAGE>

ARTICLE II

Allocation of Charges and Expenses

(a) The Administrator. The Administrator assumes and shall pay, or cause
its affiliate to pay, for maintaining the staff and personnel necessary to
perform its obligations under this Agreement, and shall, at its own expense,
provide the office space, facilities and necessary personnel which it is
obligated to provided under Article I hereof. The Administrator shall pay, or
cause its affiliate to pay, compensation of all officers of the Fund and all
Directors of the Fund who are affiliated persons of the Administrator or of an
affiliate of the Administrator.

(b) The Fund. The Fund assumes and shall pay or cause to be paid all
other expenses of the Fund (except for the expenses paid by the distributor of
the Fund's shares (the "Distributor")), including, without limitation: taxes,
expenses for legal and auditing services, costs of printing proxies,
shareholder reports, prospectuses and statements of additional information,
charges of the custodian, any sub-custodian and transfer agent, expenses of
portfolio transactions, expenses of redemption of shares, Securities and
Exchange Commission fees, expenses of registering the shares under Federal,
state and foreign laws, fees and actual out-of-pocket expenses of Directors who
are not affiliated persons of the Administrator, or of an affiliate of the
Administrator, accounting and pricing costs (including the daily calculation of
the net asset value), insurance, interest, brokerage costs, litigation and
other extraordinary or non-recurring expenses, and other expenses properly
payable by the Fund. It also is understood that the Fund will reimburse the
Administrator for its costs in providing accounting services to the Fund. The
Distributor will pay certain of the expenses of the Fund incurred in connection
with the continuous offering of shares of common stock in the Fund.

ARTICLE III

Compensation of the Administrator

Administrative Fees. For the services rendered, the facilities furnished
and expenses assumed by the Administrator, the Fund shall pay to the
Administrator at the end of each calendar month a fee based upon the average
daily value of the net assets of the Fund, as determined and computed in
accordance with the description of the determination of net asset value
contained in the prospectus and statement of additional information of the
Fund, at the annual rate of 0.25% of the average daily net assets of the Fund,
commencing on the day following effectiveness hereof. If this Agreement becomes
effective subsequent to the first day of a month or shall terminate before the
last day of a month, compensation for that part of the month this Agreement is
in effect shall be prorated in a manner consistent with the calculation of the
fee as set forth above. Payment of the Administrator's compensation for the
preceding month shall be made as promptly as possible after completion of the
computations contemplated above. During any period when the determination of
net asset value is suspended by the Directors, the net asset value of a share
as of the last business day prior to such suspension shall for this purpose be
deemed to be the net asset value at the close of each succeeding business day
until it is again determined.

ATICLE IV

Limitation of Liability of the Administrator

E-7
<PAGE>

affiliates of the Administrator performing services for the Fund contemplated
hereby and partners, shareholders, directors, officers and employees of the
Administrator and such affiliates.

ARTICLE V

Activities of the Administrator

The services of the Administrator to the Fund are not to be deemed to be
exclusive, and the Administrator and each affiliate is free to render services
to others. It is understood that Directors, officers, employees and
shareholders of the Fund are or may become interested in the Administrator and
its affiliates, as directors, officers, employees, partners and shareholders or
otherwise, and that the Administrator and directors, officers, employees,
partners and shareholders of the Administrator and its affiliates are or may
become similarly interested in the Fund as shareholders or otherwise.

ARTICLE VI

Duration and Termination of this Agreement

This Agreement shall become effective as of the date first above written
and shall remain in force for two years thereafter and thereafter continue from
year to year, but only so long as such continuance is specifically approved at
least annually by (i) the Directors of the Fund, or by the vote of a majority
of the outstanding voting securities of the Fund, and (ii) a majority of those
Directors who are not parties to this Agreement or interested persons of any
such party cast in person at a meeting called for the purpose of voting on such
approval.

This Agreement may be terminated at any time, without the payment of any
penalty, by the Directors or by the vote of a majority of the outstanding
voting securities of the Fund, or by the Administrator, on sixty days' written
notice to the other party. This Agreement shall automatically terminate in the
event of its assignment.

ARTICLE VII

Amendments of this Agreement

This Agreement may be amended by the parties only if such amendment is
specifically approved by a majority of those Directors who are not parties to
this Agreement or interested persons of any such party cast in person at a
meeting called for the purpose of voting on such approval.

ARTICLE VIII

Definitions of Certain Terms

E-8
<PAGE>

ARTICLE IX

Governing Law

In Witness Whereof, the parties hereto have executed and delivered this
Agreement as of the date first above written.

Merrill Lynch U.S. High Yield Fund,
Inc.

By: _________________________________
Name:
Title:

Fund Asset Management, L.P.

By: Princeton Services, Inc.,
General Partner

By: _________________________________
Name:
Title:

E-9
<PAGE>
----------------------------------------

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

MERRILL LYNCH ASSET MANAGEMENT Sign, Date, and Return the Proxy Card
4800 DEER LAKE DRIVE EAST Promptly Using the Enclosed Envelope.
JACKSONVILLE, FLORIDA 32246-6484
To vote by Telephone

1) Read the Proxy Statement and have the
proxy card below at hand.
2) Call 1-800-690-6903.
3) Enter the 12-digit control number set
forth on the proxy card and follow
the simple instructions.

To vote by Internet

1) Read the proxy Statement and have the
proxy card below at hand.
2) Go to Website www.proxyvote.com.
-----------------
3) Enter the 12-digit control number set
forth on the proxy card and follow
the simple instructions.

If you are voting with respect
to more than one Fund and you wish to
receive an individual ballot for each
such Fund, check the box in the lower
left-hand corner of this proxy card and
a separate proxy card for each such Fund
will be sent to you. If you do not
request separate proxy cards and utilize
this proxy card, all of the shares you
vote in each Fund will be voted in the
manner specified on this proxy card.

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

- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>

TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS: MLYNGC KEEP THIS PORTION FOR YOUR RECORDS
DETACH AND RETURN THIS PORTION ONLY
<S> <C> <C>
- -----------------------------------------------------------------------------------------------------------------------------

THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.
- -----------------------------------------------------------------------------------------------------------------------------

Vote On Directors/Trustees of each Fund

1. 01) + Ronald W. Forbes, 02) Terry K. Glenn, 03) Cynthia A. For Withhold For All To withhold authority to vote,
Montgomery, 04) Charles C. Reilly, 05) Kevin A. Ryan, All All Except mark "For All Except" and write
06) Roscoe S. Suddarth, 07) Richard R. West, 08) Arthur the nominee's number on the line
Zeikel and 09) Edward D. Zinbarg. below.
[_] [_] [_] ________________________________

+ Holders of shares of Common Stock of Merrill Lynch Municipal With respect to Items 4 through 10, solely for the Fund
Strategy Fund, Inc. cannot vote on nominees 01 and 04. or Funds named in the specific proposal:

Vote on Proposals For Against Abstain For Against Abstain
4. To consider and act upon the
2. For all Funds: To consider and act proposed Investment Advisory
upon a proposal to ratify the and Administration [_] [_] [_]
selection of independent auditors of Agreements for Merrill Lynch
each Fund for its current fiscal year. Senior Floating Rate Fund II,
[_] [_] [_] Inc., Merrill Lynch Strategic
Dividend Fund and Merrill Lynch
3. For all Funds except the Internet U.S. High Yield Fund, Inc.
Funds, the Internet Trust, Global
Financial and the Global Financial 5. To consider and act upon a [_] [_] [_]
Trust: To consider and act upon a proposal to amend the
proposal to amend the Fund's charter investment objective and
to permit the Board of Directors to policies of Merrill Lynch
convert the Fund to a master/feeder Strategic Dividend Fund.
structure. [_] [_] [_]
6. To consider and act upon a [_] [_] [_]
proposal to amend the
investment objective
of Merrill Lynch Americas
Income Fund, Inc.

7. To consider and act upon a [_] [_] [_]
proposal to amend an investment
policy of Merrill Lynch
Americas Income Fund, Inc.

8. To consider and act upon a [_] [_] [_]
proposal to amend an investment
policy of Merrill Lynch
Healthcare Fund, Inc.

9. To consider and act upon a [_] [_] [_]
proposal to amend the
If you are voting shares with respect to more than one Fund investment objective and
and you wish to receive an individual ballot for each such [_] policies of Merrill Lynch
Fund, check this box Developing Capital Markets
Fund, Inc.

10. For all Funds, to transact such
other business as may properly
come before the Meeting or any
adjournments thereof.
- --------------------------------------------------------- ------------------------------------------------------------
| |
- --------------------------------------------------------- ------------------------------------------------------------
Signature [PLEASE SIGN WITHIN BOX] Date Signature (Joint Owners) Date

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

</TABLE>
<PAGE>

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

PROXY

This proxy is solicited on behalf of the Board of Directors/Trustees

The undersigned hereby appoints Terry K. Glenn, Donald C. Burke, Robert Harris
and Ira P. Shapiro as proxies, each with the power to appoint his substitute,
and hereby authorizes each of them to represent and to vote, as designated on
the reverse side, all of the shares of Common Stock, shares of beneficial
interest and beneficial interests of the listed funds held of record or able to
be voted by the undersigned on May 12, 2000 at the Annual Meeting of
Shareholders to be held on July 10, 2000 or any adjournment thereof.

This proxy when properly executed will be voted in the manner directed
herein by the undersigned shareholder. If no direction is made, this proxy will
be voted "FOR" Proposals 1, 2, 3, 4, 5, 6, 7, 8 and 9.

By signing and dating this card, you authorize the proxies to vote each
proposal as marked, or if not marked, to vote "FOR" each proposal, and to use
their discretion to vote for any other matter as may properly come before the
meeting or any adjournment thereof. If you do not intend to personally attend
the meeting, please complete and return this card at once in the enclosed
envelope.

Please sign exactly as name appears on the reverse side. 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
persons.

CONTINUED AND TO BE SIGNED AND DATED ON THE REVERSE SIDE

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

[LOGO] MERRILL LYNCH
P.O.BOX 45000 MERRILL LYNCH MUNICIPAL STRATEGY FUND, INC.
NEW BRUNSWICK, N.J. 08945-5000 AMPS
ANNUAL MEETING OF SHAREHOLDERS
AS OF 5/12/00 TO BE HELD ON 7/10/00 AT 3:00 P.M. EDT

To vote by Telephone

1) Read the Proxy Statement and have the proxy card below
at hand.

2) Call 1-800-690-6903.

3) Enter the 12-digit control number set forth on the
proxy card and follow the simple instructions.

To vote by Internet

1) Read the Proxy Statement and have the proxy card below
at hand.
2) Go to Website www.proxyvote.com.
3) Enter the 12-digit control number set forth on the
proxy card and follow the simple instructions.

PLEASE SEE VOTING INSTRUCTION NUMBER 2 BELOW.

VOTING INSTRUCTION NUMBER 2 - WE WISH TO CALL YOUR
ATTENTION TO THE FACT THAT, UNDER THE RULES OF THE NEW
YORK STOCK EXCHANGE, WE CANNOT VOTE YOUR SECURITIES ON ONE
OR MORE OF THE MATTERS TO BE ACTED UPON AT THE MEETING
WITHOUT YOUR SPECIFIC VOTING INSTRUCTIONS. IF WE DO NOT
HEAR FROM YOU PRIOR TO THE ISSUANCE OF THE FIRST VOTE, WE
MAY VOTE YOUR SECURITIES IN OUR DISCRETION TO THE EXTENT
PERMITTED BY THE RULES OF THE EXCHANGE (ON THE TENTH DAY,
IF THE PROXY MATERIAL WAS MAILED AT LEAST 15 DAYS PRIOR TO
THE MEETING DATE; ON THE FIFTEENTH DAY IF THE PROXY
MATERIAL WAS MAILED 25 DAYS OR MORE PRIOR TO THE MEETING
DATE). IF YOU ARE UNABLE TO COMMUNICATE WITH US BY SUCH
DATE, WE WILL NEVERTHELESS FOLLOW YOUR INSTRUCTIONS, EVEN
IF OUR DISCRETIONARY VOTE HAS ALREADY BEEN GIVEN, PROVIDED
YOUR INSTRUCTIONS ARE RECEIVED PRIOR TO THE MEETING DATE.

TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS:

MLYNGO KEEP THIS PORTION FOR YOUR RECORDS
- --------------------------------------------------------------------------------
DETACH AND RETURN THIS PORTION ONLY

THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.
- --------------------------------------------------------------------------------
MERRILL LYNCH MUNICIPAL STRATEGY FUND, INC. - AMPS

PLEASE "X" HERE ONLY IF YOU PLAN TO ATTEND
THE MEETING AND VOTE YOUR SHARES IN PERSON [ ]

Vote On Directors

1. 01) Ronald W. Forbes, 02) Terry K. Glenn, 03) Cynthia A. Montogomery,
04) Charles C. Reilly, 05) Kevin A. Ryan, 06) Roscoe S. Suddarth,
07) Richard R. West, 08) Arthur Zeikel and 09) Edward D. Zinbarg.

For Withhold For All To withhold authority to vote, mark
All All Except "For All Except" and write the
nominee's number on the line below.

[ ] [ ] [ ] -----------------------------------

Vote on Proposals

2. To consider and act upon a proposal to ratify the selection of independent
auditors of the Fund for its current fiscal year.

For Against Abstain

[ ] [ ] [ ]

3. To consider and act upon a proposal to amend the Fund's charter to permit
the Board of Directors to reorganize the Fund into a master/feeder
structure.

For Against Abstain

[ ] [ ] [ ]

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

____________________________________ ____ __________________________ ______

____________________________________ ____ __________________________ ______
Signature [Please sign within box] Date Signature (Joint Owners) Date