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,
10506.0002 325282.1
<PAGE>
- --------------------------------------------------------------------------------
Preliminary Proxy Material For The Information of the Securities and Exchange
Commission Only
REICH & TANG EQUITY FUND, INC. and
DELAFIELD FUND, INC.
NOTICE OF JOINT SPECIAL MEETING OF SHAREHOLDERS
March 1, 1996
- -------------------------------------------------------------------------------
600 Fifth Avenue
New York, New York 10020
(212) 830-5220
A Special Meeting of Shareholders of Reich & Tang Equity Fund, Inc. and
Delafield Fund, Inc. (individually, the "Fund" and collectively, the "Funds")
will be held at 9:00 a.m. on March 1, 1996 at the offices of the Corporation at
600 Fifth Avenue, New York, New York for the following purposes, all of which
are more fully described in the accompanying Proxy Statement dated December __,
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, such 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 of the Corporation, each to hold office until
his successor is duly elected and qualified;
3. 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
- -------------------------------------------------------------------------------
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 THE CORPORATION OF FURTHER SOLICITATION, WE ASK
FOR YOUR COOPERATION IN MAILING YOUR PROXY PROMPTLY.
- -------------------------------------------------------------------------------
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<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........................ 3
PROPOSAL 2 ELECTION OF DIRECTORS......................................... 5
INFORMATION REGARDING THE MANAGER........................................... 11
ALLOCATION OF PORTFOLIO BROKERAGE........................................... 15
OTHER MATTERS............................................................... 15
EXHIBIT A (INVESTMENT MANAGEMENT CONTRACT BETWEEN REICH & TANG EQUITY FUND, INC.
AND REICH & TANG ASSET MANAGEMENT, L.P.).................................... 17
EXHIBIT B (INVESTMENT MANAGEMENT CONTRACT BETWEEN DELAFIELD FUND, INC. AND REICH
& TANG ASSET MANAGEMENT, L.P.).............................................. 18
EXHIBIT C (TABLE OF FEES FOR ALL FUNDS ADVISED BY THE MANAGER).............. 19
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REICH & TANG EQUITY FUND, INC.
and
DELAFIELD 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 Reich & Tang Equity Fund, Inc. ("Equity
Fund") and Delafield Fund, Inc. ("Delafield") (individually the "Fund" and
collectively, the "Funds") for use at a Joint Special Meeting of Shareholders to
be held at the offices of the Corporation at 600 Fifth Avenue, New York, New
York on March 1, 1996 at 9 A.M. Such solicitation will be made primarily by the
mailing of this statement and the materials accompanying it. Supplemental
solicitations may be made by mail, telephone, or personal interviews by officers
and representatives of the 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 __, 1995. Each
Fund's 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 the Equity
Fund and ____ shares of Common Stock of Delafield, 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 Funds at their
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 owner of the 99.5% limited partnership interest in Reich & Tang Asset
Management L.P. (the Funds' "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 Fund, 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
1
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<PAGE>
including the Investment Management Contract between each Fund and the Manager,
effective at the time of the Merger. The Directors have approved, and recommend
that the shareholders of each Fund approve, a new investment management
contract. This proposed new contract will be in substance identical to the
contract in effect immediately prior to the Merger, and will take effect at the
time of the Merger. As a result, the Manager will continue to perform investment
management services for each Fund 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 the election of directors.
One third of the outstanding shares of each Fund, 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 for each Fund.
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 the indicated Funds' outstanding shares:
Nature of
Name & Address % of Class Ownership
Reich & Tang Equity Fund,
Inc.
Delafield Fund, Inc.
As of November 30, 1995, the officers or directors of each Fund, collectively,
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.
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<PAGE>
PROPOSAL 1. APPROVAL OR DISAPPROVAL OF A NEW INVESTMENT MANAGEMENT CONTRACT TO
BE EFFECTIVE AT THE TIME OF THE MERGER
The Directors of the Funds unanimously recommend that the shareholders
vote to approve a new investment management contract for each Fund, to be
effective at the time of the Merger. The new investment management contract will
be substantially identical to the existing investment management contract in
effect for the Funds immediately prior to the time of the Merger. As explained
above, the Merger is being treated, for purposes of the 1940 Act, as a change in
control of NEIC and its subsidiary firms including the Manager, Reich & Tang
Asset Management L.P., that serve as advisers or sub-advisers to various mutual
funds including the Funds. The 1940 Act provides that such a change in control
constitutes an "assignment" of these advisory and sub-advisory agreements under
which NEIC, the Manager and these related subsidiary firms provide advisory
services to the various mutual funds including the Funds. 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
3
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<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 the Funds 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 each
Fund's 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.
4
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<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 of either Fund do not approve Proposal 1, the
investment management contract relating to that Fund will terminate at the time
of the Merger although the Manager will continue to manage such Fund, and the
Fund will consider such alternative actions as are in the best interest of that
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 Audit and Nominating
Committees and have served as such since 1980 and 1984, respectively. In
addition, Mr. Hoerle was elected to the Board for the Equity Fund and has served
as such since 1984. Mr. Delafield was elected to the Board for the Delafield
Fund and has served as such since October 1993. All such persons have consented
to be named in this Proxy Statement and to serve as directors of the Corporation
if elected. Each Board of Directors, which met four times during the fiscal year
ended December 31, 1995 for the Equity Fund and September 30, 1995 for the
Delafield Fund, 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 the Funds within the meaning of Section 2(a)(19) of the
1940 Act. The Audit Committee meets annually to review the Funds' financial
statements with the independent accountants and to report on its findings to the
Board of Directors. In addition, pursuant to a Distribution and Service Plan
adopted by the Funds 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 Funds is committed. 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 Boards of Directors, any other
positions each may now hold with the Funds, 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.
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<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> <C>
Robert F. Chairman and a Director of the [-0-] [-0-]
Hoerle* 62 Equity Fund, is Managing Director of
the Capital Management Division of
the Manager since September 1993.
Mr. Hoerle was formerly Executive
Vice President and Chairman of
Reich & Tang, Inc. with which he
was associated with from February
1971 to September 1993. Mr.
Hoerle is also Chairman and a
Trustee of Reich & Tang Government
Securities Trust.
J. Dennis Chairman, Chief Executive Officer [-0-] [-0-]
Delafield* and a Director of the Delafield Fund,
is Managing Director of the Delafield
Asset Management division of the
Manager, with which he has been
associated since September 1993. From
December 1991 to September 1993, Mr.
Delafield, acting as an investment
adviser, was a Managing Director of
Reich & Tang L.P. and an officer of
Reich & Tang, Inc.; and from October
1979 to December 1991, was President
and Director of Delafield Asset
Management, Inc.
<FN>
- --------
* Such person is an "interested person" of the Corporation with the meaning
of Section 2(a)(19) of the 1940 Act.
</FN>
6
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<PAGE>
W. Giles Director of the Funds since their [-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
California Daily Tax Free Income
Fund, Inc., Connecticut Daily Tax
Free Income Fund, Inc., Daily Tax
Free Income Fund, Inc., Michigan
Daily Tax Free Income Fund, Inc.,
New Jersey Daily Municipal Income
Fund, Inc., North Carolina Daily
Municipal Income Fund, Inc., and
Short Term Income Fund, Inc.; and a
Trustee of Florida Daily Municipal
Income Fund, Institutional Daily
Income Fund, Pennsylvania Daily
Municipal Income Fund and Reich &
Tang Government Securities Trust.
7
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Robert Director of the Equity Fund since [-0-] [-0-]
Straniere 1984 and the Delafield Fund since
1993; Member of New York State
53 Assembly; Partner, The Straniere
Law Firm since 1981; Director of
California Daily Tax Free Income Fund,
Inc., Connecticut Daily Tax Free
Income Fund, Inc., Daily Tax Free
Income Fund, Inc., Michigan Daily Tax
Free Income Fund, Inc., New Jersey
Daily Municipal Income Fund, Inc.,
North Carolina Daily Municipal Income
Fund, Inc. and Short Term Income Fund,
Inc.; Trustee of Florida Daily
Municipal Income Fund, Institutional
Daily Income Fund, Pennsylvania Daily
Municipal Income Fund and Reich & Tang
Government Securities Trust; and
Director of Life Cycle Mutual Funds,
Inc.
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Dr. Yung Director of the Funds since their [-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 California Daily Tax Free
Income Fund, Inc., Connecticut Daily
Tax Free Income Fund, Inc., Michigan
Daily Tax Free Income Fund, Inc., New
Jersey Daily Municipal Income Fund,
Inc., North Carolina Daily Municipal
Income Fund, Inc. and Short Term
Income Fund, Inc.; and Trustee of
Florida Daily Municipal Income Fund,
Institutional Daily Income Fund,
Pennsylvania Daily Municipal Income
Fund, Reich & Tang Government
Securities Trust and Eclipse Financial
Asset Trust.
</TABLE>
The address of each director and officer of the Funds is 600 Fifth Avenue, New
York, New York 10020. The officers of each Fund are:
Steven W. Duff, 42, Executive President of the Equity Fund and President of the
Mutual Funds Division of the Manager since September 1994. Mr. Duff was formerly
Director of Mutual Fund Administration of NationsBanc, with which he was
associated from 1981 to August 1994. Mr. Duff is also President and a Director
of California Daily Tax Free Income Fund, Inc., Connecticut Daily Tax Free
Income Fund, Inc., Daily Tax Free Income Fund, Inc., Michigan Daily Tax Free
Income Fund, Inc., New Jersey Daily Municipal Income Fund, Inc., New York Daily
Tax Free Income Fund, Inc., North Carolina Daily Municipal Income Fund, Inc. and
Short Term Income Fund, Inc.; President and Trustee of Florida Daily Municipal
Income Fund, Institutional Daily Income Fund, and Pennsylvania Daily Municipal
Income Fund; President of Cortland Trust, Inc., Reich & Tang Government
Securities Trust and Tax Exempt Proceeds Fund, Inc.; and Executive Vice
President of Reich & Tang Equity Fund, Inc.
9
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<PAGE>
Vincent Sellecchia, ( ), President of the Delafield Fund, is Vice President of
the Delafield Asset Management Division of the Manager, with which he has been
associated since September 1993. From December 1991 to September 1993, Mr.
Sellecchia, acting as an investment adviser, was Vice President of Reich & Tang
L.P. and an officer of Reich & Tang, Inc.; and from October 1980 to December
1991, was Vice President, Director of Investment Analysis for Delafield Asset
Management, Inc.
Cynthia L. Jeran, ( ), Vice President of the Delafield Fund, is an associate of
the Delafield Asset Management Division of the Manager, with which she has been
affiliated since September 1993. From December 1991 to September 1993, Ms. Jeran
was an associate of the Delafield Asset Management Division of the Manager's
predecessor, and from April 1981 thorough December 1991 was an associate of
Delafield Asset Management, Inc.
Steven M. Wilson, 35, Senior Vice President of the Equity Fund, is Senior Vice
President of the Capital Management Division of the Manager since September
1993. Mr. Wilson was formerly Senior Vice President of Reich & Tang, Inc. with
which he was associated from July 1986 to September 1993.
Dana E. Messina, 38, Vice President of the Funds. Ms. Messina is an Executive
Vice President of the Manager since January, 1995 and has been associated with
the Manager and its predecessors in various capacities since December, 1980. She
is also an officer of other investment companies advised by the Manager.
Lesley M. Jones, 47, Vice President of the Funds. 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 the Funds. Ms. Finn is a
Vice President of the Manager since September, 1993 and has been associated with
the Manager and its predecessors in various capacities since September, 1970.
She is also an officer of other investment companies advised by the Manager.
Molly Flewharty, 44, Vice President of the Funds. Ms. Flewharty is Vice
President of the Manager since September, 1993 and has been associated with the
Manager and its predecessors in various capacities since December, 1977. She is
also an officer of other investment companies advised by the Manager.
Richard De Sanctis, 39, Treasurer of the Funds since October 1993. 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 remuneration of $ for the Equity Fund and $ for the
Delafield Fund to its directors and to certain employees of the Manager with
respect to its fiscal year ended December 31, 1995 and September 30, 1995,
respectively, consisting of $ , and $ , respectively, in aggregate directors'
fees to the three disinterested directors, and salaries and benefits aggregating
$ and $ paid to certain employees of the Manager pursuant to the terms of the
Investment Management Contract.
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<TABLE>
<CAPTION>
===============================================================================================================
(1) (2) (3) (4) (5)
- ---------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------
Total
Pension or Compensation
Aggregate Retirement From Fund and
Name of Compensation Benefits Accrued Estimated Fund Complex
Person, From As Part of Fund Annual Benefits Paid to
Position Fund Expenses Upon Retirement Directors*
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
J. Dennis 0 0 0 0
Delafield,
Director of
Delafield Fund
- ---------------------------------------------------------------------------------------------------------------
Robert F. 0 0 0 0
Hoerle, Director
of Equity Fund
- ---------------------------------------------------------------------------------------------------------------
W. Giles Equity Fund: 0 0 $51,500
Mellon, Director $ (14 Funds)
Delafield Fund:
$
- ---------------------------------------------------------------------------------------------------------------
Robert Equity Fund: 0 0 $51,500
Straniere, $ (14 Funds)
Director
Delafield Fund:
$
- ---------------------------------------------------------------------------------------------------------------
Yung Wong, Equity Fund: 0 0 $51,500
Director $ (14 Funds)
Delafield Fund:
$
===============================================================================================================
</TABLE>
* The total compensation paid to such persons by the Fund and Fund Complex
for the fiscal year ending December 31, 1995 for the Equity Fund and
September 30, 1995 for the Delafield Fund (and, with respect to certain
of the funds in the Fund Complex, estimated to be paid during the fiscal
year ending August 31, 1995). The parenthetical number represents the
number of investment companies (including the Funds) from which such
person receives compensation that are considered part of the same Fund
Complex as the Funds, because, among other things, they have a common
investment advisor.
INFORMATION REGARDING THE MANAGER
The Manager for the Funds 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
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<PAGE>
advises pension trusts, profit sharing trusts and endowments. In addition to the
Funds, the Manager's advisory clients include, among others, California Daily
Tax Free Income Fund, Inc., Connecticut Daily Tax Free Income Fund, Inc.,
Cortland Trust, Inc., Daily Tax Free Income Fund, Inc., Florida Daily Municipal
Income Fund, Institutional Daily Income Fund, Michigan Daily Tax Free Income
Fund, Inc., New Jersey Daily Municipal Income Fund, Inc., New York Daily Tax
Free Income Fund, Inc., North Carolina Daily Municipal Income Fund, Inc.,
Pennsylvania Daily Municipal Income Fund, Reich & Tang Government Securities
Trust, Short Term Income Fund, Inc. and Tax Exempt Proceeds Fund, Inc. Attached
as Exhibit C is a Table of Fees for all funds advised by the Manager. The
Manager also advises pension trusts, profit-sharing trusts and endowments.
Peter S. Voss (49), G. Neal Ryland (54), Steven W. Duff (42) and Richard
E. Smith, III (45) are directors of Reich & Tang Asset Management, Inc. the
general partner of the Manager. Mr. Voss is President of Reich & Tang Asset
Management, Inc. The address of Messrs. Voss and Ryland is 399 Boylston Street,
Boston Massachusetts 02116. Mr. Duff is President of the Mutual Fund Group of
the Manager. Mr. Smith is President of the Capital Management Group of the
Manager. Their address is 600 Fifth Avenue, New York, New York 10020.
NEIC Inc. is a holding company offering a broad array of investment
styles across a wide range of asset categories through ten investment
advisory/management affiliates and two distribution subsidiaries which include,
in addition to the Manager, Loomis, Sayles & Company, L.P., Copley Real Estate
Advisors, Inc., Back Bay Advisors, L.P., Marlborough Capital Advisors, L.P.,
Westpeak Investment Advisors, L.P., Draycott Partners, Ltd., TNE Investment
Services, L.P., New England Investment Associates, Inc., an affiliate, Capital
Growth Management Limited Partnership, and Harris Associates. These affiliates
in the aggregate are investment advisors or managers to over 42 other registered
investment companies.
Pursuant to the Investment Management Contract for each Fund, 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 the 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.
The Investment Management Contract with the Manager's predecessor was
approved by the Board of Directors, including a majority of the Directors who
are not interested persons (as defined in the Act) of each Fund or the Manager
and by the shareholders of each Fund at a special meeting of shareholders,
effective September 15, 1993 for the Equity Fund and October , 1993 for the
Delafield Fund. The re-execution of the Investment Management Contract with the
Manager was approved by the Board of Directors, including a majority of the
directors who are not interested persons of the Corporation or Manager,
effective October 1, 1994. The Investment Management Contracts for the Equity
Fund and Delafield have terms which extend to December 31, 1996 and October 31,
1996, respectively, and may be continued in force thereafter for successive
twelve-month periods beginning each January 1 and November 1, respectively,
provided that such continuance is specifically approved annually by majority
vote of the Funds' outstanding voting securities or by their Boards of
Directors, and in either case by a majority of the Directors who are not parties
to the
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Investment Management Contracts or interested persons of any such party, by
votes cast in person at a meeting called for the purpose of voting on such
matter.
The Investment Management Contract is terminable without penalty by 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. The Investment
Management Contract provides that in the absence of willful misfeasance, bad
faith or gross negligence on the part of the Manager, or of reckless disregard
of its obligations thereunder, the Manager shall not be liable for any action or
failure to act in accordance with its duties thereunder.
Under the Investment Management Contracts, each Fund will pay an annual
management fee equal to .30% of the Fund's 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 the Funds' shares.
Pursuant to an Administrative Services Contract with the each Fund, the
Manager also performs clerical, accounting supervision, office service and
related functions for each Fund and provides the Funds 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 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's an annual fee equal to .21% of each Fund's average daily net assets not
in excess of $1.25 billion, plus .20% of such assets in excess of $1.25 billion
but not in excess of $1.5 billion, plus .19% of such assets in excess of $1.5
billion. Prior to such change, each Fund paid the Manager for such personnel and
for rendering such services at rates which were agreed upon by the Funds and the
Manager, provided that the Funds 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
the 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 Fund's and all the
expenses incurred to conduct the Fund's affairs. The amounts of such
reimbursements are to be agreed upon between the Funds and the Manager. No such
reimbursements were made.
The Manager at its discretion may waive its rights to any portion of the
management fee or the administrative services fee and may use any portion of the
management fee and the administrative services fee for purposes of shareholder
and administrative services and distribution of the Fund's shares. There can be
no assurance that such fees will be waived in the future.
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
13
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<PAGE>
prescribed by any state in which the Fund's shares are qualified for sale. For
the purpose of this obligation to reimburse expenses, the Funds' 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 the
Investment Management Contract, confirmed its obligation for payment of all its
other expenses, including all operating expenses, taxes, brokerage fees and
commissions, commitment fees, certain insurance premiums, interest charges and
expenses of the custodian, transfer agent and dividend disbursing agent's fees,
telecommunications expenses, auditing and legal expenses, bookkeeping agent
fees, costs of forming the corporation and maintaining corporate existence,
compensation of Directors, officers and employees of the Funds and costs of
other personnel performing services for the Funds 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 each Fund's prospectus for delivery to existing
shareholders and of printing application forms for shareholder accounts, and the
fees and reimbursements payable to the Manager under the Investment Management
Contract and the Administrative Services Contract and the Distributor under the
Shareholder Servicing Agreement.
The Funds may from time to time hire their own employees or contract to
have management services performed by third parties (including Participating
Organizations) as discussed herein, and the management of the Funds intend to do
so whenever it appears advantageous to the Funds. The Fund's expenses for
employees and for such services are among the expenses subject to the expense
limitation described above.
The following fees were paid to the predecessor investment managers
under the previous Investment Management Contracts or the Manager under the
current Investment Management Contract. For the Equity Fund's fiscal year ended
December 31, 1993, Reich & Tang L.P. received investment management fees of
$_________. For the Equity Fund's fiscal year ended December 31, 1994, Reich &
Tang L.P. and its successor, NEIC, received investment management fees totaling
$_________. For the Equity Fund's fiscal year ended December 31, 1994, Reich &
Tang L.P. and its successor, NEICLP, received administration fees in the
aggregate of $_________. For the Equity Fund's fiscal year ended December 31,
1995, NEIC and the Manager received investment management fees totaling
$_________. For the fiscal year ended December 31, 1995, the Manager received
administration fees in the aggregate of $_________. For the Delafield Fund's
fiscal year ended September 30, 1994, Reich & Tang L.P. and its successor, NEIC,
received investment Management fees totaling $ and administration fees totaling
$ . For the Delafield Fund's fiscal year ended September 30, - 1995, NEIC and
the Manager received investment management fees totaling $ and 30, --
administration fees totaling $ . No reimbursements were payable to the Funds by
the 30, - predecessor managers pursuant to the expense limitation described
above with respect to the fiscal 30, years ended December 31, 1993, 1994 and
1995 for the Equity Fund and September 30, 1994 and 1995 for the Delafield Fund.
The Manager now acts as investment manager or adviser for other persons
and entities and may under the Investment Management Contract act as investment
manager or adviser to other registered investment companies. At present, the
Manager is investment manager to fifteen other registered investment companies.
14
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<PAGE>
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 the Funds' shares. Because the Merger will be
considered to result in the assignment of the Funds' Distribution Agreement with
the Distributor, causing those agreements to terminate upon the Merger, the
Board of Directors of each 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 the Funds, will solicit orders for the purchase
of the Funds' shares, provided that any subscriptions and orders will not be
binding on the Funds until accepted by the Corporation as principal.
Under each Plan, the Funds and the Distributor will enter a Shareholder
Servicing Agreement. Under the Shareholder Servicing Agreement, the Distributor
receives from each Fund a service fee equal to .25% per annum of each Fund's
average daily net assets (the "Service Fee") 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 .
The Plan provides that the Manager may make payments from time to time
from its own resources, which may include the management fee and past profits
for the following purposes: (i) to defray the costs of, and to compensate
others, including Participating Organizations with whom the Distributor has
entered into written agreements for performing shareholder servicing and related
administrative functions on behalf of the Funds; (ii) to compensate certain
Participating Organizations for providing assistance in distributing the Funds'
shares; and (iii) to pay the costs of printing and distributing the Funds'
prospectus to prospective investors, and to defray the cost of the preparation
and printing of brochures and other promotional materials, mailings to
prospective stockholders, advertising, and other promotional activities,
including the salaries and/or commissions of sales personnel in connection with
the distribution of the Funds' shares. The Distributor may also make payments
from time to time from its own resources, which may include the Service Fee and
past profits for the purpose enumerated in (i) above. The Distributor will
determine the amount of such payments made pursuant to the Plan, provided that
such payments will not increase the amount which each Fund 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.
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<PAGE>
The following information applies to the Funds only. For the fiscal year
ended December 31, 1995, the Equity Fund paid a Service Fee for expenditures
pursuant to the Plan in an amount aggregating $ . For the fiscal year ended
September 30, 1995, Delafield Fund paid a Service Fee for expenditures pursuant
to the Plan in an amount aggregating $_________. During such periods, the
Manager and Distributor made payments pursuant to the Plans 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 the Funds represents s distribution and servicing expenses funded
by the Manager's predecessors and Distributor from their own resources including
the management fee.
ALLOCATION OF PORTFOLIO BROKERAGE
The Funds' purchases and sales of securities usually are principal
transactions. Portfolio securities are generally purchased directly from the
issuer or from an underwriter or market maker for the securities. There usually
are no brokerage commissions paid for such purchases and the Funds at present
does not anticipate paying brokerage commissions. Should the Funds pay a
brokerage commission on a particular transaction, the Funds would seek to effect
the transaction at the most favorable available combination of best execution
and lowest commission. Purchases from underwriters of portfolio securities
include a commission or concession paid by the issuer to the underwriter, and
purchases from dealers serving as market makers include the spread between the
bid and asked price.
No portfolio transactions are executed with the Manager, or with an
affiliate of the Manager, acting either as principal or as paid broker.
The frequency of transactions and their allocation to various dealers is
determined by the Manager in its best judgment and in a manner deemed in the
best interest of shareholders of the Funds. The primary consideration is prompt
execution of orders in an effective manner at the most favorable price.
Investment decisions for the Funds will be made independently from those
for any other accounts or investment companies that may be or become advised or
managed by the Manager or its affiliates. If, however, the Funds 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 Funds or the size of the position obtainable for the Funds. In
addition, when purchases or sales of the same security for the Funds and for
other investment companies managed by the Manager occur contemporaneously, the
purchase or sale orders may be aggregated in order to obtain any price
advantages available to large denomination purchasers or sellers.
OTHER MATTERS
As a Maryland corporation, each Fund is not required, and does not intend, to
hold regular annual meetings. Shareholders who wish to present proposals at any
future shareholder meeting must present such proposals to the Board at a
reasonable time prior to the solicitation of any shareholder proxy.
16
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<PAGE>
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
December ____, 1995
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<PAGE>
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.
REICH & TANG EQUITY FUND, INC. AND DELAFIELD FUND, INC.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARDS OF DIRECTORS
JOINT SPECIAL MEETING OF SHAREHOLDERS - MARCH 1, 1996
THE UNDERSIGNED SHAREHOLDER OF REICH & TANG EQUITY FUND, INC. AND
DELAFIELD FUND, INC., (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 THE FUNDS
STANDING IN THE NAME OF THE UNDERSIGNED AT THE CLOSE OF BUSINESS ON DECEMBER __,
1995 AT THE JOINT SPECIAL MEETING OF SHAREHOLDERS TO BE HELD AT THE OFFICES OF
THE FUNDS 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 BOARDS 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
- --------------------------------------------------------------------------------
(DETACH HERE AND RETURN THIS PORTION ONLY)
REICH & TANG EQUITY FUND, INC. AND DELAFIELD 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. ROBERT F. HOERLE (FOR THE EQUITY
FUND ONLY)
2. J. DENNIS DELAFIELD (FOR THE DELAFIELD
FUND ONLY)
3. W. GILES MELLON
4. ROBERT STRANIERE
5. YUNG WONG
________________________________ __________________________________________
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 10506.0006 292214.1
<PAGE>
EXHIBIT A (INVESTMENT MANAGEMENT CONTRACT BETWEEN REICH & TANG EQUITY FUND, INC.
AND REICH & TANG ASSET MANAGEMENT, L.P.)
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<PAGE>
EXHIBIT A
INVESTMENT MANAGEMENT CONTRACT
REICH & TANG EQUITY 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.
C/M: 10850.0000 326652.1
<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. In addition to the foregoing, we hereby employ you, pursuant
to the Distribution Plan dated December 19, 1984, as amended, adopted by us in
accordance with Rule 12b-1 under the Act, as the same may be amended from time
to time, to provide the services listed below.
(a) You will perform, or arrange for others to perform, including
organizations whose customers or clients are stockholders of our corporation
("Intermediaries"), all stockholder servicing and related administrative
functions which we do not perform or arrange for others to perform and which are
not required to be performed by our transfer agent. You may make
-2-
C/M: 10850.0000 326652.1
<PAGE>
payments from time to time from your own resources, which may include the fee
received under this agreement, the Administrative Services Agreement advisory or
other fees received from other investment companies, and past profits, for the
following purposes:
(i) to defray the costs of, and to compensate others,
including Intermediaries, for performing stockholder
servicing and related administrative functions on our
behalf;
(ii) for so long as you remain our Manager and Reich &
Tang Distributors L.P. remains a distributor of our shares
pursuant to a distribution agreement, to compensate
Intermediaries for providing assistance in distributing our
shares; and
(iii) for so long as you remain our Manager and Reich & Tang
Distributors L.P. remains a distributor of our shares pursuant to a
distribution agreement, 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 of sales personnel, in connection with the
distribution of our shares.
You will in your sole discretion determine the amount of any payments made by
you pursuant to this agreement, and you may from time to time in your sole
discretion increase or decrease the amount of those payments; provided, however,
that no such payment will increase the amount which we are required to pay to
you for any fiscal year under either this agreement or the Administrative
Services Agreement in effect for that year or an investment management contract
between you and us in effect for that year, or otherwise.
4. We agree, subject to the limitations described below, to be
responsible for, and hereby assume the obligation for payment of, all our
expenses, including: (a) brokerage and commission expenses, (b) Federal, state
or local taxes, including issue and transfer taxes incurred by or levied on us,
(c) commitment fees and certain insurance premiums, (d) interest charges on
borrowings, (e) charges and expenses of our custodian, (f) charges, expenses and
payments relating to the issuance, redemption, transfer and dividend disbursing
functions for us, (g) recurring and nonrecurring legal and accounting expenses,
including those of the bookkeeping agent, (h) telecommunications expenses, (i)
the costs of organizing and maintaining our existence as a corporation, (j)
compensation, including directors' fees, of any of our directors, officers or
employees who are not your officers or officers of your affiliates, and costs of
other personnel providing clerical, accounting
-3-
C/M: 10850.0000 326652.1
<PAGE>
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 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.
5. 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.
6. In consideration of the foregoing we will pay you a fee at the
annual rate of .80 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, to which we
may become entitled pursuant to paragraph 4 hereof, will be paid to us at the
same time as we pay you.
-4-
C/M: 10850.0000 326652.1
<PAGE>
7. 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.
8. 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.
9. 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.
-5-
C/M: 10850.0000 326652.1
<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,
REICH & TANG EQUITY FUND, INC.
By:
ACCEPTED: ___________, 1996
REICH & TANG ASSET MANAGEMENT L.P.
By: REICH & TANG ASSET MANAGEMENT, INC., General Partner
By: ___________________________________
-6-
C/M: 10850.0000 326652.1
<PAGE>
EXHIBIT B (INVESTMENT MANAGEMENT CONTRACT BETWEEN DELAFIELD FUND, INC. AND REICH
& TANG ASSET MANAGEMENT, L.P.)
19
C/M: 10506.0000 327166.1
<PAGE>
EXHIBIT B
INVESTMENT MANAGEMENT CONTRACT
DELAFIELD FUND, INC.
the "Fund"
New York, New York
___________, 1996
Reich & Tang Asset Management L.P.
600 Fifth Avenue
New York, New York 10020
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 our corporation itself might
or could do with respect to such purchases, sales or other transactions, as well
as with respect to all other things necessary or incidental to the furtherance
or conduct of such purchases, sales or other
C/M: 11319.0000 326648.1
<PAGE>
transactions. In furtherance of such and subject to applicable law and
procedures adopted by the Fund's Board of Directors, you may (i) direct
portfolio brokerage to yourself; (ii) pay commissions to brokers other than
yourself which are higher than such that might be charged by another qualified
broker to obtain brokerage and/or research services considered by you to be
useful or desirable for your investment management of the portfolio and/or other
advisory accounts of yours and any investment advisor affiliated with you; and
(iii) consider the sales of shares of the Fund by brokers including yourself as
a factor in your selection of brokers for portfolio 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
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.
-2-
C/M: 11319.0000 326648.1
<PAGE>
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 existence as a corporation, (j)
compensation, including directors' fees, of any of our directors, officers or
employees who are not your officers or officers of your affiliates, and costs of
other personnel providing clerical, accounting supervision and other office
services to us as we may request, (k) costs of stockholder's services including,
charges and expenses of persons providing confirmations of transactions in our
shares, periodic statements to stockholders, and recordkeeping and stockholders'
services, (l) costs of stockholders' reports, proxy solicitations, and corporate
meetings, (m) fees and expenses of registering our shares under the appropriate
Federal securities laws and of qualifying such shares under applicable state
securities laws, including expenses attendant upon the initial registration and
qualification of such shares and attendant upon renewals of, or amendments to,
those registrations and qualifications, (n) expenses of preparing, printing and
delivering our prospectus to existing 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 pursuant to
the Shareholder Servicing Agreement and Distribution Agreement, and (p) any
other distribution or promotional expenses contemplated by an effective plan
adopted by us pursuant to Rule 12b-1 under the Act. Our obligation for the
foregoing expenses is limited by your agreement to be responsible, while this
Agreement is in effect, for any amount by which 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
-3-
C/M: 11319.0000 326648.1
<PAGE>
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 .80% 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, 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 , 199_ and thereafter for successive twelve-month
periods (computed from each ), provided that such continuation is specifically
approved at least annually by our Board of Directors or by a majority vote of
the holders of our outstanding voting securities, as defined in the 1940 Act and
the rules thereunder, and, in either case, by a majority of those of our
directors who are neither party to this Agreement nor, other than by their
service as directors of the corporation, interested persons, as defined in the
1940 Act and the rules thereunder, of any such person who is party to this
Agreement. Upon the effectiveness of this Agreement, it shall supersede all
previous Agreements between us covering the subject matter hereof. This
Agreement may be terminated at any time, without the payment of any penalty, (i)
by vote of a majority of our outstanding voting securities, as defined in the
1940 Act and the rules thereunder, or (ii) by a vote of a majority of our entire
Board of Directors, on sixty days' written notice to you, or (iii) by you on
sixty days' written notice to us.
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
-4-
C/M: 11319.0000 326648.1
<PAGE>
employee of ours, or of a person affiliated with us, as defined in the 1940 Act,
to engage in any other business or to devote time and attention to the
management or other aspects of any other business, whether of a similar or
dissimilar nature, or to render services of any kind to any other corporation,
firm, individual or association.
If the foregoing is in accordance with your understanding, will
you kindly so indicate by signing and returning to us the enclosed copy hereof.
Very truly yours,
DELAFIELD FUND, INC.
By:
ACCEPTED: _________, 1996
REICH & TANG ASSET MANAGEMENT L.P.
By: REICH & TANG ASSET MANAGEMENT, INC., General Partner
By: ___________________________________
-5-
C/M: 11319.0000 326648.1
<PAGE>
EXHIBIT C (TABLE OF FEES FOR ALL FUNDS ADVISED BY THE MANAGER)
20
C/M: 10506.0000 327166.1
<PAGE>
<TABLE>
EXHIBIT C
<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
