<PAGE>
As filed with the Securities and Exchange Commission on January 5, 1998
SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. 1 )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Proxy Statement [_] Confidential, for Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to
Rule 14a-11(c) or Rule 14a-12
Merrill Lynch Retirement Reserves Money Fund of
Merrill Lynch Retirement Series Trust
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
Same as above
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) 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 (set forth the amount on which
the filing fee is calculated and state how it was determined):
-------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
-------------------------------------------------------------------------
(5) Total fee paid:
-------------------------------------------------------------------------
[_] Fee paid previously with preliminary materials.
-------------------------------------------------------------------------
[_] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
-------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement no.:
-------------------------------------------------------------------------
(3) Filing Party:
-------------------------------------------------------------------------
(4) Date Filed:
-------------------------------------------------------------------------
<PAGE>
MERRILL LYNCH RETIREMENT RESERVES MONEY FUND
MERRILL LYNCH RETIREMENT SERIES TRUST
P.O. BOX 9011
PRINCETON, NEW JERSEY 08543-9011
---------------
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
---------------
JANUARY 28, 1998
To The Shareholders of Merrill Lynch Retirement Series Trust
holding shares of Merrill Lynch Retirement Reserves Money Fund:
Notice is hereby given that a special meeting of shareholders (the
"Meeting") of Merrill Lynch Retirement Reserves Money Fund (the "Fund"), a
series of Merrill Lynch Retirement Series Trust (the "Trust"), will be held at
the offices of Merrill Lynch Asset Management, L.P., 800 Scudders Mill Road,
Plainsboro, New Jersey, on Wednesday, January 28, 1998 at 9:00 A.M. for the
following purposes:
(1) To elect members of the Board of Trustees to serve for an indefinite
term until their successors are duly elected and qualified;
(2) To consider and act upon a proposal to ratify the selection of
Deloitte & Touche llp to serve as independent auditors of the Trust for its
current fiscal year;
(3) To consider and act upon a proposal to amend the Declaration of Trust
of the Trust to permit the issuance of multiple classes of shares of the
Fund, as well as any other series of the Trust created in the future;
(4) To consider and act upon proposals to amend certain of the Fund's
fundamental investment restrictions with respect to (i) investment in other
investment companies, (ii) short sales of securities, (iii) purchase of
restricted securities, (iv) investment in real estate and in commodities,
and (v) investment in issuers with an operating history of less than three
years. (EACH RESTRICTION WILL BE VOTED ON SEPARATELY); and
(5) To transact such other business as may properly come before the
Meeting or any adjournment thereof.
The Board of Trustees has fixed the close of business on December 30, 1997
as the record date for the determination of shareholders entitled to notice of
and to vote at the Meeting or any adjournment thereof.
A complete list of the shareholders of the Trust entitled to vote at the
Meeting will be available and open to the examination of any shareholder of
the Trust for any purpose germane to the Meeting during ordinary business
hours from and after January 14, 1998 at the office of the Trust, 800 Scudders
Mill Road, Plainsboro, New Jersey. 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.
You are cordially invited to attend the Meeting. The enclosed proxy is being
solicited on behalf of the Board of Trustees of the Trust.
By Order of the Board of Trustees
Barbara G. Fraser
Secretary
Plainsboro, New Jersey
Dated: January 6, 1998
<PAGE>
PROXY STATEMENT
----------------
MERRILL LYNCH RETIREMENT RESERVES MONEY FUND
MERRILL LYNCH RETIREMENT SERIES TRUST
P.O. BOX 9011
PRINCETON, NEW JERSEY 08543-9011
----------------
SPECIAL MEETING OF SHAREHOLDERS
----------------
JANUARY 28, 1998
INTRODUCTION
This Proxy Statement is furnished in connection with the solicitation of
proxies on behalf of the Board of Trustees of Merrill Lynch Retirement Series
Trust, a Massachusetts business trust (the "Trust"), to be voted at the
special meeting of shareholders of the Trust (the "Meeting"), to be held at
the offices of Merrill Lynch Asset Management, L.P. ("MLAM"), 800 Scudders
Mill Road, Plainsboro, New Jersey, on January 28, 1998 at 9:00 a.m. The
approximate mailing date of this Proxy Statement is January 8, 1998.
All properly executed proxies received prior to the Meeting will be voted at
the Meeting in accordance with the instructions marked thereon or otherwise as
provided therein. Unless instructions to the contrary are marked, proxies will
be voted "FOR" the election of the Trustees to serve for an indefinite term;
"FOR" the ratification of the selection of independent auditors to serve for
the Trust's current fiscal year; "FOR" the proposal to amend the Declaration
of Trust to permit the issuance of multiple classes of shares of Merrill Lynch
Retirement Reserves Money Fund, a series of the Trust (the "Fund") as well as
any other series of the Trust created in the future; and "FOR" each of the
proposals to amend certain of the Fund's fundamental investment restrictions.
Any proxy may be revoked at any time prior to the exercise thereof by giving
written notice to the Secretary of the Trust at the Trust's address indicated
above or by voting in person at the Meeting.
The Board of Trustees has fixed the close of business on December 30, 1997
as the record date (the "Record Date") for the determination of shareholders
of the Fund entitled to notice of and to vote at the Meeting and at any
adjournment thereof. Shareholders on the Record Date will be entitled to one
vote for each share held, with no shares having cumulative voting rights. As
of the Record Date, the Fund had outstanding 10,987,818,618 shares of
beneficial interest, par value $.10 per share (the "Shares"). To the knowledge
of the Fund, as of the Record Date, no person is the beneficial owner of more
than five percent of its outstanding Shares. As of the date hereof and as of
the Record Date, the Fund is the only series of the Trust and the Shares
constitute all of the Trust's issued and outstanding shares of beneficial
interest.
<PAGE>
The Board of Trustees of the Trust knows of no business other than that
mentioned in Items 1 through 4 of the Notice of Meeting which will be
presented for consideration at the Meeting. If any other matter is properly
presented, it is the intention of the persons named in the enclosed proxy to
vote in accordance with their best judgment.
ITEM 1. ELECTION OF TRUSTEES
At the Meeting, each Board member will be elected to serve for an indefinite
term until his successor is elected and qualified, until his death, until he
resigns or is otherwise removed under the Declaration of Trust or until
December 31 of the year in which he reaches age 72.
It is the intention of the persons named in the enclosed proxy to nominate
and vote in favor of the election of the persons named below. The Board knows
of no reason why the nominees will be unable to serve, but in the event of any
such unavailability, the proxies received will be voted for such substitute
nominees as the Board of Trustees may recommend.
Certain information concerning the nominees is set forth below:
<TABLE>
<CAPTION>
PRINCIPAL OCCUPATION SHARES
DURING PAST FIVE YEARS BENEFICIALLY
AND PUBLIC TRUSTEE OWNED ON
NAME AND ADDRESS AGE DIRECTORSHIPS(/1/) SINCE THE RECORD DATE
---------------- --- ---------------------- ------- ---------------
<C> <C> <S> <C> <C>
Joe Grills(/1/)(/2/)........ 62 Member of the Committee 1994 1,359(/4/)
P.O. Box 98 of Investment of
Rapidan, Virginia 22733 Employee Benefit
Assets of the
Financial Executives
Institute ("CIEBA")
since 1986; member of
CIEBA's Executive
Committee since 1988
and its Chairman from
1991 to 1992;
Assistant Treasurer of
International Business
Machines Incorporated
("IBM") and Chief
Investment Officer of
IBM Retirement Funds
from 1986 until 1993;
Member of the
Investment Advisory
Committee of the State
of New York Common
Retirement Fund;
Member of the
Investment Advisory
Committee of the
Howard Hughes Medical
Institute; Director,
Duke Management
Company and LaSalle
Street Fund since
1995; Director, Kimco
Realty Corporation
since January 1997.
Walter Mintz(/1/)(/2/)...... 68 Special Limited Partner 1982 837,924(/4/)
1114 Avenue of the Americas of Cumberland
New York, New York 10036 Associates (investment
partnership) since
1982.
Robert S. Salomon, 61 Principal of STI 1996 -0-
Jr.(/1/)(/2/).............. Management (investment
106 Dolphin Cove Quay adviser); Chairman and
Stamford, Connecticut 06902 CEO of Salomon
Brothers Asset
Management from 1992
to 1995; Chairman of
Salomon Brothers
equity mutual funds
from 1992 to 1995;
Director of Stock
Research and U.S.
Equity Strategist at
Salomon Brothers from
1975 to 1991;
Director, The Common
Fund.
</TABLE>
2
<PAGE>
<TABLE>
<CAPTION>
PRINCIPAL OCCUPATION SHARES
DURING PAST FIVE YEARS BENEFICIALLY
AND PUBLIC TRUSTEE OWNED ON
NAME AND ADDRESS AGE DIRECTORSHIPS(/1/) SINCE THE RECORD DATE
---------------- --- ---------------------- ------- ---------------
<C> <C> <S> <C> <C>
Melvin R. Seiden(/1/)(/2/).. 67 Director of Silbanc 1982 3,536(/4/)
780 Third Avenue Properties, Ltd. (real
Suite 2502 estate, investments
New York, New York 10017 and consulting) since
1987; Chairman and
President of Seiden &
de Cuevas, Inc.
(private investment
firm) from 1964 to
1987.
Stephen B. 64 Chairman of Fernwood 1984 -0-
Swensrud(/1/)(/2/)......... Advisors (investment
24 Federal Street adviser) since 1996;
Suite 400 Principal of Fernwood
Boston, Massachusetts 02110 Associates (financial
consultant) since
1975.
Arthur Zeikel(/1/)(/3/)..... 65 Chairman of MLAM (which 1982 4,642(/4/)
P.O. Box 9011 term as used herein
Princeton, New Jersey includes its corporate
08543-9011 predecessors) since
1997; Chairman of Fund
Asset Management, L.P.
("FAM," which term as
used herein includes
its corporate
predecessors) since
1997; President of
MLAM and FAM from 1977
to 1997; President and
Director of Princeton
Services, Inc.
("Princeton Services")
from 1993 to 1997;
Executive Vice
President of Merrill
Lynch & Co., Inc.
("ML&Co.") since 1990.
</TABLE>
- --------
/1/Each of the nominees is a director, trustee or member of an advisory board
of certain other investment companies for which MLAM or FAM acts as
investment adviser.
/2/Member of Audit and Nominating Committee of the Board of Trustees.
/3/Interested person, as defined in the Investment Company Act of 1940, as
amended (the "Investment Company Act"), of the Trust.
/4/Represents less than 0.1% of the Shares outstanding on the Record Date.
Committees and Board of Trustees' Meetings. The Board of Trustees has a
standing Audit and Nominating Committee (the "Committee"), which consists of
the Trustees who are not "interested persons" of the Trust within the meaning
of the Investment Company Act. The principal purpose of the Committee is to
review the scope of the annual audit conducted by the Trust's independent
auditors and the evaluation by such auditors of the accounting procedures
followed by the Trust. The Committee will also select and nominate the
Trustees who are not "interested persons" of the Trust within the meaning of
the Investment Company Act. The Committee generally will not consider nominees
recommended by shareholders of the Fund. In addition, the Committee reviews
independently the advisory and distribution arrangements of the Trust. The
non-interested Trustees have retained their own legal counsel to assist them
in connection with these duties.
During the fiscal year ended October 31, 1997, the Board of Trustees held
four meetings and the Committee held four meetings. Each of the Trustees then
in office attended at least 75% of the aggregate of the total number of
meetings of the Board of Trustees held during the last fiscal year and the
total number of meetings of the Committee held during such period.
Interested Persons. The Trust considers Mr. Zeikel to be an "interested
person" of the Trust within the meaning of Section 2(a)(19) of the Investment
Company Act as a result of the positions he holds with MLAM and its
affiliates. Mr. Zeikel is the President of the Trust and the Chairman of MLAM
and FAM.
Compensation of Trustees and Officers. MLAM, the Trust's investment adviser,
pays all compensation of all officers of the Trust and all Trustees of the
Trust who are affiliated with ML&Co. or its subsidiaries. The
3
<PAGE>
Trust pays each Trustee not affiliated with the investment adviser (each a
"non-affiliated Trustee") a fee of $4,000 per year plus $1,000 per regular
meeting attended, together with such Trustee's actual out-of-pocket expenses
related to attendance at those meetings. The Trust also pays each member of
the Committee, which consists of all of the non-affiliated Trustees, a fee of
$4,000 per year plus $750 for each meeting of the Committee attended when the
Committee meeting is held on a day on which the Board of Trustees does not
meet, together with such Trustee's out-of-pocket expenses related to
attendance at such meetings. These fees and expenses aggregated $75,354 for
the fiscal year ended October 31, 1997.
The following table sets forth for the fiscal year ended October 31, 1997,
compensation paid by the Trust to the non-affiliated Trustees and, for the
calendar year ended December 31, 1996, the aggregate compensation paid by all
registered investment companies (including the Trust) advised by MLAM and its
affiliate, FAM ("FAM/MLAM Advised Funds"), to the non-affiliated Trustees.
<TABLE>
<CAPTION>
AGGREGATE COMPENSATION
FROM
PENSION OR RETIREMENT TRUST AND FAM/MLAM ADVISED
COMPENSATION BENEFITS ACCRUED AS PART FUNDS PAID TO
NAME OF TRUSTEE FROM THE TRUST OF TRUST EXPENSES TRUSTEES(/1/)
--------------- -------------- ------------------------ --------------------------
<S> <C> <C> <C>
Joe Grills(/1/)......... $15,000 None $164,000
Walter Mintz(/1/)....... $15,000 None $164,000
Robert S. Salomon,
Jr.(/1/)............... $15,000 None $187,167
Melvin R. Seiden(/1/)... $15,000 None $164,000
Stephen B.
Swensrud(/1/).......... $15,000 None $154,250
</TABLE>
- --------
(/1/) The Trustees serve on the boards of FAM/MLAM Advised Funds as follows: Mr.
Grills (19 registered investment companies consisting of 47 portfolios);
Mr. Mintz (18 registered investment companies consisting of 37
portfolios); Mr. Salomon (18 registered investment companies consisting of
37 portfolios); Mr. Seiden (18 registered investment companies consisting
of 37 portfolios); Mr. Swensrud (21 registered investment companies
consisting of 52 portfolios).
Officers of the Trust. The Board of Trustees has elected seven officers of
the Trust. The following sets forth information concerning each of these
officers:
<TABLE>
<CAPTION>
OFFICER
NAME AND PRINCIPAL OCCUPATION OFFICE AGE SINCE
----------------------------- ------ --- -------
<S> <C> <C> <C>
Arthur Zeikel.......................... President 65 1982
Chairman of MLAM and FAM since 1997;
President of MLAM and FAM from 1977 to
1997; President and Director of
Princeton Services from 1993 to 1997;
Executive Vice President of ML&Co.
since 1990.
Terry K. Glenn......................... Executive Vice 57 1986
Executive Vice President of MLAM and President
FAM since 1983; Executive Vice
President and Director of Princeton
Services since 1993; President of
Merrill Lynch Funds Distributor, Inc.
("MLFD") since 1986 and Director
thereof since 1991; President of
Princeton Administrators, L.P. since
1988.
Joseph T. Monagle, Jr. ................ Senior Vice President 49 1982
Senior Vice President and Department
Head of the Global Fixed Income
Division of MLAM and FAM since 1990;
Vice President of MLAM from 1978 to
1990; Senior Vice President of
Princeton Services since 1993.
</TABLE>
4
<PAGE>
<TABLE>
<CAPTION>
OFFICER
NAME AND PRINCIPAL OCCUPATION OFFICE AGE SINCE
----------------------------- ------ --- -------
<S> <C> <C> <C>
Kevin J. McKenna....................... Senior Vice President 40 1997
First Vice President of MLAM since
1997;
Vice President of MLAM from 1985 to
1997.
Christopher G. Ayoub................... Vice President 42 1986
Director (Fixed Income Fund
Management) of MLAM since 1997; Vice
President of MLAM from 1985 to 1997.
Donald C. Burke........................ Vice President 37 1993
First Vice President of MLAM since
1997; Vice President of MLAM from 1990
to 1997; Director of Taxation of MLAM
since 1990.
Gerald M. Richard...................... Treasurer 48 1984
Senior Vice President and Treasurer of
MLAM and FAM since 1984; Senior Vice
President and Treasurer of Princeton
Services since 1993; Vice President of
MLFD since 1981 and Treasurer thereof
since 1984.
Barbara G. Fraser...................... Secretary 53 1997
First Vice President of MLAM since
1996; Vice President of MLAM from 1994
to 1996; self-employed attorney from
1991 to 1994.
</TABLE>
Stock Ownership. At the Record Date, the Trustees and officers of the Trust
as a group (12 persons) owned an aggregate of less than 1% of the shares of
beneficial interest of the Trust outstanding at such date. At such date, Mr.
Zeikel, an officer and a Trustee of the Trust, and the other officers of the
Trust owned an aggregate of less than 1% of the outstanding shares of common
stock of ML&Co.
ITEM 2. SELECTION OF INDEPENDENT AUDITORS
The Board of Trustees of the Trust, including a majority of the Trustees who
are not interested persons of the Trust, has selected the firm of Deloitte &
Touche LLP ("D&T"), independent auditors, to examine the financial statements
of the Trust for the current fiscal year. The Trust knows of no direct or
indirect financial interest of such firm in the Trust. Such appointment is
subject to ratification or rejection by the shareholders of the Trust. Unless a
contrary specification is made, the accompanying proxy will be voted in favor
of ratifying the selection of such auditors.
D&T also acts as independent auditors for ML&Co. and all of its subsidiaries
and for most other investment companies for which MLAM or FAM acts as
investment adviser. The fees received by D&T from these other entities are
substantially greater, in the aggregate, than the total fees received by it
from the Trust. The Board of Trustees of the Trust 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
the Trust.
Representatives of D&T are expected to be present at the Meeting and will
have the opportunity to make a statement if they so desire and to respond to
questions from shareholders.
5
<PAGE>
ITEM 3. APPROVAL OF
AMENDMENTS TO THE DECLARATION OF TRUST TO
PERMIT THE FUND AS WELL AS ANY OTHER SERIES OF THE TRUST
TO ISSUE MULTIPLE CLASSES OF SHARES
The Trust is proposing amending its Declaration of Trust to enable the Fund,
as well as any other series of the Trust created in the future, to offer
multiple classes of shares with differing fee arrangements tailored to
different types of investors.
The issuance of additional classes will not alter the rights and privileges
of the current shareholders of the Fund, nor will it affect the net asset
value of a current shareholder's investment in the Fund. The currently issued
and outstanding shares of beneficial interest will not be subject to any
charge as a result of the creation of an additional class of shares. The
creation of additional classes of shares will in no way affect the terms and
conditions under which the existing class is sold; the existing shares will
continue to be sold without a front-end or deferred sales load and without
ongoing distribution fees.
Each share of each class will represent an identical interest in an
investment portfolio of the Trust and have the same rights, except that each
class would have exclusive voting rights with respect to the expenses
attributable to that class.
On December 22, 1997, the Trustees of the Trust approved amendments to the
Declaration of Trust of the Trust to enable the Fund to issue different
classes of shares. A copy of the proposed amendments to the Declaration of
Trust is attached hereto as Exhibit A. The Trustees of the Trust recommend
that the shareholders approve the proposed amendments to the Declaration of
Trust.
At the December 22, 1997 meeting, the Trustees also approved, subject to
shareholder approval of the amendments to the Declaration of Trust of the
Trust, the creation of a second class of shares of the Fund to be offered to
certain new retirement plan accountholders. The new class of shares will be
subject to the same fee arrangements as the current outstanding shares except
that such shares will be subject to ongoing Rule 12b-1 fees.
If the Declaration of Trust is amended as proposed, the Board of Trustees of
the Trust may in the future add additional classes to the Fund or to any other
series of the Trust existing at the time without seeking shareholder approval.
ITEM 4. APPROVAL OF AMENDMENTS TO CERTAIN
FUNDAMENTAL INVESTMENT RESTRICTIONS
The Fund has adopted fundamental investment restrictions that govern
generally the operations of the Fund. Investment restrictions that are deemed
fundamental may not be changed without a vote of the outstanding shares of the
Fund. The Fund's current investment restrictions are set forth in Exhibit B to
this Proxy Statement.
At a meeting held on December 22, 1997, the Board of Trustees approved the
amendment of certain of the Fund's fundamental investment restrictions, as
described below. The proposed revisions to the Fund's investment
6
<PAGE>
restrictions are not expected to affect materially the current operations of
the Fund. In this regard, the Board of Trustees approved revisions or
deletions of certain restrictions and the recategorization of certain
fundamental investment restrictions as non-fundamental restrictions. Non-
fundamental investment restrictions may be changed by the Board of Trustees
without a shareholder vote if the Board deems it in the best interest of the
Fund and its shareholders to do so.
A number of the Fund's current fundamental investment restrictions were
adopted by the Fund when it commenced operations more than ten years ago to
comply with various state blue sky regulations. Recent federal legislation has
substantially eliminated the states' authority to regulate investment
companies and as a result certain restrictions are no longer required. In
addition, since the Fund's inception, the variety of money market instruments
which, except for certain existing investment restrictions, would be
appropriate investments for the Fund has increased dramatically. Management of
the Fund believes that the existing investment restrictions that are proposed
to be amended or deleted may inhibit effective portfolio management without
any concomitant benefit to the Fund and its shareholders. Moreover, management
believes that the changes proposed will modernize the restrictions with which
the Fund complies and make them more consistent with more recently organized
money market funds. If adopted, these proposals will conform the affected
investment restrictions of the Fund to those adopted by the over 50 investment
companies managed by MLAM and its affiliate, FAM, which utilize the Merrill
Lynch Select Pricing SM System, a multi-class distribution system.
You should note that certain of the proposed investment restrictions are
stated in terms of "to the extent permitted by applicable law." Applicable law
may change over time and may become more or less restrictive as a result. The
text of each fundamental investment restriction has been drafted in this
manner so that a change in law would not require the Fund to seek a
shareholder vote to amend the restriction to conform to applicable law as
revised.
Approval of each of the proposed investment restrictions will require a
separate vote of shareholders, and it is therefore possible that one or more
of the proposed amendments but not all will be approved. See "Additional
Information" for the vote required for approval. The text of each investment
restriction as it is proposed to be adopted is set forth below and is shown
underlined. Each restriction is followed by a brief commentary. The text of
the Fund's existing investment restrictions is set forth in Exhibit B to this
Proxy Statement.
A.INVESTMENT IN OTHER INVESTMENT COMPANIES
The Fund is proposing deletion of current fundamental investment restriction
3 in the Fund's Statement of Additional Information (see Exhibit B to this
Proxy Statement) and substituting the following non-fundamental investment
restriction:
The Fund may not:
Purchase securities of other investment companies, except to the extent such
----------------------------------------------------------------------------
purchases are permitted by applicable law. As a matter of policy, however, the
- ------------------------------------------------------------------------------
Fund will not purchase shares of any registered open-end investment company or
- ------------------------------------------------------------------------------
registered unit investment trust, in reliance on Section 12(d)(1)(F) or (G)
- ---------------------------------------------------------------------------
(the "fund of funds" provisions) of the Investment Company Act, at any time
- ---------------------------------------------------------------------------
the Fund's shares are owned by another investment company that is part of the
- -----------------------------------------------------------------------------
same group of investment companies as the Fund.
- ----------------------------------------------
Commentary: As provided in fundamental investment restriction 3 in the
Fund's Statement of Additional Information, the Fund currently is
prohibited from investing in other investment companies, except in
7
<PAGE>
connection with a merger, consolidation, acquisition or reorganization. The
current restriction was required by state blue sky statutes at the Fund's
inception but is no longer required.
The proposed restriction would be non-fundamental and prohibits investment
in other investment companies except as permitted by applicable law.
Applicable law currently allows the Fund to purchase the securities of
other investment companies if immediately thereafter not more than (i) 3%
of the total outstanding voting stock of such company is owned by the Fund,
(ii) 5% of the Fund's total assets, taken at market value, would be
invested in any one such company, (iii) 10% of the Fund's total assets,
taken at market value, would be invested in securities of other investment
companies, and (iv) the Fund, together with other investment companies
having the same investment adviser and companies controlled by such
companies, owns not more than 10% of the total outstanding stock of any one
closed-end investment company. The purchase of securities of other
investment companies would subject the Fund to the various fees and
expenses of those investment companies.
B.INVESTMENT IN REAL ESTATE AND IN COMMODITIES
The Fund is proposing deletion of current fundamental investment restriction
4 in the Fund's Statement of Additional Information (see Exhibit B to this
Proxy Statement) and substituting the following two fundamental investment
restrictions:
The Fund may not:
Purchase or sell real estate, except that, to the extent permitted by
applicable law, the Fund may invest in securities secured by real estate or
interests therein or securities issued by companies that invest in real estate
or interests therein and may hold and sell real estate acquired by the Fund as
a result of the ownership of securities.
Purchase or sell commodities or contracts on commodities, except to the
extent that the Fund may do so in accordance with applicable law and the
Fund's Prospectus and Statement of Additional Information, as they may be
amended from time to time, and without registering as a commodity pool
operator under the Commodity Exchange Act.
Commentary: The Fund's current fundamental investment restriction 4 in the
Fund's Statement of Additional Information includes a prohibition against
investing in interests in oil, gas or other mineral exploration or
development programs. This prohibition was required by certain state blue
sky statutes in effect at the Fund's inception but is no longer required to
be as broad. The Fund has no current intention to invest in interests in
oil, gas or other mineral exploration or development programs. The proposed
investment restriction concerning real estate is also fundamental and
restates the restriction as it deals with real estate related investments
and permits the holding of real estate under certain circumstances. The
prohibition against investing in commodities or commodity contracts is now
included as a separate fundamental investment restriction.
C.SHORT SALES
The Fund is proposing deletion of current fundamental investment restriction
6 in the Fund's Statement of Additional Information (see Exhibit B to this
Proxy Statement) and substituting the following non-fundamental investment
restriction:
The Fund may not:
8
<PAGE>
Make short sales of securities or maintain a short position except to the
extent permitted by applicable law. The Fund currently does not intend to
engage in short sales.
Commentary: The Fund's current restriction 6 in the Fund's Statement of
Additional Information is fundamental and prohibits short sales or
maintaining a short position or writing, purchasing or selling puts, calls,
straddles, spreads or combinations thereof. The proposed restriction is
non-fundamental and prohibits short sales or maintaining a short position
except pursuant to applicable law.
The current restriction on writing, purchasing or selling puts, calls,
straddles, spreads or combinations thereof was required by certain state
blue sky statutes at the Fund's inception but is no longer required.
As a matter of operating policy, the Fund currently does not intend to
engage in short sales or write, purchase or sell puts, calls, straddles,
spreads or combinations thereof.
D.INVESTMENT IN RESTRICTED SECURITIES AND IN "UNSEASONED" ISSUERS.
The Fund is proposing deletion of current fundamental investment
restrictions 11 and 12 in the Fund's Statement of Additional Information (see
Exhibit B to this Proxy Statement) and substituting the following non-
fundamental investment restriction:
The Fund may not:
Invest in securities which cannot be readily resold because of legal or
contractual restrictions, or which cannot otherwise be marketed, redeemed, put
to the issuer or to a third party, if, at the time of acquisition, more than
10% of its total assets would be invested in such securities. This restriction
shall not apply to securities that mature within seven days or securities that
the Board of Trustees has otherwise determined to be liquid pursuant to
applicable law. Securities purchased in accordance with Rule 144A under the
Securities Act of 1933, as amended, and determined to be liquid by the Board
of Trustees are not subject to the limitations set forth in this investment
restriction.
Commentary: The proposed restriction replaces current restrictions 11 and
12 in the Fund's Statement of Additional Information which are fundamental.
Restriction 11 limits investment in securities for which no readily
available market exists to 10% of total assets. Restriction 12 limits
investment in securities with legal or contractual restrictions on resale
(except for repurchase agreements or purchase and sale contracts) and
investment in "unseasoned" issuers to 5% of the Fund's total assets. The
limitation regarding unseasoned issuers was required by certain state blue
sky statutes at the Fund's inception but is no longer required.
The proposed investment restriction is non-fundamental and eliminates any
restriction on investing in unseasoned issuers while continuing to restrict
the Fund's investment in securities deemed illiquid including securities
with a legal or contractual restriction on resale to an aggregate of 10% of
Fund assets.
Since unseasoned issuers do not have as long an operating history as more
mature issuers, they may present a greater risk of investment than more
mature issuers. Although the proposed investment restriction eliminates any
restriction on investing in unseasoned issuers, as a money market fund, the
Fund is subject to substantial Securities and Exchange Commission
regulation on the types of securities in which the Fund can invest,
including the requirement that such securities generally must have a rating
in one of the two highest short-term rating categories from nationally
recognized statistical ratings organizations.
9
<PAGE>
ADDITIONAL INFORMATION
The expenses of preparation, printing and mailing of the enclosed form of
proxy and accompanying Notice and Proxy Statement will be borne by the Fund.
The Fund will reimburse banks, brokers and others for their reasonable
expenses in forwarding proxy solicitation material to the beneficial owners of
the shares of the Fund.
In order to obtain the necessary quorum at the Meeting (i.e., a majority of
the shares of the Trust entitled to vote at the Meeting, present in person or
by proxy), supplementary solicitation may be made by mail, telephone,
telegraph or personal interview by officers of the Trust. It is anticipated
that the cost of such supplementary solicitation, if any, will be nominal. The
Fund has retained Tritech Services, an affiliate of ML & Co., with offices at
4 Corporate Place, Piscataway, New Jersey, to aid in the solicitation of
proxies from holders of shares held in nominee or "street" name at a cost to
be borne by the Fund of approximately $5,000, plus out-of-pocket expenses.
All shares represented by properly executed proxies, unless such proxies
have previously been revoked, will be voted at the Meeting in accordance with
the directions on the proxies; if no direction is indicated, the Shares will
be voted "FOR" the Trustee nominees, "FOR" the ratification of D&T as
independent auditors, "FOR" the proposal to amend the Declaration of Trust of
the Trust and "FOR" each of the proposals to amend certain of the Fund's
fundamental investment restrictions.
Approval of Item 1 (Election of Trustees) will require the affirmative vote
of a plurality of the votes cast by the Fund's shareholders, voting in person
or by proxy, at a meeting at which a quorum is duly constituted. Approval of
Item 2 (Selection of Independent Auditors) will require the affirmative vote,
in person or by proxy, of a majority of the Fund's Shares represented at a
meeting at which a quorum is duly constituted. Approval of Item 3 (Amendment
to the Declaration of Trust) will require the affirmative vote, in person or
by proxy, of shareholders representing a majority of the Shares outstanding,
at a meeting at which a quorum is duly constituted. Approval of each of the
parts of Item 4 (Amendment of Certain of the Fund's Fundamental Investment
Restrictions) will require the affirmative vote of the lesser of (i) 67% or
more of the Shares present at the Meeting, if more than 50% of the outstanding
Shares are present or represented by proxy, or (ii) more than 50% of the
outstanding Shares.
Broker-dealer firms, including Merrill Lynch, holding Fund shares in "street
name" for the benefit of their customers and clients, will request the
instructions of such customers and clients on how to vote their shares on each
Item before the Meeting. The Trust understands that, under the rules of the
New York Stock Exchange, such broker-dealer firms may, without instructions
from their customers and clients, grant authority to the proxies designated to
vote on the election of Trustees (Item 1), ratification of the selection of
independent auditors (Item 2) and approval of the amendment of the Declaration
of Trust (Item 3) 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 Merrill Lynch, will not be permitted to grant voting
authority without instructions with respect to any of the proposals to amend
certain of the Fund's fundamental investment restrictions (Item 4). The Trust
will include shares held of record by broker-dealers as to which such
authority has been granted in its tabulation of the total number of votes
present for purposes of determining whether the necessary quorum of
shareholders exists. Proxies that are returned to the Trust 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.
10
<PAGE>
Merrill Lynch has advised the Trust that except as limited by agreement or
applicable law, it intends to vote shares held in its name for which no
instructions are received on Items 1, 2 and 3 (but not on any of the parts of
Item 4) in the same proportion as the votes received from the 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. Abstentions and broker non-votes, therefore, will not have an
effect on the vote on Item 1 but will have the same effect as a vote against
Items 2, 3 and 4.
The Declaration of Trust establishing the Trust, dated July 15, 1986, 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 Retirement Series Trust" 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 or the satisfaction of any obligation or claim of said
Trust but the "Trust Property" (as defined in the Declaration) only shall be
liable.
ADDRESS OF INVESTMENT ADVISER
The principal office of MLAM is 800 Scudders Mill Road, Plainsboro, New
Jersey 08536.
ANNUAL REPORT DELIVERY
The Trust will furnish, without charge, a copy of its annual report for the
fiscal year ended October 31, 1997, to any shareholder upon request. Such
requests should be directed to Merrill Lynch Retirement Series Trust, P.O. Box
9011, Princeton, New Jersey 08543-9011, Attention: Barbara G. Fraser,
Secretary, or to 1-800-456-4587 ext. 123.
SHAREHOLDER PROPOSALS
If a shareholder intends to present a proposal at any subsequent meeting of
shareholders of the Trust and desires to have the proposal included in the
Trust's proxy statement and form of proxy for that meeting, the shareholder
must deliver the proposal to the offices of the Trust by a reasonable time
before the Board of Trustees solicitation relating to such meeting is to be
made.
By Order of the Board of Trustees
Barbara G. Fraser
Secretary
Dated: January 6, 1998
11
<PAGE>
[THIS PAGE IS INTENTIONALLY LEFT BLANK]
<PAGE>
EXHIBIT A
AMENDMENTS TO THE DECLARATION OF TRUST
Set forth herein is the text of Article I, Section 1.2, Article VI, Sections
6.2 and 6.3, Article IX, Sections 9.1, 9.2 and 9.4, Article X, Sections 10.1
and 10.2 and Article XI, Section 11.2 as proposed to be amended (additions are
underlined; deleted language is bracketed).
Section 1.2 of Article I of the Declaration is proposed to be amended in its
entirety to read as follows:
1.2 Definitions. As used in this Declaration, the following terms shall have
the following meanings:
The terms "Affiliated Person", "Assignment", "Commission", "Interested
Person", "Majority Shareholder Vote" (the 67% or more than 50% requirement
---------
of the third sentence of Section 2(a)(42) of the 1940 Act, whichever may be
applicable) and "Principal Underwriter" shall have the meanings given them
in the 1940 Act.
"Declaration" shall mean this Declaration [of Trust] as amended from time
to time. References in this Declaration to "Declaration", "hereof",
"herein" and "hereunder" shall be deemed to refer to the Declaration rather
than the article or section in which such words appear.
"Fundamental Policies" shall mean the investment restrictions set forth
in the Prospectus of any Series and designated as fundamental policies
therein.
"Person" shall mean and include individuals, corporations, partnerships,
trusts, associations, joint ventures and other entities, whether or not
legal entities, and governments and agencies and political subdivisions
thereof.
"Prospectus" shall mean the currently effective Prospectus of any Series
of the Trust under the Securities Act of 1933, as amended, including the
Statement of Additional Information incorporated by reference therein.
"Series" shall mean the separate series that may be established and
designated pursuant to Section 6.2.
"Shareholders" shall mean as of any particular time all holders of record
of outstanding Shares at such time.
"Shares" shall mean the equal proportionate transferable units of
interest into which the beneficial interest in any Series of the Trust
shall be divided from time to time and includes fractions of Shares as well
as whole Shares. As provided in Article VI hereof, a Series of the Trust
-------------------------------------------------------
may issue separate classes of Shares; all references to Shares shall be
------------------------------------
deemed to be Shares of any or all Series or a single class of a Series or
--------------------------------
all classes of a Series as the context may require.
-----------------------
"Trustees" shall mean the signatories to this Declaration [of Trust], so
long as they shall continue in office in accordance with the terms hereof,
and all other persons who at the time in question have been duly elected or
appointed and have qualified as trustees in accordance with the provisions
hereof and are then in office, are herein referred to as the "Trustees",
and reference in this Declaration to a Trustee or Trustees shall refer to
such person or persons in their capacity as Trustees hereunder.
A-1
<PAGE>
"Trust Property" shall mean as of any particular time any and all
property, real or personal, tangible or intangible, which at such time is
owned or held by or for the account of the Trust, any Series thereof or the
Trustees.
The "1940 Act" refers to the Investment Company Act of 1940, as amended
----------
from time to time, and shall include the rules and regulations and any
----------------- --------------------------- -------
relevant order of exemption promulgated thereunder[, as amended from time
---------------------------
to time] by the Securities and Exchange Commission.
-----------------------------------------
Section 6.2 of Article VI of the Declaration of Trust is proposed to be
amended in its entirety to read as follows:
6.2. Series Designation. The Trustees, in their discretion from time to
time, may authorize the division of Shares into two or more Series, each
Series relating to a separate portfolio of investments. The different Series
shall be established and designated, and the variations in the relative rights
and preferences as between the different series shall be fixed and determined,
by the Trustees; provided that all Shares shall be identical except that there
may be variations between different Series as to purchase price, determination
of net asset value, the price, terms and manner of redemption, special and
relative rights as to dividends and on liquidation, conversion rights, and
conditions under which the several Series shall have separate voting rights.
All references to Shares in this Declaration shall be deemed to be shares of
any or all Series as the context may require.
The Trustees, in their discretion from time to time without a vote of the
-------------------------------------------------------------------------
Shareholders, may divide the shares of beneficial interest of any Series into
- -----------------------------------------------------------------------------
classes. In such event, each class of a Series shall represent interests in
- ---------------------------------------------------------------------------
the Trust Property of a Series and have identical voting, dividend,
- ------------------------------------------------------------------
liquidation and other rights and the same terms and conditions except that
- --------------------------------------------------------------------------
expenses related directly or indirectly to the distribution of the Shares of a
- ------------------------------------------------------------------------------
class of a Series may be borne solely by such class (as shall be determined by
- ------------------------------------------------------------------------------
the Trustees) and, as provided in Section 10.1, a class of a Series may have
- ----------------------------------------------------------------------------
exclusive voting rights with respect to matters relating to the expenses being
- ------------------------------------------------------------------------------
borne solely by such class. The bearing of such expenses solely by a class of
- -----------------------------------------------------------------------------
Shares of a Series shall be appropriately reflected (in the manner determined
- -----------------------------------------------------------------------------
by the Trustees) in the net asset value, dividend and liquidation rights of
- ---------------------------------------------------------------------------
the Shares of such class of a Series. The division of the Shares of a Series
- ----------------------------------------------------------------------------
into classes and the terms and conditions pursuant to which the Shares of the
- -----------------------------------------------------------------------------
classes of a Series will be issued must be made in compliance with the 1940
- ---------------------------------------------------------------------------
Act. No division of Shares of a Series into classes shall result in the
- -----------------------------------------------------------------------
creation of a class of Shares having a preference as to dividends or
- --------------------------------------------------------------------
distributions or a preference in the event of any liquidation, termination or
- -----------------------------------------------------------------------------
winding up of the Trust. The Trustees may provide that Shares of a class will
- -----------------------------------------------------------------------------
be exchanged for Shares of another class without any act or deed on the part
- ----------------------------------------------------------------------------
of the holder of Shares of the class being exchanged, whether or not Shares of
- ------------------------------------------------------------------------------
such class are issued and outstanding, all on terms and conditions as the
- -------------------------------------------------------------------------
Trustees may specify. The Trustees may redesignate a class or Series of Shares
- ------------------------------------------------------------------------------
of beneficial interest or a portion of a class or Series of Shares of
- ---------------------------------------------------------------------
beneficial interest whether or not shares of such class or Series are issued
- ----------------------------------------------------------------------------
and outstanding, provided that such redesignation does not substantially
- ------------------------------------------------------------------------
adversely affect the preference, conversion or other rights, voting powers,
- --------------------------------------------------------------------------
restrictions, limitations as to dividends, qualifications or terms or
- ---------------------------------------------------------------------
conditions of redemption of such issued and outstanding Shares of beneficial
- ----------------------------------------------------------------------------
interest.
- --------
If the Trustees shall divide the Shares into two or more Series, the
following provisions shall be applicable:
(a) The number of Shares of each Series and of each class of a Series
-----------------------------
that may be issued shall be unlimited. The Trustees may classify or
reclassify any unissued Shares or any Shares previously issued and
reacquired of any Series into one or more Series that may be established
and designated from time to time.
A-2
<PAGE>
The Trustees may hold as treasury Shares (of the same or some other
Series), reissue for such consideration and on such terms as they may
determine, or cancel any Shares of any Series reacquired by the Trust at
their discretion from time to time.
(b) The power of the Trustees to invest and reinvest the Trust Property
of each Series that may be established shall be governed by Section 3.2 of
this Declaration.
(c) All consideration received by the Trust for the issue or sale of
Shares of a particular Series, together with all assets in which such
consideration is invested or reinvested, all income, earnings, profits, and
proceeds thereof, including any proceeds derived from the sale, exchange or
liquidation of such assets, and any funds or payments derived from any
reinvestment of such proceeds in whatever form the same may be, shall
irrevocably belong to that Series for all purposes, subject only to the
rights of creditors, and shall be so recorded upon the books of account of
the Trust. In the event that there are any assets, income, earnings,
profits, and proceeds thereof, funds, or payments which are not readily
identifiable as belonging to any particular Series, the Trustees shall
allocate them among any one or more of the Series established and
designated from time to time in such manner and on such basis as they, in
their sole discretion, deem fair and equitable. Each such allocation by the
Trustees shall be conclusive and binding upon the Shareholders of all
Series for all purposes.
(d) The assets belonging to each particular Series shall be charged with
the liabilities of the Trust in respect of that Series only and all
expenses, costs, charges and reserves attributable to that Series and shall
---------
not be charged with the liabilities, expenses, costs, charges and reserves
--------------------------------------------------------------------------
attributable to other Series, and any general liabilities, expenses, costs,
----------------------------
charges or reserves of the Trust which are not readily identifiable as
belonging to any particular Series shall be allocated and charged by the
Trustees to and among any one or more of the Series established and
designated from time to time in such manner and on such basis as the
Trustees in their sole discretion deem fair and equitable. Each allocation
of liabilities, expenses, costs, charges and reserves by the Trustees shall
be conclusive and binding upon the Shareholders of all Series for all
purposes. The Trustees shall have full discretion, to the extent not
inconsistent with the 1940 Act, to determine which items shall be treated
as income and which items as capital; and each such determination and
allocation shall be conclusive and binding upon the Shareholders.
(e) The power of the Trustees to pay dividends and make distributions
with respect to any one or more Series shall be governed by Section 9.2 of
this [Trust] Declaration. Dividends and distributions on Shares of a
-----------
particular Series may be paid with such frequency as the Trustees may
determine, [which may be daily or otherwise, pursuant to a standing
resolution or resolutions adopted only once or with such frequency as the
Trustees may determine,] to the holders of Shares of that Series, from such
of the income and capital gains, accrued or realized, from the assets
belonging to that Series, as the Trustees may determine, after providing
for actual and accrued liabilities belonging to that Series. All dividends
and distributions on Shares of a particular Series shall be distributed pro
rata to the holders of that Series in proportion to the number of Shares of
that Series held by such holders at the date and time of record established
for the payment of such dividends or distributions, except that such
----------------
dividends and distributions shall appropriately reflect expenses related
------------------------------------------------------------------------
directly or indirectly to the distribution of Shares of a class of such
-----------------------------------------------------------------------
Series.
------
The establishment and designation of any Series of Shares shall be effective
upon the execution by a majority of the then Trustees of an instrument setting
forth the establishment and designation of such Series. Such instrument shall
also set forth any rights and preferences of such Series which are in addition
to the rights and preferences of Shares set forth in this Declaration. At any
time that there are no Shares outstanding of any
A-3
<PAGE>
particular Series previously established and designated, the Trustees may by
an instrument executed by a majority of their number abolish that Series and
the establishment and designation thereof. Each instrument referred to in this
paragraph shall have the status of an amendment to this Declaration.
Section 6.3 of Article VI of the Declaration of Trust is proposed to be
amended in its entirety to read as follows:
6.3. Rights of Shareholders. The ownership of the Trust Property of every
description and the right to conduct any business hereinbefore described are
vested exclusively in the Trustees, and the Shareholders shall have no
interest therein other than the beneficial interest conferred by their Shares
with respect to a particular Series, and they shall have no right to call for
any partition or division of any property, profits, rights or interests of the
Trust nor can they be called upon to share or assume any losses of the Trust
or suffer an assessment of any kind by virtue of their ownership of Shares.
The Shares shall be personal property giving only the rights in this
Declaration specifically set forth. The Shares shall not entitle the holder to
preference, preemptive, appraisal, conversion or exchange rights (except for
rights of appraisal specified in Section 11.4 and except as may be specified
------------------------------
by the Trustees in connection with the division of shares into classes or the
- -----------------------------------------------------------------------------
redesignation of classes or portions of classes in accordance with Section
- --------------------------------------------------------------------------
6.2).
- ----
Sections 9.1, 9.2 and 9.4 of Article IX of the Declaration of Trust are
proposed to be amended in their entirety to read as follows:
9.1. Net Asset Value. The net asset value of each outstanding Share of each
Series of the Trust shall be determined at such time or times on such days as
the Trustees may determine, in accordance with the 1940 Act, with respect to
each Series. The method of determination of net asset value of Shares of each
--------------
class of a Series shall be determined by the Trustees and shall be as set
- -----------------
forth in the Prospectus with respect to the applicable Series with any
--------
expenses being borne solely by a class of Shares being reflected in the net
- ---------------------------------------------------------------------------
asset value of such Shares. The power and duty to make the daily calculations
- --------------------------
for any Series may be delegated by the Trustees to the adviser, administrator,
manager, custodian, transfer agent or such other person as the Trustees may
determine. The Trustees may suspend the daily determination of net asset value
to the extent permitted by the 1940 Act.
9.2. Distributions to Shareholders. The Trustees shall from time to time
distribute ratably among the Shareholders of any Series such proportion of the
net profits, surplus (including paid-in-surplus), capital, or assets with
respect to such Series held by the Trustees as they deem proper with any
--------
expenses being borne solely by a class of Shares of any Series being reflected
- ------------------------------------------------------------------------------
in the net profits or other assets being distributed to such class. Such
- ------------------------------------------------------------------
distribution may be made in cash or property (including without limitation any
type of obligations of the Trust or any assets thereof), and the Trustees may
distribute ratably among the Shareholders of any Series additional Shares of
such Series issuable hereunder in such manner, at such times, and on such
------------------
terms as the Trustees may deem proper. Such distributions may be among the
Shareholders of record at the time of declaring a distribution or among the
Shareholders of record at such later date as the Trustees shall determine. The
Trustees may always retain from the net profits such amount as they may deem
necessary to pay the debts or expenses of the Trust or to meet obligations of
the Trust, or as they deem desirable to use in the conduct of its affairs or
to retain for future requirements or extensions of the business. The Trustees
may adopt and offer to Shareholders of any Series such dividend reinvestment
plans, cash dividend payout plans or related plans as the Trustees shall deem
appropriate for such Series.
A-4
<PAGE>
Inasmuch as the computation of net income and gains for Federal income tax
purposes may vary from the computation thereof on the books, the above
provisions shall be interpreted to give the Trustees the power in their
discretion to distribute for any fiscal year as ordinary dividends and as
capital gains distributions, respectively, additional amounts sufficient to
enable the Trust to avoid or reduce liability for taxes.
9.4. Power to Modify Foregoing Procedures. Notwithstanding any of the
foregoing provisions of this Article IX, the Trustees may prescribe, in their
absolute discretion, such other bases and times for determining the per share
net asset value of the Trust's shares or net income, or the declaration and
payment of dividends and distributions as they [may] deem necessary or
desirable or to enable the Trust to comply with any provision of the 1940 Act,
including any rule or regulation adopted pursuant to Section 22 of the 1940 Act
- -------------------------------------------------------------------------------
by the Commission or any securities association registered under the Securities
- -----------------
Exchange Act of 1934, [or any order of exemption issued by said Commission] all
as in effect now or hereafter amended or modified.
Sections 10.1 and 10.2 of Article X of the Declaration of Trust are proposed
to be amended in their entirety to read as follows:
10.1. Voting Powers. The Shareholders shall have power to vote (i) for the
removal of Trustees as provided in Section 2.3; (ii) with respect to any
advisory or management contract of a Series as provided in Section 4.1; (iii)
with respect to the amendment of this Declaration as provided in Section 11.3;
(iv) with respect to such additional matters relating to the Trust as may be
required or authorized by the 1940 Act, the laws of the Commonwealth of
Massachusetts or other applicable law or by this Declaration or [by] the By-
Laws of the Trust; and (v) with respect to such additional matters relating to
the Trust as may be properly submitted for Shareholder approval. [Any matter
affecting a particular Series, including without limitation matters affecting
the advisory or management arrangements or investment policies or restrictions
of a Series, shall not be deemed to have been effectively acted upon unless
approved by the required vote of the Shareholders of such Series.
Notwithstanding the foregoing, to the extent permitted by the 1940 Act, each
Series shall not be required to vote separately on the selection of independent
public accountants, the election of Trustees and any submission with respect to
a contract with a principal underwriter or distributor.] If the Shares of a
------------------
Series shall be divided into classes as provided in Article VI hereof, the
- --------------------------------------------------------------------------
Shares of each class shall have identical voting rights except that the
- -----------------------------------------------------------------------
Trustees, in their discretion, may provide a class of a Series with exclusive
- -----------------------------------------------------------------------------
voting rights with respect to matters related to expenses being borne solely by
- -------------------------------------------------------------------------------
such class whether or not Shares of such class are issued and outstanding.
- -------------------------------------------------------------------------
10.2. Meetings of Shareholders. Special meetings of the Shareholders may be
called at any time by a majority of the Trustees and shall be called by any
Trustee upon written request of Shareholders of any Series holding in the
aggregate not less than 10% of the outstanding Shares of such Series having
voting rights, such request specifying the purpose or purposes for which such
meeting is to be called. Any such meeting shall be held within or without the
Commonwealth of Massachusetts on such day and at such time as the Trustees
shall designate. The holders of a majority of the outstanding Shares of each
Series present in person or by proxy shall constitute a quorum for the
transaction of any business, except as may otherwise be required by the 1940
Act, the laws of the Commonwealth of Massachusetts or other applicable law or
by this Declaration or the By-Laws of the Trust. If a quorum is present at a
meeting of a particular Series, the affirmative vote of a majority of the
Shares of each Series represented at the meeting constitutes the action of the
Shareholders, unless the 1940 Act, the laws of the Commonwealth of
Massachusetts or other applicable law, the Declaration or by the By-Laws of the
Trust requires a greater number of affirmative votes. If the Shares of any
--------------------
Series shall be divided into
- ----------------------------
A-5
<PAGE>
classes with a class having exclusive voting rights with respect to certain
matters, the aforesaid quorum and voting requirements with respect to action
to be taken by the Shareholders of the class of such Series on such matters
shall be applicable only to the Shares of such class.
Section 11.2 of Article XI of the Declaration is proposed to be amended in
its entirety to read as follows:
11.2. Termination.
(a) The Trust may be terminated by the affirmative vote of the holders of
not less than two-thirds of the Shares of each Series of the Trust at any
meeting of Shareholders or by an instrument in writing, without a meeting,
signed by a majority of the Trustees and consented to by the holders of not
less than two-thirds of such Shares. Any Series may be so terminated by vote
or written consent of not less than two-thirds of the Shares of such Series.
Upon the termination of the Trust or any Series,
(i) The Trust or such Series shall carry on no business except for the
purpose of winding up its affairs.
(ii) The Trustees shall proceed to wind up the affairs of the Trust or
such Series and all of the powers of the Trustees under this Declaration
shall continue until the affairs of the Trust or such Series shall have
been wound up, including the power to fulfill or discharge the contracts of
the Trust or such Series, collect its assets, sell, convey, assign,
exchange, transfer or otherwise dispose of all or [any] part of the
remaining Trust Property to one or more persons at public or private sale
for consideration which may consist in whole or in part of cash, securities
or other property of any kind, discharge or pay its liabilities, and do all
other acts appropriate to liquidate its business; provided that any sale,
conveyance, assignment, exchange, transfer or other disposition of all or
substantially all the Trust Property shall require approval of the
principal terms of the transaction and the nature and amount of the
consideration by vote or consent of the holders of a majority of the Shares
entitled to vote.
(iii) After paying or adequately providing for the payment of all
liabilities, and upon receipt of such releases, indemnities and refunding
agreements, as they deem necessary for their protection, the Trustees may
distribute the remaining Trust Property of any Series, in cash or in kind
or partly each, among the Shareholders of such Series and each class of
such Series, according to their respective rights taking into account the
proper allocation of expenses being borne solely by any Series or any class
of Shares of a Series.
(b) After termination of the Trust or [any] a Series and distribution to the
Shareholders as herein provided, a majority of the Trustees shall execute and
lodge among the records of the Trust an instrument in writing setting forth
the fact of such termination. Upon termination of the Trust, the Trustees
shall thereupon be discharged from all further liabilities and duties
hereunder, and the rights and interests of all Shareholders shall thereupon
[thereunder] cease. Upon termination of any Series, the Trustees shall
thereupon be discharged from all further liabilities and duties with respect
to such Series, and the rights and interests of all Shareholders of such
Series shall thereupon cease.
A-6
<PAGE>
EXHIBIT B
INVESTMENT RESTRICTIONS
Set forth below are the current investment restrictions of the Fund. The
text of the investment restrictions that are proposed to be revised, as
discussed in Item 4 in the Proxy Statement, are italicized.
From the Prospectus:
The Fund may not
1. purchase any securities other than (i) money market and (ii) other
securities described under "Investment Objectives and Policies;"
2. invest more than 25% of its total assets (taken at market value at the
time of each investment) in the securities of issuers in any particular
industry (other than U.S. Government securities, Government agency
securities, or domestic bank money instruments);
3. purchase the securities of any one issuer, other than the U.S.
Government, its agencies or instrumentalities, if immediately after such
purchase, more than 5% of the value or its total assets (taken at market
value) would be invested in such issuer, except that in the case of bank
money instruments, repurchase agreements and purchase and sale contracts
with any one bank up to 25% of the value of the Fund's total assets may be
invested without regard to such 5% limitation but shall instead be subject
to a limitation of 15% of the value of its total assets; and
4. enter into repurchase agreements or purchase and sale contracts if, as
a result, more than 10% of the Fund's total assets (taken at market value
at the time of each investment) would be subject to repurchase agreements
or purchase and sale contracts maturing in more than seven days.
From the Statement of Additional Information:
The Fund may not
1. make investments for the purpose of exercising control or management;
2. underwrite securities issued by other persons;
3. purchase securities of other investment companies, except in
connection with a merger, consolidation, acquisition or reorganization;
4. purchase or sell real estate (other than money market securities
secured by real estate or interests therein or money market securities
issued by companies which invest in real estate or interests therein),
commodities or commodity contracts, interests in oil, gas or other mineral
exploration or development programs;
5. purchase securities on margin, except for use of short-term credit
necessary for clearance of purchases and sales of portfolio securities;
6. make short sales of securities or maintain a short position or write,
purchase or sell puts, calls, straddles, spreads or combinations thereof;
7. make loans to other persons, provided that the Fund may purchase money
market securities or enter into repurchase agreements or purchase and sale
contracts and lend securities owned or held by it pursuant to (8) below;
B-1
<PAGE>
8. lend its portfolio securities other than as provided in the guidelines
set forth below, or in excess of 33 1/3% of its total assets, taken at
market value;
9. borrow amounts in excess of 20% of its total assets, taken at market
value (including the amount borrowed), and then only from banks as a
temporary measure for extraordinary or emergency purposes. (The borrowing
provisions shall not apply to reverse repurchase agreements.) Usually only
"leveraged" investment companies may borrow in excess of 5% of their
assets, however, the Fund will not borrow to increase income but only to
meet redemption requests which might otherwise require untimely
dispositions of portfolio securities. The Fund will not purchase securities
while borrowings are outstanding. Interest paid on such borrowings will
reduce net income;
10. mortgage, pledge, hypothecate or in any manner transfer (except as
provided in (8) above) as security for indebtedness any securities owned or
held by the Fund except as may be necessary in connection with borrowings
referred to in investment restriction (9) above, and then such mortgaging,
pledging or hypothecating may not exceed 10% of the Fund's net assets,
taken at market value;
11. invest in securities for which no readily available market exists if
more than 10% of its total assets (taken at market value) would be invested
in such securities;
12. invest in securities with legal or contractual restrictions on resale
(except for repurchase agreements or purchase and sale contracts), or in
securities of issuers (other than U.S. Government agency securities) having
a record, together with predecessors, of less than three years of
continuous operation if, regarding all such securities, more than 5% of its
total assets (taken at market value) would be invested in such securities;
13. enter into reverse repurchase agreements if, as a result thereof, the
Fund's obligations with respect to reverse repurchase agreements and
borrowings permitted in (9) above would exceed 33 1/3% of its net assets
(defined to be total assets, taken at market value, less liabilities other
than reverse repurchase agreements).
B-2
<PAGE>
MERRILL LYNCH RETIREMENT RESERVES MONEY FUND
Merrill Lynch Retirement Series Trust
P.O. Box 9011
Princeton, New Jersey 08543-9011
---------------
PROXY
This proxy is solicited on behalf of the Board of Trustees
The undersigned hereby appoints Arthur Zeikel, Terry K. Glenn and Barbara
G. Fraser as proxies, each with the power to appoint his or her substitute, and
hereby authorizes each of them to represent and to vote, as designated on the
reverse hereof, all the shares of beneficial interest of Merrill Lynch
Retirement Reserves Money Fund (the "Fund") held of record by the undersigned on
December 30, 1997 at the special meeting of shareholders of the Fund to be held
on January 28, 1998, 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 and 4.
(Continued and to be signed on the reverse side)
<PAGE>
Please mark boxes [ ] or [X] in blue or black ink
1. ELECTION OF TRUSTEES WITHHOLD AUTHORITY
FOR all nominees listed below to vote for all nominees listed below [_]
(Except as marked to the contrary below) [_]
(INSTRUCTION: To withhold authority to vote for any individual nominee, strike a
line through the nominee's name in the list below.)
Joe Grills, Walter Mintz, Robert S. Salomon, Jr., Melvin R. Seiden, Stephen B.
Swensrud and Arthur Zeikel.
2. Proposal to ratify the selection of Deloitte & Touche LLP as the
independent auditors of the Trust to serve for the current fiscal year.
FOR [_] AGAINST [_] ABSTAIN [_]
3. Proposal to amend the Declaration of Trust of the Trust.
FOR [_] AGAINST [_] ABSTAIN [_]
4. Proposals to amend certain of the Fund's fundamental investment
restrictions.
A. Regarding investment in other investment companies
FOR [_] AGAINST [_] ABSTAIN [_]
B. Regarding short sales of securities
FOR [_] AGAINST [_] ABSTAIN [_]
C. Regarding investment in restricted securities and "unseasoned"
issuers
FOR [_] AGAINST [_] ABSTAIN [_]
D. Regarding investment in real estate and commodities
FOR [_] AGAINST [_] ABSTAIN [_]
5. In the discretion of such proxies, upon such other business as may properly
come before the meeting or any adjournment thereof.
SIGN, DATE AND RETURN THE PROXY CARD PROMPTLY USING THE ENCLOSED ENVELOPE.
Please sign exactly as name appears hereon. When shares are held by joint
tenants, both should sign. When signing as attorney or as executor,
administrator, trustee or guardian, please give full title as such. If a
corporation, please sign in full corporate name by president or other authorized
officer. If a partnership, please sign in partnership name by authorized
person.
Dated: , 1998
----------------------------
x
---------------------------------------
Signature
x
---------------------------------------
Signature, if held jointly
