APEX MUNICIPAL FUND INC, DEF 14A, 1995-11-16

APEX MUNICIPAL FUND INC
DEF 14A, 1995-11-16

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<PAGE> 1

AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON NOVEMBER 16, 1995

SCHEDULE 14A
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )

Filed by the registrant /X/
Filed by a party other than the registrant / /
Check the appropriate box:
/ / Preliminary proxy statement
/X/ Definitive proxy statement
/X/ Definitive additional materials
/ / Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12

APEX MUNICIPAL FUND, INC.
P.O. Box 9011
Princeton, New Jersey 08543-9011
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)

APEX MUNICIPAL FUND, INC.
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement)
Payment of filing fee (Check the appropriate box):
/X/ $125 per Exchange Act Rule 0-11(c)(1)(ii), 14a-6(t)(1), or 14a-6(J)(2).
/ / $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:(1)

- --------------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:

- --------------------------------------------------------------------------------
/ / 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:

- --------------------------------------------------------------------------------
Notes:

- ---------------
(1) Set forth the amount on which the filing fee is calculated and state how
it was
determined.
<PAGE> 2

APEX MUNICIPAL FUND, INC.
P.O. BOX 9011
PRINCETON, NEW JERSEY 08543-9011

------------------------

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS

DECEMBER 15, 1995
------------------------

TO THE STOCKHOLDERS OF APEX MUNICIPAL FUND, INC.:

Notice is hereby given that the 1995 Annual Meeting of Stockholders (the
"Meeting") of Apex Municipal Fund, Inc. (the "Fund") will be held at the offices
of Merrill Lynch Asset Management, L.P., 800 Scudders Mill Road, Plainsboro, New
Jersey, on Friday, December 15, 1995, at 9:00 A.M. for the following purposes:

(1) To elect one Class III Director to serve until the 1998 Annual
Meeting of Stockholders;

(2) To consider and act upon a proposal to ratify the selection of
Deloitte & Touche LLP to serve as independent auditors of the Fund for its
current fiscal year; and

(3) To transact such other business as may properly come before the
Meeting or any adjournment thereof.

The Board of Directors has fixed the close of business on November 8, 1995
as the record date for the determination of stockholders entitled to notice of
and to vote at the Meeting or any adjournment thereof.

A complete list of the stockholders of the Fund entitled to vote at the
Meeting will be available and open to the examination of any stockholder of the
Fund for any purpose germane to the Meeting during ordinary business hours from
and after December 1, 1995, at the office of the Fund, 800 Scudders Mill Road,
Plainsboro, New Jersey. STOCKHOLDERS WHO DO NOT EXPECT TO ATTEND THE MEETING IN
PERSON ARE REQUESTED TO COMPLETE, DATE AND SIGN THE ENCLOSED FORM OF PROXY AND
RETURN IT PROMPTLY IN THE ENVELOPE PROVIDED FOR THIS PURPOSE.

You are cordially invited to attend the Meeting. The enclosed proxy is
being solicited on behalf of the Board of Directors of the Fund.

By Order of the Board of Directors

MARK B. GOLDFUS
Secretary
Plainsboro, New Jersey
Dated: November 16, 1995
<PAGE> 3

PROXY STATEMENT
------------------------

APEX MUNICIPAL FUND, INC.
P.O. BOX 9011
PRINCETON, NEW JERSEY 08543-9011
------------------------

1995 ANNUAL MEETING OF STOCKHOLDERS

DECEMBER 15, 1995

INTRODUCTION

This Proxy Statement is furnished in connection with the solicitation of
proxies on behalf of the Board of Directors of Apex Municipal Fund, Inc., a
Maryland corporation (the "Fund"), to be voted at the 1995 Annual Meeting of
Stockholders of the Fund (the "Meeting"), to be held at the offices of Merrill
Lynch Asset Management, L.P. ("MLAM"), 800 Scudders Mill Road, Plainsboro, New
Jersey, on Friday, December 15, 1995 at 9:00 A.M. The approximate mailing date
of this Proxy Statement is November 22, 1995.

All properly executed proxies received prior to the Meeting will be voted
at the Meeting in accordance with the instructions marked thereon or otherwise
as provided therein. Unless instructions to the contrary are marked, proxies
will be voted for the election of the Class III Director, to serve for a three
year term and for the ratification of the selection of independent auditors to
serve for the Fund's current fiscal year. Any proxy may be revoked at any time
prior to the exercise thereof by giving written notice to the Secretary of the
Fund at the Fund's address indicated above or by voting in person at the
Meeting.

The Board of Directors has fixed the close of business on November 8, 1995
as the record date for the determination of stockholders entitled to notice of
and to vote at the Meeting and at any adjournment thereof. Stockholders on the
record date will be entitled to one vote for each share held, with no shares
having cumulative voting rights. As of November 8, 1995, the Fund had
outstanding 19,544,644 shares of common stock, par value $.10 per share. To the
knowledge of the Fund, as of November 8, 1995, no person was the beneficial
owner of more than five percent of its outstanding shares of Common Stock.

Approval of Items 1 and 2 will require the affirmative vote of a majority
of votes cast by the Fund's shareholders, voting in person or by proxy, at a
meeting in which a quorum is duly constituted. The Board of Directors of the
Fund knows of no business other than that mentioned in Items 1 and 2 of the
Notice of Meeting which will be presented for consideration at the Meeting. If
any other matter is properly presented, it is the intention of the persons named
in the enclosed proxy to vote in accordance with their best judgment.
<PAGE> 4

ITEM 1. ELECTION OF DIRECTOR

Pursuant to the Articles of Incorporation of the Fund, the Board of
Directors is divided into three classes, designated Class I, Class II and Class
III. Each class has a term of office of three years, and each year the term of
office of one class will expire. A Director elected by stockholders will serve
until the Annual Meeting of Stockholders for the year in which his term expires
and until his successor is elected and qualified.

It is the intention of the persons named in the enclosed proxy to nominate
and vote in favor of the election of Arthur Zeikel, the Class III Director whose
current term expires at the Meeting. The Board of Directors of the Fund knows of
no reason why the nominee will be unable to serve, but in the event of any such
unavailability, the proxies received will be voted for such substitute nominee
as the Board of Directors may recommend.

Certain information concerning the nominee and the other Directors is set
forth as follows:

<TABLE>
<CAPTION>
SHARES
OF
COMMON
STOCK
OF
THE
FUND
BENEFICIALLY
OWNED
AT
PRINCIPAL OCCUPATION NOVEMBER
DURING PAST FIVE YEARS DIRECTOR 8,
NAME AND ADDRESS AND PUBLIC DIRECTORSHIPS(1) AGE SINCE 1995
- --------------------------------- --------------------------------------- --- ---- ---
<S> <C> <C> <C> <C>
Class III Nominee to serve until
the 1998 Annual Meeting of
Stockholders:
Arthur Zeikel(1)(3).............. President of Fund Asset Management, 63 1989 0
P.O. Box 9011 L.P. ("FAM") (which term as used herein
Princeton, New Jersey includes its corporate predecessors)
08543-9011 since 1977; President of MLAM (which
term as used herein includes its
corporate predecessors) since 1977;
President and Director of Princeton
Services, Inc. ("Princeton Services")
since 1993; Executive Vice President
of Merrill Lynch & Co., Inc.
("ML&Co.") since 1990; Executive Vice
President of Merrill Lynch, Pierce,
Fenner & Smith Incorporated ("Merrill
Lynch") since 1990 and a Senior Vice
President thereof from 1985 to 1990;
Director of Merrill Lynch Funds
Distributor, Inc. ("MLFD").
Class I Directors serving until
the 1997 Annual Meeting of
Stockholders:
Joe Grills(1)(2)................. Member of the Committee of Investment 60 1994 0
183 Soundview Lane of Employee Benefit Assets of the
New Canaan, Connecticut 06840 Financial Executives Institute
("CIEBA") since 1986, member of
CIEBA's Executive Committee since
1988 and its Chairman from 1991 to
1992; Assistant Treasurer of
International Business Machines
Incorporated ("IBM") and Chief
Investment Officer of IBM Retirement
Funds from 1986 until 1993; Member of
the Investment Advisory Committee of
the State of New York Common
Retirement Fund; Director, Duke
Management Company; Director, LaSalle
Street Fund.
</TABLE>

2
<PAGE> 5

- ---------------

(1) Each of the nominee and the other Directors is a director, trustee or member
of an advisory board of certain other investment companies for which FAM or
MLAM acts as investment adviser.

(2) Member of Audit Committee of the Board of Directors.

(3) Interested person, as defined in the Investment Company Act of 1940, as
amended (the "Investment Company Act"), of the Fund.

Committees and Board of Directors' Meetings. The Board of Directors has a
standing Audit Committee, which consists of the Directors who are not
"interested persons" of the Fund within the meaning of the Investment Company
Act. The principal purpose of the Audit Committee is to review the scope of the
annual audit conducted by the Fund's independent auditors and the evaluation by
such auditors of the accounting procedures followed by the Fund. The
non-interested Directors have retained independent legal counsel to assist them
in connection with these duties. The Board of Directors does not have a
nominating committee.

During the year ended June 30, 1995, the Board of Directors held 4 meetings
and the Audit Committee held 4 meetings. Each of the Directors attended at least
75% of the total number of meetings of the Board of Directors and, if a member,
the total number of meetings of the Audit Committee held during such period.

Compliance with Section 16(a) of the Securities Exchange Act of
1934. Section 16(a) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), requires the Fund's officers, directors and persons who own
more than ten percent of a registered class of the Fund's equity securities, to
file reports of ownership and changes in ownership on Forms 3, 4 and 5 with the
Securities and Exchange Commission ("SEC") and the New York Stock Exchange.
Officers, directors and greater than ten percent stockholders are required by
SEC regulations to furnish the Fund with copies of all Forms 3, 4 and 5 they
file.

Based solely on the Fund's review of the copies of such forms, and
amendments thereto, furnished to it during or with respect to its most recent
fiscal year, and written representations from certain reporting persons that
they were not required to file Form 5 with respect to the most recent fiscal
year, the Fund believes that all of its officers, directors, greater than ten
percent beneficial owners and other persons subject to Section 16 of the
Exchange Act because of the requirements of Section 30 of the Investment Company
Act, i.e., any

3
<PAGE> 6

advisory board member, investment adviser or affiliated person of the Fund's
investment adviser, have complied with all filing requirements applicable to
them with respect to transactions during the Fund's most recent fiscal year.

Interested Persons. The Fund considers Mr. Zeikel to be an "interested
person" of the Fund within the meaning of Section 2(a)(19) of the Investment
Company Act as a result of the position he holds with FAM and its affiliates.
Mr. Zeikel is the President of the Fund and the President of FAM and MLAM.

Compensation of Directors. FAM, the investment adviser, pays all
compensation of all officers of the Fund and all Directors of the Fund who are
affiliated with ML&Co. or its subsidiaries. The Fund pays each Director not
affiliated with the investment adviser a fee of $5,000 per year plus $250 per
regular meeting attended, together with such Director's actual out-of-pocket
expenses relating to attendance at those meetings. The Fund also pays each
member of its Audit Committee, which consists of all of the non-affiliated
Directors, an additional fee of $1,000 per year plus $500 per Audit Committee
meeting attended, together with such Director's out-of-pocket expenses relating
to attendance at such meetings. These fees and expenses aggregated $45,184 for
the year ended June 30, 1995.

The following table sets forth for the fiscal year ended June 30, 1995
compensation paid by the Fund to the non-affiliated Directors and, for the
calendar year ended December 31, 1995, the aggregate compensation paid by all
investment companies advised by FAM and its affiliate, MLAM ("FAM/MLAM Advised
Funds"), to the non-affiliated Directors.

<TABLE>
<CAPTION>
AGGREGATE
COMPENSATION
PENSION OR FROM FUND AND
RETIREMENT BENEFITS FAM/MLAM ADVISED
NAME OF COMPENSATION ACCRUED AS PART FUNDS PAID TO
DIRECTOR FROM FUND OF FUND EXPENSES DIRECTORS
- ------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Joe Grills(1) $9,000 None $190,383
Walter Mintz(1) $9,000 None $157,325
Melvin R. Seiden(1) $9,000 None $157,325
Stephen B. Swensrud(1) $9,000 None $165,325
Harry Woolf(1)(2) $9,000 None $157,325
</TABLE>

- ---------------

(1) In addition to the Fund, the Directors serve on the boards of other FAM/MLAM
Advised Funds as follows: Mr. Grills (36 funds and portfolios); Mr. Mintz
(36 funds and portfolios); Mr. Seiden (36 funds and portfolios); Mr.
Swensrud (46 funds and portfolios); and Mr. Woolf (36 funds and portfolios).

(2) Mr. Woolf is retiring from the Board of Directors pursuant to the Fund's
retirement policy and is not a nominee for election to the Board of
Directors.

4
<PAGE> 7

Officers of the Fund. The Board of Directors has elected seven officers of
the Fund. The following table sets forth information concerning each of these
officers:

<TABLE>
<CAPTION>
OFFICER
SINCE
NAME AND PRINCIPAL OCCUPATION OFFICE AGE tD-
-------------------------------------------------- ------------------------- ---
<S> <C> <C> <C>
Arthur Zeikel..................................... President 63 1989
President of FAM (which term as used herein
includes its corporate predecessors) since
1977; President of MLAM (which term as used
herein includes its corporate predecessors)
since 1977; President and Director of
Princeton Services since 1993; Executive Vice
President of ML&Co. and Merrill Lynch since
1990 and a Senior Vice President of Merrill
Lynch from 1985 to 1990; Director of MLFD.
Terry K. Glenn.................................... Executive Vice President 55 1989
Executive Vice President of FAM and MLAM since
1983; Executive Vice President and Director
of Princeton Services since 1993; President
of MLFD since 1986 and Director thereof since
1991; President of Princeton Administrators,
L.P. since 1988.
Vincent R. Giordano............................... Vice President 51 1989
Senior Vice President of FAM and MLAM since
1984.
Kenneth A. Jacob.................................. Vice President 44 1989
Vice President of FAM and MLAM since 1984.
Donald C. Burke................................... Vice President 35 1993
Vice President and Director of Taxation of MLAM
since 1990; Employee of Deloitte & Touche LLP
from 1982 to 1990.
Gerald M. Richard................................. Treasurer 46 1989
Senior Vice President and Treasurer of FAM and
MLAM since 1984; Senior Vice President and
Treasurer of Princeton Services since 1993;
Vice President of MLFD since 1981 and
Treasurer since 1984.
Mark B. Goldfus................................... Secretary 49 1989
Vice President of FAM and MLAM since 1985.
</TABLE>

Stock Ownership. At November 8, 1995, the Directors and officers of the
Fund as a group (12 persons) owned an aggregate of less than 1/4 of 1% of the
common stock of the Fund outstanding at such date. At such date, Mr. Zeikel, a
Director of the Fund and the officers of the Fund owned an aggregate of less
than 1% of the outstanding shares of common stock of ML&Co.

5
<PAGE> 8

ITEM 2. SELECTION OF INDEPENDENT AUDITORS

The Board of Directors of the Fund, including a majority of the Directors
who are not interested persons of the Fund, has selected the firm of Deloitte &
Touche LLP ("D&T") to examine the financial statements of the Fund for the
current fiscal year. The Fund knows of no direct or indirect financial interest
of D&T in the Fund. Such appointment is subject to ratification or rejection by
the stockholders of the Fund. Unless a contrary specification is made, the
accompanying proxy will be voted in favor of ratifying the selection of such
auditors.

D&T also acts as independent auditors for ML&Co. and all of its
subsidiaries and for the other investment companies for which FAM or MLAM acts
as investment adviser. The fees received by D&T from these other entities are
substantially greater, in the aggregate, than the total fees received by it from
the Fund. The Board of Directors of the Fund considered the fact that D&T has
been retained as the independent auditors for ML&Co. and the other entities
described above in its evaluation of the independence of D&T with respect to the
Fund.

Representatives of D&T are expected to be present at the Meeting and will
have the opportunity to make a statement if they so desire and to respond to
questions from stockholders.

ADDITIONAL INFORMATION

The expenses of preparation, printing and mailing of the enclosed form of
proxy and accompanying Notice and Proxy Statement will be borne by the Fund. The
Fund will reimburse banks, brokers and others for their reasonable expenses in
forwarding proxy solicitation material to the beneficial owners of the shares of
the Fund. The Fund may also hire proxy solicitors at the expense of the Fund.

In order to obtain the necessary quorum at the Meeting (i.e., a majority of
the shares of the Fund entitled to vote at the Meeting, present in person or by
proxy), supplementary solicitation may be made by mail, telephone, telegraph or
personal interview by officers of the Fund. It is anticipated that the cost of
such supplementary solicitation, if any, will be nominal.

Broker-dealer firms, including Merrill Lynch, holding Fund shares in
"street name" for the benefit of their customers and clients will request the
instructions of such customers and clients on how to vote their shares on each
Item before the Meeting. The Fund understands that, under the rules of the New
York Stock Exchange, such broker-dealer firms may, without instructions from
their customers and clients, grant authority to the proxies designated to vote
on the election of a Director (Item 1) and ratification of the selection of
independent auditors (Item 2) if no instructions have been received prior to the
date specified in the broker-dealer firm's request for voting instructions.
Accordingly, the Fund will include shares held of record by broker-dealers as to
which such authority has been granted in its tabulation of the total number of
votes present for purposes of determining whether the necessary quorum of
shareholders exists. Proxies which are returned but which are marked "abstain"
or on which a broker-dealer has declined to vote on any proposal ("broker
non-votes") will be counted as present for the purpose of a quorum. Merrill
Lynch has advised that it intends to exercise discretion over shares held in its
name for which no instructions are received by voting such shares in the same
proportion as it has voted shares for which it has received instructions.
Abstentions and broker non-votes will not be counted as votes cast. Abstentions
and broker non-votes, therefore, will not have an effect on the vote on Items 1
or 2.

6
<PAGE> 9

ADDRESS OF INVESTMENT ADVISER

The principal office of FAM is located at 800 Scudders Mill Road,
Plainsboro, New Jersey 08536.

ANNUAL REPORT DELIVERY

The Fund will furnish, without charge, a copy of its annual report for the
fiscal year ended June 30, 1995, to any stockholder upon request. Such requests
should be directed to Apex Municipal Fund, Inc., P.O. Box 9011, Princeton, New
Jersey 08543-9011, Attention: Mark B. Goldfus, Secretary or to 1-800-456-4587
ext. 123.

STOCKHOLDER PROPOSALS

If a stockholder intends to present a proposal at the 1996 Annual Meeting
of Stockholders of the Fund which is anticipated to be held in December 1996,
and desires to have the proposal included in the Fund's proxy statement and form
of proxy for that meeting, the stockholder must deliver the proposal to the
offices of the Fund by July 19, 1996.

By Order of the Board of Directors

MARK B. GOLDFUS
Secretary
Dated: November 16, 1995

7
<PAGE> 10

APEX MUNICIPAL FUND, INC.
P.O. BOX 9011
PRINCETON, NEW JERSEY 08543-9011

PROXY

THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS

The undersigned hereby appoints Arthur Zeikel, Terry K. Glenn and Mark B.
Goldfus as proxies, each with the power to appoint his substitute, and hereby
authorizes each of them to represent and to vote, as designated on the reverse
side hereof, all the Common Stock of Apex Municipal Fund, Inc. (the "Fund")
held of record by the undersigned on November 8, 1995, at the annual meeting of
stockholders of the Fund to be held on December 15, 1995 or any adjournment
thereof.

THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED
HEREIN BY THE UNDERSIGNED STOCKHOLDER. IF NO DIRECTION IS MADE, THIS PROXY
WILL BE VOTED FOR PROPOSALS 1 AND 2.

(Continued and to be signed on the reverse side)

<TABLE>
<S> <C> <C> <C>
1. ELECTION OF DIRECTOR FOR the nominee listed / / WITHHOLD AUTHORITY to vote for
CLASS III NOMINEES TO SERVE UNTIL the nominee listed / /
1998 ANNUAL MEETING OF STOCKHOLDERS:
ARTHUR ZEIKEL

2. Proposal to ratify the
selection of Deloitte &
Touche LLP as the independent
auditors of the Fund to serve
for the current fiscal year. FOR / / AGAINST / / ABSTAIN / /

3. In the discretion of such
proxies, upon such other
business as may properly come
before the meeting or any
adjournment thereof.
</TABLE>

Please sign exactly as name appears hereon.
When shares are held by joint tenants, both
should sign. When signing as attorney or as
executor, administrator, trustee or guardian,
please give full title as such. If a corporation,
please sign in full corporate name by president
or other authorized officer. If a partnership,
please sign in partnership name by authorized
persons.

Dated: , 1995
---------------------

X
---------------------------------
Signature

X
---------------------------------
Signature, if held jointly

PLEASE MARK BOXES /FILL IN COMPLETELY/ OR /X/ IN BLUE OR BLACK INK. SIGN, DATE
AND RETURN THE PROXY CARD PROMPTLY USING THE ENCLOSED ENVELOPE.