SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a)
of the Securities Exchange Act of 1934
(Amendment No. )
Filed by the Registrant[ ]
Filed by a Party other than the Registrant [ ]
[ X ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to section 240.14a-11(c) of
section 240.14a-12
Connecticut Daily Tax Free Income Fund, Inc.
New Jersey Daily Municipal Income Fund, Inc.
(Name of Persons(s) Filing Proxy Statement if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[ X ] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2)
or Item 22(a)(2) of Schedule 14A.
[ ] $500 per each party to the controversy pursuant to Exchange Act
Rule 14a-6(i)(3).
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and
0-11.
1) Title of each class of securities to which transaction applies:
2) Aggregate number of securities to which transaction applies:
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
4) Proposed maximum aggregate value of transaction:
5) Total fee paid:
Fee paid previously with preliminary materials.
356802.1
<PAGE>
[ ] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting
fee was paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
2) Form, Schedule or Registration Statement No.:
3) Filing Party:
4) Date Filed:
356802.1
<PAGE>
CONNECTICUT DAILY TAX FREE INCOME FUND, INC.
NEW JERSEY DAILY MUNICIPAL INCOME FUND, INC.
IMPORTANT NOTICE TO SHAREHOLDERS
Dear Shareholder:
As you are aware, each Fund is managed and advised by Reich & Tang Asset
Management L.P. (the "Manager"). The parent company of the Manager, New
England Investment Companies, L.P., is majority-owned by New England Mutual
Life Insurance Company, which proposes to merge with Metropolitan Life
Insurance Company.
As a shareholder, you are invited to vote on a proposal in connection with
this merger. Specifically, you are being asked to approve or disapprove a new
management/investment advisory agreement with the Manager since the above
transaction, in accordance with applicable regulations, would automatically
terminate the existing management/investment advisory agreement between the
Manager and each Fund.
What does this mean to you as a shareholder?
It is important to note that the management fee and the management and
investment advisory services to be performed under the new agreement are the
same as those under the current agreement. The other terms of the agreement
are the same in all material respects to the existing agreement. There are no
changes contemplated in the objectives or policies of the Fund, the management
or operation of the Manager relating to the 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,
Connecticut Daily Tax Free Income Fund, Inc.
New Jersey Daily Municipal Income Fund, Inc.
356756.1
<PAGE>
- -------------------------------------------------------------------------------
CONNECTICUT DAILY TAX FREE INCOME FUND, INC.
NEW JERSEY DAILY MUNICIPAL INCOME FUND, INC.
NOTICE OF ADJOURNED JOINT SPECIAL MEETING OF SHAREHOLDERS
June 10, 1996
- -------------------------------------------------------------------------------
600 Fifth Avenue
New York, New York 10020
(800) 676-6779
A Joint Special Meeting of Shareholders of Connecticut Daily Tax Free Income
Fund, Inc. ("Connecticut"), and New Jersey Daily Municipal Income Fund, Inc.
("New Jersey"), (individually, a "Fund" and collectively, the "Funds"), will
be held at 9:00 a.m. on June 10, 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 April 26, 1996.
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 6 of the attached Proxy
Statement);
2. To elect four directors as the case may be, for each of the Funds to hold
office until his successor is dully 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
of January 31, 1997 for Connecticut and October 31, 1996 for New Jersey;
and
4. To transact such other business as may properly come before the meeting.
Only shareholders of record at the close of business on April 19, 1996 are
entitled to notice of, and to vote at, the meeting.
By Order of the Board 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. WE ASK
FOR YOUR COOPERATION IN MAILING YOUR PROXY PROMPTLY.
- -------------------------------------------------------------------------------
-2-
356756.1
<PAGE>
- -------------------------------------------------------------------------------
PROXY STATEMENT PAGE
- -------------------------------------------------------------------------------
Introduction ......................................................
Proposal 1 Approval or Disapproval of a New Investment Management
Contract to be Effective at the Time of the
Merger................................................
Proposal 2 Election of Directors.................................
Proposal 3 Ratification or Rejection of Selection of Independent
Accountants
Information Regarding the Manager.......................................
Allocation of Portfolio Brokerage.......................................
Other Matters ......................................................
Exhibit A Investment Management Contract between Connecticut and
Reich & Tang Asset Management L.P.....................
Exhibit B Investment Management Contract between New Jersey and
Reich & Tang Asset Management L.P.....................
Exhibit C Table of Fees for all Funds Advised by the Manager....
- ------------------------------------------------------------------------
-3-
356756.1
<PAGE>
- -----------------------------------------------------------------------------
CONNECTICUT DAILY TAX FREE INCOME FUND, INC.
NEW JERSEY 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 Connecticut Daily Tax Free Income Fund, Inc.
("Connecticut") and New Jersey Daily Municipal Income Fund, Inc. ("New
Jersey"), (individually, a "Fund" and collectively, the "Funds") for use at an
Adjourned Joint Special Meeting of Shareholders to be held at the offices of
the Funds at 600 Fifth Avenue, New York, New York on June 10, 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 April 26, 1996. 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
April 19, 1996 consisted of shares of Common Stock of Connecticut and
shares of Common Stock of New Jersey, 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
April 19, 1996 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 Adjourned 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 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
- -------------------------------------------------------------------------------
-4-
356756.1
<PAGE>
- -------------------------------------------------------------------------------
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 Adjourned 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 Connecticut and New Jersey, 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 March 26, 1996, the following persons or entities owned as much as 5% of
each Fund's outstanding shares:
Nature of
Name & Address % of Cass Ownership
Connecticut Daily Tax Free Income Fund, Inc.
IFTC/Vista Mutual Funds as Agent
P.O. Box 419392
Kansas City, MO 64141 34.4% Record
- -------------------------------------------------------------------------------
-5-
356756.1
<PAGE>
- -------------------------------------------------------------------------------
Evergreen Investment Services as Agent
2500 Westchester Avenue
Purchase, New York 10577 14.8% Record
Neuberger & Berman as Agent
11 Broadway
New York, New York 10004 6.5% Record
Nature of
Name & Address % of Class Ownership
New Jersey Daily Municipal Income Fund, Inc.
Class A
Evergreen Investment Services as Agent
2500 Westchester Avenue
Purchase, New York 10577 30.3% Record
IFTC/Vista Mutual Funds as Agent
P.O. Box 419392
Kansas City, MO 64141 14.3% Record
Investors Fiduciary Trust Company as Agent
210 W. 10th Street
Kansas City, MO 64105 12.6% Record
Neuberger & Berman as Agent
11 Broadway
New York, New York 10004 8.6% Record
Class B
United National Bank as Agent
Plainfield, NJ 07061 100% Record
As of March 26, 1996, 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.
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
- -------------------------------------------------------------------------------
-6-
356756.1
<PAGE>
- -------------------------------------------------------------------------------
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 second quarter
of 1996.
NEIC is organized as a limited partnership. NEIC's sole general partner, New
England Investment Companies, Inc. ("NEIC Inc."), is a wholly-owned subsidiary
of The New England. As a result of the Merger, NEIC Inc. would become a direct
or indirect wholly-owned subsidiary of Metropolitan Life. The New England also
owns a majority of the outstanding limited partnership interests of NEIC. The
Merger would result in Metropolitan Life becoming the owner (directly or
through a wholly-owned subsidiary) of these limited partnership interests. The
Merger Agreement provides that, following the consummation of the Merger,
Metropolitan Life shall have the right to designate a majority of the board of
directors of NEIC Inc.
Under the Merger Agreement, The New England and Metropolitan Life agree that
they will use their best efforts to satisfy the conditions of Section 15(f) of
the 1940 Act. Section 15(f) provides that an investment adviser to a
registered investment company (such as the Corporation), and affiliated
persons of such investment adviser, may receive any amount or benefit in
connection with the sale of securities of, or a sale of any other interest in,
such investment adviser which results in an assignment of an investment
advisory contract with such investment company, if
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
- -------------------------------------------------------------------------------
-7-
356756.1
<PAGE>
- -------------------------------------------------------------------------------
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 6 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 Manager.
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.
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.
- -------------------------------------------------------------------------------
-8-
356756.1
<PAGE>
- -------------------------------------------------------------------------------
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 inception of each Fund,
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 January 31, 1996 for Connecticut, and October 31,
1995 for New Jersey 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 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 Fund.
- -------------------------------------------------------------------------------
-9-
356756.1
<PAGE>
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Principal Occupation Amount and Nature
During Preceding Five Years of Beneficial
Name and Age Ownership at
3/31/96 % of Shares
<S> <C> <C> <C>
Steven W. Duff* President and Director of each Fund and President of -0- -0-
the Mutual Funds Division of the Manager since October
42 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., Daily Tax Free Income Fund, Inc.,
Michigan Daily Tax Free 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, Pennsylvania Daily Municipal
Income Fund and Institutional Daily Income Fund;
President of Cortland Trust, Inc. and Tax Exempt
Proceeds Fund, Inc.; and Executive Vice President of
Reich & Tang Equity Fund, Inc.
W. Giles Mellon Director of each Fund since its formation; Professor of -0- -0-
Business Administration in the Graduate School of
64 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.,
Daily Tax Free Income Fund, Inc., Michigan Daily Tax
Free Income Fund, Inc., North Carolina Daily Municipal
Income Fund, Inc., 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 and Pennsylvania Daily
Municipal Income Fund.
</TABLE>
- --------
* Such person is an "interested person" of the Corporation within the
meaning of Section 2(a)(19) of the 1940 Act.
- -------------------------------------------------------------------------------
-10-
356756.1
<PAGE>
- -------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C>
Robert Straniere Director of each Fund since its formation; Member of -0- -0-
New York State Assembly; Partner, The Straniere Law
53 Firm since 1981; Director of California Daily Tax Free
Income Fund, Inc., Daily Tax Free Income Fund, Inc.,
Michigan Daily Tax Free Income Fund, Inc., North
Carolina Daily Municipal Income Fund, Inc., 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 Director
of Life Cycle Mutual Funds, Inc.
Dr. Yung Wong Director of each Fund since its formation; Director of -0- -0-
Shaw Investment Management (HK) Limited from
57 September 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., Daily Tax Free Income Fund, Inc.,
Michigan Daily Tax Free Income Fund, Inc., North
Carolina Daily Municipal Income Fund, Inc., 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 and
Eclipse Financial Asset Trust.
</TABLE>
The address of each director and officer of the Corporation is 600 Fifth
Avenue, New York, New York 10020.
In addition to Mr. Duff, who has served as President of the Corporation since
October, 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.
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, 48, 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
- -------------------------------------------------------------------------------
-11-
356756.1
<PAGE>
- -------------------------------------------------------------------------------
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 $39,669 and $36,026 to its
directors and to certain employees of the Manager with respect to its fiscal
year ended January 31, 1996 for Connecticut and October 31, 1995 for New
Jersey, respectively, consisting of $22,500 in aggregate directors' fees to
the three disinterested directors, and salaries and benefits aggregating
$53,195 paid to certain employees of the Manager pursuant to the terms of the
Investment Management Contract.
- -------------------------------------------------------------------------------
-12-
356756.1
<PAGE>
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
=======================================================================================================================
(1) (2) (3) (4) (5)
- -----------------------------------------------------------------------------------------------------------------------
Name of Aggregate Pension or Estimated Total
Person, Compensation Retirement Annual Compensation
Position From each Fund Benefits Accrued Benefits Upon From Funds
As Part of Fund Retirement and Fund
Expenses Complex Paid
to Directors*
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Steven W. Duff, All Funds: 0 All Funds: 0 All Funds: 0 0
Director
- -----------------------------------------------------------------------------------------------------------------------
W. Giles Mellon, Connecticut 5,500 All Funds: 0 All Funds: 0 $57,000
Director New Jersey 2,000 (13 Funds)
- ------------------------------------------------------------------------------------------------------------------------------
Robert Straniere, Connecticut 5,500 All Funds: 0 All Funds: 0 $57,000
Director New Jersey 2,000 (13 Funds)
- ------------------------------------------------------------------------------------------------------------------------------
Yung Wong, Connecticut 5,500 All Funds: 0 All Funds: 0 $57,000
Director New Jersey 2,000 (13 Funds)
==============================================================================================================================
</TABLE>
* The total compensation paid to such persons by the Funds and Fund Complex
for the fiscal year ending January 31, 1996 for Connecticut and October 31,
1995 for New Jersey (and, with respect to certain of the funds in the Fund
Complex, estimated to be paid during the fiscal year ending January 31, 1996).
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 January 31, 1997 for
Connecticut and October 31, 1996 for New Jersey. 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
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
- -------------------------------------------------------------------------------
-13-
356756.1
<PAGE>
- ------------------------------------------------------------------------------
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 February 29, 1996 1995 manager, adviser or
supervisor with respect to assets aggregating approximately $8.9 billion. The
Manager acts as manager of fifteen other investment companies and also 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., Cortland Trust, Inc., Daily Tax Free Income Fund,
Inc., Delafield Fund, Inc., Florida Daily Municipal Income Fund, Institutional
Daily Income Fund, Michigan Daily Tax Free Income Fund, Inc., New York Daily
Tax Free Income Fund, Inc., North Carolina Daily Municipal Income Fund, Inc.,
Pennsylvania Daily Municipal Income Fund, Reich & Tang Equity Fund, Inc.,
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.
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 Investment Management Contract with the Manager was
most recently approved by the Board of Directors, including a majority of the
directors who are not interested persons of each Fund or Manager on January
26, 1996 for Connecticut and July 7, 1995 for New Jersey. Each Investment
Management Contract has a term which extends to January 31, 1997 for
Connecticut, and
- -------------------------------------------------------------------------------
-14-
356756.1
<PAGE>
- -------------------------------------------------------------------------------
August 31, 1996 for New Jersey, and may to continued in force thereafter for
successive twelve-month periods beginning each February 1 for Connecticut, and
September 1 for New Jersey, 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 equal to .30% of each 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 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. 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).
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 each Fund's
shares. There can be no assurance that such fees will be waived in the future.
- -------------------------------------------------------------------------------
-15-
356756.1
<PAGE>
- -------------------------------------------------------------------------------
Investment management fees and operating expenses which are attributable to
both Classes of a New Jersey 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 New
Jersey 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 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 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 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.
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 Connecticut's fiscal year ended January 31, 1994, Reich & Tang L.P. and
its successor, NEIC, received in the aggregate investment management fees
totaling $520,579. For Connecticut's fiscal year ended January 31, 1995, NEIC
and the Manager received in the aggregate investment management fees totaling
$239,914. For Connecticut's fiscal year ended January 31, 1996, the Manager
received investment management fees of $278,564. For Connecticut's fiscal year
ended January 31, 1994, Reich & Tang L.P. and its successor, NEIC, received
administration fees in the aggregate of $92,378. For Connecticut's fiscal
- -------------------------------------------------------------------------------
-16-
356756.1
<PAGE>
- -------------------------------------------------------------------------------
year ended January 31, 1995, NEIC and the Manager received in the aggregate
administration fees in the aggregate of $159,943. For Connecticut's fiscal
year ended January 31, 1996, the Manager received administration fees of
$159,661.
For New Jersey's fiscal year ended October 31, 1993, Reich & Tang L.P. and
NEIC received in the aggregate investment management fees of $270,748. For New
Jersey's fiscal year ended October 31, 1994, NEIC and the Manager received in
the aggregate investment management fees totaling $290,271. For New Jersey's
fiscal year ended October 31, 1995, the Manager received investment management
fees totaling $355,223. For New Jersey's fiscal year ended October 31, 1994,
NEIC and the Manager received administration fees in the aggregate of
$132,683. For New Jersey's fiscal year ended October 31, 1995, the Manager
received administration fees in the aggregate of $236,815.
No reimbursements were payable to each Fund by the Manager or its predecessor
pursuant to the expense limitation described above with respect to any of the
Fund's last three fiscal years.
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 Board 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 New Jersey, the Distributor will
enter into a Shareholder Servicing Agreement with respect to the Class A
shares only. Under the Shareholder Servicing Agreement, the Distributor
receives from Connecticut a service fee equal to .20% per annum of such Fund's
average daily net assets (the "Service
- -------------------------------------------------------------------------------
-17-
356756.1
<PAGE>
- -------------------------------------------------------------------------------
Fee"), and with respect to New Jersey, 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 New Jersey, Class A
shareholders only.
Each Plan provides, and with respect to New Jersey 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
resources, which may include the Service Fee, and with respect to New Jersey
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 New Jersey,
applies only to the Class A shares. For the fiscal year ended January 31, 1996
and October 31, 1995, Connecticut and New Jersey each paid a Service Fee for
expenditures pursuant to the Plan in amounts aggregating $185,710 and $19,599,
respectively. During such period, the Manager and Distributor made payments
pursuant to the Plan to or on behalf of Participating Organizations of
$332,099 and $440,986, 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
- -------------------------------------------------------------------------------
-18-
356756.1
<PAGE>
- -------------------------------------------------------------------------------
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 orders may be aggregated in order to obtain any price
advantages available to large denomination purchasers or sellers.
OTHER MATTERS
As Maryland corporations, Connecticut and New Jersey 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 Adjourned
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 Board of Directors
BERNADETTE N. FINN, Secretary of each of the Funds
- -------------------------------------------------------------------------------
-19-
356756.1
<PAGE>
- -------------------------------------------------------------------------------
EXHIBIT A (INVESTMENT MANAGEMENT CONTRACT BETWEEN THE CORPORATION AND REICH &
TANG ASSET MANAGEMENT, L.P.)
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
- -------------------------------------------------------------------------------
-20-
356756.1
<PAGE>
- -------------------------------------------------------------------------------
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) 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 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
- ------------------------------------------------------------------------------
-21-
356756.1
<PAGE>
- ------------------------------------------------------------------------------
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
the annual operating expenses (excluding taxes, brokerage, interest and
extraordinary expenses) exceed the limits on investment company expenses
prescribed by any state in which the shares for such Portfolio 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, 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 the 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
- -------------------------------------------------------------------------------
-22-
356756.1
<PAGE>
- -------------------------------------------------------------------------------
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.
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: ___________________________
- -------------------------------------------------------------------------------
-23-
356756.1
<PAGE>
- ------------------------------------------------------------------------------
EXHIBIT B (INVESTMENT MANAGEMENT CONTRACT BETWEEN NEW JERSEY AND REICH & TANG
ASSET MANAGEMENT, L.P.)
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
- -------------------------------------------------------------------------------
-24-
356756.1
<PAGE>
- -------------------------------------------------------------------------------
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) 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 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
- -------------------------------------------------------------------------------
-25-
356756.1
<PAGE>
- -------------------------------------------------------------------------------
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
the annual operating expenses (excluding taxes, brokerage, interest and
extraordinary expenses) exceed the limits on investment company expenses
prescribed by any state in which the 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, 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 the 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
- -------------------------------------------------------------------------------
-26-
356756.1
<PAGE>
- -------------------------------------------------------------------------------
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.
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
- -------------------------------------------------------------------------------
-27-
356756.1
<PAGE>
- -------------------------------------------------------------------------------
<TABLE>
EXHIBIT C (TABLE OF FEES FOR ALL FUNDS ADVISED BY THE MANAGER)
===================================================================================================================================
<CAPTION>
FUND NAME FEES NET ASSETS (IN
MILLIONS) AT
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 895.3
.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 610.4
.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 STIF 895.3
Each Portfolio .20% of average daily net assets in excess of $1.25 billion up to $1.5 billion STIG 610.4
.19% of average daily net assets in excess of $1.5 billion
--------------------------------------------------------------------------------------------------
Shareholder Servicing and Distribution Plan Fee (Class A only) STIF (A) 671.3
.25% of average daily net assets STIG (A) 504.4
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
Management Fee
.325% of average daily net assets up to $750 million 626.7
.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 626.7
.19% in excess of $1.5 billion
--------------------------------------------------------------------------------------------------
Shareholder Servicing and Distribution Plan Fee (Class A Only) Class A 453.4
.25% of average daily net assets
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
REICH & TANG EQUITY FUND, Management Fee
INC. .80% of average daily net assets 109.5
---------------------------------------------------------------------------
Administrative Services Fee
.20% of average daily net assets
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
Management Fee
.80% of average daily net assets
DELAFIELD FUND, INC. 44.0
---------------------------------------------------------------------------
Administrative Services Fee
.21% of average daily net assets
---------------------------------------------------------------------------
Shareholder Servicing and Distribution Plan Fee
.25% of average daily net assets
- -----------------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------------
-28-
356756.1
<PAGE>
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
Management Fee
.30% of average daily net assets
CONNECTICUT DAILY TAX FREE
INCOME FUND, INC. 103.2
----------------------------------------------------------------------------
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. 263.1
----------------------------------------------------------------------------
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
CALIFORNIA DAILY TAX FEE 159.3
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
MICHIGAN DAILY TAX FREE
INCOME FUND, INC. 59.7
----------------------------------------------------------------------------
Administrative Services Fee
.21% of average daily net assets
----------------------------------------------------------------------------
Shareholder Servicing and Distribution Plan Fee
.20% of average daily net assets
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
All Inclusive Management Fee*
TAX EXEMPT PROCEEDS FUND, .40% of average daily net assets up to $250 million 265.4
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
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
Management Fee
.30% of average daily net assets
NEW JERSEY DAILY MUNICIPAL 135.1
INCOME FUND, INC.
----------------------------------------------------------------------------
Administrative Services Fee
.21% of average daily net assets
----------------------------------------------------------------------------
Shareholder Servicing and Distribution Plan Fee
.20% of average daily net assets
- -----------------------------------------------------------------------------------------------------------------------------------
<FN>
- --------
* 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.
</FN>
- -------------------------------------------------------------------------------
-29-
356756.1
<PAGE>
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
All Inclusive Management Fee
.80% of the first $500 million
CORTLAND TRUST, INC. .775% of the next $500 million 1,884.4
All Portfolios .75% of the next $500 million
.735% in excess of $1.5 billion
---------------------------------------------------------------------------------------------
Distribution Fee
.25% of average daily net assets 1,503.3
---------------------------------------------------------------------------------------------
Distribution Fee (Live Oak Shares)
.20% of average daily net assets 381.1
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
Management Fee
.40% of average daily net assets
NORTH CAROLINA DAILY
MUNICIPAL INCOME FUND, INC. 171.8
----------------------------------------------------------------------------
Administrative Services Fee
.21% of average daily net assets
----------------------------------------------------------------------------
Shareholder Servicing and Distribution Plan Fee
.25% of average daily net assets
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
Management Fee
PENNSYLVANIA DAILY .40% of average daily net assets
MUNICIPAL INCOME FUND
41.0
----------------------------------------------------------------------------
Administrative Services Fee
.21% of average daily net assets
.20% of average daily net assets in
excess of $1.25 billion up to 1.5
billion .19 of average daily net
assets in excess of $1.5 billion
----------------------------------------------------------------------------
Shareholder Servicing and Distribution Plan Fee
.25% of average daily net assets
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
Management Fee
FLORIDA DAILY MUNICIPAL FUND .40% of average daily net assets 40.6
----------------------------------------------------------------------------
Administrative Services Fee
.21% of average daily net assets
----------------------------------------------------------------------------------------------
Shareholder Servicing and Distribution Plan Fee (Class A Only)
.25% of average daily net assets Class A 19.9
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
Investment Management Fee
INSTITUTIONAL DAILY INCOME .08% of average daily net assets
FUND 350.8
All Portfolios
Class A 271.7
----------------------------------------------------------------------------
Administrative Services Fee
.05% of average daily net assets
----------------------------------------------------------------------------
Shareholder Servicing and Distribution
Plan Fee (Class A Only) .25% of
average daily net assets
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
-30-
356756.1
<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.
CONNECTICUT DAILY TAX FREE INCOME FUND, INC.,
NEW JERSEY DAILY MUNICIPAL INCOME FUND, INC.,
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
ADJOURNED JOINT SPECIAL MEETING OF SHAREHOLDERS - JUNE 10, 1996
THE UNDERSIGNED SHAREHOLDER OF CONNECTICUT DAILY TAX FREE INCOME
FUND, INC., AND NEW JERSEY 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 APRIL 19, 1996 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 JUNE 10, 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
- -------------------------------------------------------------------------------
356756.1
<PAGE>
(DETACH HERE AND RETURN THIS PORTION ONLY)
CONNECTICUT DAILY TAX FREE INCOME FUND, INC.,
NEW JERSEY 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
/ / / / / / 4. YUNG WONG
/ / / / / / III. TO RATIFY OR REJECT THE SELECTION OF
MCGLADREY & PULLEN, LLP AS INDEPENDENT
ACCOUNTANTS OF THE FUNDS FOR ITS FISCAL
YEAR ENDING JANUARY 31, 1997 FOR
CONNECTICUT, AND OCTOBER 31, 1996
______________________________________
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.
356756.1
<PAGE>
EXHIBIT A (INVESTMENT MANAGEMENT CONTRACT BETWEEN CONNECTICUT AND
REICH & TANG ASSET MANAGEMENT, L.P.)
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.
(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 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, 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.
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: ____________________________________
<PAGE>
EXHIBIT B (INVESTMENT MANAGEMENT CONTRACT BETWEEN NEW JERSEY AND
REICH & TANG ASSET MANAGEMENT, L.P.)
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.
(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 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, 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.
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: ____________________________________
<PAGE>
EXHIBIT C (TABLE OF FEES FOR ALL FUNDS ADVISED BY THE MANAGER)
<TABLE>
<CAPTION>
FUND NAME FEES NET ASSETS (IN
MILLIONS) AT
11-30-95
<S> <C> <C>
SHORT TERM INCOME FUND,
INC.
Management Fee
.30% of average daily net assets up to $750
million
.29% of average daily net assets in excess of $750
Money Market Portfolio million up to $1 billion 895.3
.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
.275% of average daily net assets up to $250
U.S. Government Portfolio million 610.4
.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
.20% of average daily net assets in excess of STIF 895.3
$1.25 billion up to $1.5 billion STIG 610.4
Each Portfolio .19% of average daily net assets in excess of $1.5
billion STIF (A) 671.3
STIF (A) 504.4
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 626.7
DAILY TAX FREE INCOME FUND, Administrative Services Fee
INC. .21% of average daily net assets up to $1.25 626.7
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 Class A 453.4
Shareholder Servicing and Distribution Plan Fee
(Class A Only)
.25% of average daily net assets
- --------------------------------------------------------------------------------------------------
Management Fee
REICH & TANG EQUITY FUND, .80% of average daily net assets 109.5
INC. Administrative Services Fee
.20% of average daily net assets
- --------------------------------------------------------------------------------------------------
Management Fee
.80% of average daily net assets
DELAFIELD FUND, INC. Administrative Services Fee 44.0
.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
CONNECTICUT DAILY TAX FREE Administrative Services Fee 103.2
INCOME 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
NEW YORK DAILY TAX FREE
INCOME FUND, INC. Administrative Services Fee 263.1
.21% of average daily net assets
Shareholder Servicing and Distribution Plan Fee
.20% of average daily net assets
- --------------------------------------------------------------------------------------------------
Management Fee
.35% of average daily net assets
REICH & TANG GOVERNMENT Administrative Services Fee .7
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 FREE Administrative Services Fee 159.3
INCOME 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 Administrative Services Fee 59.7
INCOME 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
TAX EXEMPT PROCEEDS FUND, million
INC. .35% of average daily net assets in excess of $250 265.4
million up to $500 million
.30% of average daily net assets in excess of $500
million
<FN>
- ----------------------------
* 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.
</FN>
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
Management Fee
.30% of average daily net assets
NEW JERSEY DAILY MUNICIPAL Administrative Services Fee 135.1
INCOME 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
.775% of the next $500 million
.75% of the next $500 million 1,884.4
CORTLAND TRUST, INC. .735% in excess of $1.5 billion
All Portfolios
Distribution Fee
.25% of average daily net assets 1,503.3
Distribution Fee (Live Oak Shares) 381.1
.20% of average daily net assets
- --------------------------------------------------------------------------------------------------
Management Fee
.40% of average daily net assets
NORTH CAROLINA DAILY Administrative Services Fee 171.8
MUNICIPAL INCOME FUND, INC. .21% of average daily net assets
Shareholder Servicing and Distribution Plan Fee
.25% of average daily net assets
- --------------------------------------------------------------------------------------------------
Management Fee
.40% of average daily net assets
Administrative Services Fee
.21% of average daily net assets up to $1.25
PENNSYLVANIA DAILY billion
MUNICIPAL INCOME FUND .20% of average daily net assets in excess of 41.0
$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 Administrative Services Fee 40.6
FUND .21% of average daily net assets
Shareholder Servicing and Distribution Plan Fee Class A 19.9
(Class A Only)
.25% of average daily net assets
- --------------------------------------------------------------------------------------------------
Investment Management Fee
.08% of average daily net assets
INSTITUTIONAL DAILY INCOME Administrative Services Fee 350.8
FUND .05% of average daily net assets
All Portfolios
Shareholder Servicing and Distribution Plan Fee Class A 271.7
(Class A Only)
.25% of average daily net assets
</TABLE>
