<PAGE>
As filed with the Securities and Exchange Commission on August 7, 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:
[_] Preliminary Proxy Statement [_] Confidential, for Use of
the Commission Only
[X] 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
MUNIYIELD QUALITY 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
Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration state-
ment 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>
MUNIYIELD QUALITY FUND, INC.
P.O. BOX 9011
PRINCETON, NEW JERSEY 08543-9011
----------------
NOTICE OF 1997 ANNUAL MEETING OF STOCKHOLDERS
----------------
SEPTEMBER 18, 1997
To The Stockholders of MuniYield Quality Fund, Inc.:
Notice is hereby given that the 1997 Annual Meeting of Stockholders (the
"Meeting") of MuniYield Quality 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 11:00 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; and
(3) To transact such other business as may properly come before the
Meeting or any adjournment thereof.
The Board of Directors has fixed the close of business on 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 08536. 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
Philip M. Mandel
Secretary
Plainsboro, New Jersey
Dated: August 7, 1997
<PAGE>
PROXY STATEMENT
----------------
MUNIYIELD QUALITY FUND, INC.
P.O. BOX 9011
PRINCETON, NEW JERSEY 08543-9011
----------------
1997 ANNUAL 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 MuniYield Quality Fund, Inc., a
Maryland corporation (the "Fund"), to be voted at the 1997 Annual Meeting of
Stockholders of the Fund (the "Meeting"), to be held at the offices of Merrill
Lynch Asset Management, L.P. ("MLAM"), 800 Scudders Mill Road, Plainsboro, New
Jersey, on Thursday, September 18, 1997 at 11:00 a.m. The approximate mailing
date of this Proxy Statement is August 11, 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 and for the ratification of the selection of independent auditors to
serve for the Fund's current fiscal year. Any proxy may be revoked at any time
prior to the exercise thereof by giving written notice to the Secretary of the
Fund at the Fund's address indicated above or by voting in person at the
Meeting.
The Board of Directors has fixed the close of business on 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 30,425,258 shares of common stock, par value
$.10 per share ("Common Stock"), and 8,000 shares of auction market preferred
stock, par value $.05 per share and liquidation preference of $25,000 per
share plus an amount equal to accumulated but unpaid dividends thereon
("AMPS"). 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 or five percent of the outstanding AMPS.
The Board of Directors of the Fund knows of no business other than that
mentioned in Items 1 and 2 of the Notice of Meeting that 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 the
next Annual Meeting of Stockholders and 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) as follows:
(1) All proxies of the holders of AMPS, voting separately as a class, in
favor of the two (2) persons designated as Directors to be elected by
holders of AMPS; and
(2) All proxies of the holders of Common Stock and AMPS, voting together
as a class, in favor of the four (4) persons designated as Directors to be
elected by holders of Common Stock and AMPS.
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 below:
TO BE ELECTED BY HOLDERS OF AMPS, VOTING SEPARATELY AS A CLASS:
<TABLE>
<CAPTION>
SHARES
BENEFICIALLY
OWNED ON THE
RECORD DATE
PRINCIPAL OCCUPATIONS --------------
DURING PAST FIVE YEARS DIRECTOR COMMON
NAME AND ADDRESS AGE AND PUBLIC DIRECTORSHIPS(/1/) SINCE STOCK AMPS
---------------- --- -------------------------------- -------- ------- -----
<S> <C> <C> <C> <C> <C>
Joseph L. 68 Attorney in private practice 1992 1,000 0
May(/1/)(/2/).......... since 1984; President, May and
424 Church Street Athens Hosiery Mills Division,
Suite 2000 Wayne-Gossard Corporation from
Nashville, Tennessee 1954 to 1983; Vice President,
37219 Wayne-Gossard Corporation from
1972 to 1983; Chairman, The May
Corporation (personal holding
company) from 1972 to 1983;
Director, Signal Apparel Co.
from 1972 to 1989.
Andre F. 45 Professor, Harvard Business 1992 0 0
Perold(/1/)(/2/)....... School since 1989 and Associate
Morgan Hall Professor from 1983 to 1989;
Soldiers Field Trustee, The Common Fund since
Boston, Massachusetts 1989; Director, Quantec Limited
02163 since 1991 and TIBCO from 1994
to 1996.
</TABLE>
2
<PAGE>
TO BE ELECTED BY HOLDERS OF COMMON STOCK AND AMPS, VOTING TOGETHER AS A SINGLE
CLASS:
<TABLE>
<CAPTION>
SHARES
BENEFICIALLY
OWNED ON THE
RECORD DATE
PRINCIPAL OCCUPATIONS ---------------
DURING PAST FIVE YEARS DIRECTOR COMMON
NAME AND ADDRESS AGE AND PUBLIC DIRECTORSHIPS(/1/) SINCE STOCK AMPS
---------------- --- -------------------------------- -------- ------- ------
<S> <C> <C> <C> <C> <C>
James H. 53 Director and Executive Vice 1995 0 0
Bodurtha(/1/)(/2/)..... President, The China Business
36 Popponesset Road Group, Inc. since 1996;
Cotuit, Massachusetts Chairman and Chief Executive
02635 Officer, China Enterprise
Management Corporation from
1993 to 1996; Chairman,
Berkshire Corporation since
1980; Partner, Squire, Sanders
& Dempsey from 1980 to 1993.
Herbert I. 58 John M. Olin Professor of 1992 0 0
London(/1/)(/2/)....... Humanities, New York University
113-115 University since 1993 and Professor
Place thereof since 1980; Dean,
New York, New York Gallatin Division of New York
10003 University from 1976 to 1993;
Distinguished Fellow, Herman
Kahn Chair, Hudson Institute
from 1984 to 1985; Trustee,
Hudson Institute since 1980 and
President in 1997; Director,
Damon Corp. from 1991 to 1995;
Overseer, Center for Naval
Analyses from 1983 to 1993;
Limited Partner, Hypertech LP
in 1996.
Robert R. 70 Chairman and Chief Executive 1993 0 0
Martin(/1/)(/2/)....... Officer, Kinnard Investments,
513 Grand Hill Inc. from 1990 to 1993;
St. Paul, Minnesota Executive Vice President, Dain
55102 Bosworth from 1974 to 1989;
Director, Carnegie Capital
Management from 1977 to 1985
and Chairman thereof in 1979;
Director, Securities Industry
Association from 1981 to 1982
and Public Securities
Association from 1979 to 1980;
Chairman of the Board, WTC
Industries, Inc., in 1994;
Trustee, Northland College
since 1992.
Arthur Zeikel(/1/)*..... 65 President of Fund Asset 1992 0 0
P.O. Box 9011 Management, L.P. ("FAM") (which
Princeton, New Jersey term as used herein includes
08543-9011 its corporate predecessors)
since 1977; President of MLAM
(which term as used herein
includes its corporate
predecessors) since 1977;
President and Director of
Princeton Services, Inc.
("Princeton Services") since
1993; Executive Vice President
of Merrill Lynch & Co., Inc.
("ML & Co.") since 1990;
Director of Merrill Lynch Funds
Distributor, Inc. ("MLFD")
since 1977.
</TABLE>
(Footnotes on next page)
3
<PAGE>
(Footnotes from previous page)
- --------
(1) Each of the nominees is a director, trustee or member of an advisory board
of certain other investment companies for which FAM or MLAM acts as
investment adviser. See "Compensation of Directors."
(2) Member of the Audit Committee of the Board of Directors.
* Interested person, as defined in the Investment Company Act of 1940, as
amended (the "Investment Company Act"), of the Fund.
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. 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 October 31, 1996, the Board of Directors held
four meetings and the Audit Committee held four meetings. All of the Directors
attended at least 75% of the aggregate of the total number of meetings of the
Board of Directors and, if a member, of the total number of meetings of the
Audit Committee held during the period for which he served.
Compliance with Section 16(a) of the Securities Exchange Act of
1934. Section 16(a) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), requires the Fund's officers, directors and persons who own
more than ten percent of a registered class of the Fund's equity securities,
to file reports of ownership and changes in ownership on Forms 3, 4 and 5 with
the Securities and Exchange Commission ("SEC") and the New York Stock
Exchange. Officers, directors and greater than ten percent stockholders are
required by SEC regulations to furnish the Fund with copies of all Forms 3, 4
and 5 they file.
Based solely on the Fund's review of the copies of such forms, and
amendments thereto, furnished to it during or with respect to its most recent
fiscal year, and written representations from certain reporting persons that
they were not required to file Form 5 with respect to the most recent fiscal
year, the Fund believes that all of its officers, directors, greater than ten
percent beneficial owners and other persons subject to Section 16 of the
Exchange Act because of the requirements of Section 30 of the Investment
Company Act, i.e., any advisory board member, investment adviser or affiliated
person of the Fund's investment adviser, have complied with all filing
requirements applicable to them with respect to transactions during the Fund's
most recent fiscal year.
Interested Persons. The Fund considers Mr. Zeikel to be an "interested
person" of the Fund within the meaning of Section 2(a)(19) of the Investment
Company Act because of the positions he holds with FAM and its affiliates. Mr.
Zeikel is the President of the Fund and the President of FAM and MLAM.
Compensation of Directors. FAM, the 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 FAM (each a "non-affiliated Director") a fee of $2,500 per
year plus $250 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-affiliated
Directors, a fee of $500 per year plus $125 per meeting attended, together
with such Director's out-of-pocket expenses relating to attendance at
meetings. These fees and expenses aggregated $23,187 for the fiscal year ended
October 31, 1996.
4
<PAGE>
The following table sets forth for the fiscal year ended October 31, 1996
compensation paid by the Fund to the non-affiliated Directors and, for the year
ended December 31, 1996, the aggregate compensation paid by all registered
investment companies advised by FAM and its affiliate, MLAM ("FAM/MLAM Advised
Funds"), to the non-affiliated Directors.
<TABLE>
<CAPTION>
AGGREGATE COMPENSATION FROM
PENSION OR RETIREMENT FUND AND FAM / MLAM
COMPENSATION BENEFITS ACCRUED AS PART ADVISED FUNDS PAID TO
NAME OF DIRECTOR FROM FUND OF FUND EXPENSES DIRECTORS(/1/)
- ---------------- ------------ ------------------------ ---------------------------
<S> <C> <C> <C>
James H. Bodurtha....... $4,500 None $148,500
Herbert I. London....... 4,500 None 148,500
Robert R. Martin........ 4,500 None 148,500
Joseph L. May........... 4,500 None 148,500
Andre F. Perold......... 4,500 None 148,500
</TABLE>
- --------
(1) The Directors serve on the boards of FAM/MLAM Advised Funds as follows: Mr.
Bodurtha (22 registered investment companies consisting of 46 portfolios);
Mr. London (22 registered investment companies consisting of 46
portfolios); Mr. Martin (22 registered investment companies consisting of
46 portfolios); Mr. May (22 registered investment companies consisting of
46 portfolios); and Mr. Perold (22 registered investment companies
consisting of 46 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 1992
President of FAM since 1977; President of MLAM
since 1977; President and
Director of Princeton Services since 1993;
Executive Vice President of
ML & Co. since 1990; Director of MLFD since 1977.
Terry K. Glenn ..................................... Executive Vice 56 1992
Executive Vice President of FAM and MLAM since President
1983; Executive Vice President and Director of
Princeton Services since 1993; President of MLFD
since 1986 and Director thereof since 1991;
President of Princeton
Administrators, L.P. since 1988.
Vincent R. Giordano ................................ Senior Vice 52 1992
Portfolio Manager of FAM and MLAM since 1977 and President
Senior Vice President
of FAM and MLAM since 1984; Senior Vice President
of Princeton Services since 1993; Vice President of
MLAM from 1980 to 1984.
Kenneth A. Jacob ................................... Vice President 46 1992
Vice President of MLAM since 1984.
Donald C. Burke .................................... Vice President 37 1993
Vice President and Director of Taxation of MLAM
since 1990; Employee of Deloitte & Touche LLP from
1982 to 1990.
Hugh T. Hurley, III ................................ Vice President 32 1995
Vice President of MLAM since 1993; Municipal Bond
Broker with Titus & Donnelly from 1990 to 1993.
Gerald M. Richard .................................. Treasurer 48 1992
Senior Vice President and Treasurer of FAM and MLAM
since 1984; Senior Vice President and Treasurer of
Princeton Services since 1993; Vice President of
MLFD since 1981 and Treasurer thereof since 1984.
Philip M. Mandel.................................... Secretary 50 1997
Vice President of FAM and MLAM since 1997;
Assistant General Counsel of Merrill Lynch, Pierce,
Fenner & Smith Incorporated ("MLFP&S") from 1989
to 1997.
</TABLE>
5
<PAGE>
Stock Ownership. At the Record Date, the Directors and officers of the Fund
as a group (13 persons) owned an aggregate of less than 1% of the Common Stock
of the Fund outstanding at such date and owned none of the AMPS 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 FAM or MLAM
acts as investment adviser. The fees received by D&T from these other entities
are substantially greater, in the aggregate, than the total fees received by
it from the Fund. The Board of Directors of the Fund considered the fact that
D&T has been retained as the independent auditors for ML & Co. and the other
entities described above in its evaluation of the independence of D&T with
respect to the Fund.
Representatives of D&T are expected to be present at the Meeting and will
have the opportunity to make a statement if they so desire and to respond to
questions from stockholders.
LEGAL PROCEEDINGS
On June 21, 1996, a purported class action titled Jack Green, et al. v. Fund
Asset Management, L.P., et al. was filed in the United States District Court
for the District of Massachusetts. Among the named defendants in the action
are seven of the leveraged closed-end municipal bond funds (including the
Fund) for which FAM serves as the investment adviser (two of these seven funds
have merged since the commencement of the litigation). In addition to the
named defendants, plaintiffs also purport to bring claims against a defendant
class consisting of all other publicly traded, closed-end investment companies
for which FAM serves as investment adviser and which, among other things, have
issued AMPS. The named plaintiffs, who claim to be investors in the seven
named funds, purport to bring the action on behalf of a class consisting of
all holders of the common stock of the subject funds.
Plaintiffs allege that FAM and other affiliated defendants received
excessive compensation for managing the subject funds. Plaintiffs claim, among
other things, that the registration statements, annual reports and other
documents filed by the funds with the SEC were misleading because such
documents allegedly failed to disclose that proceeds arising from the issuance
of AMPS would be included in a fund's net assets for the purposes of
calculating the investment advisory fee payable to FAM. In addition,
plaintiffs allege that a conflict of interest existed because it would always
be in the defendants' interest to keep the funds fully leveraged to maximize
the
6
<PAGE>
advisory fees and collateral compensation notwithstanding adverse market
conditions. Plaintiffs also allege an additional conflict of interest arising
from the receipt by such affiliates of underwriting discounts, or other
revenues in connection with the sale of the AMPS by the funds. The complaint
asserts claims under Sections 8(e), 34(b), 36(a) and 36(b) of the Investment
Company Act and the common law. Plaintiffs seek unspecified monetary damages
as well as injunctive relief.
On August 27, 1996, defendants moved to transfer the action to the United
States Court for the District of New Jersey. By order dated June 10, 1997, the
Magistrate Judge assigned to the case granted defendants' motion. Plaintiffs
objected to the Magistrate's order and moved for reconsideration. By order
dated July 16, 1997, the District Court Judge denied plaintiffs' motion and
ordered the case transferred to the District of New Jersey.
The defendants believe that the plaintiffs' allegations are entirely without
merit and intend to defend the action vigorously. FAM has agreed to indemnify
the named defendant funds for any liabilities or expenses that they may incur
in connection with this litigation.
ADDITIONAL INFORMATION
The expenses of preparation, printing and mailing of the enclosed form of
proxy and accompanying Notice and Proxy Statement will be borne by the Fund.
The Fund will reimburse banks, brokers and others for their reasonable
expenses in forwarding proxy solicitation material to the beneficial owners of
the shares of the Fund. The Fund may also hire proxy solicitors at the expense
of the Fund.
In order to obtain the necessary quorum at the Meeting (i.e., a majority of
the shares of 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 and "FOR" the ratification of D&T as
independent auditors.
With respect to Item 1, "Election of Directors," holders of AMPS, voting
separately as a class, are entitled to elect two Directors and holders of
Common Stock and AMPS, voting together as a single class, are entitled to
elect the remaining Directors. Assuming a quorum is present, (i) election of
the two Directors to be elected by the holders of AMPS, voting separately as a
class, will require the affirmative vote of a majority of the votes cast by
the holders of AMPS, represented at the Meeting and entitled to vote; (ii)
election of the remaining Directors will require the affirmative vote of a
majority of the votes cast by the holders of Common Stock and AMPS represented
at the Meeting and entitled to vote, voting together as a single class; and
(iii) approval of Item 2, "Selection of Independent Auditors," will require
the affirmative vote of majority of the votes cast by the holders of Common
Stock and AMPS represented at the Meeting and entitled to vote, voting
together as a single class.
Broker-dealer firms, including 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
7
<PAGE>
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. 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 to the Fund
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 the Fund that it intends to exercise
discretion over shares held in its name for which no instructions have been
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. 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 Item 1 or Item 2.
ADDRESS OF INVESTMENT ADVISER
The principal office of FAM is located at 800 Scudders Mill Road,
Plainsboro, New Jersey 08536.
ANNUAL REPORT DELIVERY
THE FUND WILL FURNISH, WITHOUT CHARGE, A COPY OF ITS ANNUAL REPORT FOR THE
FISCAL YEAR ENDED OCTOBER 31, 1996 AND A COPY OF ITS SEMI-ANNUAL REPORT FOR
THE SIX MONTHS ENDED APRIL 30, 1997 TO ANY STOCKHOLDER UPON REQUEST. Such
requests should be directed to MuniYield Quality Fund, Inc., P.O. Box 9011,
Princeton, New Jersey 08543-9011, Attention: Philip M. Mandel, or to 1-800-
456-4587 ext. 123.
STOCKHOLDER PROPOSALS
If a stockholder intends to present a proposal at the 1998 Annual Meeting of
Stockholders of the Fund, which is anticipated to be held in September 1998,
and desires to have the proposal included in the Fund's proxy statement and
form of proxy for that meeting, the stockholder must deliver the proposal to
the offices of the Fund by April 3, 1998.
By Order of the Board of Directors
Philip M. Mandel
Secretary
Dated: August 7, 1997
8
<PAGE>
AUCTION MARKET
PREFERRED STOCK
MUNIYIELD QUALITY 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 shares of Auction Market Preferred Stock of MuniYield Quality Fund, Inc.
(the "Fund") held of record by the undersigned on July 25, 1997 at the annual
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 AND 2.
(Continued and to be signed on the reverse side)
<PAGE>
Please mark boxes [_] or [X] in blue or black ink.
1. ELECTION OF DIRECTORS FOR all nominees listed below WITHHOLD AUTHORITY
(except as marked to the to vote for all
contrary below) [_] nominees listed
below [_]
(INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE, STRIKE
A LINE THROUGH THE NOMINEE'S NAME IN THE LIST BELOW.)
JAMES H. BODURTHA, HERBERT I. LONDON, ROBERT R. MARTIN, JOSEPH L. MAY, ANDRE F.
PEROLD, ARTHUR ZEIKEL
2. Proposal to ratify the selection of Deloitte & Touche LLP as the independent
auditors of the Fund to serve for the current fiscal year.
FOR [ ] AGAINST [ ] ABSTAIN [ ]
3. In the discretion of such proxies, upon such other business as may properly
come before the meeting or any adjournment thereof.
Please sign exactly as name appears
hereon. When shares are held by joint
tenants, both should sign. When signing
as attorney or as executor,
administrator, trustee or guardian,
please give full title as such. If a
corporation, please sign in full
corporate name by president or other
authorized officer. If a partnership,
please sign in partnership name by
authorized persons.
Dated: , 1997
-----------------------------
X
----------------------------------------
Signature
X
----------------------------------------
Signature, if held jointly
SIGN, DATE AND RETURN THE PROXY CARD PROMPTLY USING THE ENCLOSED ENVELOPE.
2
<PAGE>
COMMON STOCK
MUNIYIELD QUALITY 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 MuniYield Quality Fund, Inc. (the "Fund") held of record
by the undersigned on July 25, 1997 at the annual 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 AND 2.
(Continued and to be signed on the reverse side)
<PAGE>
Please mark boxes [_] or [X] in blue or black ink.
1. ELECTION OF DIRECTORS FOR all nominees listed below WITHHOLD AUTHORITY
(except as marked to the to vote for all
contrary below) [ ] nominees listed
below [ ]
(INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE, STRIKE
A LINE THROUGH THE NOMINEE'S NAME IN THE LIST BELOW.)
JAMES H. BODURTHA, HERBERT I. LONDON, ROBERT R. MARTIN, ARTHUR ZEIKEL
2. Proposal to ratify the selection of Deloitte & Touche LLP as the independent
auditors of the Fund to serve for the current fiscal year.
FOR [ ] AGAINST [ ] ABSTAIN [ ]
3. In the discretion of such proxies, upon such other business as may properly
come before the meeting or any adjournment thereof.
Please sign exactly as name appears
hereon. When shares are held by joint
tenants, both should sign. When signing
as attorney or as executor,
administrator, trustee or guardian,
please give full title as such. If a
corporation, please sign in full
corporate name by president or other
authorized officer. If a partnership,
please sign in partnership name by
authorized persons.
Dated: , 1997
-----------------------------
X
----------------------------------------
Signature
X
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Signature, if held jointly
SIGN, DATE AND RETURN THE PROXY CARD PROMPTLY USING THE ENCLOSED ENVELOPE.
2
