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 [ ]
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
[ X ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to 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):
[ ] $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:
[ X ] 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.
<PAGE>
CONNECTICUT DAILY TAX FREE INCOME FUND, INC.
NEW JERSEY DAILY MUNICIPAL INCOME FUND, INC.
NOTICE OF ADJOURNED JOINT SPECIAL MEETING OF SHAREHOLDERS
July 3, 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 July 3, 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.
<PAGE>
PROXY STATEMENT PAGE
Introduction ......................................................... 4
Proposal 1 Approval or Disapproval of a New Investment
Management Contract to be
Effective at the Time of the
Merger......................................................6
Proposal 2 Election of Directors.......................................8
Proposal 3 Ratification or Rejection of Selection of
Independent Accountants ....................................11
Information Regarding the Manager.......................................11
Allocation of Portfolio Brokerage.......................................16
Other Matters...........................................................16
Exhibit A Investment Management Contract between Connecticut
and Reich & Tang Asset Management L.P.......................17
Exhibit B Investment Management Contract between New
Jersey and Reich & Tang Asset Management L.P................21
Exhibit C Table of Fees for all Funds Advised by the Manager..........25
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 July 3, 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, without charge, upon written request to Reich & Tang at 600 Fifth
Avenue, New York, New York 10020 or by calling toll free 1-800-676-6779.
The outstanding voting stock of the Funds as of the close of business on April
19, 1996 consisted of 110,503,144.70 shares of Common Stock of Connecticut and
156,131,755.79 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 a new Investment Management Contract for each of
the Funds to be effective upon 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 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 Class 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
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 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
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.
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.
<TABLE>
<CAPTION>
Amount and Nature
of Beneficial
Principal Occupation Ownership at
Name and Age During Preceding Five Years 3/31/96
% of Shares
<S> <C> <C> <C>
Steven W. President and Director of each Fund and President of the Mutual -0- -0-
Duff* Funds Division of the Manager since October 1994. Mr. Duff was
42 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 Director of each Fund since its formation; Professor of Business -0- -0-
Mellon Administration in the Graduate School of Management, Rutgers 64
University, with which he has been associated since 1966.
Dr. Mellon is also a Director of California Daily Tax Free Income
64 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.
Robert Director of each Fund since its formation; Member of New York -0- -0-
Straniere State Assembly; Partner, The Straniere Law Firm since 1981;
53 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 Shaw -0- -0-
57 Investment Management (HK) Limited from 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.
<PAGE>
</TABLE>
- ------------------------------------------------------------------------------
* Such person is an "interested person" of the Corporation within the meaning
of Section 2(a)(19) of the 1940 Act.
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 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.
<TABLE>
<CAPTION>
- ----------------- ------------------------- --------------------- ----------------------- =======================
(1) (2) (3) (4) (5)
- ----------------- ------------------------- --------------------- ----------------------- =======================
================= ------------------------- --------------------- ----------------------- =======================
Name of Aggregate Compensation Pension or Estimated Total Compensation
Person, From each Fund Retirement Annual From Funds
Position Benefits Accrued Benefits Upon and Fund
As Part of Fund Retirement Complex Paid
Expenses to Directors*
================= ------------------------- --------------------- ----------------------- =======================
<S> <C> <C> <C> <C>
Steven W. Duff, All Funds: 0 All Funds: 0 All Funds: 0 0
Director
================= ------------------------- --------------------- ----------------------- =======================
W. Giles Connecticut 5,500 All Funds: 0 All Funds: 0 $57,000
Mellon, Director New Jersey 2,000 (13 Funds)
================= ------------------------- --------------------- ----------------------- =======================
Robert Connecticut 5,500 All Funds: 0 All Funds: 0 $57,000
Straniere, New Jersey 2,000 (13 Funds)
Director
================= ========================= ===================== ======================= =======================
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
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
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.
Investment management fees and operating expenses which are attributable to both
Classes of 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 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 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 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
<PAGE>
EXHIBIT A (INVESTMENT MANAGEMENT CONTRACT BETWEEN THE 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 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 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: ___________________________
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 port
<PAGE>
(d) folio 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.
(e) 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.
(f) 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 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 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
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT C (TABLE OF FEES FOR ALL FUNDS ADVISED BY THE MANAGER)
=============================== ---------------------------------------------------------------- ==================
FUND NAME FEES NET ASSETS (IN
MILLIONS) AT
11-30-95
- ------------------------------- ---------------------------------------------------------------- ==================
SHORT TERM INCOME FUND, INC.
- ------------------------------- ---------------------------------------------------------------- ==================
<S> <C> <C>
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 895.3
to $1 billion
.28% of average daily net assets in excess of $1 billion up
to $1.5 billion
.27% of average daily net assets in excess of $1.5 billion
=============================== ---------------------------------------------------------------- ==================
Management Fee
U.S. Government Portfolio .275% of average daily net assets up to $250 million 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 STIG 610.4
up to $1.5 billion
.19% of average daily net assets in excess of $1.5 billion
================================================================ ==================
Shareholder Servicing and Distribution Plan Fee
(Class A only) 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
---------------------------------------------------------------- ==================
Administrative Services Fee
.21% of average daily net assets up to $1.25 million
DAILY TAX FEE INCOME FUND, .20% of average daily net assets in excess of $1.25 million
INC. up to $1.5 billion 626.7
.19% in excess of $1.5 billion
---------------------------------------------------------------- ==================
Shareholder Servicing and Distribution Plan Fee
(Class A Only) .25% of average daily net
assets _________________________________ Class A 453.4
=============================== ---------------------------------------------------------------- ==================
Management Fee
.80% of average daily net assets
REICH & TANG EQUITY FUND, INC. 109.5
----------------------------------------------------------------
Administrative Services Fee
.20% of average daily net assets
=============================== ---------------------------------------------------------------- ==================
Management Fee
.80% of average daily net assets
----------------------------------------------------------------
----------------------------------------------------------------
DELAFIELD FUND, INC. Administrative Services Fee
.21% of average daily net assets 44.0
================================================================
Shareholder Servicing and Distribution Plan Fee
.25% of average daily net assets
=============================== ================================================================ ==================
EXHIBIT C (TABLE OF FEES FOR ALL FUNDS ADVISED BY THE MANAGER) (CONTINUED)
================================ --------------------------------------------------------------- ===================
Management Fee
.30% of average daily net assets
---------------------------------------------------------------
CONNECTICUT DAILY TAX FREE Administrative Services Fee
INCOME FUND, INC. .21% of average daily net assets 103.2
---------------------------------------------------------------
Shareholder Servicing and Distribution Plan Fee
.20% of average daily net assets
================================ --------------------------------------------------------------- ===================
Management Fee
.30% of average daily net assets
---------------------------------------------------------------
NEW YORK DAILY TAX FEE Administrative Services Fee
INCOME FUND, INC. .21% of average daily net assets 263.1
---------------------------------------------------------------
Shareholder Servicing and Distribution Plan Fee
.20% of average daily net assets
================================ --------------------------------------------------------------- ===================
Management Fee
.30% of average daily net assets
---------------------------------------------------------------
---------------------------------------------------------------
CALIFORNIA DAILY TAX FEE Administrative Services Fee
INCOME FUND, INC. .21% of average daily net assets 159.3
---------------------------------------------------------------
---------------------------------------------------------------
Shareholder Servicing and Distribution Plan Fee
.20% of average daily net assets
================================ --------------------------------------------------------------- ===================
Management Fee
.30% of average daily net assets
---------------------------------------------------------------
---------------------------------------------------------------
MICHIGAN DAILY TAX FREE Administrative Services Fee
INCOME FUND, INC. .21% of average daily net assets 59.7
---------------------------------------------------------------
---------------------------------------------------------------
Shareholder Servicing and Distribution Plan Fee
.20% of average daily net assets
================================ =============================================================== ===================
All Inclusive Management Fee*
.40% of average daily net assets up to $250 million
TAX EXEMPT PROCEEDS FUND, INC. .35% of average daily net assets in excess of $250 million 265.4
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 Administrative Services Fee
INCOME FUND, INC. .21% of average daily net assets 135.1
===============================================================
Shareholder Servicing and Distribution Plan Fee
.20% of average daily net assets
================================ =============================================================== ===================
* 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.
EXHIBIT C (TABLE OF FEES FOR ALL FUNDS ADVISED BY THE MANAGER) (CONTINUED)
================================== -------------------------------------------------------------- ====================
All Inclusive Management Fee .80% of the
first $500 million .775% of the next $500
million
CORTLAND TRUST, INC. .75% of the next $500 million 1,884.4
All Portfolios .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 Administrative Services Fee
MUNICIPAL INCOME FUND, INC. .21% of average daily net assets 171.8
==============================================================
Shareholder Servicing and Distribution Plan Fee
.25% of average daily net assets
================================== ============================================================== ====================
================================== -------------------------------------------------------------- ====================
Management Fee
.40% of average daily net assets
--------------------------------------------------------------
PENNSYLVANIA DAILY MUNICIPAL Administrative Services Fee
INCOME FUND .21% of average daily net assets
.20% of average daily net assets in excess of $1.25 billion 41.0
up to 1.5 billion
.19 of average daily net assets in excess of $1.5 billion
--------------------------------------------------------------
Shareholder Servicing and Distribution Plan Fee
.25% of average daily net assets
================================== -------------------------------------------------------------- ====================
Management Fee
.40% of average daily net assets
--------------------------------------------------------------
FLORIDA DAILY MUNICIPAL FUND Administrative Services Fee 40.6
.21% of average daily net assets
====================
--------------------------------------------------------------
Shareholder Servicing and Distribution Plan Fee (Class A
Only) Class A 19.9
.25% of average daily net assets
================================== -------------------------------------------------------------- ====================
Investment Management Fee
INSTITUTIONAL DAILY INCOME FUND .08% of average daily net assets
--------------------------------------------------------------
--------------------------------------------------------------
All Portfolios Administrative Services Fee 350.8
.05% of average daily net assets
==============================================================
Shareholder Servicing and Distribution Plan Fee (Class A
Only) Class A 271.7
.25% of average daily net assets
================================== ============================================================== ====================
</TABLE>
