<PAGE>
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 Commission Only (as permitted by Rule
14a-6(e)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to 240.14a-11(c) or 240.14a-12
MUNICIPAL ADVANTAGE 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 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>
MUNICIPAL ADVANTAGE FUND INC.
OPPENHEIMER TOWER, ONE WORLD FINANCIAL CENTER
200 LIBERTY STREET, NEW YORK, NEW YORK 10281
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
January 10, 1997
To the Stockholders:
The Annual Meeting of Stockholders of Municipal Advantage Fund Inc. (the
"Fund") will be held at Oppenheimer Tower, One World Financial Center, 200
Liberty Street, New York, New York on the 40th floor, on February 21, 1997, at
11:30 A.M., for the purposes of considering and voting upon:
1. The election of directors (Proposal 1).
2. The ratification of the selection of Price Waterhouse LLP as the
independent accountants of the Fund for the year ending October 31, 1997
(Proposal 2).
3. Any other business that may properly come before the meeting.
The close of business on January 2, 1997 has been fixed as the record date
for the determination of stockholders entitled to notice of and to vote at the
meeting.
By Order of the Board of Directors,
Robert I. Kleinberg
SECRETARY
TO AVOID UNNECESSARY EXPENSE OF FURTHER SOLICITATION, WE URGE YOU to
indicate voting instructions on the enclosed proxy card, date and sign it and
return it promptly in the envelope provided, no matter how large or small your
holdings may be.
<PAGE>
INSTRUCTIONS FOR SIGNING PROXY CARDS
The following general rules for signing proxy cards may be of assistance to
you and avoid the time and expense to the Fund involved in validating your vote
if you fail to sign your proxy card properly.
1. INDIVIDUAL ACCOUNTS: Sign your name exactly as it appears in the
registration on the proxy card.
2. JOINT ACCOUNTS: Either party may sign, but the name of the party signing
should conform exactly to a name shown in the registration.
3. OTHER ACCOUNTS: The capacity of the individual signing the proxy card
should be indicated unless it is reflected in the form of registration.
For example:
<TABLE>
<CAPTION>
REGISTRATION VALID SIGNATURE
- ---------------------------------------------------- ----------------------------------
<S> <C>
CORPORATE ACCOUNTS
(1) ABC Corp...................................... ABC Corp.
(2) ABC Corp...................................... John Doe, Treasurer
(3) ABC Corp...................................... John Doe
c/o John Doe, Treasurer
(4) ABC Corp. Profit Sharing Plan................. John Doe, Trustee
TRUST ACCOUNTS
(1) ABC Trust..................................... Jane B. Doe, Trustee
(2) Jane B. Doe, Trustee.......................... Jane B. Doe
u/t/d/ 12/28/78
CUSTODIAL OR ESTATE ACCOUNTS
(1) John B. Smith, Cust........................... John B. Smith
f/b/o John B. Smith, Jr. UGMA
(2) John B. Smith................................. John B. Smith, Jr., Executor
</TABLE>
<PAGE>
MUNICIPAL ADVANTAGE FUND INC.
OPPENHEIMER TOWER, ONE WORLD FINANCIAL CENTER
200 LIBERTY STREET, NEW YORK, NEW YORK 10281
------------------------
PROXY STATEMENT
This proxy statement is furnished in connection with a solicitation by the
Board of Directors of Municipal Advantage Fund Inc. (the "Fund") of proxies to
be used at the Annual Meeting of Stockholders of the Fund (the "Annual Meeting")
to be held at Oppenheimer Tower, One World Financial Center, 200 Liberty Street,
New York, New York on the 40th floor, on February 21, 1997, at 11:30 A.M. (and
at any adjournment or adjournments thereof) for the purposes set forth in the
accompanying Notice of Annual Meeting of Stockholders. This proxy statement and
the accompanying form of proxy are first being mailed to stockholders on or
about January 10, 1997. THE FUND'S ANNUAL REPORT CONTAINING FINANCIAL STATEMENTS
FOR THE FISCAL YEAR ENDED OCTOBER 31, 1996 IS AVAILABLE, FREE OF CHARGE, BY
CONTACTING THE FUND AT THE ADDRESS LISTED ABOVE OR BY CALLING 1-800-421-4777.
Stockholders who execute proxies retain the right to revoke them in person at
the Annual Meeting or by written notice received by the Secretary of the Fund at
any time before they are voted. Unrevoked proxies will be voted in accordance
with the specifications thereon and, unless specified to the contrary, will be
voted FOR the election of directors and FOR Proposal 2. The close of business on
January 2, 1997 has been fixed as the record date for the determination of
stockholders entitled to notice of and to vote at the Annual Meeting. Each
stockholder is entitled to one vote for each full share and an appropriate
fraction of a vote for each fractional share held. On the record date there were
7,257,093 shares of Common Stock outstanding and 1,100 shares of Preferred Stock
outstanding.
In the event that a quorum is not present at the Annual Meeting, or in the
event that a quorum is present but sufficient votes to approve any of the
proposals are not received, the persons named as proxies may propose one or more
adjournments of the Annual Meeting to a date not more than 120 days after the
original record date to permit further solicitation of proxies. Any such
adjournment will require the affirmative vote of a majority of those shares
represented at the Annual Meeting in person or by proxy. The persons named as
proxies will vote those proxies which they are entitled to vote FOR or AGAINST
any such proposal in their discretion. A stockholder vote may be taken on one or
more of the proposals in this proxy statement prior to any such adjournment if
sufficient votes have been received for approval. Under the By-Laws of the Fund,
a quorum is constituted by the presence in person or by proxy of the holders of
record of a majority of the outstanding shares of the Fund entitled to vote at
the Annual Meeting.
Advantage Advisers, Inc. ("Advantage"), whose principal business address is
Oppenheimer Tower, One World Financial Center, 200 Liberty Street, New York, New
York 10281, is the Fund's investment manager. OpCap Advisors ("OpCap"), whose
principal business address is Oppenheimer Tower, One World Financial Center, 200
Liberty Street, New York, New York 10281, is the Fund's investment advisor and
administrator. OpCap was formerly known as Quest for Value Advisors.
<PAGE>
SUMMARY OF PROPOSALS
<TABLE>
<CAPTION>
PROPOSAL CLASS OF SHAREHOLDER SOLICITED
- ----------------------------------------------------------- -------------------------------------------------------
<C> <S> <C>
1. Election of Directors
Robert I. Kleinberg Holders of Preferred Stock and Common Stock
Jeswald W. Salacuse Holders of Preferred Stock and Common Stock
2. Ratification of Selection of Independent
Accountants Holders of Preferred Stock and Common Stock
</TABLE>
PROPOSAL 1: ELECTION OF DIRECTORS
In accordance with the Fund's Charter, the Fund's Board of Directors is
divided into three classes: Class I, Class II and Class III. At the Annual
Meeting, stockholders will be asked to elect two Class III Directors to hold
office until the 2000 Annual Meeting of Stockholders or thereafter when their
successors are elected and qualified. The term of office of the Class I and
Class II Directors expire at the Annual Meeting of Stockholders in 1998 and
1999, respectively, or thereafter, in each case when their respective successors
are elected and qualified. The effect of these staggered terms is to limit the
ability of other entities or persons to acquire control of the Fund by delaying
the replacement of a majority of the Board of Directors. Mr. Kleinberg and Mr.
Salacuse will be elected by the holders of the Fund's Preferred Stock and Common
Stock, voting together as a single class.
The persons named in the accompanying form of proxy intend to vote at the
Annual Meeting (unless directed not to vote) FOR the election of the nominees
named below. Both of the nominees are currently members of the Board of
Directors of the Fund. Each nominee has indicated that he will serve if elected,
but if any nominee should be unable to serve, the proxy will be voted for any
other person determined by the persons named in the proxy in accordance with
their judgment.
The following table provides information concerning each nominee for
election as a director:
<TABLE>
<CAPTION>
COMMON STOCK PREFERRED STOCK
BENEFICIALLY OWNED, BENEFICIALLY OWNED,
DIRECTLY OR INDIRECTLY, DIRECTLY OR INDIRECTLY,
ON DECEMBER 31, 1996 ON DECEMBER 31, 1996
NOMINEES AND PRINCIPAL OCCUPATIONS DIRECTOR ----------------------- -----------------------
DURING THE PAST FIVE YEARS SINCE AGE SHARES (A) SHARES (A)
- ------------------------------------------------------ -------- --- ----------------------- -----------------------
<S> <C> <C> <C> <C>
CLASS III NOMINEES TO SERVE UNTIL 2000 ANNUAL MEETING
OF STOCKHOLDERS
Robert I. Kleinberg*, SECRETARY; Director and 1994 59 -0- -0-
Secretary, Advantage Advisers, Inc.; Executive Vice
President, Secretary and General Counsel of
Oppenheimer & Co., Inc.
Jeswald W. Salacuse, MEMBER OF AUDIT COMMITTEE; Henry 1994 58 217(B) -0-
J. Braker Professor of Commercial Law, and formerly
Dean, The Fletcher School of Law & Diplomacy, Tufts
University.
</TABLE>
2
<PAGE>
The following table provides information concerning the directors serving
until the 1998 and 1999 Annual Meetings of Stockholders.
<TABLE>
<CAPTION>
COMMON STOCK PREFERRED STOCK
BENEFICIALLY OWNED, BENEFICIALLY OWNED,
DIRECTLY OR DIRECTLY OR
INDIRECTLY, INDIRECTLY,
ON DECEMBER 31, 1996 ON DECEMBER 31, 1996
DIRECTORS AND PRINCIPAL OCCUPATIONS DIRECTOR --------------------- ---------------------
DURING THE PAST FIVE YEARS SINCE AGE SHARES (A) SHARES (A)
- ------------------------------------------------------- ----------- --- --------------------- ---------------------
<S> <C> <C> <C> <C>
CLASS I DIRECTOR SERVING UNTIL 1998 ANNUAL MEETING OF
STOCKHOLDERS
Robert L. Rosen, MEMBER OF AUDIT COMMITTEE; Chief 1993 50 -0- -0-
Executive Officer, RLR Partners, L.L.C. (general
partner of private investment fund); Chairman, Damon
Corporation (1989-1993).
CLASS II DIRECTORS SERVING UNTIL 1999 ANNUAL MEETING OF
STOCKHOLDERS
Mark C. Biderman*, PRESIDENT; Executive Vice President, 1993 51 5,785 -0-
Advantage Advisers, Inc.; Managing Director,
Oppenheimer & Co., Inc.
Raymond D. Horton, MEMBER OF AUDIT COMMITTEE; 1994 57 -0- -0-
Professor; Columbia University Graduate School of
Business; President, Citizens Budget Commission, Inc.
</TABLE>
- ------------------------
* "Interested person" as defined in the Investment Company Act of 1940 (the
"1940 Act") because of a relationship with Oppenheimer & Co., Inc.,
Advantage or OpCap.
(A) The holdings of no director represented more than 1% of the outstanding
shares of the Fund. Each director has sole voting and investment power with
respect to the listed shares.
(B) Common Stock beneficially owned, directly or indirectly, on October 31,
1996.
Each of Messrs. Biderman, Kleinberg, Salacuse and Rosen serves as a director
of certain other U.S. registered investment companies, as described below.
Messrs. Biderman and Rosen each serve as a director for two investment companies
co-advised by Advantage and Salomon Brothers Asset Management Inc ("SBAM"). Mr.
Kleinberg is a director of one other registered investment company co-advised by
Advantage and OpCap. Mr. Salacuse is a director of two other registered
investment companies co-advised by Advantage and Barclays Global Investors
International Inc. and four other registered investment companies co-advised by
Advantage and SBAM.
At December 31, 1996, directors and officers of the Fund as a group owned
beneficially less than 1% of the outstanding shares of the Fund. No person owned
of record, or to the knowledge of management owned beneficially, more than 5% of
the Fund's outstanding shares at that date,
3
<PAGE>
except that Cede & Co., a nominee for participants in Depository Trust Company,
held of record 6,520,152 shares of Common Stock equal to approximately 89.85% of
the outstanding shares of Common Stock of the Fund and 1,100 shares of Preferred
Stock equal to 100% of the outstanding shares of Preferred Stock of the Fund.
The executive officers of the Fund are chosen each year at the first meeting
of the Board of Directors of the Fund following the Annual Meeting of
Stockholders, to hold office until the Meeting of the Board following the next
Annual Meeting of Stockholders and until their successors are chosen and
qualified. The Fund has no executive officers apart from Messrs. Biderman and
Kleinberg.
The Fund's Audit Committee is composed of Messrs. Horton, Rosen and
Salacuse. The principal functions of the Audit Committee are to recommend to the
Board the appointment of the Fund's independent accountants, to review with the
independent accountants the scope and anticipated cost of their audit and to
receive and consider a report from the independent accountants concerning their
conduct of the audit, including any comments or recommendations they might want
to make in that connection. This Committee met two times during the year ended
October 31, 1996. The Fund has no nominating or compensation committees.
During the fiscal year ended October 31, 1996, the Board of Directors met
five times. Each director attended at least 75% of the meetings of the Board or
the Committee of the Board for which he was eligible.
Under the federal securities laws, the Fund is required to provide to
stockholders in connection with the Annual Meeting information regarding
compensation paid to directors by the Fund as well as by the various other
investment companies advised by Advantage and/or OpCap. The following table
provides information concerning the approximate compensation paid during the
year ended October 31, 1996 to each director of the Fund. Please note that the
Fund does not provide any pension or retirement benefits to directors. In
addition, no remuneration was paid during the year ended October 31, 1996 by the
Fund to either Messrs. Biderman or Kleinberg, who as officers of Advantage and
Oppenheimer & Co., Inc., are interested persons as defined under the 1940 Act.
<TABLE>
<CAPTION>
AGGREGATE TOTAL COMPENSATION TOTAL COMPENSATION
COMPENSATION FROM OTHER FUNDS FROM OTHER FUNDS
NAME OF DIRECTOR FROM FUND ADVISED BY ADVANTAGE ADVISED BY OPCAP TOTAL COMPENSATION
- -------------------------------------------------- ------------ -------------------- ------------------ ------------------
<S> <C> <C> <C> <C>
DIRECTORSHIPS (A) DIRECTORSHIPS (A) DIRECTORSHIPS (A)
Raymond D. Horton................................. $8,850 $ 0 $0 $ 8,850(1)
Jeswald W. Salacuse............................... 8,500 50,700(6) 0 59,200(7)
Robert L. Rosen................................... 8,150 12,800(2) 0 20,950(3)
</TABLE>
- ------------------------
(A) The numbers in parentheses indicate the applicable number of investment
company directorships held by that director.
4
<PAGE>
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 and Section 30(f) of
the 1940 Act in combination require the Fund's directors and officers, persons
who own more than ten percent of the Fund's Common Stock, Advantage, OpCap, and
their respective directors and certain officers, to file reports of ownership
and changes in ownership with the Securities and Exchange Commission and the New
York Stock Exchange, Inc. The Fund believes that all relevant persons have
complied with applicable filing requirements during the fiscal year ended
October 31, 1996.
REQUIRED VOTE
Election of Messrs. Kleinberg and Salacuse as directors requires the
affirmative vote of the holders of a plurality of the shares of the Common Stock
and Preferred Stock of the Fund, voting together as a single class, present or
represented by proxy at the Annual Meeting with a quorum present. For purposes
of the election of directors, abstentions and broker non-votes will not be
considered votes cast, and do not affect the plurality vote required for
directors.
PROPOSAL 2: RATIFICATION OF SELECTION OF INDEPENDENT ACCOUNTANTS
The Board of Directors of the Fund has selected Price Waterhouse LLP as
independent accountants of the Fund for the year ending October 31, 1997. The
appointment of independent accountant is approved annually by the Board of
Directors and is subsequently submitted to the stockholders for ratification.
The Fund has been advised by Price Waterhouse LLP that at October 31, 1996,
neither the firm nor any of its partners had any direct or material indirect
financial interest in the Fund. A representative of Price Waterhouse LLP will be
at the Annual Meeting to answer questions concerning the audit of the Fund's
financial statements and will have an opportunity to make a statement if he or
she chooses to do so.
THE DIRECTORS, INCLUDING THE "NON-INTERESTED" DIRECTORS, UNANIMOUSLY
RECOMMEND THAT THE STOCKHOLDERS VOTE "FOR" RATIFICATION OF THE SELECTION OF
INDEPENDENT ACCOUNTANTS.
REQUIRED VOTE
Ratification of the selection of Price Waterhouse LLP as independent
accountants of the Fund requires the affirmative vote of the holders of a
majority of the votes cast by holders of shares of Common Stock and Preferred
Stock of the Fund, voting together as a single class, present in person or
represented by proxy at the Annual Meeting with a quorum present. For purposes
of this proposal, abstentions and broker non-votes will not be considered votes
cast for the foregoing purpose.
OTHER BUSINESS
The Board of Directors of the Fund does not know of any other matter which
may come before the Annual Meeting. If any other matter properly comes before
the Annual Meeting, it is the intention of the persons named in the proxy to
vote the proxies in accordance with their judgment on that matter.
5
<PAGE>
PROPOSALS TO BE SUBMITTED BY STOCKHOLDERS
All proposals by stockholders of the Fund which are intended to be presented
at the Fund's next Annual Meeting of Stockholders to be held in 1998 must be
received by the Fund for inclusion in the Fund's proxy statement and proxy
relating to that meeting no later than September 12, 1997.
EXPENSES OF PROXY SOLICITATION
The costs of preparing, assembling and mailing material in connection with
this solicitation of proxies will be borne by the Fund. Proxies may also be
solicited personally by officers of the Fund and by regular employees of
Advantage and OpCap or their respective affiliates, or other representatives of
the Fund or by telephone or telegraph, in addition to the use of mails.
Brokerage houses, banks and other fiduciaries may be requested to forward proxy
solicitation material to their principals to obtain authorization for the
execution of proxies, and they will be reimbursed by the Fund for out-of-pocket
expenses incurred in this connection.
January 10, 1997
6
