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, Inc., 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 not changes contemplated in the objectives or policies of the Fund,
the management or operation so the Manager relating to the Funds, the
personnel managing the Funds or the shareholder or other business activities
of the Funds.
The Board of Directors has determined that the new agreement
would be in the best interest of the Funds and their shareholders.
Accordingly, the Board of Directors of the Funds 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,
325282.1
<PAGE>
- -------------------------------------------------------------------------------
Preliminary Proxy Material For The Information of the Securities and Exchange
Commission Only
California Daily Tax Free Income Fund, Inc., Connecticut Daily Tax Free
Income Fund, Inc., Michigan Daily Tax Free Fund, Inc.,
New Jersey Daily Municipal Income Fund, Inc.,
New York Daily Tax Free Fund, Inc.,
and North Carolina Daily Municipal Income Fund, Inc.
NOTICE OF JOINT SPECIAL MEETING OF SHAREHOLDERS
March 1, 1996
- -------------------------------------------------------------------------------
600 Fifth Avenue
New York, New York 10020
(212) 830-5220
A Joint Special Meeting of Shareholders of California Daily Tax Free Income
Fund, Inc. ("California"), Connecticut Daily Tax Free Income Fund, Inc.
("Connecticut"), Michigan Daily Tax Free Fund, Inc. ("Michigan"), New Jersey
Daily Municipal Income Fund, Inc. ("New Jersey"), New York Daily Tax Free Fund,
Inc. ("New York"), and North Carolina Daily Municipal Income Fund, Inc. ("North
Carolina") (individually, a "Fund" and collectively, the "Funds"), will be held
at 9:00 a.m. on March 1, 1996 at the offices of the Funds 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 December 18, 1995.
1. 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 between each Fund and Reich &
Tang Asset Management L.P., the Manager, each Contract to be identical
to the Investment Management Contract in effect for each Fund
immediately prior to such merger (see page of the attached Proxy
Statement);
2. To elect four directors as the case may be, for each of the Funds,
each director to hold office until his successor is duly elected and
qualified;
3. To ratify or reject the selection of Messrs. McGladrey & Pullen LLP as
independent accountants of each Fund for their respective fiscal years
ending December 31, 1996 for California, January 31, 1996 for
Connecticut, February 28, 1996 for Michigan, October 31, 1996 for New
Jersey, April 30, 1996 for New York, and August 31, 1996 for North
Carolina; and
4. To transact such other business as may properly come before the meeting.
Only shareholders of record at the close of business on December 13, 1995 are
entitled to notice of, and to vote at, the meeting.
By Order of the Boards of Directors
BERNADETTE N. FINN, Secretary of each of the Funds
- -------------------------------------------------------------------------------
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 TO EACH OF THE FUNDS OF FURTHER SOLICITATION, WE
ASK FOR YOUR COOPERATION IN MAILING YOUR PROXY PROMPTLY.
- -------------------------------------------------------------------------------
C/M: 10506.0002 324111.1
<PAGE>
PROXY STATEMENT
- -------------------------------------------------------------------------------
INTRODUCTION............................................................1
PROPOSAL 1 APPROVAL OR DISAPPROVAL OF A NEW INVESTMENT
MANAGEMENT CONTRACT TO BE EFFECTIVE AT THE TIME OF
THE MERGER..................................................4
PROPOSAL 2 ELECTION OF DIRECTORS.......................................6
PROPOSAL 3 RATIFICATION OR REJECTION OF SELECTION OF
INDEPENDENT ACCOUNTANTS.....................................11
INFORMATION REGARDING THE MANAGER.......................................13
ALLOCATION OF PORTFOLIO BROKERAGE.......................................17
OTHER MATTERS...........................................................18
EXHIBIT A INVESTMENT MANAGEMENT CONTRACT BETWEEN CALIFORNIA AND
REICH & TANG ASSET MANAGEMENT L.P...........................
EXHIBIT B INVESTMENT MANAGEMENT CONTRACT BETWEEN CONNECTICUT AND
REICH & TANG ASSET MANAGEMENT L.P...........................
EXHIBIT C INVESTMENT MANAGEMENT CONTRACT BETWEEN MICHIGAN AND
REICH & TANG ASSET MANAGEMENT L.P...........................
EXHIBIT D INVESTMENT MANAGEMENT CONTRACT BETWEEN NEW JERSEY AND
REICH & TANG ASSET MANAGEMENT L.P...........................
EXHIBIT E INVESTMENT MANAGEMENT CONTRACT BETWEEN NEW YORK AND
REICH & TANG ASSET MANAGEMENT L.P...........................
EXHIBIT F INVESTMENT MANAGEMENT CONTRACT BETWEEN NORTH CAROLINA AND
REICH & TANG ASSET MANAGEMENT L.P...........................
EXHIBIT G TABLE OF FEES FOR ALL FUNDS ADVISED BY THE MANAGER...........
C/M: 10506.0002 324111.1
<PAGE>
CALIFORNIA DAILY TAX FREE INCOME FUND, INC.,
CONNECTICUT DAILY TAX FREE INCOME FUND, INC.,
MICHIGAN DAILY TAX FREE FUND, INC.,
NEW JERSEY DAILY MUNICIPAL INCOME FUND, INC.,
NEW YORK DAILY TAX FREE FUND, INC., AND
NORTH CAROLINA DAILY MUNICIPAL 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 California Daily Tax Free Income Fund, Inc.
("California"), Connecticut Daily Tax Free Income Fund, Inc. ("Connecticut"),
Michigan Daily Tax Free Fund, Inc. ("Michigan"), New Jersey Daily Municipal
Income Fund, Inc. ("New Jersey"), New York Daily Tax Free Fund, Inc. ("New
York"), and North Carolina Daily Municipal Income Fund, Inc. ("North Carolina"),
(individually, a "Fund" and collectively, the "Funds") for use at a Joint
Special Meeting of Shareholders to be held at the offices of the Funds 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 Funds. 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 December 20, 1995. The Funds' most recent annual and semi-annual reports
are available upon request.
The outstanding voting stock of the Funds as of the close of business
on December 13, 1995 consisted of __________ shares of Common Stock of
California, _______ shares of Common Stock of Connecticut, _______ shares of
Common Stock of Michigan, _______ shares of Common Stock of New Jersey, _______
shares of Common Stock of New York, and _______ shares of Common Stock of North
Carolina, 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 13, 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 Fund
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 Joint Special Meeting of the Shareholders of
the Funds 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
1
C/M: 10506.0002 324111.1
<PAGE>
owner of the 99.5% limited partnership interest in Reich & Tang Asset Management
L.P. (the Corporations' "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 each of the Funds, 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 each of the Funds and the
Manager, effective at the time of the Merger. The Directors have approved, and
recommend that the shareholders of the Funds approve, a new investment
management contract with respect to their Fund. 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 each of the Funds
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 Joint Special
Meeting of Shareholders include: (i) the election of directors of each Fund and
(ii) the ratification of the selection of independent accountants of each Fund.
One third of the outstanding shares of California, Connecticut,
Michigan, New Jersey, New York and North Carolina, 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 Funds 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 November 30, 1995, the following persons or entities owned as
much as 5% of each Fund's outstanding shares:
2
C/M: 10506.0002 324111.1
<PAGE>
Nature of
Name & Address % of Class Ownership
California Daily Tax Free Income
Fund, Inc.
Connecticut Daily Tax Free Income
Fund, Inc.
Michigan Daily Tax Free Fund, Inc.
New Jersey Daily Municipal Income
Fund, Inc.
New York Daily Tax Free Fund, Inc.
North Carolina Daily Municipal Income
Fund, Inc.
Class A
Class B
As of November 30, 1995, the officers or directors, collectively, of each Fund,
beneficially owned, directly or indirectly (including the power to vote or to
dispose of any shares), less than 1% of the shares of each Fund's total
outstanding shares.
3
C/M: 10506.0002 324111.1
<PAGE>
PROPOSAL 1. APPROVAL OR DISAPPROVAL OF A NEW INVESTMENT
MANAGEMENT CONTRACT TO BE EFFECTIVE AT THE TIME OF
THE MERGER
The Directors of each Fund unanimously recommend that the shareholders
vote to approve a new investment management contract for each of their
respective Funds, 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 each Fund 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 each Fund. 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
each Fund. 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 after the end of 1995.
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
4
C/M: 10506.0002 324111.1
<PAGE>
(1) 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
(2) 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 each Fund'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 each Fund, 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
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 each Fund, 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 each Fund 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 each Fund, 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.
5
C/M: 10506.0002 324111.1
<PAGE>
In order that each Fund 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 each Fund 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 Funds, and each Fund will consider such
alternative actions as are in the best interest of such Fund.
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 each Fund's Board and the respective 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 each Fund in October, 1994. All such persons have consented to be
named in this Proxy Statement and to serve as directors of each Fund if elected.
The Board of Directors, which met four times during each Fund's fiscal year
ended December 31, 1995 for California, January 31, 1995 for Connecticut,
February 28, 1995 for Michigan, October 31, 1995 for New Jersey, April 30, 1995
for New York, and August 31, 1995 for North Carolina, has no compensation
committee. Each director attended at least 75% of the board meetings held. Each
Fund has an Audit Committee of the Board of Directors, comprised of Drs. Mellon
and Wong and Mr. Straniere who are not "interested persons" of each Fund within
the meaning of Section 2(a)(19) of the 1940 Act. The Audit Committee meets
annually to review each Fund'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 each Fund in
accordance with the provisions of Rule 12b-1 under the Investment Company Act of
1940, each Fund 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 Fund is
committed. The Nominating Committee met once with regard to the fiscal year
ended December 31, 1995 for California, January 31, 1995 for Connecticut,
February 28, 1995 for Michigan, October 31, 1995 for New Jersey, April 30, 1995
for New York, and August 31, 1995 for North Carolina 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 each Fund, the principal occupation of
each Director during the past five years and the nature, amount and percentage
of shares held by each in each Fund.
6
C/M: 10506.0002 324111.1
<PAGE>
<TABLE>
<CAPTION>
Amount and
Nature
of Beneficial
Principal Occupation Ownership at
Name and Age During Preceding Five Years 11/30/95 % of Shares
<S> <C> <C>
Steven W. President and Director of each Fund [-0-] [-0-]
Duff* and President of the Mutual Funds
Division of the Manager since
42 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 Short
Term Income Fund Inc.; President
and Trustee of Florida Daily
Municipal Income Fund,
Pennsylvania Daily Municipal Income
Fund and Institutional Daily 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.
W. Giles Director of each Fund since its [-0-] [-0-]
Mellon formation; Professor of Business
Administration and Area Chairman of
64 Economics and Finance in the
Graduate School of Management,
Rutgers University, with which he
has been associated since 1966.
Dr. Mellon is also a Director of
Delafield Fund, Inc., Reich & Tang
Equity Fund, Inc. and Short Term
Income Fund, Inc.; and a Trustee of
Institutional Daily Income Fund,
Florida Daily Municipal Income
Fund, Pennsylvania Daily Municipal
Income Fund, and Reich & Tang
Government Securities Trust.
</TABLE>
- --------
* Such person is an "interested person" of the Corporation within the meaning
of Section 2(a) (19) of the 1940 Act.
7
C/M: 10506.0002 324111.1
<PAGE>
<TABLE>
<CAPTION>
Amount and
Nature
of Beneficial
Principal Occupation Ownership at
Name and Age During Preceding Five Years 11/30/95 % of Shares
<S> <C> <C>
Robert Director of each Fund since 1984; [-0-] [-0-]
Straniere Member of New York State
Assembly; Partner, The Straniere
53 Law Firm since 1981; Director of
Delafield Fund, Inc., Reich & Tang
Equity Fund, Inc. and Short Term
Income Fund, Inc.; Trustee of
Institutional Daily Income Fund,
Florida Daily Municipal Income Fund
and Pennsylvania Daily Municipal
Income Fund, and Reich & Tang
Government Securities Trust; and
Director of Life Cycle Mutual Funds,
Inc.
Dr. Yung Director of each Fund since its [-0-] [-0-]
Wong formation; Director of Shaw
Investment Management (UK)
56 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 Delafield Fund, Inc.,
Reich & Tang Equity Fund, Inc. and
Short Term Income Fund, Inc.; and
Trustee of Institutional Daily Income
Fund, Florida Daily Municipal
Income Fund, Pennsylvania Daily
Municipal Income Fund, Reich &
Tang Government Securities Trust
and Eclipse Financial Asset Trust.
</TABLE>
The address of each director and officer of each Fund is 600 Fifth Avenue, New
York, New York 10020.
In addition to Mr. Duff, who has served as President of each Fund since
September, 1994, the officers of each Fund are:
Dana E. Messina, 38, Vice President of each Fund. 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.
8
C/M: 10506.0002 324111.1
<PAGE>
Lesley M. Jones, 47, Vice President of each Fund. 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, 47, Vice President and Secretary of each Fund. 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 each Fund. 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 each Fund 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.
Each Fund paid an aggregate renumeration of $ , $ , $ , $ , $ and $ to its
directors and to certain employees of the Manager with respect to its fiscal
year ended December 31, 1995 for California, January 31, 1995 for Connecticut,
February 28, 1995 for Michigan, October 31, 1995 for New Jersey, April 30, 1995
for New York, and August 31, 1995 for North Carolina, respectively, consisting
of $ in aggregate directors' fees to the three disinterested directors, and
salaries and benefits aggregating $ paid to certain employees of the Manager
pursuant to the terms of the Investment Management Contract.
<TABLE>
<CAPTION>
===============================================================================
(1) (2) (3) (4) (5)
- ----------------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------------
Total
Pension or Compensation
Retirement from Funds and
Name of Aggregate Benefits Accrued Estimated Fund Complex
Person, Compensation As Part of Fund Annual Benefits Paid to
Position from each Fund Expenses upon Retirement Directors*
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Steven W. Duff, All Funds: 0 All Funds: 0 All Funds: 0 0
Director
- ----------------------------------------------------------------------------------------------------------------------------------
W. Giles California $ All Funds: 0 All Funds: 0 $
Mellon, Director Connecticut (14 Funds)
Michigan
New Jersey
New York
North Carolina
</TABLE>
9
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<PAGE>
<TABLE>
<CAPTION>
===============================================================================
(1) (2) (3) (4) (5)
- ----------------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------------
Total
Pension or Compensation
Retirement from Funds and
Name of Aggregate Benefits Accrued Estimated Fund Complex
Person, Compensation As Part of Fund Annual Benefits Paid to
Position from each Fund Expenses upon Retirement Directors*
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Robert California $ All Funds: 0 All Funds: 0 $
Straniere, Connecticut (14 Funds)
Director Michigan
New Jersey
New York
North Carolina
- -----------------------------------------------------------------------------------------------------------------------------------
Yung Wong, California $ All Funds: 0 All Funds: 0 $
Director Connecticut (14 Funds)
Michigan
New Jersey
New York
North Carolina
==================================================================================================================================
</TABLE>
* The total compensation paid to such persons by the Funds and Fund Complex
for the fiscal year ending December 31, 1995 for California, January 31,
1995 for Connecticut, February 28, 1995 for Michigan, October 31, 1995 for
New Jersey, April 30, 1995 for New York, and August 31, 1995 for North
Carolina (and, with respect to certain of the funds in the Fund Complex,
estimated to be paid during the fiscal year ending October 31, 1995). The
parenthetical number represents the number of investment companies
(including the Fund) from which such person receives compensation that are
considered part of the same Fund Complex as the Fund, 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 each Fund for the fiscal year ending December 31, 1996 for
California, January 31, 1996 for Connecticut, February 28, 1996 for Michigan,
October 31, 1996 for New Jersey, April 30, 1996 for New York, and August 31,
1996 for North Carolina. Messrs. McGladrey & Pullen LLP have audited the
accounts of each Fund since their inception and do not have any direct financial
interest or any material indirect financial interest in each Fund.
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
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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 each Fund 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 investment companies and also advises pension
trust, profit sharing trusts and endowments. In addition to the Funds, the
Manager's advisory clients include, among others, Cortland Trust, Inc.,
Delafield Fund, Inc., Florida Daily Municipal Income Fund and Pennsylvania Daily
Municipal Income Fund, Institutional Daily 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 G 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.The
Manager also advises pension trusts, profit-sharing trusts and endowments.
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
each Fund'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 each Fund.
The Manager provides persons satisfactory to the Board of Directors of
each Fund to serve as officers of each Fund. Such officers, as well as certain
other employees and directors of each Fund, 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.
Each Fund's 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 each Fund or
the Manager and by the shareholders at a special meeting of shareholders,
effective September 15, 1993. The re-execution of each 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 each Fund or
Manager, effective October 1, 1994. Each Investment
11
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<PAGE>
Management Contract has a term which extends to June 30, 1996 for California,
January 31, 1996 for Connecticut, February 29, 1996 for Michigan, August 31,
1996 for New Jersey, April 30, 1996 for New York, and August 31, 1996 for North
Carolina, and may be continued in force thereafter for successive twelve-month
periods beginning each July 1 for California, February 1 for Connecticut, March
1 for Michigan, September 1 for New Jersey, May 1 for New York, and September 1
for North Carolina, respectively, provided that such continuance is specifically
approved annually by majority vote of each Fund's outstanding voting securities
or by their 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.
Each Investment Management Contract is terminable without penalty by
each Fund 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. Each 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 its Investment Management Contract, each Fund will pay an annual
management fee of (a) for California, Connecticut, Michigan, New Jersey and New
York equal to .30% of each Fund's average daily net asset and (b) North Carolina
equal to .40% of its average daily net assets. 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 each Fund's shares.
Pursuant to an Administrative Services Contract with each Fund, the
Manager also performs clerical, accounting supervision, office service and
related functions for each Fund and provides each Fund with personnel to (i)
supervise the performance of bookkeeping related services by Investors Fiduciary
Trust Company, the Fund's bookkeeping agent, (ii) prepare reports to and filings
with regulatory authorities, and (iii) perform such other services as the Funds
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 for each Fund 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 each
Fund's average daily net assets. For its services under the Administrative
Services Contract, the Manager will receive (after such increase) from each Fund
an annual fee equal to .21% of each Fund'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 Funds paid the Manager for such personnel and
for rendering such services at rates which were agreed upon by each Fund and the
Manager, provided that each Fund 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, each Fund may reimburse the Manager for all of
such Fund'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 Fund's affairs. The amounts of such
reimbursements are to be agreed upon between each Fund and the Manager. No such
reimbursements were made.
12
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<PAGE>
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 Fund'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 of North Carolina 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 of North Carolina shall be paid
by the Manager.
Expense Limitation. The Manager has agreed, pursuant to the Investment
Management Contract, to reimburse each Fund for its expenses (exclusive of
interest, taxes, brokerage and extraordinary expenses) which in any year exceed
the limits on investment company expenses prescribed by any state in which the
Fund's shares are qualified for sale. For the purpose of this obligation to
reimburse expenses, the Fund'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 Funds for its excess
expenses as described above, each Fund has, under its 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 each Fund and costs of
other personnel performing services for each Fund 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 Funds' prospectus for delivery to existing
shareholders and of printing application forms for shareholder accounts, and the
fees and reimbursements payable to the Manager under each Investment Management
Contract and Administrative Services Contract and the Distributor under each
Shareholder Servicing Agreement.
Each Fund 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 such Fund intends to
do so whenever it appears advantageous to such Fund. The Funds' 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 California's fiscal year ended December 31, 1993, Reich & Tang L.P.
received investment management fees of $ . For California's fiscal year ended
December 31, 1994, Reich & Tang L.P. and its successor, NEIC, received
investment management fees totaling $ . For California's fiscal year ended
December 31, 1995, NEIC and the Manager received investment management fees
totaling $_________ and $__________. For California's fiscal year ended December
31, 1994, Reich & Tang L.P. and its successor, NEICLP, received administration
fees in the aggregate of $ . For California's fiscal year ended December 31,
1995, the Manager received administration fees in the aggregate of $__________.
13
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<PAGE>
For Connecticut's fiscal year ended January 31, 1993, Reich & Tang L.P.
received investment management fees of $ . For Connecticut's fiscal year ended
January 31, 1994, Reich & Tang L.P. and its successor, NEIC, received investment
management fees totaling $ . For Connecticut's fiscal year ended January 31,
1995, NEIC and the Manager received investment management fees totaling
$_________ and $__________. For Connecticut's fiscal year ended January 31,
1994, Reich & Tang L.P. and its successor, NEICLP, received administration fees
in the aggregate of $ . For Connecticut's fiscal year ended January 31, 1995,
the Manager received administration fees in the aggregate of $__________.
For Michigan's fiscal year ended February 28, 1993, Reich & Tang L.P.
received investment management fees of $ . For Michigan's fiscal year ended
February 28, 1994, Reich & Tang L.P. and its successor, NEIC, received
investment management fees totaling $_________. For Michigan's fiscal year ended
February 28, 1995, NEIC and the Manager received investment management fees
totaling $_________ and $__________. For Michigan's fiscal year ended February
28, 1994, Reich & Tang L.P. and its successor, NEICLP, received administration
fees in the aggregate of $ . For Michigan's fiscal year ended February 28, 1995,
the Manager received administration fees in the aggregate of $__________.
For New Jersey's fiscal year ended October 31, 1993, Reich & Tang L.P.
received investment management fees of $__________. For New Jersey's fiscal year
ended October 31, 1994, Reich & Tang L.P. and its successor, NEIC, received
investment management fees totaling $__________. For New Jersey's fiscal year
ended October 31, 1995, NEIC and the Manager received investment management fees
totaling $_________ and $__________. For New Jersey's fiscal year ended October
31, 1994, Reich & Tang L.P. and its successor, NEICLP, received administration
fees in the aggregate of $___________. For New Jersey's fiscal year ended
October 31, 1995, the Manager received administration fees in the aggregate of
$__________.
For New York's fiscal year ended April 30, 1993, Reich & Tang L.P.
received investment management fees of $__________. For New York's fiscal year
ended April 30, 1994, Reich & Tang L.P. and its successor, NEIC, received
investment management fees totaling $__________. For New York's fiscal year
ended April 30, 1995, NEIC and the Manager received investment management fees
totaling $_________ and $__________. For New York's fiscal year ended April 30,
1994, Reich & Tang L.P. and its successor, NEICLP, received administration fees
in the aggregate of $__________. For New York's fiscal year ended April 30,
1995, the Manager received administration fees in the aggregate of $__________.
For North Carolina's fiscal year ended August 31, 1993, Reich & Tang
L.P. received investment management fees of $___________. For North Carolina's
fiscal year ended August 31, 1994, Reich & Tang L.P. and its successor, NEIC,
received investment management fees totaling $__________. For North Carolina's
fiscal year ended August 31, 1995, NEIC and the Manager received investment
management fees totaling $_________ and $__________. For North Carolina's fiscal
year ended August 31, 1994, Reich & Tang L.P. and its successor, NEICLP,
received administration fees in the aggregate of $___________. For North
Carolina's fiscal year ended August 31, 1995, the Manager received
administration fees in the aggregate of $__________. No reimbursements were
payable to each Fund by the Manager or its predecessor pursuant to the expense
limitation described above with respect to any Fund's fiscal years ended
December 31, 1993, 1994, and 1995.
14
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<PAGE>
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 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. Each Fund's Board of
Directors has adopted a distribution and service plan (the "Plan") and, pursuant
to the Plan, each Fund 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 each Fund's shares. Because the
Merger will be considered to result in the assignment of each Fund's
Distribution Agreement with the Distributor, causing those agreements to
terminate upon the Merger, the Boards of Directors of the Fund approved a new
Distribution Agreement with Reich & Tang Distributors L.P. for each Fund to take
effect if a new Investment Management Agreement is approved by shareholders of
each Fund 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 each Fund, will solicit orders for the purchase
of the Fund's shares, provided that any subscriptions and orders will not be
binding on such Fund until accepted by such Fund as principal.
Under each Plan, each Fund will enter into a Shareholder Servicing
Agreement with the Distributor, and with respect to North Carolina, the
Distributor will enter into a Shareholder Servicing Agreement with respect to
the Class A shares only. Under each Shareholder Servicing Agreement, the
Distributor receives from each Fund a service fee equal to .20% per annum of
such Fund's average daily net assets (the "Service Fee"), and with respect to
North Carolina, the Service Fee is equal to .20% per annum of its Class A
shares' average daily net assets, for providing 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 Funds, and
with respect to North Carolina, Class A shareholders only.
Each Plan provides, and with respect to North Carolina for the Class A
shares only, 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 each Fund or Class A shares (ii) to
compensate certain Participating Organizations for providing assistance in
distributing such Fund's shares or the shares of the Class A shares; and (iii)
to pay the costs of printing and distributing such Fund's or Class A shares'
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 such Fund's shares or the shares of the Class A shares. The
Distributor may also make payments from time to time from its own
15
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<PAGE>
resources, which may include the Service Fee, and with respect to North Carolina
for the Class A shares only, and past profits for the purpose enumerated in (i)
above. The Distributor will determine the amount of such payments made pursuant
to each Plan, provided that such payments will not increase the amount which
each Fund or Class A shares 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 is for each Fund, and with respect to North
Carolina, applies only to the Class A shares. For the fiscal year ended December
31, 1995, January 31, 1995, February 28, 1995, October 31, 1995, April 30, 1995,
and August 31, 1995, California, Connecticut, Michigan, New Jersey, New York,
North Carolina each paid a Service Fee for expenditures pursuant to the Plan in
amounts aggregating $________, $________, $________, $________, $________ and
$________, respectively. During such period, the Manager and Distributor made
payments pursuant to the Plan to or on behalf of Participating Organizations of
$________, $________, $________, $________, $________ and $________,
respectively. The excess of such payments over the total payments the
predecessor managers and Distributor received from each Fund or Class A shares
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
Each Fund'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 each Fund at present
does not anticipate paying brokerage commissions. Should any Fund pay a
brokerage commission on a particular transaction, such Fund 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 each Fund. The primary consideration is prompt
execution of orders in an effective manner at the most favorable price.
Investment decisions for each Fund 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, any Fund 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 Fund or the size of the position obtainable for the Fund. In
addition, when purchases or sales of the same security for each Fund and for
other investment companies managed by the Manager occur contemporaneously, the
purchase or sale
16
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<PAGE>
orders may be aggregated in order to obtain any price advantages available to
large denomination purchasers or sellers.
OTHER MATTERS
As Maryland corporations, California, Connecticut, Michigan, New Jersey, New
York and North Carolina are not required, and do 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 of the appropriate
Fund 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 Joint 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 Boards of Directors
BERNADETTE N. FINN, Secretary of each of the
Funds
December ____, 1995
17
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<PAGE>
EXHIBIT A (INVESTMENT MANAGEMENT CONTRACT BETWEEN CALIFORNIA AND REICH & TANG
ASSET MANAGEMENT, L.P.)
C/M 10506.0002 324111.1 18
<PAGE>
EXHIBIT A
INVESTMENT MANAGEMENT CONTRACT
CALIFORNIA 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:
1. 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.
2. (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.
(b) 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 the Fund 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.
112022.1
<PAGE>
(c) You will report to our Board of Directors at
each meeting thereof all changes in our portfolio 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.
(d) 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.
(e) 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.
3. 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
-2-
112022.1
<PAGE>
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 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 stockholders and of printing stockholder application
forms for stockholder accounts, (o) payment of the fees and expenses provided
for herein, under the Administrative Services Agreement and under 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 our 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.
4. 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.
5. In consideration of the foregoing we will pay you a fee at
the annual rate of .30 of 1% of the Fund's average daily net assets. 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 stockholders. 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,
-3-
112022.1
<PAGE>
to which we may become entitled pursuant to paragraph 3 hereof, will be paid to
us at the same time as we pay you.
6. This Agreement will become effective on the date hereof and
shall continue in effect until _______________ 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, by vote of a majority of our outstanding voting
securities, as defined in the 1940 Act and the rules thereunder, or by a vote of
a majority of our entire Board of Directors, on sixty days' written notice to
you, or by you on sixty days' written notice to us.
7. 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.
8. 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.
-4-
112022.1
<PAGE>
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,
CALIFORNIA DAILY TAX FREE INCOME FUND, INC.
By:
ACCEPTED: , 1996
REICH & TANG ASSET MANAGEMENT L.P.
By: REICH & TANG ASSET MANAGEMENT, INC., General Partner
By: ___________________________________
-5-
112022.1
<PAGE>
EXHIBIT B (INVESTMENT MANAGEMENT CONTRACT BETWEEN CONNECTICUT AND REICH & TANG
ASSET MANAGEMENT, L.P.)
19
C/M: 10506.0002 324111.1
<PAGE>
EXHIBIT B
INVESTMENT MANAGEMENT CONTRACT
CONNECTICUT 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:
1. 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.
2. (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.
(b) 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 the Fund 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.
112005.1
<PAGE>
(c) You will report to our Board of Directors at
each meeting thereof all changes in our portfolio 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.
(d) 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.
(e) 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.
3. 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
-2-
112005.1
<PAGE>
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 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 stockholders and of printing stockholder application
forms for stockholder accounts, (o) payment of the fees and expenses provided
for herein, under the Administrative Services Agreement and under 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 our 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.
4. 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.
5. In consideration of the foregoing we will pay you a fee at
the annual rate of .30 of 1% of the Fund's average daily net assets. 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,
-3-
112005.1
<PAGE>
to which we may become entitled pursuant to paragraph 3 hereof, will be paid to
us at the same time as we pay you.
6. This Agreement will become effective on the date hereof and
shall continue in effect until _______________ 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, by vote of a majority of our outstanding voting
securities, as defined in the 1940 Act and the rules thereunder, or by a vote of
a majority of our entire Board of Directors, on sixty days' written notice to
you, or by you on sixty days' written notice to us.
7. 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.
8. 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.
-4-
112005.1
<PAGE>
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,
CONNECTICUT DAILY TAX FREE INCOME FUND, INC.
By:
ACCEPTED: , 1996
REICH & TANG ASSET MANAGEMENT L.P.
By: REICH & TANG ASSET MANAGEMENT, INC., General Partner
By: ___________________________________
-5-
112005.1
<PAGE>
EXHIBIT C (INVESTMENT MANAGEMENT CONTRACT BETWEEN MICHIGAN AND REICH & TANG
ASSET MANAGEMENT, L.P.)
20
C/M: 10506.0002 324111.1
<PAGE>
EXHIBIT C
INVESTMENT MANAGEMENT CONTRACT
MICHIGAN 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:
1. 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.
2. (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.
(b) 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 the Fund 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.
111996.1
<PAGE>
(c) You will report to our Board of Directors at
each meeting thereof all changes in our portfolio 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.
(d) 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.
(e) 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.
3. 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
-2-
111996.1
<PAGE>
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 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 stockholders and of printing stockholder application
forms for stockholder accounts, (o) payment of the fees and expenses provided
for herein, under the Administrative Services Agreement and under 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 our 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.
4. 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.
5. In consideration of the foregoing we will pay you a fee at
the annual rate of .30 of 1% of the Fund's average daily net assets. 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,
-3-
111996.1
<PAGE>
to which we may become entitled pursuant to paragraph 3 hereof, will be paid to
us at the same time as we pay you.
6. This Agreement will become effective on the date hereof and
shall continue in effect until _______________ 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, by vote of a majority of our outstanding voting
securities, as defined in the 1940 Act and the rules thereunder, or by a vote of
a majority of our entire Board of Directors, on sixty days' written notice to
you, or by you on sixty days' written notice to us.
7. 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.
8. 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.
-4-
111996.1
<PAGE>
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,
MICHIGAN DAILY TAX FREE INCOME FUND, INC.
By:
ACCEPTED: , 1996
REICH & TANG ASSET MANAGEMENT L.P.
By: REICH & TANG ASSET MANAGEMENT, INC., General Partner
By: ___________________________________
-5-
111996.1
<PAGE>
EXHIBIT D (INVESTMENT MANAGEMENT CONTRACT BETWEEN NEW JERSEY AND REICH & TANG
ASSET MANAGEMENT, L.P.)
21
C/M: 10506.0002 324111.1
<PAGE>
EXHIBIT D
INVESTMENT MANAGEMENT CONTRACT
NEW JERSEY DAILY MUNICIPAL 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:
1. 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 Amended 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.
2. (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.
(b) 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 the Fund 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.
111972.1
<PAGE>
(c) You will report to our Board of Directors at
each meeting thereof all changes in our portfolio 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 Amended
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.
(d) 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.
(e) 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.
3. 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
-2-
111972.1
<PAGE>
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 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 stockholders and of printing stockholder application
forms for stockholder accounts, (o) payment of the fees and expenses provided
for herein, under the Administrative Services Agreement and under 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 our 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.
4. 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.
5. In consideration of the foregoing we will pay you a fee at
the annual rate of .30 of 1% of the Fund's average daily net assets. 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 stockholders. 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,
-3-
111972.1
<PAGE>
to which we may become entitled pursuant to paragraph 3 hereof, will be paid to
us at the same time as we pay you.
6. This Agreement will become effective on the date hereof and
shall continue in effect until _______________ 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, by vote of a majority of our outstanding voting
securities, as defined in the 1940 Act and the rules thereunder, or by a vote of
a majority of our entire Board of Directors, on sixty days' written notice to
you, or by you on sixty days' written notice to us.
7. 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.
8. 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.
-4-
111972.1
<PAGE>
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,
NEW JERSEY DAILY MUNICIPAL INCOME FUND, INC.
By:
ACCEPTED: , 1996
REICH & TANG ASSET MANAGEMENT L.P.
By: REICH & TANG ASSET MANAGEMENT, INC., General Partner
By: ___________________________________
-5-
111972.1
<PAGE>
EXHIBIT E (INVESTMENT MANAGEMENT CONTRACT BETWEEN NEW YORK AND REICH & TANG
ASSET MANAGEMENT, L.P.)
22
C/M: 10506.0002 324111.1
<PAGE>
EXHIBIT E
INVESTMENT MANAGEMENT CONTRACT
NEW YORK 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:
1. 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 Amended 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.
2. (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.
(b) 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 the Fund 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
C/M: 10506.0002 326230.1
<PAGE>
the furtherance or conduct of such purchases, sales or other
transactions.
(c) You will report to our Board of Directors at
each meeting thereof all changes in our portfolio 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 Amended
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.
(d) 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.
(e) 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.
3. 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,
C/M: 10506.0002 326230.1
2
<PAGE>
(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 stockholders' 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 stockholders and of printing stockholder
application forms for stockholder accounts, (o) payment of the fees and expenses
provided for herein, under the Administrative Services Agreement and under 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 our 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.
4. 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.
5. In consideration of the foregoing we will pay you a fee at
the annual rate of .30 of 1% of the Fund's average daily net assets. 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
C/M: 10506.0002 326230.1
3
<PAGE>
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.
6. This Agreement will become effective on the date hereof and
shall continue in effect until _______________ 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, by vote of a majority of our outstanding voting
securities, as defined in the 1940 Act and the rules thereunder, or by a vote of
a majority of our entire Board of Directors, on sixty days' written notice to
you, or by you on sixty days' written notice to us.
7. 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.
8. 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.
C/M: 10506.0002 326230.1
4
<PAGE>
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,
NEW YORK DAILY TAX FREE INCOME FUND, INC.
By:
ACCEPTED: , 1996
REICH & TANG ASSET MANAGEMENT L.P.
By: REICH & TANG ASSET MANAGEMENT, INC., General Partner
By: ___________________________________
C/M: 10506.0002 326230.1
5
<PAGE>
EXHIBIT F (INVESTMENT MANAGEMENT CONTRACT BETWEEN NORTH CAROLINA AND REICH &
TANG ASSET MANAGEMENT, L.P.)
23
C/M: 10506.0002 324111.1
<PAGE>
EXHIBIT F
INVESTMENT MANAGEMENT CONTRACT
NORTH CAROLINA DAILY MUNICIPAL 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:
1. 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 Amended 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.
2. (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.
(b) 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 the Fund 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.
111839.1
<PAGE>
(c) You will report to our Board of Directors at
each meeting thereof all changes in our portfolio 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 Amended
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.
(d) 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.
(e) 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.
3. 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
-2-
111839.1
<PAGE>
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 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 stockholders and of printing stockholder application
forms for stockholder accounts, (o) payment of the fees and expenses provided
for herein, under the Administrative Services Agreement and under 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 our 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.
4. 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.
5. In consideration of the foregoing we will pay you a fee at
the annual rate of .40 of 1% of the Fund's average daily net assets. 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 stockholders. 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,
-3-
111839.1
<PAGE>
to which we may become entitled pursuant to paragraph 3 hereof, will be paid to
us at the same time as we pay you.
6. This Agreement will become effective on the date hereof and
shall continue in effect until _______________ 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, by vote of a majority of our outstanding voting
securities, as defined in the 1940 Act and the rules thereunder, or by a vote of
a majority of our entire Board of Directors, on sixty days' written notice to
you, or by you on sixty days' written notice to us.
7. 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.
8. 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.
-4-
111839.1
<PAGE>
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,
NORTH CAROLINA DAILY MUNICIPAL INCOME FUND, INC.
By:
ACCEPTED: , 1996
REICH & TANG ASSET MANAGEMENT L.P.
By: REICH & TANG ASSET MANAGEMENT, INC., General Partner
By: ___________________________________
-5-
111839.1
<PAGE>
EXHIBIT G (TABLE OF FEES FOR ALL FUNDS ADVISED BY THE MANAGER)
24
C/M: 10506.0002 324111.1
<PAGE>
<TABLE>
EXHIBIT G
<CAPTION>
===================================================================================================================================
NET ASSETS (IN
MILLIONS) AT
FUND NAME FEES 11-30-95
<S> <C> <C>
- -----------------------------------------------------------------------------------------------------------------------------------
SHORT TERM INCOME FUND, INC.
- ------------------------------------------------------------------------------------------------------------------------------------
Management Fee
.30% of average daily net assets up to $750 million
Money Market Portfolio .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
- ------------------------------------------------------------------------------------------------------------------------------------
Management Fee
U.S. Government Portfolio .275% of average daily net assets up to $250 million
.25% of average daily net assets in excess of $250 million
- ------------------------------------------------------------------------------------------------------------------------------------
Administrative Services Fee
.21% of average daily net assets up to $1.25 billion
Each Portfolio .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
-----------------------------------------------------------------------------------------------
Shareholder Servicing and Distribution Plan Fee (Class A only)
.25% of average daily net assets
====================================================================================================================================
Management Fee
.325% of average daily net assets up to $750 million
.30% of average daily net assets in excess of $750 million
-----------------------------------------------------------------------------------------------
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
-----------------------------------------------------------------------------------------------
Shareholder Servicing and Distribution Plan Fee (Class A Only)
.25% of average daily net assets
===================================================================================================================================
</TABLE>
-1-
322069.1
<PAGE>
<TABLE>
<CAPTION>
===================================================================================================================================
NET ASSETS (IN
MILLIONS) AT
FUND NAME FEES 11-30-95
<S> <C> <C>
- -----------------------------------------------------------------------------------------------------------------------------------
Management Fee
REICH & TANG EQUITY FUND, INC. .80% of average daily net assets
------------------------------------------------------------------------------------------------
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
------------------------------------------------------------------------------------------------
Shareholder Servicing and Distribution Plan Fee
.25% of average daily net assets
====================================================================================================================================
Management Fee
CONNECTICUT DAILY TAX FREE .30% of average daily net assets
INCOME FUND, INC. ------------------------------------------------------------------------------------------------
Administrative Services Fee
.21% of average daily net assets
------------------------------------------------------------------------------------------------
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
------------------------------------------------------------------------------------------------
Shareholder Servicing and Distribution Plan Fee
.20% of average daily net assets
====================================================================================================================================
</TABLE>
-2-
322069.1
<PAGE>
<TABLE>
<CAPTION>
===================================================================================================================================
NET ASSETS (IN
MILLIONS) AT
FUND NAME FEES 11-30-95
<S> <C> <C>
- -----------------------------------------------------------------------------------------------------------------------------------
Management Fee
.35% of average daily net assets
-----------------------------------------------------------------------------------------------
REICH & TANG GOVERNMENT Administrative Services Fee
SECURITIES TRUST .21% of average daily net assets
-----------------------------------------------------------------------------------------------
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 Administrative Services Fee
FUND, INC. .21% of average daily net assets
-----------------------------------------------------------------------------------------------
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 Administrative Services Fee
FUND, INC. .21% of average daily net assets
-----------------------------------------------------------------------------------------------
Shareholder Servicing and Distribution Plan Fee
.20% of average daily net assets
====================================================================================================================================
All Inclusive Management Fee*
.40% of average daily net assets up to $250 million
TAX EXEMPT PROCEEDS FUND, INC. .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
</TABLE>
- -----------------
* 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.
-3-
322069.1
<PAGE>
<TABLE>
<CAPTION>
===================================================================================================================================
NET ASSETS (IN
MILLIONS) AT
FUND NAME FEES 11-30-95
<S> <C> <C>
- -----------------------------------------------------------------------------------------------------------------------------------
Management Fee
.30% of average daily net assets
-----------------------------------------------------------------------------------------------
NEW JERSEY DAILY MUNICIPAL INCOME Administrative Services Fee
FUND, INC. .21% of average daily net assets
------------------------------------------------------------------------------------------------
Shareholder Servicing and Distribution Plan Fee
.20% of average daily net assets
===================================================================================================================================
All Inclusive Management Fee
.80% of the first $500 million
CORTLAND TRUST, INC. .775% of the next $500 million
.75% of the next $500 million
All Portfolios .735% in excess of $1.5 billion
------------------------------------------------------------------------------------------------
Distribution Fee
.25% of average daily net assets
===================================================================================================================================
Management Fee
.40% of average daily net assets
------------------------------------------------------------------------------------------------
NORTH CAROLINA DAILY MUNICIPAL Administrative Services Fee
INCOME FUND, INC. .21% of average daily net assets
------------------------------------------------------------------------------------------------
Shareholder Servicing and Distribution Plan Fee
.25% of average daily net assets
====================================================================================================================================
</TABLE>
-4-
322069.1
<PAGE>
<TABLE>
<CAPTION>
===================================================================================================================================
NET ASSETS (IN
MILLIONS) AT
FUND NAME FEES 11-30-95
<S> <C> <C>
- -----------------------------------------------------------------------------------------------------------------------------------
Management Fee
.40% of average daily net assets
------------------------------------------------------------------------------------------------
Administrative Services Fee
PENNSYLVANIA DAILY MUNICIPAL .21% of average daily net assets up to $1.25 billion
INCOME FUND .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
------------------------------------------------------------------------------------------------
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
------------------------------------------------------------------------------------------------
Shareholder Servicing and Distribution Plan Fee (Class A Only)
.25% of average daily net assets
===================================================================================================================================
Investment Management Fee
.08% of average daily net assets
INSTITUTIONAL DAILY INCOME FUND -----------------------------------------------------------------------------------------------
Administrative Services Fee
.05% of average daily net assets
All Portfolios -----------------------------------------------------------------------------------------------
Shareholder Servicing and Distribution
Plan Fee (Class A Only) .25% of average
daily net assets
===================================================================================================================================
</TABLE>
-5-
322069.1
<PAGE>
FORM OF PROXY
BY SIGNING AND DATING THE LOWER PORTION OF THIS CARD, YOU AUTHORIZE THE PROXIES
TO VOTE EACH PROPOSAL AS MARKED, OR, IF NOT MARKED TO VOTE, "FOR" EACH PROPOSAL
AND TO USE THEIR DISCRETION TO VOTE ANY OTHER MATTER AS MAY PROPERLY COME BEFORE
THE MEETING. IF YOU DO NOT INTEND TO PERSONALLY ATTEND THE MEETING, PLEASE
COMPLETE, DETACH AND MAIL THE LOWER PORTION OF THIS CARD AT ONCE IN THE ENCLOSED
ENVELOPE.
CALIFORNIA DAILY TAX FREE INCOME FUND, INC.,
CONNECTICUT DAILY TAX FREE INCOME FUND, INC.,
MICHIGAN DAILY TAX FREE FUND, INC.,
NEW JERSEY DAILY MUNICIPAL INCOME FUND, INC.,
NEW YORK DAILY TAX FREE FUND, INC., AND
NORTH CAROLINA DAILY MUNICIPAL INCOME FUND, INC.,
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
JOINT SPECIAL MEETING OF SHAREHOLDERS - MARCH 1, 1996
THE UNDERSIGNED SHAREHOLDER OF CALIFORNIA DAILY TAX FREE
INCOME FUND, INC., CONNECTICUT DAILY TAX FREE INCOME FUND, INC., MICHIGAN DAILY
TAX FREE FUND, INC., NEW JERSEY DAILY MUNICIPAL INCOME FUND, INC., NEW YORK
DAILY TAX FREE FUND, INC., AND NORTH CAROLINA DAILY MUNICIPAL INCOME FUND, INC.
(INDIVIDUALLY, A "FUND" AND COLLECTIVELY, THE "FUNDS") HEREBY APPOINTS
BERNADETTE N. FINN AND DANA E. MESSINA, AND EACH OF THEM, AS ATTORNEYS AND
PROXIES OF THE UNDERSIGNED, WITH POWER OF SUBSTITUTION, TO VOTE ALL OF THE
SHARES OF COMMON STOCK OF EACH FUND STANDING IN THE NAME OF THE UNDERSIGNED AT
THE CLOSE OF BUSINESS ON DECEMBER 13, 1995 AT THE JOINT SPECIAL MEETING OF
SHAREHOLDERS OF THE FUNDS TO BE HELD AT THE OFFICES OF THE CORPORATION AT 600
FIFTH AVENUE, NEW YORK, NY 10020 AT 9:00 A.M. ON MARCH 1, 1996 AND AT ALL
ADJOURNMENTS THEREOF, WITH ALL OF THE POWERS THE UNDERSIGNED WOULD POSSESS IF
THEN AND THERE PERSONALLY PRESENT AND ESPECIALLY (BUT WITHOUT LIMITING THE
GENERAL AUTHORIZATION AND POWER THEREBY GIVEN) TO VOTE AS INDICATED ON THE
PROPOSAL. AS MORE FULLY DESCRIBED IN THE PROXY STATEMENT FOR THE MEETING, AND
VOTE AND ACT ON ANY OTHER MATTER WHICH MAY PROPERLY COME BEFORE THE MEETING.
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS AND WILL BE
VOTED "FOR" THE PROPOSALS LISTED BELOW UNLESS OTHERWISE INDICATED.
TO VOTE MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS X
KEEP THIS PORTION FOR YOUR RECORDS
- -------------------------------------------------------------------------------
C/M: 10506.0002 324111.1
<PAGE>
(DETACH HERE AND RETURN THIS PORTION ONLY)
CALIFORNIA DAILY TAX FREE INCOME FUND, INC.,
CONNECTICUT DAILY TAX FREE INCOME FUND, INC.,
MICHIGAN DAILY TAX FREE FUND, INC.,
NEW JERSEY DAILY MUNICIPAL INCOME FUND, INC.,
NEW YORK DAILY TAX FREE FUND, INC., AND
NORTH CAROLINA DAILY MUNICIPAL INCOME FUND, INC.,
VOTE ON PROPOSALS
FOR AGAINST ABSTAIN
I. TO APPROVE OR DISAPPROVE A NEW
INVESTMENT CONTRACT
II. ELECT THE FOLLOWING NOMINEES
FOR DIRECTORS
1. STEVEN W. DUFF
2. W. GILES MELLON
3. ROBERT STRANIERE
4. YUNG WONG
III. TO RATIFY OR REJECT T E
SELECTION OF MCGLADREY & PULLEN
LLP AS INDEPENDENT ACCOUNTANTS
OF THE FUNDS FOR ITS FISCAL YEAR
ENDING DECEMBER 31, 1996 FOR
CALIFORNIA, JANUARY 31, 1996 FOR
CONNECTICUT, FEBRUARY 28, 1996
FOR MICHIGAN, OCTOBER 31, 1996
FOR NEW JERSEY, APRIL 30, 1996
FOR NEW YORK, AND AUGUST 31,
1996 FOR NORTH CAROLINA
_______________________________________
NAME OF FUND
_______________________________________ ____________________________________
SIGNATURE SIGNATURE (JOINT OWNERS DATE
PLEASE SIGN NAME OR NAMES AS PRINTED ABOVE TO AUTHORIZE THE VOTING OF
YOUR SHARES AS INDICATED ABOVE, WHERE SHARES ARE REGISTERED WITH JOINT OWNERS,
ALL JOINT OWNERS SHOULD SIGN. PERSONS SIGNING AS EXECUTORS, ADMINISTRATORS,
TRUSTEES, ETC.
SHOULD SO INDICATE.
C/M: 10506.0002 324111.1
