MUNIVEST FUND II INC, DEFR14A, 1999-04-14

MUNIVEST FUND II INC
DEFR14A, 1999-04-14

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<PAGE> 1

AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON APRIL 14, 1999

SCHEDULE 14A

(RULE 14A-101)

INFORMATION REQUIRED IN PROXY STATEMENT

SCHEDULE 14A INFORMATION

PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )

Filed by the registrant [X]
Filed by a party other than the registrant [ ]
Check the appropriate box:

[ ]Preliminary proxy statement

[ ] Confidential, For Use of the Com-
mission Only (as permitted by
Rule 14a-6(e)(2))

[X] Definitive proxy statement

[ ] Definitive additional materials
[ ] Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12

MUNIVEST FUND II, INC.
P.O. BOX 9011
PRINCETON, NEW JERSEY 08543-9011

- --------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)

Same as above
- --------------------------------------------------------------------------------
(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 statement number, or
the form or schedule and the date of its filing.

(1) Amount previously paid:

- --------------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement no.:

- --------------------------------------------------------------------------------
(3) Filing Party:

- --------------------------------------------------------------------------------
(4) Date Filed:

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<PAGE> 2

MUNIVEST FUND II, INC.
P.O. BOX 9011
PRINCETON, NEW JERSEY 08543-9011
------------------------

NOTICE OF 1999 ANNUAL MEETING OF STOCKHOLDERS
MAY 26, 1999
------------------------

TO THE STOCKHOLDERS OF MUNIVEST FUND II, INC.:

NOTICE IS HEREBY GIVEN that the 1999 Annual Meeting of Stockholders (the
"Meeting") of MuniVest Fund II, Inc. (the "Fund") will be held at the offices of
Merrill Lynch Asset Management, L.P., 800 Scudders Mill Road, Plainsboro, New
Jersey, on Wednesday, May 26, 1999 at 10:00 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;

(3) To consider and act upon a proposal to approve an amendment to the
Articles Supplementary of the Fund; and

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

The Board of Directors has fixed the close of business on March 31, 1999 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 May 12, 1999, at the office of the Fund, 800 Scudders Mill Road,
Plainsboro, New Jersey. You are cordially invited to attend the Meeting.
STOCKHOLDERS WHO DO NOT EXPECT TO ATTEND THE MEETING IN PERSON ARE REQUESTED TO
COMPLETE, DATE AND SIGN THE ENCLOSED FORM OF PROXY AND RETURN IT PROMPTLY IN THE
ENVELOPE PROVIDED FOR THIS PURPOSE. The enclosed proxy is being solicited on
behalf of the Board of Directors of the Fund.

By Order of the Board of Directors
WILLIAM E. ZITELLI
Secretary

Plainsboro, New Jersey
Dated: April 14, 1999
<PAGE> 3

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

MUNIVEST FUND II, INC.
P.O. BOX 9011
PRINCETON, NEW JERSEY, 08543-9011
---------------------------

1999 ANNUAL MEETING OF STOCKHOLDERS
MAY 26, 1999

INTRODUCTION

This Proxy Statement is furnished in connection with the solicitation of
proxies on behalf of the Board of Directors of MuniVest Fund II, Inc., a
Maryland corporation (the "Fund"), to be voted at the 1999 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 Wednesday, May 26, 1999, at 10:00 a.m. The approximate mailing date
of this Proxy Statement is April 14, 1999.

All properly executed proxies received prior to the Meeting will be voted
at the Meeting in accordance with the instructions marked thereon or otherwise
as provided therein. Unless instructions to the contrary are marked, proxies
will be voted for the election of the Board of Directors to serve for the
ensuing year, for the ratification of the selection of independent auditors to
serve for the Fund's current fiscal year and for the amendment to the Articles
Supplementary of the Fund. 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 March 31, 1999 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 19,907,055 shares of common stock, par value $.10 per share
("Common Stock"), and 5,400 shares of auction market preferred stock, par value
$.025 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, 2 and 3 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> 4

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 such 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 such proxies of the holders of Common Stock and AMPS, voting
together as a single class, in favor of the five (5) 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 as follows:

TO BE ELECTED BY HOLDERS OF AMPS, VOTING SEPARATELY AS A CLASS

(Footnotes on following page)

2
<PAGE> 5

TO BE ELECTED BY HOLDERS OF COMMON STOCK AND AMPS, VOTING TOGETHER AS A SINGLE
CLASS:

<TABLE>
<CAPTION>
SHARES
BENEFICIALLY
OWNED AT
THE RECORD DATE
PRINCIPAL OCCUPATIONS ---------------
DURING PAST FIVE YEARS DIRECTOR COMMON
NAME AND ADDRESS OF NOMINEE AGE AND PUBLIC DIRECTORSHIPS(1) SINCE STOCK AMPS
- ---------------------------------- --- ------------------------------------- -------- ------ ----
<S> <C> <C> <C> <C> <C>
Terry K. Glenn(1)*................ 58 Executive Vice President of MLAM and 1999 0 0
P.O. Box 9011 its affiliate, Fund Asset Management,
Princeton, NJ 08543-9011 L.P. ("FAM")(which terms as used
herein include their corporate
predecessors), since 1983; President
of Princeton Funds Distributor, Inc.
("PFD") since 1986 and Director
thereof since 1991; Executive Vice
President and Director of Princeton
Services, Inc. ("Princeton Services")
since 1993; President of Princeton
Administrators, L.P. since 1988.
Cynthia A. Montgomery(1)(2)....... 46 Professor, Harvard Business School, 1993 0 0
Harvard Business School since 1989; Associate Professor, J.L.
Soldiers Field Road Kellogg Graduate School of
Boston, Massachusetts 02163 Management, Northwestern University,
from 1985 to 1989; Assistant
Professor, Graduate School of
Business Administration, The
University of Michigan, from 1979 to
1985; Director, UNUM Corporation
since 1990; Director, Newell Co.
since 1995.
Charles C. Reilly(1)(2)........... 67 Self-employed financial consultant 1993 0 0
9 Hampton Harbor Road since 1990; President and Chief
Hampton Bays, New York 11946 Investment Officer of Verus Capital,
Inc., from 1979 to 1990; Senior Vice
President of Arnhold and S.
Bleichroeder, Inc., from 1973 to
1990; Adjunct Professor, Columbia
University Graduate School of
Business, from 1990 to 1991; Adjunct
Professor, Wharton School, The
University of Pennsylvania from 1989
to 1990; Partner, Small Cities Cable
Television, from 1986 to 1997.
</TABLE>

(Footnotes on following page)

3
<PAGE> 6

TO BE ELECTED BY HOLDERS OF COMMON STOCK AND AMPS, VOTING TOGETHER AS A SINGLE
CLASS (CONTINUED):

- ---------------
(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" below.

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

During the fiscal year ended October 31, 1998, the Board of Directors held
five meetings and the Audit Committee held four meetings. All of the Directors
then serving attended at least 75% of the aggregate of the total number of
meetings of the Board of Directors and, if a member, the total number of
meetings of the Audit Committee held during such period.

Compliance with Section 16(a) of the Securities Exchange Act of
1934. Section 16(a) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), requires the Fund's officers, directors and persons who own
more than ten percent of a registered class of the Fund's equity securities, to
file reports of ownership and changes in ownership on Forms 3, 4 and 5 with the
Securities and Exchange Commission ("SEC") and

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<PAGE> 7

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, except as noted below, all of its officers,
directors, greater than ten percent beneficial owners and other persons subject
to Section 16 of the Exchange Act due to 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, except that Fred K. Stuebe inadvertently made a
late Form 4 filing reporting changes in his ownership of shares of the Fund.

Interested Persons. The Fund considers Mr. Zeikel and Mr. Glenn to be
"interested persons" of the Fund within the meaning of Section 2(a)(19) of the
Investment Company Act due to the positions each holds or has held with FAM and
its affiliates and/or due to their ownership of securities issued by ML & Co.
Mr. Glenn is the President of the Fund.

Compensation of Directors. FAM, the Fund's investment adviser, pays all
compensation of all officers of the Fund and all Directors of the Fund who are
affiliated with ML & Co. or its subsidiaries. The Fund pays each Director not
affiliated with FAM (each "non-interested Director") a fee of $2,000 per year
plus $200 per meeting attended, together with such Director's actual
out-of-pocket expenses relating to attendance at meetings. The Fund also pays
each member of its Audit Committee, which consists of all of the non-interested
Directors, a fee of $800 per year, together with such Director's out-of-pocket
expenses relating to attendance at meetings. The Chairman of the Audit Committee
receives an additional annual fee of $1,000. These fees and expenses aggregated
$28,114 for the fiscal year ended October 31, 1998.

The following table sets forth for the fiscal year ended October 31, 1998
compensation paid by the Fund to the non-interested Directors and, for the
calendar year ended December 31, 1998, the aggregate compensation paid by all
investment companies advised by FAM and its affiliate, MLAM ("FAM/MLAM advised
funds"), to the non-interested Directors.

<TABLE>
<CAPTION>
AGGREGATE COMPENSATION
PENSION OR RETIREMENT FROM FUND AND
COMPENSATION BENEFITS ACCRUED AS PART FAM/MLAM ADVISED
NAME OF DIRECTOR FROM FUND OF FUND EXPENSES FUNDS PAID TO DIRECTORS
---------------- ------------ ------------------------ -----------------------
<S> <C> <C> <C>
Ronald W. Forbes(1)...................... $5,300 None $192,567
Cynthia A. Montgomery(1)................. $5,300 None $192,567
Charles C. Reilly(1)..................... $6,300 None $362,858
Kevin A. Ryan(1)......................... $5,300 None $192,567
Richard R. West(1)....................... $5,300 None $346,125
</TABLE>

- ---------------
(1) The Directors serve on the boards of FAM/MLAM advised funds as follows: Mr.
Forbes (38 registered investment companies consisting of 51 portfolios); Ms.
Montgomery (38 registered investment companies consisting of 51 portfolios);
Mr. Reilly (57 registered investment companies consisting of 70 portfolios);
Mr. Ryan (38 registered investment companies consisting of 51 portfolios);
and Mr. West (58 registered investment companies consisting of 79
portfolios).

5
<PAGE> 8

Officers of the Fund. The Board of Directors has elected six 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>
Terry K. Glenn.............................................. President 58 1993 *
Executive Vice President of FAM and MLAM since 1983;
President of Princeton Funds Distributor, Inc. since 1986
and Director thereof since 1991; Executive Vice President
and Director of Princeton Services since 1993; President
of Princeton Administrators, L.P. since 1988.
Vincent R. Giordano......................................... Vice President 54 1993
Portfolio Manager of FAM and MLAM since 1977; 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 48 1993
First Vice President of FAM and MLAM since 1997; Vice
President of FAM and MLAM from 1984 to 1997.
Fred K. Stuebe.............................................. Vice President 48 1993
Vice President of MLAM since 1989.
Donald C. Burke............................................. Vice President 38 1993
Senior Vice President and Treasurer of FAM and MLAM since
1999; Senior Vice President and Treasurer of Princeton
Services since 1999; Vice President of PFD since 1999;
First Vice President of MLAM from 1997 to 1999; Vice
President of MLAM from 1990 to 1997; Director of Taxation
of MLAM since 1990.
William E. Zitelli.......................................... Secretary 30 1999
Attorney with MLAM since 1998; Associate with Pepper
Hamilton LLP from 1997 to 1998; Associate with Reboul,
MacMurray, Hewitt & Kristol from 1994 to 1997.
</TABLE>

- ---------------
* Mr. Glenn was elected President of the Fund in 1999. Prior to that he served
as Executive Vice President of the Fund.

Stock Ownership. At the Record Date, the Directors and officers of the
Fund as a group (12 persons) owned an aggregate of less than 1% of the Common
Stock of the Fund outstanding at such date and owned none of the AMPS
outstanding at such date. At such date, Mr. Zeikel, a Director of the Fund, Mr.
Glenn, 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. RATIFICATION OF THE 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.

6
<PAGE> 9

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

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

ITEM 3. PROPOSED AMENDMENT TO ARTICLES SUPPLEMENTARY

At a meeting held January 25, 1999, the Board of Directors of the Fund
approved amendments to Section 5(c) of the Articles Supplementary of the Fund.
The proposed amendment of Section 5(c) will affect issued and outstanding AMPS.
The Fund has three series of AMPS (A, B and C), each created under Articles
Supplementary dated April 19, 1993. The proposed amendment is described below
and a form of amended Section 5(c) for the Fund is attached as Exhibit A to this
Proxy Statement. The Board of Directors of the Fund has declared the amendment
advisable and has directed that the proposed amendments be submitted to the
stockholders of the Fund for approval at the Meeting. The Board recommends that
the stockholders of the Fund approve the proposed amendments to the Fund's
Articles Supplementary.

Currently, the Articles Supplementary of the Fund requires the approval of
a majority of the Fund's outstanding shares of AMPS in order to issue any
additional shares of AMPS or any other preferred stock. The proposed amendment
would delete this requirement and permit the Fund, upon Board approval, to issue
additional shares of preferred stock, including AMPS, without obtaining
stockholder approval, provided that such additional preferred stock does not
rank prior to the AMPS or any other outstanding preferred stock in the Fund's
capital structure.

The proposed amendment provides the Board and the Fund with greater
flexibility to adjust the Fund's leverage in response to market conditions. The
proposed amendment permits the Board members to authorize the Fund to issue
additional AMPS in order to maintain the Fund's targeted level of financial
leverage without the time delays and costs involved with seeking stockholder
approval each time the Fund wishes to issue additional AMPS.

The issuance of additional AMPS may provide holders of Common Stock with a
potentially higher yield. The use of leverage, however, involves certain risks
for holders of Common Stock, including higher volatility of both the net asset
value and the market value of the Common Stock. Leverage also creates the risk
that the investment return on the Fund's Common Stock will be reduced to the
extent the dividends paid on preferred stock and other expenses of the preferred
stock exceed the income earned by the Fund on its investments. If the Fund is
liquidated, preferred stockholders will be entitled to receive liquidating
distributions before any distribution is made to holders of Common Stock.

The fee paid to the Investment Adviser for investment advisory and
management services is based on the Fund's average weekly net assets, including
assets acquired from the sale of preferred stock. Therefore, the fee paid to the
Investment Adviser will increase as a result of any issuance of additional AMPS
or other preferred stock.

7
<PAGE> 10

Any issuance of additional shares of preferred stock by the Fund must be in
compliance with the 200% asset coverage requirement of Section 18 of the
Investment Company Act. Also, the Fund currently anticipates that any additional
shares of preferred stock to be issued would also be AMPS and that any such AMPS
would be rated by nationally recognized statistical rating organizations
("NRSROs") as are all currently outstanding AMPS. These NRSROs, in rating the
additional AMPS, will impose their own asset coverage requirements on the
additional AMPS.

If additional AMPS or other shares of preferred stock are issued by the
Fund, except as indicated below and as otherwise required by applicable law,
holders of shares of any newly issued AMPS or other preferred stock will have
equal voting rights with outstanding Common Stock and AMPS (one vote per share)
and will vote together with holders of outstanding Common Stock and AMPS as a
single class.

In connection with the election of the Fund's Board members, holders of
shares of any newly issued AMPS or other preferred stock along with holders of
outstanding AMPS, voting together as a separate class, will be entitled to elect
two of the Fund's Board members, and the remaining Board members will be elected
by the holders of Common Stock and AMPS, voting together as a single class. If
at any time dividends on shares of the Fund's preferred stock shall be unpaid in
an amount equal to two full years' dividends thereon, the holders of any newly
issued AMPS or other preferred stock and outstanding AMPS, voting together as a
separate class, will be entitled to elect a majority of the Fund's Board members
until all dividends in default have been paid or declared and set apart for
payment. Also, the affirmative vote of the holders of any newly issued AMPS or
other preferred stock and the outstanding AMPS, voting together as a separate
class, will be required to approve any plan of reorganization adversely
affecting such shares or any action requiring a vote of security holders under
Section 13(a) of the Investment Company Act, including any vote to convert the
Fund to an open-end investment company or to change the Fund's fundamental
investment policies.

Stockholders will not be entitled to appraisal rights under Maryland law.

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 advisory fees and
collateral compensation notwithstanding adverse market

8
<PAGE> 11

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
District Court Judge granted defendants' motion. Plaintiff objected to the
District Court Judge's order and moved for reconsideration. By order dated July
16, 1997, the District Court Judge ordered the case transferred to the District
of New Jersey.

On September 17, 1997, defendants moved to dismiss plaintiffs' complaint on
the ground that, even if the allegations in the complaint were true, plaintiffs
had failed to state a claim upon which relief could be granted. On February 23,
1998, the Court granted defendants' motion in substantial part and dismissed
plaintiffs' claim under Sections 8(e), 34(b) and 36(a) of the Investment Company
Act with prejudice, but declined to dismiss plaintiffs' claims under Section
36(b) and state law. Plaintiffs filed a First Amended Complaint on March 31,
1998, realleging their claims under Section 36(b) and state law. Defendants
filed an Answer on April 30, 1998, denying the substantive allegations in the
First Amended Complaint.

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 or
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 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. The
Fund has retained Shareholder Communications Corp. to assist in the solicitation
of proxies at a cost to the Fund of approximately $5,000 plus out-of-pocket
expenses.

All shares represented by properly executed proxies, unless such proxies
have previously been revoked, will be voted at the Meeting in accordance with
the directions on the proxies; if no direction is indicated, the shares will be
voted "FOR" the Director nominees, "FOR" the ratification of D&T as independent
auditors, and "FOR" the amendment to the Articles Supplementary.

With respect to Item 1, "Election of Directors," holders of AMPS, voting
separately as a class, are entitled to elect the two Directors designated above
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

9
<PAGE> 12

require a plurality 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 a plurality of the votes cast by the holders of Common Stock and the
AMPS represented at the Meeting and entitled to vote, voting together as a
single class.

With respect to Item 2, "Ratification of the Selection of Independent
Auditors," assuming a quorum is present, approval will require the affirmative
vote of a majority of the votes cast by the holders of shares of Common Stock
and the AMPS represented at the Meeting and entitled to vote, voting together as
a single class.

With respect to Item 3, "Proposed Amendment to Articles Supplementary,"
assuming a quorum is present, approval of the amendment to the Fund's Articles
Supplementary will require the affirmative vote of (i) a majority of the
outstanding Common Stock and AMPS, voting together as a single class, and (ii) a
majority of the outstanding AMPS of all series of the Fund, voting together as a
single class.

Broker-dealer firms, including Merrill Lynch, Pierce, Fenner & Smith
Incorporated ("MLPF&S"), holding Fund shares in "street name" for the benefit of
their customers and clients, will request the instructions of such customers and
clients on how to vote their shares on each Item before the Meeting. The Fund
understands that, under the rules of the New York Stock Exchange, such
broker-dealer firms may, without instructions from their customers and clients,
grant authority to the proxies designated to vote on the election of Directors
(Item 1) and ratification of the selection of independent auditors (Item 2) if
no instructions have been received prior to the date specified in the
broker-dealer firm's request for voting instructions. With respect to Common
Stock, broker-dealer firms, including MLPF&S, will not be permitted to grant
voting authority without instructions with respect to amending the Articles
Supplementary (Item 3). Shares of AMPS held in "street name," however, may be
voted under certain conditions by broker-dealer firms with respect to Item 3 and
counted for purposes of establishing a quorum if no instructions are received
one business day before the Meeting, or, if adjourned, one business day before
the day to which the Meeting is adjourned. These conditions include, among
others, that (i) at least 30% of the AMPS outstanding have voted on Item 3, (ii)
less than 10% of the AMPS outstanding have voted against Item 3 and (iii)
holders of Common Stock have voted to approve Item 3. In such instances, the
broker-dealer firm will vote those shares of AMPS on Item 3 in the same
proportion as the votes cast by all holders of AMPS who have voted on Item 3.
The Fund will include shares held of record by broker-dealers as to which such
authority has been granted in its tabulation of the total number of votes
present for purposes of determining whether the necessary quorum of stockholders
exists. Proxies that are returned but that are marked "abstain" or on which a
broker-dealer has declined to vote on any proposal ("broker non-votes") will be
counted as present for purposes of a quorum. MLPF&S has advised the Fund that it
intends to vote shares held in its name for which no instructions are received,
except as limited by agreement or applicable law, on Items 1 and 2 (with respect
to Common Stock and AMPS) and 3 (with respect to AMPS only) in the same
proportion as the votes received from beneficial owners of those shares for
which instructions have been received, whether or not held in nominee name.
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. Abstentions and broker non-votes will have the same effect as a vote
against Item 3.

ADDRESS OF INVESTMENT ADVISER

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

10
<PAGE> 13

ANNUAL REPORT DELIVERY

The Fund will furnish, without charge, a copy of its annual report for the
fiscal year ended October 31, 1998 to any stockholder upon request. Such
requests should be directed to MuniVest Fund II, Inc., P.O. Box 9011, Princeton,
New Jersey 08543-9011, Attention: William E. Zitelli, Secretary or to
1-800-456-4587 ext. 123.

STOCKHOLDER PROPOSALS

It is currently intended that the 2000 Annual Meeting of Stockholders of
the Fund will be held in May, 2000. If a stockholder intends to present a
proposal at the 2000 Annual Meeting of Stockholders of the Fund, 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 December 16, 1999.

By Order of the Board of Directors
WILLIAM E. ZITELLI
Secretary

Dated: April 14, 1999

11
<PAGE> 14

EXHIBIT A

PROPOSED AMENDMENT TO ARTICLES SUPPLEMENTARY OF:

MUNIVEST FUND II, INC., SERIES A, B AND C

Section 5(c) of the Articles Supplementary is revised to read, as
follows (the underlining indicates language added; brackets indicate language
deleted):

Right to Vote with Respect to Certain Other Matters. So long as any
shares of AMPS are outstanding, the Corporation shall not, without the
affirmative vote of the holders of a majority of the shares of the Preferred
Stock Outstanding at the time, voting separately as one class: (i) authorize,
create or issue [, or increase the authorized or issued amount of,] any class or
series of stock ranking prior to the AMPS or [on a parity with] any other series
of Preferred Stock with respect to payment of dividends or the distribution of
assets on liquidation, [or increase the authorized amount of AMPS or any other
Preferred Stock,] or (ii) amend, alter or repeal the provisions of the Charter,
whether by merger, consolidation or otherwise, so as to adversely affect any of
the contract rights expressly set forth in the Charter of holders of shares of
AMPS or any other Preferred Stock. To the extent permitted under the 1940 Act,
in the event shares of more than one series of AMPS are outstanding, the
Corporation shall not approve any of the actions set forth in clause (i) or (ii)
which adversely affects the contract rights expressly set forth in the Charter
of a Holder of shares of a series of AMPS differently than those of a Holder of
shares of any other series of AMPS without the affirmative vote of the holders
of at least a majority of the shares of AMPS of each series adversely affected
and outstanding at such time (each such adversely affected series voting
separately as a class). The Corporation shall notify Moody's and S&P 10 Business
Days prior to any such vote described in clause (i) or (ii). Unless a higher
percentage is provided for under the Charter, the affirmative vote of the
holders of a majority of the outstanding shares of Preferred Stock, including
AMPS, voting together as a single class, will be required to approve any plan of
reorganization (including bankruptcy proceedings) adversely affecting such
shares or any action requiring a vote of security holders under Section 13(a) of
the 1940 Act. The class vote of holders of shares of Preferred Stock, including
AMPS, described above will in each case be in addition to a separate vote of the
requisite percentage of shares of Common Stock and shares of Preferred Stock,
including AMPS, voting together as a single class necessary to authorize the
action in question.

A-1
<PAGE> 15

COMMON STOCK

MUNIVEST FUND II, INC.

P.O. BOX 9011
PRINCETON, NEW JERSEY 08543-9011

PROXY

THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS

The undersigned hereby appoints Arthur Zeikel, Terry K. Glenn and
Alice A. Pellegrino as proxies, each with the power to appoint his substitute,
and hereby authorizes each of them to represent and to vote, as designated on
the reverse hereof, all the shares of Common Stock of MuniVest Fund II, Inc.
(the "Fund") held of record by the undersigned on March 31, 1999 at the annual
meeting of stockholders of the Fund to be held on May 26, 1999 or any
adjournment thereof.

THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER
DIRECTED HEREIN BY THE UNDERSIGNED STOCKHOLDER. IF NO DIRECTION IS MADE,
THIS PROXY WILL BE VOTED FOR PROPOSALS 1, 2 AND 3.
---

By signing and dating the reverse side of this card, you authorize the
proxies to vote each proposal as marked, or if not marked, to vote "FOR" each
proposal, and to use their discretion to vote for any other matter as may
properly come before the meeting or any adjournment thereof. If you do not
intend to personally attend the meeting, please complete and return this card at
once in the enclosed envelope.

(Continued and to be signed on the reverse side)

<PAGE> 16

Please mark boxes [-] or [X] in blue or black ink.

1. ELECTION OF DIRECTORS

FOR all nominees listed below
(except as marked to the contrary below) [ ]

WITHHOLD AUTHORITY
to vote for all 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.) TERRY K. GLENN, CYNTHIA A.
MONTGOMERY, CHARLES C. REILLY, KEVIN A. RYAN AND 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. Proposal to approve an amendment to the Articles Supplementary of the Fund.

FOR [ ] AGAINST [ ] ABSTAIN [ ]

4. In the discretion of such proxies, upon such other business as may properly
come before the meeting or any adjournment thereof.

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

Dated: , 1999
-------------------------------

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

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

SIGN, DATE AND RETURN THE PROXY CARD PROMPTLY USING THE ENCLOSED ENVELOPE.

<PAGE> 17

AUCTION MARKET
PREFERRED STOCK

MUNIVEST FUND II, INC.
P.O. BOX 9011
PRINCETON, NEW JERSEY 08543-9011

PROXY

THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS

The undersigned hereby appoints Arthur Zeikel, Terry K. Glenn and
Alice A. Pellegrino as proxies, each with the power to appoint his substitute,
and hereby authorizes each of them to represent and to vote, as designated on
the reverse hereof, all the shares of Auction Market Preferred Stock of
MuniVest Fund II, Inc. (the "Fund") held of record by the undersigned on March
31, 1999 at the annual meeting of shareholders of the Fund to be held on May
26, 1999 or any adjournment thereof.

THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER
DIRECTED HEREIN BY THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE,
THIS PROXY WILL BE VOTED FOR PROPOSALS 1, 2 AND 3.
---

(Continued and to be signed on the reverse side)

<PAGE> 18

Please mark boxes [-] or [X] in blue or black ink.

1. ELECTION OF DIRECTORS

FOR all nominees listed below
(except as marked to the contrary below) [ ]

WITHHOLD AUTHORITY
to vote for all 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.) RONALD W. FORBES, TERRY K.
GLENN, CYNTHIA A. MONTGOMERY, CHARLES C. REILLY, KEVIN A. RYAN, RICHARD R. WEST
AND 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. Proposal to approve an amendment to the Articles Supplementary of the Fund.

FOR [ ] AGAINST [ ] ABSTAIN [ ]

4. In the discretion of such proxies, upon such other business as may properly
come before the meeting or any adjournment thereof.

Dated: , 1999
-------------------------------

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

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

SIGN, DATE AND RETURN THE PROXY CARD PROMPTLY USING THE ENCLOSED ENVELOPE.