DAILY TAX FREE INCOME FUND, INC.
IMPORTANT NOTICE TO SHAREHOLDERS
Dear Shareholder:
As you are aware, each Fund is managed and advised by Reich & Tang Asset
Management L.P. (the "Manager"). The parent company of the Manager, New England
Investment Companies, L.P., is majority-owned by New England Mutual Life
Insurance Company, which proposes to merge with Metropolitan Life Insurance
Company sometime after the end of the 1995 year. As a shareholder, you are
invited to vote on a proposal in connection with this merger. Specifically, you
are being asked to approve or disapprove a new management/investment advisory
agreement with the Manager since the above transaction, in accordance with
applicable regulations, would automatically terminate the existing
management/investment advisory agreement between the Manager and each Fund. What
does this mean to you as a shareholder? It is important to note that the
management fee and the management and investment advisory services to be
performed under the new agreement are the same as those under the current
agreement. The other terms of the agreement are the same in all material
respects to the existing agreement. There are no changes contemplated in the
objectives or policies of the Fund, the management or operation of the Manager
relating to the Fund, the personnel managing the Fund or the shareholder or
other business activities of the Fund. The Board of Directors has determined
that the new agreement would be in the best interest of the Fund and its
shareholders. Accordingly, the Board of Directors of the Fund approved the new
agreement and voted to recommend it to shareholders for approval. We encourage
you to vote promptly no matter how many shares you own. Timely votes save money
and avoid follow-up mailings. Your cooperation as we go through the process of
the transition is greatly appreciated. We are confident that the combining of
these firms will result in a structure that will better service your needs.
Thanking you, in advance, for your patience and support.
Very truly yours,
Daily Tax Free Income Fund, Inc.
DAILY TAX FREE INCOME FUND, INC.
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
March 1, 1996
600 Fifth Avenue
New York, New York 10020
(800) 676-6779
A Special Meeting of Shareholders of Daily Tax Free Income Fund, Inc. (the
"Corporation") will be held at 9:00 a.m. on March 1, 1996 at the offices of the
Corporation at 600 Fifth Avenue, New York, New York for the following purposes,
all of which are more fully described in the accompanying Proxy Statement dated
January 3, 1996.
To approve or disapprove a new Investment Management Contract to be effective
upon the merger of New England Mutual Life Insurance Company into Metropolitan
Life Insurance Company, such Contract to be identical to the Investment
Management Contract in effect for the Corporation immediately prior to such
merger (see page 4 of the attached Proxy Statement); To elect four directors of
the Corporation, each to hold office until his successor is duly elected and
qualified; To ratify or reject the selection of Messrs. McGladrey & Pullen LLP
as independent accountants of the Corporation for its fiscal year ending October
31, 1996; and To transact such other business as may properly come before the
meeting. Only shareholders of record at the close of business on December 11,
1995 are entitled to notice of, and to vote at, the meeting. By Order of the
Board of Directors BERNADETTE N. FINN, Secretary
YOUR VOTE IS IMPORTANT NO MATTER HOW MANY SHARES YOU OWNED ON THE RECORD DATE.
PLEASE INDICATE YOUR VOTING INSTRUCTIONS ON THE ENCLOSED PROXY BALLOT, DATE AND
SIGN IT, AND RETURN IT IN THE ENVELOPE PROVIDED, WHICH IS ADDRESSED FOR YOUR
CONVENIENCE AND NEEDS NO POSTAGE IF MAILED IN THE UNITED STATES. IN ORDER TO
AVOID THE ADDITIONAL EXPENSE OF FURTHER SOLICITATION, WE ASK FOR YOUR
COOPERATION IN MAILING YOUR PROXY PROMPTLY.
PROXY STATEMENT PAGE
Introduction 4
Approval or Disapproval of a New Investment Management
Contract to be Effective at the Time of the Merger 6
Election of Directors 8
Ratification or Rejection of Selection of Independent Accountants 11
Information Regarding the Manager 11
Allocation of Portfolio Brokerage 15
Other Matters 15
Exhibit A Investment Management Contract Between the Corporation and
Reich & Tang Asset Management L.P. 17
Exhibit B Table of Fees for all Funds Advised by the Manager 21
DAILY TAX FREE INCOME FUND, INC.
600 FIFTH AVENUE
NEW YORK, NEW YORK 10020
PROXY STATEMENT
INTRODUCTION
This statement is furnished in connection with the solicitation of proxies by
the Board of Directors of Daily Tax Free Income Fund, Inc. (the "Corporation")
for use at a Special Meeting of Shareholders to be held at the offices of the
Corporation at 600 Fifth Avenue, New York, New York on March 1, 1996 at 9 A.M.
Such solicitation will be made primarily by the mailing of this statement and
the materials accompanying it. Supplemental solicitations may be made by mail,
telephone, or personal interviews by officers and representatives of the
Corporation. The expenses in connection with preparing and mailing this
statement and the material accompanying it, and of such supplemental
solicitations, will be borne by The New England and Metropolitan Life (each as
hereinafter defined). This Proxy Statement and the accompanying Proxy are first
being sent to shareholders on or about January 3, 1996. The Corporation's most
recent annual and semi-annual reports are available upon request. The
outstanding voting stock of the Corporation as of the close of business on
December 11, 1995 consisted of 649,603,985 shares of Common Stock, each whole
share being entitled to one vote and each fraction of a share being entitled to
a proportionate fraction of a vote. Only shareholders of record at the close of
business on December 11, 1995 are entitled to vote at the meeting. Any
shareholder may revoke his proxy at any time prior to its exercise by a written
notification of such revocation, which must be signed, include the shareholder's
name and account number, be addressed to the Secretary of the Corporation at its
principal executive office, 600 Fifth Avenue, New York, New York 10020, and be
received prior to the meeting to be effective, or by signing another proxy of a
later date, or by personally casting his vote at the meeting of shareholders.
Among the purposes of this Special Meeting of the Shareholders of the
Corporation is the approval of the Merger (the "Merger") of New England Mutual
Life Insurance Company ("The New England") into Metropolitan Life Insurance
Company ("Metropolitan Life"). The Merger is being treated, for purposes of the
Investment Company Act of 1940, as amended (the "1940 Act"), as a change of
control of New England Investment Companies, L.P. ("NEIC"), the limited partner
and owner of the 99.5% limited partnership interest in Reich & Tang Asset
Management L.P. (the Corporation's "Manager").
Reich & Tang Asset Management, Inc. (a wholly-owned subsidiary of NEIC) is the
general partner and owner of the remaining 0.5% interest of the Manager. Under
the 1940 Act, such a change of control constitutes an "assignment" (as defined
in the 1940 Act) of the Investment Management Contract between the Manager and
the Corporation, as well as various other investment advisory agreements under
which NEIC and its subsidiary firms serve as advisers or sub-advisers to certain
other mutual funds, and results in the automatic termination of each of those
agreements including the Investment Management Contract between the Corporation
and the Manager, effective at the time of the Merger. The Directors have
approved, and recommend that the shareholders of the Corporation approve, a new
investment management contract. This proposed new contract will be in substance
identical to the contract in effect immediately prior to the Merger, and will
take effect at the time of the Merger. As a result, the Manager will continue to
perform investment management services for the Corporation after the Merger, on
the same terms as are in effect immediately before the Merger. In addition to
the above, the other purposes for this Special Meeting of Shareholders include:
(i) the election of directors and (ii) the ratification of the selection of
independent accountants. One third of the outstanding shares of the Corporation,
represented in person or by proxy, shall be required to constitute a quorum at
the meeting although more than one third of the outstanding shares may be
required to be present to approve a particular issue. Any signed proxy will be
voted in favor of the proposals unless a choice is indicated to vote against or
to abstain from voting on that proposal. An abstention on any proposal will have
the same legal effect as a vote against such proposal. If a quorum is not
present at the meeting, or if a quorum is present but sufficient votes to
approve any of the proposals are not received, the persons named as proxies may
propose one or more adjournments of the meeting to permit further solicitation
of proxies. In determining whether to adjourn the meeting, the following factors
may be considered: the nature of the proposals that are the subject of the
meeting, the percentage of votes actually cast, the percentage of negative votes
actually cast, the nature of any further solicitation and the information to be
provided to shareholders with respect to the reasons for the solicitation. Any
adjournment will require the affirmative vote of a majority of those shares
represented at the meeting in person or by proxy. A shareholder vote may be
taken on one or more of the proposals in this proxy statement prior to any
adjournment if sufficient votes have been received for approval. The proposals
are considered "non-discretionary" and brokers that are record or nominee
holders of shares of the Corporation who have received no instructions from
their clients do not have discretion to vote on these matters. Absent voting by
the particular beneficial owners of such shares, such "broker non-voters" will
not be considered as votes cast in determining the outcome of the proposals. As
of December 20, 1995, the following persons or entities owned as much as 5% of
the Corporation's outstanding shares:
Nature of
Name & Address % of Class Ownership Class A PNC Securities Corp., as Agent for
Customers Fifth Ave & Wood Street, 9th Floor Pittsburgh, PA 15265 8.56% Record
Mellon Bank N.A., as Agent for Customers Mellon Bank West P.O. Box 710 c/o
Funding Unit Pittsburgh, PA 15230-0710 5.58% Record Class B Neuberger & Berman,
as Agent for Customers 11 Broadway Operations Control Department New York, NY
10004-1302 14.55% Record Morgan Stanley, as Agent for Customers 1251 Avenue of
the Americas New York, NY 10020 5.58% Record
As of November 30, 1995, the officers or directors of the Corporation,
collectively, beneficially owned, directly or indirectly (including the power to
vote or to dispose of any shares), less than 1% of the shares of the
Corporation's total outstanding shares. PROPOSAL 1. APPROVAL OR DISAPPROVAL OF A
NEW INVESTMENT MANAGEMENT CONTRACT TO BE EFFECTIVE AT THE TIME OF THE MERGER The
Directors of the Corporation unanimously recommend that the shareholders vote to
approve a new investment management contract for the Corporation, to be
effective at the time of the Merger. The new investment management contract will
be substantially identical to the existing investment management contract in
effect for the Corporation immediately prior to the time of the Merger. As
explained above, the Merger is being treated, for purposes of the 1940 Act, as a
change in control of NEIC and its subsidiary firms including the Manager, Reich
& Tang Asset Management L.P., that serve as advisers or sub-advisers to various
mutual funds including the Corporation. The 1940 Act provides that such a change
in control constitutes an "assignment" of these advisory and sub-advisory
agreements under which NEIC, the Manager and these related subsidiary firms
provide advisory services to the various mutual funds including the Corporation.
The 1940 Act further provides that such an "assignment" will result in the
automatic termination of each of those agreements, at the time of the Merger.
The Merger. In August of 1995, The New England and Metropolitan Life entered
into an agreement providing for the Merger of the two companies (the "Merger
Agreement"). Metropolitan Life will be the surviving company following the
Merger. Both The New England and Metropolitan Life are mutual insurance
companies. The Merger will result in the insurance policyholders of The New
England becoming policyholders of Metropolitan Life. The policyholders of The
New England will not receive any other payment, property or consideration in
connection with the Merger. The Merger will not be effected unless it is
approved by the requisite vote of the policyholders of both The New England and
Metropolitan Life. The Merger also requires approval by various government
regulatory agencies. In addition, consummation of the Merger is subject to
fulfillment of a number of other conditions, although the parties may waive some
or all of these conditions. There is no assurance that the Merger will in fact
be consummated. In addition, because it is impossible to predict with certainty
when the necessary regulatory approvals will be obtained and the other
conditions to the Merger be fulfilled, it is not known, as of the date of this
Proxy Statement, when the Merger will occur. The parties currently expect,
however, that the Merger will not occur until the first quarter of 1996. NEIC is
organized as a limited partnership. NEIC's sole general partner, New England
Investment Companies, Inc. ("NEIC Inc."), is a wholly-owned subsidiary of The
New England. As a result of the Merger, NEIC Inc. would become a direct or
indirect wholly-owned subsidiary of Metropolitan Life. The New England also owns
a majority of the outstanding limited partnership interests of NEIC. The Merger
would result in Metropolitan Life becoming the owner (directly or through a
wholly-owned subsidiary) of these limited partnership interests. The Merger
Agreement provides that, following the consummation of the Merger, Metropolitan
Life shall have the right to designate a majority of the board of directors of
NEIC Inc. Under the Merger Agreement, The New England and Metropolitan Life
agree that they will use their best efforts to satisfy the conditions of Section
15(f) of the 1940 Act. Section 15(f) provides that an investment adviser to a
registered investment company (such as the Corporation), and affiliated persons
of such investment adviser, may receive any amount or benefit in connection with
the sale of securities of, or a sale of any other interest in, such investment
adviser which results in an assignment of an investment advisory contract with
such investment company, if for a period of 3 years after the time of such
action, at least 75% of the board of such investment company are not interested
persons of such company's investment adviser or predecessor investment adviser,
and there is not imposed an unfair burden on such investment company as a result
of such transaction or any express or implied terms, conditions, or
understandings applicable thereto. Satisfaction of condition (1) above is not
expected to require any changes in the current composition of the Corporation's
Board of Directors. Information About Metropolitan Life. Metropolitan Life was
incorporated under the laws of New York in 1866 and since 1868 has been engaged
in the life insurance business under its present name. By the early 1900s, it
had become the largest life insurance company in the United States and is
currently the second largest life insurance company in the United States in
terms of total assets. Metropolitan Life's assets as of June 30, 1995 were over
$130 billion, and its adjusted capital as of that date exceeded $8 billion.
Subsidiaries of Metropolitan Life manage over $25 billion of assets for mutual
funds, institutional and other investment advisory clients. Directors'
Recommendation. The Directors unanimously recommend that shareholders approve
the new investment management contract between the Manager and the Corporation,
to be effective at the time of the Merger. The new investment management
contract will be substantially identical to the investment management contract
in effect immediately before the Merger which is described on page 12 of this
Proxy Statement. (The only difference will be that the new investment management
contract will be dated the date of the Merger and will be in effect initially
for a period of two years and from year to year thereafter provided that its
continuance is approved in accordance with the terms of the contract and the
applicable provisions of the 1940 Act.) In coming to the recommendation set
forth above, the Directors reviewed extensive information about the Corporation,
the Manager, NEIC and Metropolitan Life. The Directors noted that, for purposes
of the 1940 Act, the Merger constitutes a change in control of NEIC and the
Manager as well as NEIC's other subsidiaries that act as advisers or
sub-advisers for various other mutual funds. Although the Merger is being
treated as a change in control of NEIC and of the various advisers and
sub-advisers that are affiliated with NEIC, including the Manager, the Merger is
not expected to result in any change in the personnel, operations or financial
condition of NEIC or of such advisers or sub-advisers, including the Manager.
NEIC has indicated that each adviser and sub-adviser affiliated with NEIC,
including the Manager, will continue to be independently managed, as has
historically been the case. Thus, the Merger is not expected to result in any
changes in the investment approaches or styles of the advisers and sub-advisers,
including the Manger. The Directors accordingly concluded that it is appropriate
and desirable for the Corporation to continue, after the Merger, the same
investment management arrangements as is in effect immediately before the
Merger. Under the 1940 Act, such continuation requires, in the case of the
Corporation, the approval of its shareholders, by vote of the lesser of (1) 67%
of the shares represented at the Meeting, if more than 50% of the shares are
represented at the Meeting, or (2) more than 50% of the outstanding shares. In
order that the Corporation may continue to receive investment management
services following the Merger, on the same basis as before the Merger, the
Directors unanimously recommend that shareholders of the Corporation vote in
favor of Proposal 1. If the shareholders do not approve Proposal 1, the
investment management contract will terminate at the time of the Merger although
the Manager will continue to manage the Portfolios, and the Corporation will
consider such alternative actions as are in the best interest of the
Corporation. PROPOSAL 2. ELECTION OF DIRECTORS At the meeting, four directors
are to be elected, each to hold office until his successor has been elected and
has qualified. Drs. Mellon and Wong and Mr. Straniere were elected to the Board
and the Audit and Nominating Committees and have served as such since 1982 and
1984, respectively. Mr. Duff was elected by the Board of Directors to serve as
President and Director of the Corporation in October, 1994. All such persons
have consented to be named in this Proxy Statement and to serve as directors of
the Corporation if elected. The Board of Directors, which met four times during
the Corporation's fiscal year ended October 31, 1995, has no compensation
committee. Each director attended at least 75% of the board meetings held. The
Corporation has an Audit Committee of the Board of Directors, comprised of Drs.
Mellon and Wong and Mr. Straniere who are not "interested persons" of the
Corporation within the meaning of Section 2(a)(19) of the 1940 Act. The Audit
Committee meets annually to review the Corporation's financial statements with
the independent accountants and to report on its findings to the Board of
Directors. In addition, pursuant to a Distribution and Service Plan adopted by
the Corporation in accordance with the provisions of Rule 12b-1 under the
Investment Company Act of 1940, the Corporation has a Nominating Committee of
the Board of Directors comprised of Drs. Mellon and Wong and Mr. Straniere, to
whose discretion the selection and nomination of directors who are not
"interested persons" of the Corporation is committed. The Nominating Committee
met once with regard to the fiscal year ended October 31, 1995 regarding the
nomination of Mr. Duff. The Nominating Committee currently does not consider
nominees recommended by shareholders. The election of each director requires the
approval of a majority present at the meeting in person or by proxy. The
following is a list of the members of the Board of Directors, any other
positions each may now hold with the Corporation, the principal occupation of
each Director during the past five years and the nature, amount and percentage
of shares held by each in the Corporation.
Amount and Nature
of Beneficial
Principal Occupation Ownership at
Name and Age During Preceding Five Years 11/30/95 % of Shares
Steven W. Duff*
42
President and Director of the Corporation and President of the Mutual Funds
Division of the Manager since September 1994. Mr. Duff was formerly Director of
Mutual Fund Administration of NationsBanc, with which he was associated from
1981 to August 1994. Mr. Duff is also President and a Director of California
Daily Tax Free Income Fund, Inc., Connecticut Daily Tax Free Income Fund, Inc.,
Michigan Daily Tax Free Income Fund, Inc., New Jersey Daily Municipal Income
Fund, Inc., New York Daily Tax Free Income Fund, Inc., North Carolina Daily
Municipal Income Fund, Inc. and Short Term Income Fund, Inc.; President and
Trustee of Florida Daily Municipal Income Fund, Institutional Daily Income Fund
and Pennsylvania Daily Municipal Income Fund; President of Cortland Trust, Inc.,
Reich & Tang Government Securities Trust and Tax Exempt Proceeds Fund, Inc.; and
Executive Vice President of Reich & Tang Equity Fund, Inc. [-0-] [-0-]
W. Giles Mellon
64
Director of the Corporation since its formation in 1982; Professor of Business
Administration in the Graduate School of Management, Rutgers University, with
which he has been associated since 1966. Dr. Mellon is also a Director of
California Daily Tax Free Income Fund, Inc., Connecticut Daily Tax Free Income
Fund, Inc., Delafield Fund, Inc., Michigan Daily Tax Free Income Fund, Inc., New
Jersey Daily Municipal Income Fund, Inc., North Carolina Daily Municipal Income
Fund, Inc., Reich & Tang Equity Fund, Inc. and Short Term Income Fund, Inc.; and
a Trustee of Florida Daily Municipal Income Fund, Institutional Daily Income
Fund, Pennsylvania Daily Municipal Income Fund and Reich & Tang Government
Securities Trust. [-0-] [-0-]
Robert Straniere
53
Director of the Corporation since 1984; Member of New York State Assembly;
Partner, The Straniere Law Firm since 1981; Director of California Daily Tax
Free Income Fund, Inc., Connecticut Daily Tax Free Income Fund, Inc., Delafield
Fund, Inc., Michigan Daily Tax Free Income Fund, Inc., New Jersey Daily
Municipal Income Fund, Inc., North Carolina Daily Municipal Income Fund, Inc.,
Reich & Tang Equity Fund, Inc. and Short Term Income Fund, Inc.; Trustee of
Florida Daily Municipal Income Fund, Institutional Daily Income Fund,
Pennsylvania Daily Municipal Income Fund and Reich & Tang Government Securities
Trust; and Director of Life Cycle Mutual Funds, Inc. [-0-] [-0-]
Dr. Yung Wong
57
Director of the Corporation since its formation in 1982; Director of Shaw
Investment Management (UK) Limited from 1994 to October, 1995; formerly General
Partner of Abacus Partners Limited Partnership (a general partner of a venture
capital investment firm) from 1984 to 1994; Director of California Daily Tax
Free Income Fund, Inc., Connecticut Daily Tax Free Income Fund, Inc., Delafield
Fund, Inc., Michigan Daily Tax Free Income Fund, Inc., New Jersey Daily
Municipal Income Fund, Inc., North Carolina Daily Municipal Income Fund, Inc.,
Reich & Tang Equity Fund, Inc. and Short Term Income Fund, Inc.; and Trustee of
Florida Daily Municipal Income Fund, Institutional Daily Income Fund,
Pennsylvania Daily Municipal Income Fund, Reich & Tang Government Securities
Trust and Eclipse Financial Asset Trust.
656,412.72
Record & Beneficial
.105%
The address of each director and officer of the Corporation is 600 Fifth Avenue,
New York, New York 10020.
In addition to Mr. Duff, who has served as President of the Corporation since
September, 1994, the officers of the Corporation are:
Dana E. Messina, 38, Vice President of the Corporation. Ms. Messina is an
Executive Vice President of the Manager since January, 1995 and has been
associated with the Manager and its predecessors in various capacities since
December, 1980. She is also an officer of other investment
companies advised by the Manager.
Lesley M. Jones, 47, Vice President of the Corporation. Ms. Jones is a Senior
Vice President of the Manager since September, 1993 and has been associated
with the Manager and its predecessors in various capacities since April, 1973.
She is also an officer of other investment companies
advised by the Manager.
Bernadette N. Finn, 48, Vice President and Secretary of the Corporation.
Ms. Finn is a Vice President of the Manager since September, 1993 and has been
associated with the Manager and its predecessors in various capacities since
September, 1970. She is also an officer of other investment
companies advised by the Manager.
Molly Flewharty, 44, Vice President of the Corporation. Ms. Flewharty is Vice
President of the Manager since September, 1993 and has been associated with
the Manager and its predecessors in various capacities since December, 1977.
She is also an officer of other investment companies
advised by the Manager.
Richard De Sanctis, 39, Treasurer of the Corporation since October 1992.
Mr. De Sanctis is Treasurer of the Manager and its predecessors since
December, 1990 and is an officer of other investment companies advised by the
Manager.
The Corporation paid an aggregate remuneration of $137,696 to its directors
and to certain employees of the Manager with respect to its fiscal year ended
October 31, 1995, consisting of $27,000 in aggregate directors' fees to the
three disinterested directors, and salaries and benefits
aggregating $110,696 paid to certain employees of the Manager pursuant to the
terms of the Investment Management Contract.
(1)
(2)
(3)
(4)
(5)
Name of
Person,
Position
Aggregate Compensation
From
Corporation
Pension or Retirement Benefits Accrued As Part of Fund Expenses
Estimated Annual Benefits Upon Retirement
Total Compensation From Corporation and Corporation Complex Paid to Directors*
Steven W. Duff, Director
0
0
0
0
W. Giles Mellon, Director
$9,000
0
0
$51,500
(13 Funds)
Robert Straniere, Director
$9,000
0
0
$51,500
(13 Funds)
Yung Wong, Director
$9,000
0
0
$51,500
(13 Funds)
* The total compensation paid to such persons by the Corporation and Corporation
Complex for the fiscal year ending October 31, 1995 (and, with respect to
certain of the funds in the Corporation Complex, estimated to be paid during the
fiscal year ending October 31, 1995). The parenthetical number represents the
number of investment companies (including the Corporation ) from which such
person receives compensation that are considered part of the same Corporation
Complex as the Corporation, because, among other things, they have a common
investment advisor.
PROPOSAL 3. RATIFICATION OR REJECTION OF SELECTION OF INDEPENDENT ACCOUNTANTS
The Board of Directors recommends that the shareholders ratify the selection of
Messrs. McGladrey & Pullen LLP, independent public accountants, to audit the
accounts of the Corporation for the fiscal year ending October 31, 1996. Messrs.
McGladrey & Pullen LLP have audited the accounts of the Corporation since its
inception and do not have any direct financial interest or any material indirect
financial interest in the Corporation. A representative of Messrs. McGladrey &
Pullen LLP is not expected to be present at the shareholders' meeting. If the
shareholders do not ratify the Board's recommendation, the Board will submit
another proposal to the shareholders with a recommendation for independent
public accountants.
The ratification of selection of Independent Accountants requires the approval
of a majority present at the meeting in person or by proxy.
INFORMATION REGARDING THE MANAGER
The Manager for the Corporation is Reich & Tang Asset Management L.P., a
Delaware limited partnership with principal offices at 600 Fifth Avenue, New
York, New York 10020. The Manager was at August 31, 1995 manager, adviser or
supervisor with respect to assets aggregating approximately $7.9 billion. The
Manager acts as manager of fifteen other investment companies and also advises
pension trust, profit sharing trusts and endowments. In addition to the
Corporation, the Manager's advisory clients include, among others, California
Daily Tax Free Income Fund, Inc., Connecticut Daily Tax Free Income Fund, Inc.,
Cortland Trust, Inc., Delafield Fund, Inc., Florida Daily Municipal Income Fund,
Institutional Daily Income Fund, Michigan Daily Tax Free Income Fund, Inc., New
Jersey Daily Municipal Income Fund, Inc., New York Daily Tax Free Income Fund,
Inc., North Carolina Daily Municipal Income Fund, Inc., Pennsylvania Daily
Municipal Income Fund, Reich & Tang Equity Fund, Inc., Reich & Tang Government
Securities Trust, Short Term Income Fund, Inc. and Tax Exempt Proceeds Fund,
Inc. Attached as Exhibit B is a Table of Fees for all funds advised by the
Manager. The Manager also advises pension trusts, profit-sharing trusts and
endowments. Peter S. Voss (49), G. Neal Ryland (54), Steven W. Duff (42) and
Richard E. Smith, III (45) are directors of Reich & Tang Asset Management, Inc.
the general partner of the Manager. Mr. Voss is President of Reich & Tang Asset
Management, Inc. The address of Messrs. Voss and Ryland is 399 Boylston Street,
Boston Massachusetts 02116. Mr. Duff is President of the Mutual Fund Group of
the Manager. Mr. Smith is President of the Capital Management Group of the
Manager. Their address is 600 Fifth Avenue, New York, New York 10020. NEIC Inc.
is a holding company offering a broad array of investment styles across a wide
range of asset categories through ten investment advisory/management affiliates
and two distribution subsidiaries which include, in addition to the Manager,
Loomis, Sayles & Company, L.P., Copley Real Estate Advisors, Inc., Back Bay
Advisors, L.P., Marlborough Capital Advisors, L.P., Westpeak Investment
Advisors, L.P., Draycott Partners, Ltd., TNE Investment Services, L.P., New
England Investment Associates, Inc., an affiliate, Capital Growth Management
Limited Partnership, and Harris Associates. These affiliates in the aggregate
are investment advisors or managers to over 42 other registered investment
companies. Pursuant to the Investment Management Contract, the Manager manages
the Corporation's portfolio of securities and makes decisions with respect to
the purchase and sale of investments, subject to the general control of the
Board of Directors of the Corporation. The Manager provides persons satisfactory
to the Board of Directors of the Corporation to serve as officers of the
Corporation. Such officers, as well as certain other employees and directors of
the Corporation, may be directors or officers of Reich & Tang Asset Management,
Inc., the sole general partner of the Manager, or employees of the Manager or
its affiliates. The Investment Management Contract with the Manager's
predecessor was approved by the Board of Directors, including a majority of the
Directors who are not interested persons (as defined in the Act) of the
Corporation or the Manager and by the shareholders at a special meeting of
shareholders, effective September 15, 1993. The re-execution of the Investment
Management Contract with the Manager was approved by the Board of Directors,
including a majority of the directors who are not interested persons of the
Corporation or Manager, effective October 1, 1994. The Investment Management
Contract has a term which extends to April 30, 1996 and may be continued in
force thereafter for successive twelve-month periods beginning each May 1,
provided that such continuance is specifically approved annually by majority
vote of the Corporation's outstanding voting securities or by its Board of
Directors, and in either case by a majority of the Directors who are not parties
to the Investment Management Contract or interested persons of any such party,
by votes cast in person at a meeting called for the purpose of voting on such
matter. The Investment Management Contract is terminable without penalty by the
Corporation on sixty days' written notice when authorized either (1) by majority
vote of its outstanding voting shares or (2) by a vote of a majority of its
Board of Directors or (3) by the Manager on sixty days' written notice, and will
automatically terminate in the event of its assignment. The Investment
Management Contract provides that in the absence of willful misfeasance, bad
faith or gross negligence on the part of the Manager, or of reckless disregard
of its obligations thereunder, the Manager shall not be liable for any action or
failure to act in accordance with its duties thereunder. Under the Investment
Management Contract, the Corporation will pay an annual management fee of .325%
of the Corporation's average daily net assets not in excess of $750 million,
plus .30% of such assets in excess of $750 million. The Manager, at its
discretion, may voluntarily waive all or a portion of the management fee. The
fees are accrued daily and paid monthly. Any portion of the total fees received
by the Manager may be used by the Manager to provide shareholder services and
for distribution of the Corporation's shares. Pursuant to an Administrative
Services Contract with the Corporation, the Manager also performs clerical,
accounting supervision, office service and related functions for the Corporation
and provides the Corporation with personnel to (i) supervise the performance of
bookkeeping related services by Investors Fiduciary Trust Company, the
Corporation's bookkeeping agent, (ii) prepare reports to and filings with
regulatory authorities, and (iii) perform such other services as the Corporation
may from time to time request of the Manager. The personnel rendering such
services may be employees of the Manager, of its affiliates or of other
organizations. The Board of Directors has approved a change in the
Administration Services Contract that ceases all reimbursements to the Manager
and increases the Administration Fee payable to the Manager by 0.01% of the
Corporation's average daily net assets. For its services under the
Administrative Services Contract, the Manager will receive (after such increase)
from the Corporation an annual fee equal to .21% of each Portfolio's average
daily net assets not in excess of $1.25 million, plus .20% of such assets in
excess of $1.25 million but not in excess of $1.5 billion, plus .19% of such
assets in excess of $1.5 billion. Prior to such change, the Corporation paid the
Manager for such personnel and for rendering such services at rates which were
agreed upon by the Corporation and the Manager, provided that the Corporation
did not pay for services performed by any such persons who were also officers of
the general partner of the Manager. It was intended that such rates would be the
actual costs of the Manager. Under the Administrative Services Contract, the
Corporation may reimburse the Manager for all of the Corporation's operating
costs (in addition to the personnel reimbursement), including rent, depreciation
of equipment and facilities, interest and amortization of loans financing
equipment used by the Corporation and all the expenses incurred to conduct the
Corporation's affairs. The amounts of such reimbursements are to be agreed upon
between the Corporation and the Manager. No such reimbursements were made. The
Manager at its discretion may waive its rights to any portion of the management
fee or the administrative services fee and may use any portion of the management
fee and the administrative services fee for purposes of shareholder and
administrative services and distribution of the Corporation's shares. There can
be no assurance that such fees will be waived in the future. Investment
management fees and operating expenses which are attributable to both Classes
will be allocated daily to each Class share based on the percentage of
outstanding shares at the end of the day. Additional shareholder services
provided by Participating Organizations to Class A shareholders pursuant to the
Plan shall be compensated by the Distributor from its shareholder servicing fee,
and the Manager from its management fee. Expenses incurred in the distribution
of Class B shares shall be paid by the Manager. Expense Limitation. The Manager
has agreed, pursuant to the Investment Management Contract, to reimburse the
Corporation for its expenses (exclusive of interest, taxes, brokerage and
extraordinary expenses) which in any year exceed the lesser of (i) 1 1/2% of the
Corporation's average annual net assets or (ii) the limits on investment company
expenses prescribed by any state in which the Corporation's shares are qualified
for sale. For the purpose of this obligation to reimburse expenses, the
Corporation's annual expenses are estimated and accrued daily, and any
appropriate estimated payments are made to it on a monthly basis. Subject to the
obligations of the Manager to reimburse the Corporation for its excess expenses
as described above, the Corporation has, under the Investment Management
Contract, confirmed its obligation for payment of all its other expenses,
including all operating expenses, taxes, brokerage fees and commissions,
commitment fees, certain insurance premiums, interest charges and expenses of
the custodian, transfer agent and dividend disbursing agent's fees,
telecommunications expenses, auditing and legal expenses, bookkeeping agent
fees, costs of forming the corporation and maintaining corporate existence,
compensation of Directors, officers and employees of the Corporation and costs
of other personnel performing services for the Corporation who are not officers
of the Manager or its affiliates, costs of investor services, shareholders'
reports and corporate meetings, Securities and Exchange Commission registration
fees and expenses, state securities laws registration fees and expenses,
expenses of preparing and printing the Corporation's prospectus for delivery to
existing shareholders and of printing application forms for shareholder
accounts, and the fees and reimbursements payable to the Manager under the
Investment Management Contract and the Administrative Services Contract and the
Distributor under the Shareholder Servicing Agreement. The Corporation may from
time to time hire its own employees or contract to have management services
performed by third parties (including Participating Organizations) as discussed
herein, and the management of the Corporation intends to do so whenever it
appears advantageous to the Corporation. The Corporation's expenses for
employees and for such services are among the expenses subject to the expense
limitation described above. The following fees were paid to the predecessor
investment managers under the previous Investment Management Contracts or the
Manager under the current Investment Management Contract. For the Corporation's
fiscal year ended October 31, 1993, Reich & Tang L.P. and NEIC received
investment management fees of $2,359,348. For the Corporation's fiscal year
ended October 31, 1994, NEIC and the Manager received investment management fees
totaling $2,475,208. For the Fund's fiscal year ended October 31, 1995, the
Manager received investment management fees totaling $2,124,937. For the
Corporation's fiscal year ended October 31, 1994, NEIC and the Manager received
administration fees in the aggregate of $1,525,139. For the fiscal year ended
October 31, 1995, the Manager received administration fees in the aggregate of
$1,307,653. No reimbursements were payable to the Corporation by the Manager or
its predecessor pursuant to the 1 1/2% expense limitation described above with
respect to the fiscal years ended October 31, 1993, October 31, 1994 and October
31, 1995. The Manager now acts as investment manager or adviser for other
persons and entities and may under the Investment Management Contract act as
investment manager or adviser to other registered investment companies. At
present, the Manager is investment manager to fifteen other registered
investment companies. Distribution and Service Plan. Pursuant to Rule 12b-1
under the Act, the Securities and Exchange Commission has required that an
investment company which bears any direct or indirect expense of distributing
its shares must do so only in accordance with a plan permitted by the Rule. The
Corporation's Board of Directors has adopted a distribution and service plan
(the "Plan") and, pursuant to the Plan, the Corporation and the Manager have
entered into a Distribution Agreement and a Shareholder Servicing Agreement with
Reich & Tang Distributors L.P. (the "Distributor") as distributor of the
Corporation's shares. Because the Merger will be considered to result in the
assignment of the Corporation's Distribution Agreement with the Distributor,
causing those agreements to terminate upon the Merger, the Board of Directors of
the Corporation approved a new Distribution Agreement with Reich & Tang
Distributors L.P. for the Corporation to take effect if a new Investment
Management Agreement is approved by shareholders of the Corporation and upon
consummation of the Merger. The new Distribution Agreement would replace the
current Distribution Agreement with the Distributor and would be identical to
those agreements, except for the dates of execution and effectiveness. Reich &
Tang Asset Management, Inc. serves as the sole general partner for both Reich &
Tang Asset Management L.P. and Reich & Tang Distributors L.P. Reich & Tang Asset
Management L.P. serves as the sole limited partner of the Distributor. The
Distributor's address is 600 Fifth Avenue, New York, New York 10020. Under the
Distribution Agreement, the Distributor, for nominal consideration and as agent
for the Corporation, will solicit orders for the purchase of the Corporation's
shares, provided that any subscriptions and orders will not be binding on the
Corporation until accepted by the Corporation as principal. Under the Plan, the
Corporation and the Distributor will enter a Shareholder Servicing Agreement
with respect to the Class A shares. Under the Shareholder Servicing Agreement,
the Distributor receives from the Corporation a service fee equal to .25% per
annum of each Portfolio's Class A shares average daily net assets (the "Service
Fee") for providing, with respect only to the Class A shares, personal
shareholder services and for the maintenance of shareholder accounts. The
Service Fee is accrued daily and paid monthly and any portion of the Service Fee
may be deemed to be used by the Distributor for payments to Participating
Organizations with respect to servicing their clients or customers who are
shareholders of the Corporation. The Plan provides, with respect to Class A
shares, that the Manager may make payments from time to time from its own
resources, which may include the management fee and past profits for the
following purposes: (i) to defray the costs of, and to compensate others,
including Participating Organizations with whom the Distributor has entered into
written agreements for performing shareholder servicing and related
administrative functions on behalf of the Corporation; (ii) to compensate
certain Participating Organizations for providing assistance in distributing the
Corporation's shares; and (iii) to pay the costs of printing and distributing
the Corporation's prospectus to prospective investors, and to defray the cost of
the preparation and printing of brochures and other promotional materials,
mailings to prospective stockholders, advertising, and other promotional
activities, including the salaries and/or commissions of sales personnel in
connection with the distribution of the Corporation's shares. The Distributor
may also make payments from time to time from its own resources, which may
include the Service Fee with respect to Class A shares and past profits for the
purpose enumerated in (i) above. The Distributor will determine the amount of
such payments made pursuant to the Plan, provided that such payments will not
increase the amount which the Corporation is required to pay to the Manager and
the Distributor for any fiscal year under either the Investment Management
Contract in effect for that year, the Administrative Services Contract in effect
for that year or under the Shareholder Servicing Agreement in effect for that
year. The following information applies only to the Class A shares of the
Corporation. For the fiscal year ended October 31, 1995, the Corporation paid a
Service Fee for expenditures pursuant to the Plan in amounts aggregating
$1,254,570. During such period, the Manager and Distributor made payments
pursuant to the Plan to or on behalf of Participating Organizations of
$2,169,960. The excess of such payments over the total payments the predecessor
managers and Distributor received from the Corporation represents distribution
and servicing expenses funded by the Manager's predecessors and Distributor from
their own resources including the management fee. ALLOCATION OF PORTFOLIO
BROKERAGE The Corporation's purchases and sales of securities usually are
principal transactions. Portfolio securities are generally purchased directly
from the issuer or from an underwriter or market maker for the securities. There
usually are no brokerage commissions paid for such purchases and the Corporation
at present does not anticipate paying brokerage commissions. Should the
Corporation pay a brokerage commission on a particular transaction, the
Corporation would seek to effect the transaction at the most favorable available
combination of best execution and lowest commission. Purchases from underwriters
of portfolio securities include a commission or concession paid by the issuer to
the underwriter, and purchases from dealers serving as market makers include the
spread between the bid and asked price. No portfolio transactions are executed
with the Manager, or with an affiliate of the Manager, acting either as
principal or as paid broker. The frequency of transactions and their allocation
to various dealers is determined by the Manager in its best judgment and in a
manner deemed in the best interest of shareholders of the Corporation. The
primary consideration is prompt execution of orders in an effective manner at
the most favorable price. Investment decisions for the Corporation will be made
independently from those for any other accounts or investment companies that may
be or become advised or managed by the Manager or its affiliates. If, however,
the Corporation and other investment companies or accounts advised or managed by
the Manager are contemporaneously engaged in the purchase or sale of the same
security, the transactions may be averaged as to price and allocated equitably
to each account. In some cases, this policy might adversely affect the price
paid or received by the Corporation or the size of the position obtainable for
the Corporation. In addition, when purchases or sales of the same security for
the Corporation and for other investment companies managed by the Manager occur
contemporaneously, the purchase or sale orders may be aggregated in order to
obtain any price advantages available to large denomination purchasers or
sellers. OTHER MATTERS As a Maryland corporation, the Corporation is not
required, and does not intend, to hold regular annual meetings. Shareholders who
wish to present proposals at any future shareholder meeting must present such
proposals to the Board at a reasonable time prior to the solicitation of any
shareholder proxy. The management does not know of any matters to be present at
this Special Meeting of Shareholders other than those mentioned in this Proxy
Statement. If any of the persons listed above is unavailable for election as a
director, an event not now anticipated, or if any other matters properly come
before the meeting, the shares represented by proxies will be voted with respect
thereto in accordance with the best judgment of the person or persons voting the
proxies.
By Order of the Board of Directors
BERNADETTE N. FINN, Secretary
January 3, 1996
EXHIBIT A (INVESTMENT MANAGEMENT CONTRACT BETWEEN THE CORPORATION AND REICH &
TANG ASSET MANAGEMENT, L.P.)
INVESTMENT MANAGEMENT CONTRACT
DAILY TAX FREE INCOME FUND, INC.
the "Fund"
New York, New York
1996
Reich & Tang Asset Management L.P.
600 Fifth Avenue
New York, New York 10022
Gentlemen:
We herewith confirm our agreement with you as follows:
We propose to engage in the business of investing and reinvesting our assets in
securities of the type, and in accordance with the limitations, specified in our
Articles of Incorporation, By-Laws and Registration Statement filed with the
Securities and Exchange Commission under the Investment Company Act of 1940 (the
"1940 Act") and the Securities Act of 1933, including the Prospectus forming a
part thereof (the "Registration Statement"), all as from time to time in effect,
and in such manner and to such extent as may from time to time be authorized by
our Board of Directors. We enclose copies of the documents listed above and will
furnish you such amendments thereto as may be made from time to time. (a) We
hereby employ you to manage the investment and reinvestment of our assets as
above specified, and, without limiting the generality of the foregoing, to
provide the investment management services specified below.
Subject to the general control of our Board of Directors, you will make
decisions with respect to all purchases and sales of the portfolio securities.
To carry out such decisions, you are hereby authorized, as our agent and
attorney-in-fact for our account and at our risk and in our name, to place
orders for the investment and reinvestment of our assets. In all purchases,
sales and other transactions in our portfolio securities you are authorized to
exercise full discretion and act for us in the same manner and with the same
force and effect as our corporation itself might or could do with respect to
such purchases, sales or other transactions, as well as with respect to all
other things necessary or incidental to the furtherance or conduct of such
purchases, sales or other transactions. You will report to our Board of
Directors at each meeting thereof all changes in our portfolios since your prior
report, and will also keep us in touch with important developments affecting our
portfolio and, on your initiative, will furnish us from time to time with such
information as you may believe appropriate for this purpose, whether concerning
the individual entities whose securities are included in our portfolio, the
activities in which such entities engage, Federal income tax policies applicable
to our investments, or the conditions prevailing in the money market or the
economy generally. You will also furnish us with such statistical and analytical
information with respect to our portfolio securities as you may believe
appropriate or as we may reasonably request. In making such purchases and sales
of our portfolio securities, you will comply with the policies set from time to
time by our Board of Directors as well as the limitations imposed by our
Articles of Incorporation and by the provisions of the Internal Revenue Code and
the 1940 Act relating to regulated investment companies and the limitations
contained in the Registration Statement. It is understood that you will from
time to time employ, subcontract with or otherwise associate with yourself,
entirely at your expense, such persons as you believe to be particularly fitted
to assist you in the execution of your duties hereunder. You or your affiliates
will also furnish us, at your own expense, such investment advisory supervision
and assistance as you may believe appropriate or as we may reasonably request
subject to the requirements of any regulatory authority to which you may be
subject. You and your affiliates will also pay the expenses of promoting the
sale of our shares (other than the costs of preparing, printing and filing our
registration statement, printing copies of the prospectus contained therein and
complying with other applicable regulatory requirements), except to the extent
that we are permitted to bear such expenses under a plan adopted pursuant to
Rule 12b-1 under the 1940 Act or a similar rule.
We agree, subject to the limitations described below, to be responsible for, and
hereby assume the obligation for payment of, all our expenses, including: (a)
brokerage and commission expenses, (b) Federal, state or local taxes, including
issue and transfer taxes incurred by or levied on us, (c) commitment fees and
certain insurance premiums, (d) interest charges on borrowings, (e) charges and
expenses of our custodian, (f) charges, expenses and payments relating to the
issuance, redemption, transfer and dividend disbursing functions for us, (g)
recurring and nonrecurring legal and accounting expenses, including those of the
bookkeeping agent, (h) telecommunications expenses, (i) the costs of organizing
and maintaining our existence as a corporation, (j) compensation, including
directors' fees, of any of our directors, officers or employees who are not your
officers or officers of your affiliates, and costs of other personnel providing
clerical, accounting supervision and other office services to us as we may
request, (k) costs of stockholder's services including, charges and expenses of
persons providing confirmations of transactions in our shares, periodic
statements to stockholders, and recordkeeping and stockholders' services, (l)
costs of stockholders' reports, proxy solicitations, and corporate meetings, (m)
fees and expenses of registering our shares under the appropriate Federal
securities laws and of qualifying such shares under applicable state securities
laws, including expenses attendant upon the initial registration and
qualification of such shares and attendant upon renewals of, or amendments to,
those registrations and qualifications, (n) expenses of preparing, printing and
delivering our prospectus to existing shareholders and of printing shareholder
application forms for shareholder accounts, (o) payment of the fees and expenses
provided for herein, under the Administrative Services Agreement and pursuant to
the Shareholder Servicing Agreement and Distribution Agreement, and (p) any
other distribution or promotional expenses contemplated by an effective plan
adopted by us pursuant to Rule 12b-1 under the Act. Our obligation for the
foregoing expenses is limited by your agreement to be responsible, while this
Agreement is in effect, for any amount by which the annual operating expenses
(excluding taxes, brokerage, interest and extraordinary expenses) exceed the
limits on investment company expenses prescribed by any state in which our
shares are qualified for sale. We will expect of you, and you will give us the
benefit of, your best judgment and efforts in rendering these services to us,
and we agree as an inducement to your undertaking these services that you will
not be liable hereunder for any mistake of judgment or for any other cause,
provided that nothing herein shall protect you against any liability to us or to
our security holders by reason of willful misfeasance, bad faith or gross
negligence in the performance of your duties hereunder, or by reason of your
reckless disregard of your obligations and duties hereunder. In consideration of
the foregoing we will pay you a fee at the annual rate of .325% of the Fund's
average daily net assets not in excess of $750 million, plus .30% of such assets
in excess of $750 million. Your fee will be accrued by us daily, and will be
payable on the last day of each calendar month for services performed hereunder
during that month or on such other schedule as you shall request of us in
writing. You may use any portion of this fee for distribution of our shares, or
for making servicing payments to organizations whose customers or clients are
our shareholders. You may waive your right to any fee to which you are entitled
hereunder, provided such waiver is delivered to us in writing. Any reimbursement
of our expenses, to which we may become entitled pursuant to paragraph 3 hereof,
will be paid to us at the same time as we pay you. This Agreement will become
effective on the date hereof and shall continue in effect until ____________ __,
199_ and thereafter for successive twelve-month periods (computed from each
____________), provided that such continuation is specifically approved at least
annually by our Board of Directors or by a majority vote of the holders of our
outstanding voting securities, as defined in the 1940 Act and the rules
thereunder, and, in either case, by a majority of those of our directors who are
neither party to this Agreement nor, other than by their service as directors of
the corporation, interested persons, as defined in the 1940 Act and the rules
thereunder, of any such person who is party to this Agreement. Upon the
effectiveness of this Agreement, it shall supersede all previous Agreements
between us covering the subject matter hereof. This Agreement may be terminated
at any time, without the payment of any penalty, (i) by vote of a majority of
our outstanding voting securities, as defined in the 1940 Act and the rules
thereunder, or (ii) by a vote of a majority of our entire Board of Directors, on
sixty days' written notice to you, or (iii) by you on sixty days' written notice
to us. This Agreement may not be transferred, assigned, sold or in any manner
hypothecated or pledged by you and this agreement shall terminate automatically
in the event of any such transfer, assignment, sale, hypothecation or pledge by
you. The terms "transfer", "assignment" and "sale" as used in this paragraph
shall have the meanings ascribed thereto by governing law and in applicable
rules or regulations of the Securities and Exchange Commission. Except to the
extent necessary to perform your obligations hereunder, nothing herein shall be
deemed to limit or restrict your right, or the right of any of your employees or
the officers and directors of Reich & Tang Asset Management, Inc., your general
partner, who may also be a director, officer or employee of ours, or of a person
affiliated with us, as defined in the 1940 Act, to engage in any other business
or to devote time and attention to the management or other aspects of any other
business, whether of a similar or dissimilar nature, or to render services of
any kind to any other corporation, firm, individual or association. If the
foregoing is in accordance with your understanding, will you kindly so indicate
by signing and returning to us the enclosed copy hereof.
Very truly yours,
DAILY TAX FREE INCOME FUND, INC.
By:
ACCEPTED: , 1996
REICH & TANG ASSET MANAGEMENT L.P.
By: REICH & TANG ASSET MANAGEMENT, INC.,
General Partner
By: ___________________________
EXHIBIT B (TABLE OF FEES FOR ALL FUNDS ADVISED BY THE MANAGER)
FUND NAME
FEES
NET ASSETS (IN MILLIONS) AT
11-30-95
SHORT TERM INCOME FUND, INC.
Money Market Portfolio
Management Fee
.30% of average daily net assets up to $750 million
.29% of average daily net assets in excess of $750 million up to $1
billion .28% of average daily net assets in excess of $1 billion up to
$1.5 billion .27% of average daily net assets in excess of $1.5 billion
895.3
U.S. Government Portfolio
Management Fee
.275% of average daily net assets up to $250 million
.25% of average daily net assets in excess of $250 million
610.4
Each Portfolio
Administrative Services Fee
.21% of average daily net assets up to $1.25 billion
.20% of average daily net assets in excess of $1.25 billion up to $1.5
billion .19% of average daily net assets in excess of $1.5 billion
STIF 895.3
STIG 610.4
Shareholder Servicing and Distribution Plan Fee (Class A only) .25% of average
daily net assets
STIF (A) 671.3
STIG (A) 504.4
Management Fee
.325% of average daily net assets up to $750 million
.30% of average daily net assets in excess of $750 million
626.7
DAILY TAX FEE INCOME FUND, INC.
Administrative Services Fee
.21% of average daily net assets up to $1.25 million
.20% of average daily net assets in excess of $1.25 million up to
$1.5 billion
.19% in excess of $1.5 billion
626.7
Shareholder Servicing and Distribution Plan Fee (Class A Only) .25% of average
daily net assets
Class A 453.4
REICH & TANG EQUITY FUND, INC.
Management Fee
.80% of average daily net assets
109.5
Administrative Services Fee
.21% of average daily net assets
Management Fee
.80% of average daily net assets
DELAFIELD FUND, INC.
Administrative Services Fee
.21% of average daily net assets
44.0
Shareholder Servicing and Distribution Plan Fee
.25% of average daily net assets
EXHIBIT B (TABLE OF FEES FOR ALL FUNDS ADVISED BY THE MANAGER) (CONTINUED)
Management Fee
.30% of average daily net assets
CONNECTICUT DAILY TAX FREE INCOME FUND, INC.
Administrative Services Fee
.21% of average daily net assets
103.2
Shareholder Servicing and Distribution Plan Fee
.20% of average daily net assets
Management Fee
.30% of average daily net assets
NEW YORK DAILY TAX FEE
INCOME FUND, INC.
Administrative Services Fee
.21% of average daily net assets
263.1
Shareholder Servicing and Distribution Plan Fee
.20% of average daily net assets
Management Fee
.35% of average daily net assets
REICH & TANG GOVERNMENT SECURITIES TRUST
Administrative Services Fee
.21% of average daily net assets
.7
Shareholder Servicing and Distribution Plan Fee
.25% of average daily net assets
Management Fee
.30% of average daily net assets
CALIFORNIA DAILY TAX FEE INCOME FUND, INC.
Administrative Services Fee
.21% of average daily net assets
159.3
Shareholder Servicing and Distribution Plan Fee
.20% of average daily net assets
Management Fee
.30% of average daily net assets
MICHIGAN DAILY TAX FREE
INCOME FUND, INC.
Administrative Services Fee
.21% of average daily net assets
59.7
Shareholder Servicing and Distribution Plan Fee
.20% of average daily net assets
TAX EXEMPT PROCEEDS
FUND, INC.
All Inclusive Management Fee*
.40% of average daily net assets up to $250 million
.35% of average daily net assets in excess of $250 million up to
$500 million
.30% of average daily net assets in excess of $500 million
265.4
EXHIBIT B (TABLE OF FEES FOR ALL FUNDS ADVISED BY THE MANAGER) (CONTINUED)
Management Fee
.30% of average daily net assets
NEW JERSEY DAILY MUNICIPAL INCOME FUND, INC.
Administrative Services Fee
.21% of average daily net assets
135.1
Shareholder Servicing and Distribution Plan Fee
.20% of average daily net assets
CORTLAND TRUST, INC.
All Portfolios
All Inclusive Management Fee
.80% of the first $500 million .775% of the next $500 million .75% of
the next $500 million .735% in excess of $1.5 billion
1,884.4
Distribution Fee
.25% of average daily net assets
1,503.3
Distribution Fee (Live Oak Shares)
.20% of average daily net assets
381.1
Management Fee
.40% of average daily net assets
NORTH CAROLINA DAILY
MUNICIPAL INCOME FUND, INC.
Administrative Services Fee
.21% of average daily net assets
171.8
Shareholder Servicing and Distribution Plan Fee
.25% of average daily net assets
Management Fee
.40% of average daily net assets
PENNSYLVANIA DAILY MUNICIPAL INCOME FUND
Administrative Services Fee
.21% of average daily net assets
.20% of average daily net assets in excess of $1.25 billion up to 1.5 billion
.19 of average daily net assets in excess of $1.5 billion
41.0
Shareholder Servicing and Distribution Plan Fee
.25% of average daily net assets
Management Fee
.40% of average daily net assets
FLORIDA DAILY MUNICIPAL FUND
Administrative Services Fee
.21% of average daily net assets
40.6
Shareholder Servicing and Distribution Plan Fee (Class A Only) .25% of average
daily net assets
Class A 19.9
INSTITUTIONAL DAILY INCOME FUND
Investment Management Fee
.08% of average daily net assets
All Portfolios
Administrative Services Fee
.05% of average daily net assets
350.8
Shareholder Servicing and Distribution Plan Fee (Class A Only) .25% of average
daily net assets
Class A 271.7
* Such person is an "interested person" of the Corporation within the meaning
of Section 2(a) (19) of the 1940 Act.
* Management Contract requires the Manager, not the Fund to bear all
other fund expenses; therefore, the fee payable under the Management
Contract is the only expense of the Fund.
