<PAGE>
CMA TREASURY FUND
------------------------------------
NOTICE OF MEETING OF SHAREHOLDERS
FEBRUARY 25, 1994
------------------------------------
TO THE SHAREHOLDERS OF
CMA TREASURY FUND
Notice is hereby given that a Meeting of Shareholders (the 'Meeting') of
CMA Treasury Fund (the 'Fund') will be held at the offices of Merrill Lynch
Asset Management, 800 Scudders Mill Road, Plainsboro, New Jersey on Friday,
February 25, 1994 at 9:00 A.M. for the following purposes:
(1) To elect six Trustees to serve for an indefinite term;
(2) To ratify or reject the selection of Deloitte & Touche as
independent auditors of the Fund for its fiscal year ending March
31, 1994; and
(3) To transact such other business as may properly come before the
Meeting or any adjournment thereof.
The Trustees have fixed the close of business on December 20, 1993 as the
record date for the determination of shareholders entitled to notice of and to
vote at the Meeting or any adjournment thereof.
A complete list of the shareholders of the Fund entitled to vote at the
Meeting will be available and open to the examination of any shareholder of the
Fund for any purpose germane to the Meeting during ordinary business hours from
and after February 11, 1994, at the office of the Fund, 800 Scudders Mill Road,
Plainsboro, New Jersey 08536. You are cordially invited to attend the Meeting.
Shareholders 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 that purpose. The enclosed proxy is being solicited on
behalf of the Board of Trustees of the Fund.
By Order of the Board of Trustees
ROBERT HARRIS
Secretary
Plainsboro, New Jersey
Dated: January 7, 1994
<PAGE>
PROXY STATEMENT
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CMA TREASURY FUND
BOX 9011
PRINCETON, NEW JERSEY 08543-9011
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MEETING OF SHAREHOLDERS
FEBRUARY 25, 1994
INTRODUCTION
This Proxy Statement is furnished in connection with the solicitation of
proxies on behalf of the Trustees of CMA Treasury Fund, a Massachusetts business
trust (the 'Fund'), to be voted at the Meeting of Shareholders of the Fund (the
'Meeting'), to be held at the offices of Merrill Lynch Asset Management
('MLAM'), 800 Scudders Mill Road, Plainsboro, New Jersey, on Friday, February
25, 1994 at 9:00 A.M. The approximate mailing date of this Proxy Statement is
January 12, 1994.
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 six Trustees named herein to serve for an
indefinite 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.
The Trustees have fixed the close of business on December 20, 1993 as the
record date for the determination of shareholders entitled to notice of and to
vote at the Meeting and at any adjournment thereof. Shareholders on the record
date will be entitled to one vote for each share held, with no shares having
cumulative voting rights. As of December 20, 1993, the Fund had outstanding
1,279,334,782 shares of beneficial interest, par value $0.10 per share. To the
knowledge of management of the Fund, no person owned beneficially more than 5%
of its outstanding shares at such date.
The Trustees of the Fund know 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>
ELECTION OF TRUSTEES
At the Meeting, six Trustees will be elected to serve for an indefinite
term until their successors are 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 the persons listed below.
There normally will be no meeting of shareholders for the purpose of
electing Trustees unless and until such time as less than a majority of the
Trustees holding office have been elected by shareholders, at which time the
Trustees then in office will call a special meeting of shareholders for the
election of Trustees. Shareholders may, in accordance with the terms of the
Declaration of Trust of the Fund, cause a meeting to be held for the purpose of
voting on the removal of Trustees at the request of 10% of the outstanding
shares of the Fund. A Trustee may be removed by a vote of the holders of at
least two-thirds of the shares of the Fund entitled to vote on the matter. See
'Additional Information--Meetings of Stockholders' below.
Each nominee listed below has consented to serve as a Trustee. The Trustees
of the Fund know 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 Trustees may recommend.
Certain information concerning the nominees is set forth below:
<TABLE>
<CAPTION>
SHARES OF
THE FUND
PRINCIPAL OCCUPATIONS BENEFICIALLY
DURING PAST FIVE YEARS TRUSTEE OWNED AT
NAME AND ADDRESS OF NOMINEE AGE AND PUBLIC DIRECTORSHIPS(1) SINCE DECEMBER 20, 1993
- -------------------------------------- ---- ----------------------------------------- -------- ------------------
<S> <C> <C> <C> <C>
Ronald W. Forbes(1)(2) ............... 53 Professor of Finance, School of Busi- 1991 -0-
School of Business BA 309 ness, State University of New York at
State University of New York Albany, since 1989, and Associate
at Albany Professor prior thereto; Member, Task
1400 Washington Avenue Force on Municipal Securities Markets,
Albany, New York 12222 Twentieth Century Fund.
Cynthia A. Montgomery(1) ............. 41 Professor, Harvard Business School, since -- -0-
Harvard Business School 1989; Associate Professor, J.L. Kellogg
Soldiers Field Road Graduate School of Management,
Boston, Massachusetts 02163 Northwestern University, 1985-1989;
Assistant Professor, Graduate School of
Business Administration, University of
Michigan, 1979-1985; Director, UNUM
Corporation.
Charles C. Reilly(1)(2) .............. 62 President and Chief Investment Officer of 1991 -0-
9 Hampton Harbor Road Verus Capital, Inc. from 1979 to 1990;
Hampton Bays, New York 11946 Senior Vice President of Arnhold and S.
Bleichroeder, Inc. from 1973 to 1990;
Adjunct Professor, Columbia University
Graduate School of Business since 1990;
Adjunct Professor, Wharton School,
University of Pennsylvania, 1990; Di-
rector, Harvard Business School Alumni
Association.
Kevin A. Ryan(1)(2) .................. 61 Professor of Education at Boston 1992 -0-
127 Commonwealth Avenue University since 1982; Founder and
Chestnut Hill, Massachusetts 02167 current Director of The Boston Uni-
versity Center for the Advancement of
Ethics and Character.
</TABLE>
2
<PAGE>
<TABLE>
<CAPTION>
SHARES OF
THE FUND
PRINCIPAL OCCUPATIONS BENEFICIALLY
DURING PAST FIVE YEARS TRUSTEE OWNED AT
NAME AND ADDRESS OF NOMINEE AGE AND PUBLIC DIRECTORSHIPS(1) SINCE DECEMBER 20, 1993
- -------------------------------------- ---- ----------------------------------------- -------- ------------------
<S> <C> <C> <C> <C>
Richard R. West(1)(2) ................ 55 Professor of Finance, and Dean from 1984 1991 -0-
482 Tepi Drive to 1993, New York University Leonard N.
Southbury, Connecticut 06488 Stern School of Business
Administration; Professor of Finance at
the Amos Tuck School of Business
Administration from 1976 to 1984 and
Dean from 1976 to 1983; Director of
Vornado, Inc. (real estate
holding company), Bowne & Co., Inc.
(printer), Smith Corona Corporation
(manufacturer of typewriters and word
processors) and Alexander's Inc.
Arthur Zeikel(1)(3) .................. 61 President and Chief Investment Officer of 1991 -0-
P.O. Box 9011 Fund Asset Management ('FAM' or the
Princeton, New Jersey 08543-9011 'Investment Adviser') since 1977 and
Director thereof from 1977 to 1993;
Director of Princeton Services, Inc.
('Princeton Services') since 1993;
President of MLAM since 1977, Chief
Investment Officer thereof since 1976
and Director thereof from 1976 to 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 Senior Vice President thereof
from 1985 to 1990.
</TABLE>
- ------------------
(1) Each of the nominees is a director or trustee of certain other investment
companies for which MLAM or FAM acts as investment adviser. See 'Merrill
Lynch Investment Company Directorships' below.
(2) Member of Audit and Nominating Committee of the Board of Trustees.
(3) Interested person, as defined in the Investment Company Act of 1940, of the
Fund.
Committee and Trustees' Meetings. The Board of Trustees has a standing
Audit and Nominating Committee which consists of the Trustees who are not
'interested persons' of the Fund within the meaning of the Investment Company
Act of 1940. The purposes of the Audit and Nominating Committee are (i) to
review the scope of the annual audit conducted by the Fund's independent
accountants and the evaluation by such accountants of the accounting procedures
followed by the Fund, (ii) to consider matters generally within the
responsibility of the non-interested directors of investment companies under the
Investment Company Act of 1940 and (iii) to select and nominate the Trustees who
are not 'interested persons' of the Fund as defined in the Investment Company
Act of 1940. The Audit and Nominating Committee generally will not consider
nominees recommended by shareholders of the Fund.
3
<PAGE>
During the Fund's fiscal year ended March 31, 1993, the Trustees held four
meetings and the Audit and Nominating Committee held five meetings. Each Trustee
nominated for election who was a Trustee during such fiscal year attended at
least 75% of the aggregate of the number of these meetings of the Trustees and,
if a member, of the Audit and Nominating Committee held during the year.
Interested Persons. The Fund considers one of its Trustees, Mr. Zeikel, to
be an 'interested person' of the Fund within the meaning of Section 2(a)(19) of
the Investment Company Act of 1940. Mr. Zeikel is the President of the Fund, the
President of FAM and MLAM, and a Director of Princeton Services, the general
partner of FAM and MLAM.
Compensation of Trustees. FAM, the investment adviser, pays all
compensation of all officers of the Fund and all Trustees of the Fund who are
affiliated with ML & Co. or its subsidiaries. The Fund presently pays each
Trustee not affiliated with the investment adviser an annual fee of $2,000 plus
$800 per meeting attended and pays all Trustees' actual out-of-pocket expenses
relating to attendance at meetings. Each member of the Audit and Nominating
Committee receives an annual fee of $1,000 and the chairman of such committee
receives an annual fee of $1,000. The aggregate fees and expenses paid to the
unaffiliated Trustees totaled $38,669 for the fiscal year ended March 31, 1993.
Merrill Lynch Investment Company Directorships. FAM and MLAM act as the
investment adviser for over 90 other registered investment companies. Mr. Zeikel
is a trustee or director of each of these companies except for Merrill Lynch
Series Fund, Inc., Merrill Lynch Institutional Intermediate Fund, Merrill Lynch
Funds for Institutions Series and Merrill Lynch Institutional Tax-Exempt Fund.
Each of the nominees is a director or trustee of Merrill Lynch Utility Income
Fund, MuniVest Fund, Inc., MuniVest Fund II, Inc., Senior High Income Portfolio,
Inc., Senior High Income Portfolio II, Inc., Taurus MuniCalifornia Holdings,
Inc. and Taurus MuniNewYork Holdings, Inc. Messrs. Forbes, Reilly, Ryan and West
are trustees or directors of and Ms. Montgomery is nominated to be a trustee or
director of CMA Money Fund, CMA Tax-Exempt Fund, CMA Government Securities Fund,
CMA Multi-State Municipal Series Trust, CBA Money Fund, Merrill Lynch Strategic
Dividend Fund, Merrill Lynch Municipal Series Trust, Merrill Lynch Corporate
Bond Fund, Inc., Merrill Lynch Municipal Bond Fund, Inc., The Corporate Fund
Accumulation Program, Inc., The Municipal Fund Accumulation Program, Inc.,
Merrill Lynch Prime Fund, Inc., Merrill Lynch Global Utility Fund, Inc., Merrill
Lynch High Income Municipal Bond Fund, Inc., and Merrill Lynch Fund for
Tomorrow, Inc. In addition, Messrs. Reilly and West are directors of Merrill
Lynch Healthcare Fund, Inc., Merrill Lynch International Holdings, Inc., Merrill
Lynch Latin America Fund, Inc., Merrill Lynch Short-Term Global Income Fund,
Inc., Merrill Lynch Technology Fund, Inc., Merrill Lynch Global Bond Fund for
Investment and Retirement, Merrill Lynch Global Allocation Fund, Inc., Merrill
Lynch Pacific Fund, Inc., Merrill Lynch Developing Capital Markets Fund, Inc.,
Merrill Lynch EuroFund, Merrill Lynch Dragon Fund, Inc., Merrill Lynch
International Equity Fund, and Merrill Lynch Americas Income Fund, Inc.
Officers of the Fund. The Board of Trustees has elected nine 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 61 1991
President and Chief Investment Officer of FAM since 1977 and Director thereof
from 1977 to 1993; Director of Princeton Services since 1993; President of
MLAM since 1977, Chief Investment Officer thereof since 1976 and Director
thereof from 1976 to 1993; an Executive Vice
</TABLE>
4
<PAGE>
<TABLE>
<CAPTION>
OFFICER
NAME AND PRINCIPAL OCCUPATION OFFICE AGE SINCE
- -------------------------------------------------------------------------------- --------------- ---- --------
<S> <C> <C> <C>
President of ML & Co. since 1990; an Executive Vice President of Merrill Lynch
since 1990 and a Senior Vice President from 1985 to 1990.
Terry K. Glenn ................................................................. Executive Vice 53 1991
Executive Vice President of FAM and MLAM since 1983 and Director thereof from President
1992 to 1993; Director of Princeton Services since 1993; President of Merrill
Lynch Funds Distributor, Inc. (the 'Distributor') since 1986 and Director
thereof since 1991; President of Princeton Administrators.
Joseph T. Monagle .............................................................. Senior Vice 45 1991
Senior Vice President of FAM and MLAM since 1990; Vice President of MLAM from President
1978 to 1990.
Donald C. Burke ................................................................ Vice President 33 1993
Vice President of MLAM since 1990; employee of Deloitte & Touche from 1982 to
1990.
Linda B. Costanzo .............................................................. Vice President 43 1991
Vice President of MLAM since 1989.
Kevin J. McKenna ............................................................... Vice President 36 1991
Vice President of MLAM since 1985.
Patrick Maldari ................................................................ Vice President 31 1991
Vice President of MLAM since 1988.
Gerald M. Richard .............................................................. Treasurer 44 1991
Senior Vice President and Treasurer of FAM and MLAM since 1984; Treasurer of
the Distributor since 1984 and Vice President since 1981.
Robert Harris .................................................................. Secretary 41 1991
Vice President of MLAM since 1984; Secretary of the Distributor since 1982.
</TABLE>
Share Ownership. On December 20, 1993, the Trustees and officers of the
Fund as a group (13 persons) owned an aggregate of less than 1/4 of 1% of the
outstanding shares of beneficial interest of the Fund. Mr. Zeikel, a Trustee of
the Fund, and the officers of the Fund owned on December 20, 1993, an aggregate
of less than 1/4 of 1% of the outstanding shares of Common Stock of ML & Co.
SELECTION OF INDEPENDENT AUDITORS
At their meeting on December 8, 1993, the Trustees of the Fund, including a
majority of the Trustees who are not interested persons of the Fund, selected
the firm of Deloitte & Touche ('D&T'), independent auditors, to examine the
financial statements of the Fund for the fiscal year ending March 31, 1994. 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 shareholders 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 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 Trustees considered the fact that D&T has been retained as the
independent auditors for ML & Co. and the other entities described above in
their evaluation of the independence of D&T with respect to the Fund.
5
<PAGE>
Representatives of D&T are expected to be present at the Meeting and will
have the opportunity to respond to questions from shareholders and to make a
statement if they so desire.
THE INVESTMENT ADVISORY AGREEMENT
FAM acts as the investment adviser for the Fund and provides the Fund with
management services pursuant to an investment advisory agreement dated April 1,
1991 (the 'Investment Advisory Agreement'). FAM has acted as the investment
adviser for the Fund since the Fund commenced operations on April 15, 1991.
On June 29, 1992, the shareholders of the Fund approved the continuance of
the Investment Advisory Agreement. On June 2, 1993, the Board of Trustees of the
Fund, including a majority of the Trustees who are not interested persons of the
Fund, approved the continuance of the Investment Advisory Agreement for a period
of one year. In their consideration of this matter, the Trustees received
extensive information relating to, among other things, the nature, quality and
extent of the advisory, administrative and other services provided to the Fund
by FAM and its affiliates (including Merrill Lynch), comparative data with
respect to the advisory and management fees paid by other money market funds,
the operating expenses and expense ratio of the Fund as compared to such funds
and the performance of the Fund as compared to the performance of such other
money market funds. The Trustees also have received information as to the costs
of FAM and its affiliates for providing services to the Fund and to the Cash
Management Account financial service program of Merrill Lynch of which the Fund
is a part.
INFORMATION CONCERNING FAM
Effective January 1, 1994, FAM was reorganized as a Delaware limited
partnership. FAM (the general partner of which is Princeton Services, a
wholly-owned subsidiary of ML & Co.) is owned and controlled by ML & Co. and is
located at 800 Scudders Mill Road, Plainsboro, New Jersey 08536. ML & Co. is
located at 250 Vesey Street, New York, New York 10281. The reorganization did
not result in a change of management of FAM, in any of its personnel, or in an
adverse change in its financial condition. Prior to the reorganization, FAM
(which was known as Fund Asset Management, Inc.) was a Delaware corporation
which was incorporated in 1976. FAM was a wholly-owned subsidiary of MLAM (a
Delaware corporation, which was also reorganized as a Delaware limited
partnership effective January 1, 1994) prior to its reorganization. MLAM was a
wholly-owned subsidiary of ML & Co. prior to its reorganization and continues to
be owned and controlled by ML & Co. after its reorganization. MLAM is also
located at 800 Scudders Mill Road, Plainsboro, New Jersey 08536. FAM and MLAM
act as the investment adviser for more than 90 other registered investment
companies. In addition, MLAM offers portfolio management and portfolio analysis
services to individuals and institutions. FAM's audited balance sheet for its
fiscal year ended December 28, 1992 is appended to this Proxy Statement as
Exhibit A. An unaudited balance sheet for FAM as of September 24, 1993 is
appended to this Proxy Statement as Exhibit B. FAM represents that, to its
knowledge, there has been no material adverse change in its financial condition
since September 24, 1993.
FAM has access to the expertise of its affiliate, Merrill Lynch Government
Securities, Inc. ('GSI'), which is a wholly-owned subsidiary of ML & Co. In
terms of dollar volume of trading, GSI is one of the largest dealers in United
States Government securities and Government agency securities, acting both as a
primary dealer and a secondary market trader. GSI is one of the reporting
dealers in government securities who report their daily position and activity to
the Federal Reserve Bank of New York. A subsidiary of GSI acts as a dealer in
bankers' acceptances, certificates of deposit and commercial paper. See
'Portfolio Transactions' herein for information
6
<PAGE>
with respect to the ability of the Fund to conduct portfolio transactions with
GSI and its subsidiary. In addition, FAM has access to the securities and
economic research of Merrill Lynch.
Securities held by the Fund may also be held by, or be appropriate
investments for, other funds or clients (collectively referred to as 'clients')
for which FAM or MLAM acts as an independent adviser. Because of different
investment objectives or other factors, a particular security may be bought for
one or more clients when one or more clients are selling the security. If
purchases or sales of securities for the Fund or other clients arise for
consideration at or about the same time, transactions in such securities will be
made, insofar as feasible, for the respective clients in a manner deemed
equitable to all by FAM or MLAM. To the extent that transactions on behalf of
more than one client of the Investment Adviser or MLAM during the same period
may increase the demand for securities being purchased or the supply of
securities being sold, there may be an adverse effect on price.
The following table sets forth the name, title and principal occupation of
the principal executive officer of FAM and the directors of Princeton Services,
the general partner of FAM:
<TABLE>
<CAPTION>
NAME* TITLE PRINCIPAL OCCUPATION
- ---------------------------------- ---------------------------------- ----------------------------------
<S> <C> <C>
Arthur Zeikel..................... President and Chief Investment President of MLAM and FAM and
Officer of FAM and Director of Executive Vice President of ML &
Princeton Services Co.
Terry K. Glenn.................... Executive Vice President of FAM Executive Vice President of MLAM
and Director of Princeton and FAM
Services
Philip L. Kirstein................ Senior Vice President and General Senior Vice President and General
Counsel of FAM and Director of Counsel of MLAM and FAM
Princeton Services
</TABLE>
- ------------------------
* Mr. Zeikel is presently the President and a Trustee, and Mr. Glenn is
presently the Executive Vice President, of the Fund. The address of Messrs.
Zeikel, Glenn and Kirstein is P.O. Box 9011, Princeton, New Jersey 08543-9011,
which is also the address of FAM and MLAM.
TERMS OF THE INVESTMENT ADVISORY AGREEMENT
Pursuant to the Investment Advisory Agreement, subject to the direction of
the Trustees, the Investment Adviser is responsible for the actual management of
the Fund's portfolio and constantly reviews the Fund's holdings in light of its
own research analysis and that from other relevant sources. The responsibility
for making decisions to buy, sell or hold a particular security rests with the
Investment Adviser. The Investment Adviser performs certain of the other
administrative services and provides all the office space, facilities, equipment
and necessary personnel for portfolio management of the Fund.
Advisory Fee. The Investment Advisory Agreement provides that, as
compensation for its services to the Fund, the Investment Adviser shall receive
from the Fund at the end of each month a fee at the annual rate of 0.50% of
average net assets not exceeding $500 million, 0.425% of average net assets in
excess of $500 million but not in excess of $1 billion and 0.375% of average net
assets in excess of $1 billion. For the fiscal year ended March 31, 1993, the
total advisory fees payable, prior to any reimbursement by the Fund to the
Investment Adviser aggregated $5,629,043 (based on average net assets of
approximately $1.3 billion) and the effective fee rate was 0.443%. During such
fiscal year, the Investment Adviser reimbursed $236,472 to the Fund pursuant to
voluntary arrangements to limit the Fund's operating expenses, and the effective
fee rate after such reimbursement
7
<PAGE>
was 0.424%. At March 31, 1993, the net assets of the Fund aggregated
approximately $1.3 billion. At this asset level the annual effective fee rate
(without regard to any possible reimbursement) is approximately 0.446% of
average net assets and the annual advisory fee would aggregate approximately
$5.8 million.
Payment of Expenses. The Investment Advisory Agreement obligates the
Investment Adviser to provide investment advisory services, to furnish
administrative services, office space and facilities for management of the
Fund's affairs, to pay all compensation of and furnish office space for officers
and employees of the Fund, as well as the fees of all Trustees of the Fund who
are affiliated persons of ML & Co. or any of its subsidiaries. Except for
certain expenses incurred by the Distributor (see 'Distribution Arrangements'),
the Fund pays all other expenses incurred in the operation of the Fund,
including, among other things, taxes, expenses for legal and auditing services,
costs of printing proxies, reports, prospectuses, and statements of additional
information sent to shareholders, charges of the Custodian and Transfer Agent,
expenses of redemption of shares, Securities and Exchange Commission fees,
expenses of registering the shares under Federal and state securities laws, fees
and expenses of unaffiliated trustees, accounting and pricing costs (including
the daily calculation of net asset value), insurance, interest, brokerage costs,
litigation and other extraordinary or non-recurring expenses, and other expenses
properly payable by the Fund. Accounting services are provided for the Fund by
the Investment Adviser, and the Fund reimburses the Investment Adviser for its
costs in connection with such services. For the year ended March 31, 1993, the
amount of such reimbursement was $61,982.
The State of California imposes limitations on the expenses of the Fund. At
the date of this Proxy Statement, such annual expense limitations require that
the Investment Adviser reimburse the Fund in any amount necessary to prevent
such operating expenses from exceeding in any fiscal year 2.5% of the Fund's
first $30 million of average net assets, 2.0% of the next $70 million of average
net assets and 1.5% of the remaining average net assets. No fee payment will be
made to the Investment Adviser during any year which will cause such expenses to
exceed the pro rata expense limitation at the time of such payment. During the
fiscal year ended March 31, 1993, the Fund was not required to make any
reimbursement pursuant to such limitations.
Duration and Termination. The Investment Advisory Agreement will continue
in effect from year to year if approved annually (a) by the Trustees of the Fund
or by a majority of the outstanding voting securities of the Fund and (b) by a
majority of Trustees who are not parties to such contract or interested persons
(as defined in the Investment Company Act of 1940) of any such party. Such
contract is not assignable and may be terminated without penalty on 60 days'
written notice at the option of either party thereto or by the vote of the
shareholders of the Fund.
Transfer Agency Arrangements. On March 26, 1991, the Board of Trustees
approved a Transfer Agency, Shareholder Servicing Agency, and Proxy Agency
Agreement (the 'Transfer Agency Agreement') between the Fund and Financial Data
Services, Inc. (the 'Transfer Agent'), a subsidiary of ML & Co. Pursuant to the
Transfer Agency Agreement, the Transfer Agent is responsible for the issuance,
transfer and redemption of shares and the opening and maintenance of shareholder
accounts. The Fund pays the Transfer Agent a fee of $5.25 per account for the
first one million accounts and $4.75 per shareholder account thereafter. At
March 31, 1993, the Fund had 15,886 accounts. At this level of accounts, the
annual fee payable to the Transfer Agent would aggregate approximately $83,402.
The Transfer Agent is also entitled to reimbursement for out-of-pocket expenses
incurred by it under the Transfer Agency Agreement and to payment of specified
fees in connection with the closing of accounts and certain other events. For
the fiscal year ended March 31, 1993, $46,285 (including out-of-pocket expenses,
closed account and other fees) was paid to the Transfer Agent pursuant to the
Transfer Agency Agreement.
8
<PAGE>
DISTRIBUTION ARRANGEMENTS
The shares of the Fund are offered to participants in the Cash Management
Account(Registered) financial service program ('CMA(Registered)') of Merrill
Lynch to provide a medium for the investment of free credit cash balances held
in CMA accounts. Shares of the Fund also are offered to other investors who do
not participate in the CMA program. The minimum initial purchase for investors
who do not participate in the CMA program is $5,000 and subsequent purchases
must be $1,000 or more. Additionally, such investors do not receive many of the
services available to participants in the CMA program. A CMA account is a
conventional Merrill Lynch securities margin account which is linked to the Fund
and 13 other money market funds (CMA Money Fund, CMA Government Securities Fund,
CMA Tax-Exempt Fund, CMA Arizona Municipal Money Fund, CMA California Municipal
Money Fund, CMA Connecticut Municipal Money Fund, CMA Massachusetts Municipal
Money Fund, CMA Michigan Municipal Money Fund, CMA New Jersey Municipal Money
Fund, CMA New York Municipal Money Fund, CMA North Carolina Municipal Money
Fund, CMA Ohio Municipal Money Fund and CMA Pennsylvania Municipal Money Fund),
money market deposit accounts maintained with depository institutions and to a
Visa card/check account ('Visa Account'). A subscriber to the CMA program may
automatically invest his free credit balances periodically in shares of the Fund
and earn a return thereon pending further investment of such funds in other
aspects of the CMA program or utilization through the Visa Account. The shares
of the Fund are offered at net asset value without a sales charge. Merrill Lynch
charges CMA customers a service fee to defray its costs of maintaining the CMA
account.
Merrill Lynch has acted as the Distributor for the Fund since the Fund
commenced operations in 1991. On June 2, 1993, the Trustees of the Fund,
including a majority of the non-interested Trustees, approved the continuance of
the Distribution Agreement for an additional year. The Distribution Agreement is
renewable annually and may be terminated upon 60 days' written notice by either
party. The Distribution Agreement obligates Merrill Lynch to pay certain
expenses in connection with the offering of the shares of the Fund. After the
prospectuses, statements of additional information and periodic reports have
been prepared, set in type and mailed to shareholders, Merrill Lynch pays for
the printing and distribution of copies thereof used in connection with the
offering to investors. Merrill Lynch also pays for other supplementary sales
literature and advertising costs.
PORTFOLIO TRANSACTIONS
The Fund invests in short-term securities which are direct obligations of
the U.S. Government and repurchase agreements pertaining to such securities. The
Fund has no obligation to deal with any dealer or group of dealers in the
execution of transactions in portfolio securities. Subject to policy established
by the Trustees and officers of the Fund, the Investment Adviser is primarily
responsible for the Fund's portfolio decisions and the placing of the Fund's
portfolio transactions. In placing orders, it is the policy of the Fund to
obtain the best net results, taking into account the firm's general execution
and operational facilities, the type of transaction involved and other factors
such as the firm's risk in positioning the securities involved. While the
Investment Adviser generally seeks reasonably competitive spreads or
commissions, the Fund will not necessarily be paying the lowest spread or
commission available. The Fund's policy of investing in securities with short
maturities will result in high portfolio turnover.
The securities in which the Fund invests are traded primarily in the
over-the-counter market. Where possible, the Fund will deal directly with the
dealers who make a market in the securities involved except in those
circumstances where better prices and execution are available elsewhere. Such
dealers usually are acting as principal for their own account. U.S. Government
securities are generally traded on a net basis and do not normally involve
either brokerage commissions or transfer taxes. The cost of portfolio securities
transactions of the Fund will primarily consist of dealer spreads and
underwriting commissions.
9
<PAGE>
Under the Investment Company Act of 1940, persons affiliated with the Fund
are prohibited from dealing with the Fund as a principal in the purchase and
sale of securities unless a permissive order allowing such transactions is
obtained from the Securities and Exchange Commission. Since over-the-counter
transactions are
usually principal transactions, affiliated persons of the Fund, including GSI
and Merrill Lynch, may not serve as the Fund's dealer in connection with such
transactions except pursuant to the exemptive order described below. Affiliated
persons of the Fund may serve as its broker in over-the-counter transactions
conducted on an agency basis.
The Securities and Exchange Commission has issued an order which permits
the Fund to conduct principal transactions with GSI in U.S. Government and
Government agency securities. This order contains a number of conditions,
including conditions designed to insure that the price to the Fund available
from GSI is equal to or better than that available from other sources. GSI has
informed the Fund that it will in no way, at any time, attempt to influence or
control the activities of the Fund or the Investment Adviser in placing such
principal transactions. The permissive order allows GSI to receive a dealer
spread on any transaction with the Fund no greater than its customary dealer
spread for transactions of the type involved. During the fiscal year ended March
31, 1993, the Fund engaged in 19 such transactions aggregating approximately
$380.9 million.
The Trustees of the Fund have considered the possibilities of recapturing
for the benefit of the Fund expenses of possible portfolio transactions, such as
dealer spreads and underwriting commissions, by conducting such portfolio
transactions through affiliated entities, including GSI and Merrill Lynch. After
considering all factors deemed relevant, the Trustees made a determination not
to seek such recapture. The Trustees will reconsider this matter from time to
time.
The Fund does not expect to use one particular dealer, but, subject to
obtaining the best net results as described above, dealers who provide
supplemental investment research to the Investment Adviser may receive orders
for transactions by the Fund. Information so received will be in addition to and
not in lieu of the services required to be performed by the Investment Adviser
under its Investment Advisory Agreement and the expenses of the Investment
Adviser will not necessarily be reduced as a result of the receipt of such
supplemental information. Such supplemental information may be used by the
Investment Adviser in managing other investment companies or advisory accounts.
ADDITIONAL INFORMATION
The expense 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.
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. In addition, the Fund
may retain an outside firm to solicit proxies on behalf of the Trustees of the
Fund. The fees and expenses of any such firm will be borne by the Investment
Adviser.
The proposal to elect the Fund's Trustees (Item 1) and the proposal to
ratify the selection of the Fund's auditors (Item 2) may be approved by majority
vote of the shareholders, present in person or by proxy, at a meeting at which a
quorum is duly constituted.
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 six Trustee nominees and 'FOR' the ratification of D&T as
independent auditors for the Fund. Shares will not be voted for any of the
aforementioned proposals, however, unless (i) in the judgment
10
<PAGE>
of the Fund's Board of Trustees, there has been no material adverse change in
the financial condition of FAM between September 24, 1993 and the date of FAM's
most recently completed fiscal quarter and (ii) the Fund shall have received a
certificate of the President or a Senior Vice President of FAM, dated the
Meeting date, attesting that, to the knowledge of such officer, there has been
no material adverse change in the financial condition of FAM unless such
material adverse change has been disclosed to shareholders in additional proxy
solicitation materials.
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 both
Items 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 Trustees (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.
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. 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. The Fund also will count towards a quorum shares as to
which proxies are returned by record shareholders but which are marked 'abstain'
on any Item. Accordingly, a failure to instruct or an abstention will not have
an effect on the vote on Item 1 or Item 2.
The Declaration of Trust establishing the Fund, dated October 24, 1990, a
copy of which, together with all amendments thereto (the 'Declaration'), is on
file in the office of the Secretary of the Commonwealth of Massachusetts,
provides that the name of the Fund refers to the Trustees under the Declaration
collectively as Trustees, but not as individuals or personally; and no Trustee,
shareholder, officer, employee or agent of the Fund shall be held to any
personal liability, nor shall resort be had to their private property for the
satisfaction of any obligation or claim of the Fund but the Trust Estate only
shall be liable.
MEETINGS OF SHAREHOLDERS
The Declaration does not require that the Trust hold an annual meeting of
shareholders. However, the Trust will be required to call special meetings of
shareholders in accordance with the requirements of the Investment Company Act
of 1940 to seek approval of new management and advisory arrangements, of a
material increase in distribution fees or of a change in the fundamental
policies, objectives or restrictions of the Fund. The Trust also would be
required to hold a special shareholders' meeting to elect new Trustees at such
time as less than a
majority of the Trustees holding office have been elected by shareholders. The
Declaration provides that a shareholders' meeting may be called for any reason
at the request of 10% of the outstanding shares of the Trust or by a majority of
the Trustees.
By Order of the Board of Trustees
ROBERT HARRIS
Secretary
Dated: January 7, 1994
11
<PAGE>
EXHIBIT A
INDEPENDENT AUDITORS' REPORT
FUND ASSET MANAGEMENT, INC.:
We have audited the accompanying balance sheet of Fund Asset
Management, Inc. (the 'Company') as of December 25, 1992.
This balance sheet is the responsibility of the Company's
management. Our responsibility is to express an opinion
on the balance sheet based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the balance sheet is free of
material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the balance sheet. An
audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the
overall balance sheet presentation. We believe that our audit provides a
reasonable basis for our opinion.
In our opinion, such balance sheet presents fairly, in all material
respects, the financial position of the Company at December 25, 1992 in
conformity with generally accepted accounting principles.
DELOITTE & TOUCHE
Parsippany, New Jersey
February 19, l993
A-1
<PAGE>
FUND ASSET MANAGEMENT, INC.
BALANCE SHEET, DECEMBER 25, 1992
<TABLE>
<S> <C>
ASSETS
Cash.............................................................................................. $ 21,356
Receivable from affiliated companies:
Lease transactions.............................................................................. 46,734,122
Fund management fees receivable................................................................... 20,435,376
Investments in leases:
Leveraged leases................................................................................ 121,508,161
Sales-type lease................................................................................ 12,831,711
Investments in affiliated investment companies at the lower of cost or market
(market: $33,307,413)........................................................................... 32,952,761
Investment in affiliated Limited Partnership...................................................... 32,293,647
Deferred charges.................................................................................. 586,166
--------------
TOTAL ASSETS...................................................................................... $ 267,363,300
--------------
--------------
LIABILITIES AND STOCKHOLDER'S EQUITY
LIABILITIES:
Payable to Merrill Lynch Investment Management, Inc. and affiliates............................... $ 54,881,755
Deferred income taxes:
Arising from leveraged leases................................................................... 111,585,182
Arising from sales-type lease................................................................... 5,245,721
Other........................................................................................... 15,892,806
Other............................................................................................. 6,000
--------------
Total liabilities................................................................................. 187,611,464
--------------
STOCKHOLDER'S EQUITY:
Common stock, par value $1.00 per share--authorized 25,000 shares;
outstanding 1,000 shares........................................................................ 1,000
Additional paid-in capital........................................................................ 684,594,627
Retained earnings................................................................................. 79,271,257
Proceeds receivable from ML & Co. from sale of subsidiary......................................... (684,115,048)
--------------
Total stockholder's equity........................................................................ 79,751,836
--------------
TOTAL LIABILITIES AND STOCKHOLDER'S EQUITY........................................................ $ 267,363,300
--------------
--------------
</TABLE>
See notes to balance sheet.
A-2
<PAGE>
FUND ASSET MANAGEMENT, INC.
NOTES TO BALANCE SHEET
DECEMBER 25, 1992
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Organization--Fund Asset Management, Inc. (the 'Company'), a wholly-owned
subsidiary of Merrill Lynch Investment Management, Inc. (the 'Parent'), which
is an indirect wholly-owned subsidiary of Merrill Lynch & Co.,
Inc. ('ML & Co.'), serves as an investment adviser to various
registered open-end investment companies. The Company is also
a lessor participant in certain leveraged and sales-type lease agreements.
Income Taxes--The results of the operations of the Company are included in
the consolidated Federal and combined state and local income tax returns filed
by ML & Co. It is the policy of ML & Co. to allocate the tax associated with
such operating results to each respective subsidiary in a manner which
approximates the separate company method. Effective in the first quarter of
1992, ML & Co. adopted Statement of Financial Accounting Standards No. 109,
'Accounting for Income Taxes' ('SFAS 109') which requires an asset and liability
method in recording income taxes on all transactions that have been recognized
in the financial statements. SFAS 109 provides that deferred taxes be adjusted
to reflect tax rates at which future tax liabilities or assets are expected to
be settled or realized. Previously, the Company accounted for income taxes in
accordance with SFAS 96. The current year's impact on adopting SFAS 109 was
minimal.
2. TRANSACTIONS WITH AFFILIATES
The Company serves as an investment adviser for certain affiliated
investment companies. The Company maintains investments in certain of these
investment companies. Such investments are carried at the lower of cost or
market value. Market value is determined based upon quoted market prices.
During 1992, the Company sold its investment in Merrill Lynch Interfunding,
Inc., an investor in select credit instruments, and Merlease Leasing Corp., a
lessor participant in lease agreements, to an affiliate at book value, resulting
in a receivable from ML & Co. This receivable is reflected as a reduction to
stockholder's equity.
The Company has an arrangement with Merrill Lynch, Pierce, Fenner & Smith
Incorporated ('MLPF&S') which provides that the Company, which receives revenue
as investment adviser to certain investment companies (the 'Funds'), reimburse
MLPF&S for certain costs incurred in processing transactions involving shares of
the Funds.
The 'Receivable from affiliated companies' arising from lease transactions
is summarized as follows:
<TABLE>
<S> <C>
Monies advanced to fund lease transactions................................................ $(117,240,047)
Tax benefits allocated to the Company by ML & Co. ........................................ 150,407,083
Other..................................................................................... 13,567,086
-------------
Total..................................................................................... $ 46,734,122
-------------
-------------
</TABLE>
The Company has a 49 percent limited partnership interest in ML Plainsboro
Limited Partnership ('MLP'), whose general partner is an affiliate. Profits and
losses are allocated to the Company based on its percentage interest.
A-3
<PAGE>
ML & Co. is the holder of the Company's excess cash, which is available on
demand to meet current liabilities. ML & Co. credits the Company for interest,
at a floating rate approximating ML & Co.'s average borrowing rate, based on the
Company's average daily balances due to/from ML & Co.
3. INVESTMENTS IN LEASES
The Company is a lessor participant in leveraged leases. The Company's net
investment in leveraged leases is summarized as follows:
<TABLE>
<S> <C>
Rentals receivable (net of principal and interest on nonrecourse debt).................... $ 117,309,811
Estimated residual values of leased assets................................................ 40,329,738
Less:
Unearned and deferred income............................................................ (34,891,388)
Allowance for uncollectibles............................................................ (1,240,000)
-------------
Investment in leveraged leases............................................................ 121,508,161
Less deferred taxes arising from leveraged leases......................................... (111,585,182)
-------------
Net investment in leveraged leases........................................................ $ 9,922,979
-------------
-------------
</TABLE>
Pertinent information relating to the Company's investments in leveraged
leases is summarized as follows:
<TABLE>
<CAPTION>
ESTIMATED
LENGTH OF RESIDUAL VALUE
LEASE EQUITY OF LEASED
TYPE OF PROPERTY (YEARS) INVESTMENT PROPERTY
- ---------------------------------------------------------------- --------- ---------- --------------
<S> <C> <C> <C>
Chemical tanker................................................. 20 42.75% 15.0%
Generating plant................................................ 24-25 34.06% 15.0%
</TABLE>
Financing beyond the Company's equity interest in the purchase price of the
properties was furnished by outside parties in the form of long-term debt that
provides for no recourse against the Company and is secured by a first lien on
the properties and related rentals. At the end of the respective lease terms,
ownership of the properties remains with the Company.
The Company's investment in the sales-type leases consisted of the
following elements at December 25, 1992:
<TABLE>
<S> <C>
Minimum lease payments receivable......................................................... $ 13,612,690
Less--unearned income..................................................................... (780,979)
-------------
Investment in sales-type financing leases................................................. $ 12,831,711
-------------
-------------
</TABLE>
At December 25, 1992 minimum lease payments receivable are $9,941,000 for
1993, $3,672,000 for 1994.
For Federal income tax purposes, the Company receives the investment tax
credit and has the benefit of tax deductions for (i) depreciation on the entire
amount of leased assets and (ii) interest on the outstanding long-term debt. For
state and local tax purposes, the Company also receives the benefits of tax
deductions from (i) and (ii) above. Since, during the early years of the leases,
those deductions exceed the Company's lease rental income, substantial excess
deductions are available to be applied against the Company's other income and
the consolidated income of ML & Co. In the later years of these leases, rental
income will exceed the related deductions and taxes will be payable (to the
extent that net deductions arising from additional leveraged lease transactions
do not offset such net lease income). Deferred taxes have been provided to
reflect these temporary differences.
A-4
<PAGE>
4. INCOME TAXES
As part of the consolidated group, the Company transfers its current
Federal and state tax liabilities to MLIM. No such amounts were due to MLIM at
December 25, 1992.
5. PENSION PLAN
The Company participates in the ML & Co. Comprehensive Retirement Program
(the 'Program'), consisting of the Retirement Accumulation Plan ('RAP') and the
Employee Stock Ownership Plan (the 'ESOP'). Under the Program, cash
contributions made by the Company and the ML & Co. stock held by the ESOP will
be allocated quarterly to participant's accounts. Allocations will be based on
years of service, age and eligible compensation. Actuarial data regarding the
Company's Plan participants is not separately available.
6. POSTRETIREMENT BENEFITS OTHER THAN PENSIONS
The Company provides certain health care and life insurance benefits for
retired employees. The Company reserves the right to amend or terminate this
program at any time. Substantially all of the Company's employees become
eligible for these benefits upon attainment of age 55 and completion of 10 years
of service. The cost of these benefits is expensed as claims are paid.
In December 1990, the Financial Accounting Standards Board issued Statement
of Financial Accounting Standards No. 106, Employers' Accounting for
Postretirement Benefits Other Than Pensions ('SFAS 106'). SFAS 106, effective
for fiscal year 1993, will require that the Company change its method of
accounting for postretirement health care and life insurance benefits from
expensing these costs on a pay-as-you-go basis to an accrual basis. This change
in accounting will require the recognition of a transition obligation which
represents the actuarial present value of benefits attributed to prior employee
service. The Company has not yet determined what effect the adoption of SFAS 106
will have on its financial condition, results of operations or liquidity.
7. NAME CHANGE
Effective December 28, 1991, the Parent, through an amendment of its
certificate of incorporation, changed its name to Merrill Lynch Investment
Management, Inc. ('MLIM'). MLIM will do business under the name 'Merrill Lynch
Asset Management'.
A-5
<PAGE>
EXHIBIT B
FUND ASSET MANAGEMENT, INC.
BALANCE SHEET
SEPTEMBER 24, 1993 (UNAUDITED)
<TABLE>
<S> <C>
ASSETS
Cash............................................................................................. $ 561,297
Receivable from Affiliated Companies--Lease transactions......................................... 63,526,920
Investment in Affiliated Limited Partnership..................................................... 31,483,140
Investment in Leases:
Leveraged leases............................................................................... 118,273,550
Sales-type lease............................................................................... 8,152,491
Investment in Affiliated Investment Companies--at the lower of cost or market (market:
$18,285,362)................................................................................... 16,702,798
Fund Management Fees Receivable.................................................................. 22,057,239
---------------
TOTAL ASSETS..................................................................................... $ 260,757,435
---------------
---------------
LIABILITIES AND STOCKHOLDER'S EQUITY
LIABILITIES
Payable to Merrill Lynch Investment Management, Inc. and Affiliates.............................. $ 19,667,011
Other Payables................................................................................... 11,400
Deferred Income Taxes:
Arising from leveraged leases.................................................................. 111,401,573
Arising from sales-type lease.................................................................. 2,333,002
Other.......................................................................................... 15,876,124
---------------
Total Liabilities................................................................................ 149,289,110
---------------
STOCKHOLDER'S EQUITY
Common Stock, par value $1.00 per share--authorized 25,000 shares;
outstanding 1,000 shares....................................................................... 1,000
Additional Paid-in Capital....................................................................... 684,594,627
Retained Earnings................................................................................ 110,987,716
Proceeds Receivable from ML&Co. from Sale of Subsidiary.......................................... (684,115,018)
---------------
Total Stockholder's Equity....................................................................... 111,468,325
---------------
TOTAL LIABILITIES & STOCKHOLDER'S EQUITY......................................................... $ 260,757,435
---------------
---------------
</TABLE>
B-1
<PAGE>
<PAGE>
PROXY
CMA TREASURY FUND
Box 9011, Princeton, New Jersey 08543-9011
This Proxy is solicited on behalf of the Board of Trustees
The undersigned hereby appoints Arthur Zeikel, Terry K. Glenn and Robert
Harris as proxies, each with the power to appoint his substitute, and
hereby authorizes them to represent and to vote, as designated below,
all the shares of beneficial interest of CMA Treasury Fund (the "Fund")
held of record by the undersigned on December 20, 1993 at a special
meeting of shareholders of the Fund to be held on February 25, 1994 or
any adjournment thereof.
This proxy when properly executed will be voted in the manner directed
by the undersigned shareholder. If no direction is made, this proxy will
be voted for Proposals 1 and 2.
____________________________________________________________________________
1. Election of Trustees.
FOR / / WITHHOLD / /
Nominees: Ronald W. Forbes, Cynthia A. Montgomery, Charles C. Reilly,
Kevin A. Ryan, Richard R. West, Arthur Zeikel
To withhold authority to vote for any individual nominee, write the name
on the following line:
_____________________________________________________________
____________________________________________________________________________
2. Proposal to ratify the selection of Deloitte & Touche 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.
____________________________________________________________________________
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.
__________________________________________________
Signature Date
__________________________________________________
Signature, if held jointly Date
Please mark boxes in blue or black ink.
__________________________________________________
<PAGE>
<PAGE>
_________________________________________________________________
BY SIGNING AND PROMPTLY RETURNING THE ENCLOSED PROXY YOU MAY SAVE YOUR
FUND THE EXPENSE OF ADDITIONAL SOLICITATION COSTS.
_________________________________________________________________
THE ENCLOSED PROXY CARD HAS BEEN FORWARDED TO YOU BECAUSE YOU WERE A
SHAREHOLDER ON THE RECORD DATE.
IT IS IMPORTANT THAT YOU VOTE AND SIGN THIS PROXY AND RETURN IT IN THE
ENCLOSED ENVELOPE AS SOON AS POSSIBLE.
_________________________________________________________________
