<PAGE>
As filed with the Securities and Exchange Commission on July 14, 1997
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:
/x/ Preliminary Proxy Statement / / Confidential, for Use of
the Commission Only
/ / Definitive Proxy Statement (as permitted by Rule
14a-6(e)(2))
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
MERRILL LYNCH HIGH INCOME MUNICIPAL BOND FUND, INC.
- ----------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
- ----------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of filing fee (Check the appropriate box):
/x/ No fee required.
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
- -------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
- -------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which
the filing fee is calculated and state how it was determined.):
- -------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
- -------------------------------------------------------------------------
(5) Total fee paid:
- -------------------------------------------------------------------------
/ / Fee paid previously with preliminary materials.
- -------------------------------------------------------------------------
/ / Check box if any part of the fee is offset as provided by Exchange
<PAGE>
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:
- -------------------------------------------------------------------------
<PAGE>
MERRILL LYNCH HIGH INCOME MUNICIPAL BOND FUND, INC.
P.O. BOX 9011
PRINCETON, NEW JERSEY 08543-9011
---------------------
NOTICE OF 1997 SPECIAL MEETING OF STOCKHOLDERS
SEPTEMBER 18, 1997
------------------------
TO THE STOCKHOLDERS OF MERRILL LYNCH HIGH INCOME MUNICIPAL BOND FUND, INC.:
Notice is hereby given that the 1997 Special Meeting of Stockholders (the
"Meeting") of Merrill Lynch High Income Municipal Bond 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 Thursday, September 18, 1997 at
A.M. for the following purposes:
(1) To elect a Board of Directors to serve for the ensuing year;
(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;
(3) To consider and act upon a proposal to amend the Fund's fundamental
investment restriction regarding the Fund's health care industry
concentration policy; and
(4) 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 July 25, 1997 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 September 4, 1997 at the office of the Fund, 800 Scudders Mill Road,
Plainsboro, New Jersey. You are cordially invited to attend the Meeting.
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. The enclosed proxy is being solicited on
behalf of the Board of Directors of the Fund.
By Order of the Board of Directors
PATRICK D. SWEENEY
SECRETARY
Plainsboro, New Jersey
Dated: July , 1997
<PAGE>
PROXY STATEMENT
------------------------
MERRILL LYNCH HIGH INCOME MUNICIPAL BOND FUND, INC.
P.O. BOX 9011
PRINCETON, NEW JERSEY 08543-9011
---------------------
1997 SPECIAL MEETING OF STOCKHOLDERS
SEPTEMBER 18, 1997
INTRODUCTION
This Proxy Statement is furnished in connection with the solicitation of
proxies on behalf of the Board of Directors of Merrill Lynch High Income
Municipal Bond Fund, Inc., a Maryland corporation (the "Fund"), to be voted at
the 1997 Special 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 Thursday, September 18, 1997 at A.M. The
approximate mailing date of this Proxy Statement is July , 1997.
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 Board of Directors to serve for the ensuing
year, for the ratification of the selection of independent auditors to serve for
the Fund's current fiscal year and for amending the Fund's fundamental
investment restriction regarding its health care industry concentration policy.
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 July 25, 1997 as
the record date (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 the Record Date, the
Fund had outstanding shares of common stock, par value $.10 per share
("Common Stock"). To the knowledge of the Fund, as of the Record Date, no person
is the beneficial owner of more than five percent of the outstanding shares of
Common Stock.
The Board of Directors of the Fund knows of no business other than that
mentioned in Items 1, 2 and 3 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>
ITEM 1. ELECTION OF DIRECTORS
At the Meeting, the Board of Directors will be elected to serve until their
successors are elected and qualified. It is intended that all properly executed
proxies will be voted (unless such authority has been withheld in the proxy) in
favor of the persons designated as Directors to be selected by holders of Common
Stock.
The Board of Directors of the Fund knows of no reason why any of these
nominees will be unable to serve, but in the event of any such unavailability,
the proxies received will be voted for such substitute nominee or nominees as
the Board of Directors may recommend.
Certain information concerning the nominees, including their designated
classes, is set forth as follows:
<TABLE>
<CAPTION>
SHARES
BENEFICIALLY
OWNED AT
PRINCIPAL OCCUPATIONS DURING PAST DIRECTOR THE RECORD
NAME AND ADDRESS AGE FIVE YEARS AND PUBLIC DIRECTORSHIP(1) SINCE DATE
- ----------------------------------------- --- ----------------------------------------- ----------- ---------------
<S> <C> <C> <C> <C>
Ronald W. Forbes(1)(2)................... 56 Professor of Finance, School of Business, 1990 448
1400 Washington Avenue State University of New York at Albany,
Albany, New York 12222 since 1989.
Cynthia A. Montgomery(1)(2).............. 44 Professor, Harvard Business School since 1994 0
Harvard Business School 1989; Associate Professor, J.L. Kellogg
Soldiers Field Road Graduate School of Management,
Boston, Massachusetts 02163 Northwestern University from 1985 to
1989; Assistant Professor, Graduate
School of Business Administration, The
University of Michigan from 1979 to 1985;
Director, UNUM Corporation since 1990 and
Director of Newell Co. since 1995.
Charles C. Reilly(1)(2).................. 66 Self-employed financial consultant since 1990 0
9 Hampton Harbor Road 1990; President and Chief Investment
Hampton Bays, New York 11946 Officer of Verus Capital, Inc. from 1979
to 1990; Senior Vice President of Arnhold
and S. Bleichroeder, Inc. from 1973 to
1990; Adjunct Professor, Columbia
University Graduate School of Business
from 1990 to 1991; Adjunct Professor,
Wharton School, The University of
Pennsylvania from 1989 to 1990; Partner,
Small Cities Cable Television since 1986.
</TABLE>
2
<PAGE>
<TABLE>
<CAPTION>
SHARES
BENEFICIALLY
OWNED AT
PRINCIPAL OCCUPATIONS DURING PAST DIRECTOR THE RECORD
NAME AND ADDRESS AGE FIVE YEARS AND PUBLIC DIRECTORSHIP(1) SINCE DATE
- ----------------------------------------- --- ----------------------------------------- ----------- ---------------
<S> <C> <C> <C> <C>
Kevin A. Ryan(1)(2)...................... 64 Founder and current Director of The 1992 0
127 Commonwealth Avenue Boston University Center for the
Chestnut Hill, Advancement of Ethics and Character;
Massachusetts 02167 Professor of Education at Boston
University since 1982; formerly taught on
the faculties of The University of
Chicago, Stanford University and Ohio
State University.
Richard R. West (1)(2)................... 59 Professor of Finance since 1984, and Dean 1990 0
Box 604 from 1984 to 1993, and currently Dean
Genoa, Nevada 89411 Emeritus of New York University, Leonard
N. Stern School of Business
Administration; Director of Bowne & Co.,
Inc. (financial printers), Vornado, Inc.
(real estate holding company) and
Alexander's Inc. (real estate company).
Arthur Zeikel(1)*........................ 65 President of Fund Asset Management, L.P. 1990 0
P.O. Box 9011 ("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; Director of Merrill Lynch
Funds Distributor, Inc. (the
"Distributor") since 1977.
</TABLE>
- ------------------------
(1) Each of the nominees is a director, trustee or member of an advisory board
of certain other investment companies for which MLAM, FAM or their
affiliates act as investment adviser. See "Compensation of Directors" below.
(2) Member of Audit Committee of the Board of Directors.
* Interested person, as defined in the Investment Company Act of 1940, as
amended, of the Fund.
3
<PAGE>
COMMITTEE AND BOARD OF DIRECTORS MEETINGS. The Board of Directors has a
standing Audit Committee which consists of Directors who are not "interested
persons" of the Fund within the meaning of the Investment Company Act of 1940,
as amended (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 fiscal year ended August 31, 1996, the Board of Directors held
meetings and the Audit Committee held meetings. All 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 (the "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 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. However, Mr. Forbes inadvertently failed to file a timely report to
disclose reinvestment of Fund dividends during the Fund's fiscal year ended
August 31, 1996. This transaction was accurately reflected in a subsequent
filing.
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 because of the positions he holds with MLAM and its affiliates. Mr.
Zeikel is the President of the Fund and the President of MLAM and FAM.
COMPENSATION OF DIRECTORS. MLAM, the Fund's investment adviser, pays all
compensation to 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 MLAM a fee of $2,000 per year plus $400 per meeting attended,
together with such Director's actual out-of-pocket expenses relating to
attendance at meetings. The Fund also pays each member of its Audit Committee,
which consists of all of the non-interested Directors, a fee of $1,000 per year,
together with such Director's out-of-pocket expenses relating to attendance at
meetings. The Chairman of the Audit Committee receives an additional annual fee
of $1,000. These fees and expenses aggregated $24,597 for the fiscal year ended
August 31, 1996.
The following table sets forth for the fiscal year ended August 31, 1996
compensation paid by the Fund to the non-interested Directors and, for the
calendar year ended December 31, 1996, the aggregate
4
<PAGE>
compensation paid by all investment companies advised by MLAM and its affiliate,
FAM ("MLAM/FAM Advised Funds"), to the non-interested Directors.
<TABLE>
<CAPTION>
PENSION OR RETIREMENT AGGREGATE COMPENSATION FROM
BENEFITS ACCRUED AS FUND AND FAM/MLAM
COMPENSATION PART ADVISED FUNDS PAID TO
NAME OF DIRECTOR FROM FUND OF FUND EXPENSES DIRECTORS
- ------------------------------------------- ------------- ----------------------- -----------------------------
<S> <C> <C> <C>
Ronald W. Forbes(1)........................ $ 4,600 None $ 142,500
Cynthia A. Montgomery(1)................... $ 4,600 None $ 142,500
Charles C. Reilly(1)....................... $ 4,600 None $ 293,833
Kevin A. Ryan(1)........................... $ 4,600 None $ 142,500
Richard R. West(1)......................... $ 5,600 None $ 272,833
</TABLE>
- ------------------------
(1) The Directors serve on the Boards of other MLAM/FAM Advised Funds as
follows: Mr. Forbes (25 registered investment companies consisting of 38
portfolios); Ms. Montgomery (25 registered investment companies consisting
of 38 portfolios); Mr. Reilly (43 registered investment companies
consisting of 56 portfolios); Mr. Ryan (25 registered investment companies
consisting of 38 portfolios); and Mr. West (44 registered investment
companies consisting of 66 portfolios).
OFFICERS OF THE FUND. The Board of Directors has elected eight officers of
the Fund. The following sets forth information concerning each of these
officers:
<TABLE>
<CAPTION>
OFFICER
NAME AND PRINCIPAL OCCUPATION OFFICE AGE SINCE
- --------------------------------------------------------------------- ---------------------------- --- -----------
<S> <C> <C> <C>
Arthur Zeikel........................................................ President 65 1990
President of MLAM since 1977; President of FAM since 1977;
President and Director of Princeton Services since 1993; Executive
Vice President of ML&Co. since 1990; Director of the Distributor
since 1977.
Terry K. Glenn....................................................... Executive Vice President 56 1990
Executive Vice President of MLAM and FAM since 1983; Executive Vice
President and Director of Princeton Services since 1993; President
of the Distributor since 1986 and Director thereof since 1991;
President of Princeton Administrators, L.P. since 1988.
Vincent R. Giordano.................................................. Vice President 52 1990
Senior Vice President of MLAM and FAM since 1984; Vice President of
MLAM from 1980 to 1984; Senior Vice President of Princeton Services
since 1993.
Kenneth A. Jacob..................................................... Vice President 46 1990
Vice President of MLAM and FAM since 1984.
Theodore R. Jaeckel, Jr.............................................. Vice President 37 1990
Vice President of MLAM since 1991.
Donald C. Burke...................................................... Vice President 37 1990
Vice President and Director of Taxation of MLAM since 1990.
</TABLE>
5
<PAGE>
<TABLE>
<CAPTION>
OFFICER
NAME AND PRINCIPAL OCCUPATION OFFICE AGE SINCE
- --------------------------------------------------------------------- ---------------------------- --- -----------
<S> <C> <C> <C>
Gerald M. Richard.................................................... Treasurer 48 1990
Senior Vice President and Treasurer of MLAM and FAM since 1984;
Senior Vice President and Treasurer of Princeton Services since
1993; Vice President of the Distributor since 1981; Treasurer since
1984.
Patrick D. Sweeney................................................... Secretary 43 1997
Vice President of MLAM since 1990.
</TABLE>
STOCK OWNERSHIP. At the Record Date, the Directors and officers of the Fund
as a group (12 persons) owned an aggregate of less than 1% of the Common Stock
of the Fund outstanding at such date. At such date, Mr. Zeikel, an officer and a
Director of the Fund, and the other officers of the Fund owned an aggregate of
less than 1% of the outstanding shares of common stock of ML&Co.
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"), independent auditors, to examine the financial statements of
the Fund for the current fiscal year. The Fund knows of no direct or indirect
financial interest of such firm 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 most other investment companies for which MLAM or FAM 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 such other entities 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.
ITEM 3. ADOPTION OF AMENDED FUNDAMENTAL
INVESTMENT RESTRICTION
The Fund has adopted investment restrictions that govern generally the
operations of the Fund. Investment restrictions that are deemed to be
fundamental may not be changed without a vote of the outstanding shares of
Common Stock of the Fund. The Fund is required to disclose in its prospectus, as
a fundamental policy, whether it will "concentrate" its investments in a
particular industry. A fund is considered to be concentrated in an industry when
it invests 25% or more of its assets in the securities of issuers in such
industry. A fund that adopts a policy of not concentrating its investments in a
particular industry is prohibited from making purchases within such industry in
excess of 25% of its assets, and a fund that has adopted a policy of
concentrating its investments in a particular industry must maintain at least
25% of its assets in the industry in which it has elected to concentrate. Except
in very limited and specific circumstances, none of which apply to the Fund, a
fund cannot adopt a "flexible" policy of switching back
6
<PAGE>
and forth between being concentrated and non-concentrated in a particular
industry. The Fund currently concentrates its investments in municipal bonds
issued to finance projects in the health care industry. The Board of Directors
of the Fund recommends amending the Fund's fundamental investment restrictions
to remove the Fund's required concentration in the health care industry.
At the time the Fund was organized in 1990, bonds and obligations issued to
finance not-for-profit hospitals and other health care facilities were a
significant source of high yield investments. In recent years there has been a
shift in health care providers in the United States, whereby many not-for-profit
hospitals and health care systems are being acquired by for-profit entities.
This trend appears to be continuing and, as a result, the issuance and
availability of tax-exempt health care-related bonds, which are rated in any one
of the medium and lower ratings categories of a nationally recognized
statistical rating organization or are unrated, have fallen dramatically. Based
on this trend in the health care industry, the Board of the Directors of the
Fund no longer believes that it is in the best interests of the Fund and its
shareholders for the Fund to maintain a policy of investing in at least 25% of
its assets in health care-related municipal bonds.
Currently, the Fund's health care industry concentration policy is set forth
in the following fundamental investment restriction, which provides that the
Fund may not:
Invest more than 25% of its total assets (taken at market value at
the time of each investment) in securities of issuers in a single
industry, except that the Fund will invest 25% or more of its
assets in Municipal Bonds issued to finance projects in the health
care industry. (For the purposes of this restriction, states,
municipalities and their political subdivisions are not considered
to be part of any industry.)
The revised investment restriction eliminates the exception for health care
industry bonds from the Fund's general concentration policy. The proposed
restriction was approved by the Board of Directors on June 11, 1997. Under the
proposed amended investment restriction, the Fund may not:
Invest more than 25% of its total assets (taken at market value at
the time of each investment) in securities of issuers in any
single industry. (For the purposes of this restriction, states,
municipalities and their political subdivisions are not considered
to be part of any industry.)
VOTE REQUIRED. The proposal to amend the Fund's fundamental investment
restriction requires the affirmative vote of a majority of the Fund's
outstanding Common Shares (which for this purpose and under the Investment
Company Act means the lesser of (i) 67% or more of the Common Shares present at
the Meeting, if more than 50% of the outstanding Common Shares are present or
represented by proxy, or (ii) more than 50% of the outstanding Common Shares).
If the proposed amendment to the Fund's fundamental investment restriction is
not approved by the stockholders of the Fund, the Fund will continue to
concentrate its investments in the health care industry. The Board recommends a
vote "FOR" Item 3.
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.
7
<PAGE>
In order to obtain the necessary quorum at the Meeting (i.e., a majority of
the shares of each class of the Fund's securities 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.
All shares represented by properly executed proxies, unless such proxies
have previously been revoked, will be voted at the Meeting in accordance with
the directions on the proxies; if no direction is indicated, the shares will be
voted "FOR" the Director nominees, "FOR" the ratification of D&T as independent
auditors and "FOR" amending the Fund's fundamental investment restriction
regarding its health care industry concentration policy.
Broker-dealer firms, including Merrill Lynch, Pierce, Fenner & Smith
Incorporated ("MLPF&S"), 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 Directors
(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. Broker-dealer firms,
including Merrill Lynch, will not be permitted to grant voting authority without
instructions with respect to the proposal to amend the Fund's fundamental
investment restriction (Item 3). 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 stockholders exists. Proxies that are returned but that 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 purposes of a
quorum. MLPF&S has advised that it intends to exercise discretion over shares
held in its name for which no instructions are received by voting such shares on
Items 1 and 2 in the same proportion as it has voted shares for which it has
received instructions. However, 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 and 2; however, abstentions and broker
non-votes will have the same effect as a vote against Item 3.
ADDRESS OF INVESTMENT ADVISER
The principal office of MLAM 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 AUGUST 31, 1996 TO ANY STOCKHOLDER UPON REQUEST. Such requests
should be directed to Merrill Lynch High Income Municipal Bond Fund, Inc., P.O.
Box 9011, Princeton, New Jersey 08543-9011, Attention: Patrick D. Sweeney,
Secretary or to 1-800-456-4587 ext. 123.
MEETINGS OF STOCKHOLDERS
The Fund's charter does not require that the Fund hold an annual meeting of
stockholders. The Fund will be required, however, to call special meetings of
stockholders in accordance with the requirements of the Investment Company Act
to seek approval of new management and investment advisory arrangements
8
<PAGE>
or of a change in the fundamental policies, objectives or restrictions of the
Fund. The Fund also would be required to hold a special stockholders' meeting to
elect new Board members at such time as less than a majority of the Board
members holding office have been elected by stockholders. The charter or by-laws
provide that a stockholders' meeting may be called at the request of 10% of the
outstanding shares of the Fund entitled to vote at such meeting, or by a
majority of the Board members.
By Order of the Board of Directors
PATRICK D. SWEENEY
SECRETARY
Dated: July , 1997
9
<PAGE>
MERRILL LYNCH HIGH INCOME MUNICIPAL BOND FUND, INC.
P.O. Box 9011
Princeton, New Jersey 08543-9011
P R O X Y
This proxy is solicited on behalf of the Board of Directors
The undersigned hereby appoints Arthur Zeikel, Terry K. Glenn and
Patrick D. Sweeney as proxies, each with the power to appoint his substitute,
and hereby authorizes them to represent and to vote, as designated on the
reverse hereof, all the common stock of Merrill Lynch High Income Municipal
Bond Fund, Inc. (the "Fund") held of record by the undersigned on July 25,
1997 at the special meeting of the stockholders of the Fund to be held on
September 18, 1997 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, 2 and 3.
(Continued and to be signed on the reverse side)
<PAGE>
<TABLE>
<S> <C> <C>
I. ELECTION OF DIRECTORS FOR all nominees listed below WITHHOLD AUTHORITY
(except as marked to the contrary below) / / to vote for all nominees listed below / /
</TABLE>
(INSTRUCTION: To withhold authority to vote for any individual nominee, strike
a line through the nominee's name in the list below.) Ronald W. Forbes, Cynthia
A. Montgomery, Charles C. Reilly, Kevin A. Ryan, Richard R. West, Arthur Zeikel
II. 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 / /
III. To consider and act upon a proposal to amend the Fund's fundamental
investment restriction regarding the Fund's health care industry concentration
policy.
FOR / / AGAINST / / ABSTAIN / /
IV. In the discretion of such proxies, upon such other business as may properly
come before the meeting or any adjournment thereof.
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 person.
Dated: _______________________, 1997
X __________________________________
Signature
X __________________________________
Signature, if held jointly
Please mark boxes / / or /x/ in blue or black ink. Sign, Date and Return the
Proxy Card Promptly Using the Enclosed Envelope.
