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<PAGE> PAGE 2
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SIGNATURE BERNARD GARIL
TITLE PRESIDENT
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
Annual Report for the year ended October 31, 1998
</LEGEND>
<CIK> 0000897951
<NAME> THE MUNICIPAL ADVANTAGE FUND INC.
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> OCT-31-1998
<PERIOD-START> NOV-01-1997
<PERIOD-END> OCT-31-1998
<INVESTMENTS-AT-COST> 152724190
<INVESTMENTS-AT-VALUE> 162780422
<RECEIVABLES> 3483134
<ASSETS-OTHER> 96862
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 166360418
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 804957
<TOTAL-LIABILITIES> 804957
<SENIOR-EQUITY> 55000000
<PAID-IN-CAPITAL-COMMON> 100625610
<SHARES-COMMON-STOCK> 7257093
<SHARES-COMMON-PRIOR> 7257093
<ACCUMULATED-NII-CURRENT> 243339
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (369720)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 10056232
<NET-ASSETS> 165555461
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 9180948
<OTHER-INCOME> 0
<EXPENSES-NET> (1425525)
<NET-INVESTMENT-INCOME> 7755423
<REALIZED-GAINS-CURRENT> 2420489
<APPREC-INCREASE-CURRENT> 1991692
<NET-CHANGE-FROM-OPS> 12167604
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (7830663)
<DISTRIBUTIONS-OF-GAINS> 0
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<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 4336941
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<ACCUMULATED-GAINS-PRIOR> (2790209)
<OVERDISTRIB-NII-PRIOR> 0
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<GROSS-EXPENSE> 1428593
<AVERAGE-NET-ASSETS> 108761824
<PER-SHARE-NAV-BEGIN> 14.64
<PER-SHARE-NII> 1.07
<PER-SHARE-GAIN-APPREC> .60
<PER-SHARE-DIVIDEND> 1.08
<PER-SHARE-DISTRIBUTIONS> 0
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<PER-SHARE-NAV-END> 15.23
<EXPENSE-RATIO> 1.31 <F1>
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
<FN>
<F1> Ratios calculated on the basis of income and expenses applicable
to both the common and preferred shares relative to the average weekly
net assets of common shareholders.
</FN>
</TABLE>
(AS OF MAY 19, 1998)
AMENDED AND RESTATED BY-LAWS
OF
MUNICIPAL ADVANTAGE FUND INC.
A Maryland Corporation
ARTICLE I
OFFICES
SECTION 1. Principal Office in Maryland. Municipal Advantage
Fund Inc. (the"Corporation") shall have a principal office in the City
of Baltimore, State of Maryland.
SECTION 2. Other Offices. The Corporation may have offices
also at such other places within and without the State of Maryland as
the Board of Directors may from time to time determine or as the
business of the Corporation may require.
ARTICLE II
STOCKHOLDERS
SECTION 1. Annual Meetings. The annual meeting of the
Stockholders of the Corporation shall be held on a date not less
than ninety (90) days nor more than one hundred twenty (120) days
following the end of the Corporation's fiscal year fixed from time
to time by the Board of Directors. An annual meeting may be held
at any place in or out of the State of Maryland and at any time, each
as may be determined by the Board of Directors and designated
in the notice of the meeting. Any business of the Corporation may
be transacted at an annual meeting without the purposes having been
specified in the notice unless otherwise provided by statute, the
Corporation's Articles of Incorporation, as amended from time to time
(the "Charter"), or these By-Laws.
SECTION 2. Special Meetings. Special meetings of the
stockholders for any purpose or purposes, unless otherwise prescribed
by statute or by the Corporation's Charter, maybe held at any place
within the United States, and may be called at any time by the Board of
Directors or by the Chairman or the President, and shall be called by the
Secretary (or in his absence, an Assistant Secretary) at the request
in writing of stockholders entitled to cast at least a majority of the
votes entitled to be cast at the meeting upon payment by such stockholders
to the Corporation of the reasonably estimated cost of preparing and
mailing a notice of the meeting (which estimated cost shall be provided
to such stockholders by the Secretary of the Corporation). A written
request shall state the purpose or purposes of the proposed meeting.
SECTION 3. Notice of Meetings. Written or printed notice
of the purpose or purposes and of the time and place of every meeting
of the stockholders shall be given by the Secretary of the Corporation
to each stockholder of record entitled to vote at or to notice of the
meeting, by placing the notice in the mail at least ten (10) days,
but not more than ninety (90)days, prior to the date designated
for the meeting addressed to each stockholder at his address
appearing on the books of the Corporation or supplied by the
stockholder to the Corporation for the purpose of notice. Notice
of any meeting of stockholders shall be deemed waived by any
stockholder who attends the meeting in person or by proxy, or
who before or after the meeting submits a signed waiver of notice
that is filed with the records of the meeting.
SECTION 4. Notice of Stockholder Business.
At any annual or special meeting of the stockholders, only such business
shall be conducted as shall have
been properly brought before the meeting. To be properly brought
before an annual meeting, the business must be (i) (A) specified
in the notice of meeting (or any supplement thereto) given by or at the
direction of the Board of Directors, (B) otherwise properly brought
before the meeting by or at the direction of the Board of Directors,
or (C) otherwise properly brought before the meeting by a stockholder in
accordance with Section 4(b) below and (ii) a proper subject under applicable
law for stockholder action. To be properly brought before a special
meeting, the business must be (i) (A) specified in the notice of meeting
(or any supplement thereto) given by or at the direction of the Board of
Directors, or (B) otherwise properly brought before the meeting by or
at the direction of the Board of Directors and (ii) a proper subject under
applicable law for stockholder action.
(b) For any stockholder proposal to be presented in connection
with an annual meeting of stockholders of the Corporation (other than
proposals made under Rule 14a-8 of the Securities Exchange Act of 1934, as
amended (the "Exchange Act")), including any proposal relating to the
nomination of a director to be elected to the Board of Directors of the
Corporation,the stockholder must have given timely notice thereof in
writing to the Secretary of the Corporation. To be timely, a stockholder's
notice shall be delivered to the Secretary at the principal executive
offices of the Corporation not less than 60 days nor more than 90 days prior
to the first anniversary of the preceding year's annual meeting; provided,
however, that in the event that the date of the annual meeting is
advanced by more than 30 days or delayed by more than 60 days from such
anniversary date, notice by the stockholder to be timely must be so
delivered not earlier than the 90th day prior to such annual meeting and
not later than the close of business on the later of the 60th day
prior to such annual meeting or the tenth day following the
day on which public announcement of the date of such meeting is first made.
Such stockholder's notice shall set forth (a) as to each person
whom the stockholder proposes to nominate for election or
re-election as a director all information relating to such
person that is required to be disclosed in solicitations of proxies
for election of directors, or is otherwise required, in each
case pursuant to Regulation 14A under the Exchange Act (including
such person's written consent to being named in the proxy statement
as a nominee and to serving as a director if elected); (b) as to
any other business that the stockholder proposes to bring before
the meeting, a brief description of the business desired to be
brought before the meeting, the reasons for conducting such
business at the meeting and any material interest in such
business of such stockholder and of the beneficial owner, if
any, on whose behalf the proposal is made; and (c) as to the
stockholder giving the notice and the beneficial owner, if any,
on whose behalf thenomination or proposal is made, (i) the name
and address of such stockholder, as they appear on the Corporation's
books, and of such beneficial owner and (ii) the class and number
of shares of stock of the Corporation which are owned beneficially
and of record by such stockholder and such beneficial owner.
(c) Notwithstanding anything in the By-Laws to the contrary,
no business shall be conducted at any stockholder meeting except
in accordance with the procedures set forth in this Section 4.
The Chairman of the stockholder meeting shall, if the facts warrant,
determine and declare to the meeting that business was not properly
brought before the meeting and in accordance with the provisions of
this Section 4, and if he should so determine, he shall so declare
to the meeting that any such business not properly brought before
the meeting shall not be considered or transacted.
SECTION 5. Quorum; Voting. Except as otherwise provided
by statute or by the Corporation's Charter, the presence in person
or by proxy of stockholders of the Corporation entitled to cast at
least a majority of the votes entitled to be cast shall constitute
a quorum at each meeting of the stockholders. A majority of the
votes cast at a meeting at which a quorum is present is sufficient
to approve any matter which properly comes before the meeting, except
that a plurality of the votes cast at a meeting at which a quorum is
present shall be sufficient to elect directors. In the absence of a
quorum, the stockholders present in person or by proxy at the
meeting, by majority vote and without notice other than by announcement
at the meeting, may adjourn the meeting from time to time as provided
in this Section 5 until a quorum shall attend. The stockholders present
at any duly organized meeting may continue to do business until
adjournment, notwithstanding the withdrawal of enough stockholders
to leave less than aquorum.
SECTION 6. Adjournment. Any meeting of the stockholders may be
adjourned from time to time, without notice other than by announcement
at the meeting at which the adjournment is taken. At any adjourned
meeting at which a quorum shall be present any action may be taken that
could have been taken at the meeting originally called. A meeting of the
stockholders may not be adjourned to a date more than one hundred twenty
(120) days after the original record date.
SECTION 7. Organization. At every meeting of the stockholders,
the Chairman of the Board, or in his absence or inability to act, the
President, or in his absence or inability to act, a Vice President,
or in the absence or inability to act of all the Vice Presidents,
a chairman chosen by the stockholders, shall act as chairman of the
meeting. The Secretary, or in his or her absence or inability to act,
a person appointed by the chairman of the meeting, shall act as
secretary of the meeting and keep the minutes of the meeting.
SECTION 8. Order of Business. The order of business at all
meetings of the stockholders shall be as determined by the chairman of the
meeting.
SECTION 9. Proxies. A stockholder may vote the stock he owns of
record eitherin person or by written proxy signed by the stockholder or
by his duly authorized agent. Stockholders may authorize others to act as
proxies by means of facsimile signatures, electronic transmissions,
internet transmissions, telephone, telegrams, datagrams, proxygrams
and other reasonable means authorized or accepted by the Corporation,
subject to the reasonable satisfaction of the Corporation that the
stockholder has authorized the creation of the proxy. No
proxy shall be valid after the expiration of eleven (11) months
from the date thereof, unless otherwise provided in the proxy.
Every proxy shall be revocable at the pleasure of the
stockholder executing it, except in those cases in which the proxy
states that it is irrevocable andin which an irrevocable proxy is
permitted by law.
SECTION 10. Fixing of Record Date for Determining Stockholders
Entitled to Vote at Meeting. The Board of Directors shall set a
record date for the purpose of determining stockholders entitled to
vote at any meeting of the stockholders. The record date for a particular
meeting shall be not more than ninety (90) nor fewer than ten (10)
days before the date of the meeting. All persons who were holders
of record of shares as of the record date of a meeting, and no
others, shall be entitled to notice of and to vote at such meeting
and any adjournment thereof.
SECTION 11. Inspectors. The Board of Directors may, in
advance of any meeting of stockholders, appoint one (1) or more
inspectors to act at the meeting or at any adjournment of the
meeting. If the inspectors shall not be so appointed or if any of
them shall fail to appear or act, the chairman of the meeting may
appoint inspectors. Each inspector, beforeentering upon the discharge
of his duties, shall, if required by the chairman of the meeting, take
and sign an oath to execute faithfully the duties of inspector at
the meeting with strict impartiality and according to the best of
his ability. The inspectors, if appointed, shall determine
the number of shares outstanding and the voting power of each share,
the number of shares represented at the meeting, the existence of
a quorum and the validity and effect of proxies, and shall receive
votes, ballots or consents, hear and determine all challenges and
questions arising inconnection with the right to vote, count and
tabulate all votes, ballots or consents, determine the result, and
do those acts as are proper to conduct the election or vote with
fairness to all stockholders. On request of the chairman of the
meeting or any stockholder entitled to vote at the meeting, the
inspectors shall make a report in writing of any challenge request
or matterdetermined by them and shall execute a certificate of
any fact found by them. No director or candidate for the office
of director shall act as inspector of an election of directors.
Inspectors need not be stockholders of the Corporation.
SECTION 12. Consent of Stockholders in Lieu of Meeting.
Except as otherwise provided by statute or the Corporation's
Charter, any action required or permitted to be taken at any
annual or special meeting of stockholders may be taken without
a meeting, without prior notice and without a vote, if the following
are filed with the records of stockholders' meetings: (a) a unanimous
written consent that sets forth the action and is signed by each
stockholder entitled to vote on the matter and (b) a written waiver
of any right to dissent signed by each stockholder entitled to
notice of the meeting but not entitled to vote at the meeting.
ARTICLE III
BOARD OF DIRECTORS
SECTION 1. General Powers. Except as otherwise provided in the
Corporation's Charter, the business and affairs of the Corporation shall
be managed under the direction of the Board of Directors. All powers
of the Corporation may be exercised by or under authority of the
Board of Directors except as conferred on or reserved to the stockholders
by law, by theCorporation's Charter or by these By-Laws.
SECTION 2. Number, Election and Term of Directors. The number
of directorsconstituting the entire Board of Directors (which initially
was fixed at two (2) in the Corporation's Charter) may be changed
from time to time by a majority of the entire Board of Directors;
provided, however, that the number of directors shall in no event
be fewer than that required by law, nor more than twelve (12).
Beginning with the first annual meeting of stockholders of the
Corporation and if at such time, the number of directors shall be
three (3) or more, (the "First Annual Meeting"), the Board of
Directors of the Corporation shall be divided into three classes:
Class I, Class II and Class III. At the First Annual Meeting,
directors of Class I shall be elected to the Board of Directors for
a term expiring at the next succeeding annual meeting of stockholders,
directors of Class II shall be elected to the Board of Directors for
a term expiring at the second succeeding annual meeting of stockholders
and directors of Class III shall be elected to the Board of Directors
for a term expiring at the third succeeding annual meeting of
stockholders. At each subsequent annual meeting of stockholders,
the directors chosen to succeed those whose terms are expiring
shall be identified as being of the same class as the directors
whom they succeed and shall be elected for a term expiring at
the time of the third succeeding annual meeting of stockholders
subsequent to their election. The directors shall be elected at
the annual meeting of the stockholders, except as provided in Section
5 of this Article III, and each director elected shall hold office
for the term provided above and until his successor shall have
been elected and shall have qualified, or until his death, or until
he shall have resigned or have been removed as provided in
these By-Laws, or as otherwise provided by statute or the
Corporation's Charter. Any vacancy created by an increase in
directors may be filled in accordance with Section 5 of this
Article III. No reduction in the number of directors shall have
the effect of removing any director from office prior to the
expiration of his term unless the director is specifically
removed pursuant to Section 4 of this Article III at the time of the
decrease.
SECTION 3. Resignation. A director of the Corporation
may resign at any time by giving written notice of his resignation
to the Board of Directors or the Chairman of the Boardor to the
Vice-Chairman of the Board or the President or the Secretary of
the Corporation. Any resignation shall take effect at the time
specified in it or, should the time when it is to become
effective not be specified in it, immediately upon its receipt.
Acceptance of a resignation shall not be necessary to make it
effective unless the resignation states otherwise.
SECTION 4. Removal of Directors. A director of the
Corporation may be removed from office only for cause and then
only by vote of the holders of at least seventy-five percent (75%)
of the votes entitled to be cast for the election of directors.
SECTION 5. Vacancies. Subject to the provisions of the
Investment CompanyAct of 1940 (the "1940 Act"), any vacancies in
the Board of Directors, whether arising from death, resignation,
removal or any other cause except an increase in the number of
directors, shall be filled by a vote of the majority of the
remaining Directors whether or not sufficient to constitute a quorum.
A majority of the entire Board may fill a vacancy that results
from an increase in the number of directors. Notwithstanding the
foregoing, if the stockholders of any class of the Corporation's
capital stock are entitled separately to elect one or more directors,
a majority of the remaining directors elected by that class or the
sole remaining director elected by that class may fill any
vacancy among the number of directors elected by that class.
Any director appointed by the Board of Directors to fill a vacancy
shall hold office only until the next annual meeting of stockholders
of the Corporation and until a successor has been elected and
qualifies. Any director elected by the stockholders to fill a
vacancy shall hold office for the balance of the term of the
director he replaced.
SECTION 6. Place of Meetings. Meetings of the Board
may be held at any place that the Board of Directors may from
time to time determine or that is specified in the notice of
the meeting.
SECTION 7. Regular Meetings. Regular meetings of the
Board of Directors maybe held without notice at the time and place
determined by the Board of Directors.
SECTION 8. Special Meetings. Special meetings of the
Board of Directors maybe called by two (2) or more directors of
the Corporation or by the Chairman of the Board or the
President.
SECTION 9. Annual Meeting. The annual meeting of the
newly elected and other directors shall be the first meeting after
the meeting of the stockholders at which the newly elected directors
were elected. No notice of such annual meeting shall be necessary
if such meeting is held immediately after the adjournment, and at
the site,of the meeting of stockholders. If not so held, notice shall
begiven as hereinafter provided for special meetings of
the Board of Directors.
SECTION 10. Notice of Special Meetings. Notice of each
special meeting of the Board of Directors shall be given by the
Secretary as hereinafter provided. Each notice shall state the
time and place of the meeting and shall be delivered to each director,
either personally or by telephone or other standard form of
telecommunication, at least twenty-four (24) hours before the time
at which the meeting is to be held, or by first-class mail, postage
prepaid, addressed to the director at his residence or usual place
of business, and mailed at least three (3) days before the day on
which the meeting is to be held.
SECTION 11. Waiver of Notice of Meetings. Notice of any
special meeting need not be given to any director who shall, either
before or after the meeting, sign a written waiver ofnotice that
is filed with the records of the meeting or who shall attend the meeting.
SECTION 12. Quorum and Voting. A majority of the entire Board
of Directors shall constitute a quorum for the transaction of business,
and except as otherwise expressly required by statute, the Corporation's
Charter or these By-Laws, the act of a majority of the directors
present at any meeting at which a quorum is present shall be the
act of the Board.
SECTION 13. Organization. The Chairman of the Board
shall preside at each meeting of the Board. In the absence or
inability of the Chairman of the Board to act, the President
(if he is a director), or, in his absence or inability to act,
another director chosen by a majority of the directors present,
shall act as chairman of the meeting and preside at the meeting.
The Secretary (or, in his or her absence or inability to act, any
person appointed by the chairman) shall act as secretary of the
meeting and keep the minutes of the meeting.
SECTION 14. Committees. The Board of Directors may
designate one (1) or more committees of the Board of Directors,
including an executive committee, each consisting of one (1) or
more directors. To the extent provided in the resolutions adopted
by the Board of Directors, and permitted by law, the committee
or committees shall have and may exercise the powers of the Board
of Directors in the management of the business and affairs of the
Corporation. Any committee or committees shall have the name or
names determined from time to time by resolution adopted by the Board
of Directors. Each committee shall keep regular minutes of its
meetings and provide those minutes to the Board of Directors
when required. The members of a committee present at any meeting,
whether or not they constitute a quorum, may appoint a director
to act in the place of an absent member.
SECTION 15. Written Consent of Directors in Lieu of a
Meeting. Subject to the provisions of the 1940 Act, any action
required or permitted to be taken at any meeting of the Board of
Directors or of any committee of the Board may be taken without
a meeting if all members of the Board or committee, as the case
may be, consent thereto in writing, and the writing or writings
are filed with the minutes of the proceedings of the Board or
committee.
SECTION 16. Telephone Conference. Members of the Board
of Directors or any committee of the Board may participate in any
Board or committee meeting by means of a conference telephone
or similar communications equipment by means of which all persons
participating in the meeting can hear each other at the same time.
Participation by such means shall constitute presence in person
at the meeting, provided, however, that such participation shall
not constitute presence in person with respect to matters which
the 1940 Act, and the rules thereunder require the approval of
directors by vote cast in person at a meeting.
SECTION 17. Compensation. Each director shall be entitled
to receive compensation, if any, as may from time to time be fixed by
the Board of Directors, including a fee for each meeting of the
Board or any committee thereof, regular or special, he attends.
Directors may also be reimbursed by the Corporation for all
reasonable expenses incurred in traveling to and from the place
of a Board or committee meeting.
ARTICLE IV
OFFICERS, AGENTS AND EMPLOYEES
SECTION 1. Number and Qualifications. The officers
of the Corporation shall be a Chairman, a President, a Secretary,
a Treasurer, and an Assistant Secretary, each of whom shall
be elected by the Board of Directors. The Board of Directors
may elect or appoint a Chairman of the Board of Directors, and
one (1) or more Vice Presidents and may also appoint any other
officers, assistant officers, agents and employees it deems
necessary or proper. Any two (2) or more offices may be held by
the same person, except the offices of President and Vice President,
but no officer shall execute, acknowledge or verify in more than one
capacity any instrument required by law to be executed,
acknowledged or verified by more than one officer. Officers shall
be elected by the Board of Directors each year at its first meeting
held after the annual meeting of stockholders, each to hold office
until the meeting of the Board following the next annual meeting
of the stockholders and until his successor shall have been duly
elected and shall have qualified, or until his death, or until he
shall have resigned or have been removed, as provided in these
By-Laws. The Board of Directors may from time to time elect such
Officers (including one or more Assistant Vice Presidents, one or
more Assistant Treasurers and one or more Assistant Secretaries)
and may appoint, or delegate to the President the power to appoint,
such agents as may be necessary or desirable for the business of the
Corporation. Such other officers and agents shall have such duties
and shall hold their offices for such terms as may be prescribed
by the Board or by the appointing authority.
SECTION 2. Resignations. Any officer of the Corporation
may resign at any time by giving written notice of his resignation
to the Board of Directors, the Chairman of the Board, the President
or the Secretary. Any resignation shall take effect at the time specified
therein or, if the time when it shall become effective is not specified
therein, immediately upon its receipt. The acceptance of a resignation
shall not be necessary to make it effective unless otherwise stated
in the resignation.
SECTION 3. Removal of Officer, Agent or Employee. Any
officer, agent or employee of the Corporation may be removed by
the Board of Directors with or without cause at any time, and
the Board may delegate the power of removal as to agents and
employees not elected or appointed by the Board of Directors.
Removal shall be without prejudice to the person's contract rights,
if any, but the appointment of any person as an officer, agent or
employee of the Corporation shall not of itself create contract
rights.
SECTION 4. Vacancies. A vacancy in any office, whether
arising from death, resignation, removal or any other cause, may
be filled for the unexpired portion of the term of the office that
shall be vacant, in the manner prescribed in these By-Laws for
the regular election or appointment to the office.
SECTION 5. Compensation. The compensation of the officers
of the Corporation shall be fixed by the Board of Directors, but
this power may be delegated to anyofficer with respect
to other officers under his control.
SECTION 6. Bonds or Other Security. If required by the Board,
any officer, agent or employee of the Corporation shall give a bond
or other security for the faithful performance of his duties, in an amount
and with any surety or sureties as the Board may require.
SECTION 7. Chairman of the Board of Directors. The Chairman
of the Board of Directors shall be the chief executive officer of the
Corporation and shall have, subject to the control of the Board of
Directors, general and active management and supervision of the
business, affairs, and property of the Corporation and its several
officers and may employ and discharge employees and agents
of the Corporation, except those elected or appointed by the
Board, and he may delegate these powers. The Chairman shall
preside at all meetings of the stockholders and of the Board
of Directors. He shall execute on behalf of the Corporation all
instruments requiring such execution except to the extent that signing
and execution thereof shall be required by the President of the
Corporation or shall be expressly delegated by the Board of
Directors to some other officer or agent of the Corporation.
SECTION 8. Vice-Chairman of the Board of the Directors.
The Vice-Chairman of the Board of Directors shall, in the absence
of the Chairman of the Board, preside at all meetings of the stockholders
and directors. He shall have and exercise all the powers and authority
of the Chairman of the Board in the event of the Chairman's absence
or inability to act or during a vacancy in the office of Chairman
of the Board. He shall also have such other duties and responsibilities
as shall be assigned to him by the Chairman or the Board of Directors.
SECTION 9. President. The President shall, in the absence
of the Chairman and Vice-Chairman of the Board of Directors, preside
at all meetings of the stockholders and directors. He shall have and
exercise all the powers and authority of the Chairman of the Board
in the event of the Chairman's and Vice-Chairman's absence or inability
to act or during a vacancy in the offices of Chairman and Vice-Chairman
of the Board. He shall sign and execute all instruments required to
be signed and executed by the President of the Corporation. He shall
also have such other duties and responsibilities as shall be assigned
to him by the Chairman or he Board of Directors.
SECTION 10. Vice President. Each Vice President shall
have the powers andperform the duties that the Board of Directors
or the Chairman of the Board may from time to time prescribe.
SECTION 11. Treasurer. Subject to the provisions of any
contract that may be entered into with any custodian pursuant
to authority granted by the Board of Directors, the Treasurer
shall have charge of all receipts and disbursements of the
Corporation and shall have or provide for the custody of the
Corporation's funds and securities; he shall have full authority to
receive and give receipts for all money due and payable to the
Corporation, and to endorse checks, drafts, and warrants, in its
name and on its behalf and to give full discharge for the same;
he shall deposit all funds of the Corporation, except those that
may be required for current use, in such banks or other places of
deposit as the Board of Directors may from time to time designate;
and, in general, he shall perform all duties incident to the office
of Treasurer and such other duties as may from time to time be
assigned to him by the Board of Directors or the Chairman of the Board.
SECTION 12. Assistant Treasurers. The Assistant Treasurers
in the order oftheir seniority, unless otherwise determined by the
Chairman of the Board or the Board of Directors, shall, in the absence or
disability of the Treasurer, perform the duties and exercise the
powers of the Treasurer. They shall perform such other duties and
have such other powers as the Chairman or the Board of Directors may
from time to time prescribe.
SECTION 13. Secretary. The Secretary shall:
(a) keep or cause to be kept in one or more books
provided for the purpose, the minutes of all meetings of the
Board of Directors, the committees of the Board and the stockholders;
(b) see that all notices are duly given in accordance with
the provisions of these By-Laws and as required by law;
(c) be custodian of the records and the seal of the
Corporation and affix and attest the seal to all stock
certificates of the Corporation (unless the seal of the
Corporation on such certificates shall be a facsimile, as
Here in after provided) and affix and attest the seal
to all other documents to be executed on behalf of the
Corporation under its seal;
(d) see that the books, reports, statements, certificates
and other documents and records required by law to be kept and
filed are properly kept and filed; and
(e) in general, perform all the duties incident to the
office of Secretary and such other duties as from time to time may
be assigned to him by the Board of Directors or the Chairman of the
Board.
SECTION 14. Assistant Secretaries. The Assistant Secretaries
in the order of their seniority, unless otherwise determined by
the Chairman of the Board or the Board of Directors, shall, in
the absence or disability of the Secretary, perform the duties
and exercise the powers of the Secretary. They shall perform such
other duties and have such other powers as the President or
the Board of Directors may from time to time prescribe.
SECTION 15. Delegation of Duties. In case of the absence
of any officer of the Corporation, or for any other reason that
the Board of Directors may deem sufficient, the Board may confer for
the time being the powers or duties, or any of them, of such
officer upon any other officer or upon any director.
ARTICLE V
STOCK
SECTION 1. Stock Certificates. Unless otherwise provided
by the Board of Directors and permitted by law, each holder
of stock of the Corporation shall be entitled upon specific written
request to such person as may be designated by the Corporation
to have a certificate or certificates, in a form approved by
the Board, representing the number of shares of stock of the
Corporation owned by him; provided, however, that certificates
for fractional shares will not be delivered in any case. The
certificates representing shares of stock shall be signed by
or in the name of the Corporation by the Chairman of the Board,
the Vice-Chairman of the Board, the President or a Vice President
and by the Secretary or an Assistant Secretary or the Treasurer or
an Assistant Treasurer and may be sealed with the seal of the
Corporation. Any or all of the signatures or the seal on the
certificate may be facsimiles. In case any officer, transfer
agent or registrar who has signed or whose facsimile signature
has been placed upon a certificate shall have ceased to be such
officer, transfer agent or registrar before the certificate is
issued, it may be issued by the Corporation with the same effect
as if the officer, transfer agent or registrar was still in office
at the date of issue.
SECTION 2. Stock Ledger. There shall be maintained a
stock ledger containing the name and address of each stockholder
and the number of shares of stock of each class the shareholder
holds. The stock ledger may be in written form or any other
form which can be converted within a reasonable time into
written form for visual inspection. The original or a
duplicate of the stock ledger shall be kept at the principal
office of the Corporation or at any other office or agency specified
by the Board of Directors.
SECTION 3. Transfers of Shares. Transfers of shares of stock
of the Corporation shall be made on the stock records of the
Corporation only by the registered holder of the shares,or by his
attorney thereunto authorized by power of attorney duly executed
and filed with the Secretary or with a transfer agent or transfer
clerk, and on surrender of the certificate or certificates, if
issued, for the shares properly endorsed or accompanied by a duly
executed stock transfer power and the payment of all taxes thereon.
Except as otherwise provided by law, the Corporation shall be
entitled to recognize the exclusive right of a person in whose
name any share or shares stand on the record of stockholders as the
owner of the share or shares for all purposes, including, without
limitation, the rights to receive dividends or other distributions and
to vote as the owner, and the Corporation shall not be bound to
recognize any equitable or legal claim to or interest in any such
share or shares on the part of any other person.
SECTION 4. Regulations. The Board of Directors may authorize
the issuance of uncertificated securities if permitted by law.
If stock certificates are issued, the Board of Directors may make
any additional rules and regulations, not inconsistent with these
By-Laws, as it may deem expedient concerning the issue,
transfer and registration of certificates for shares of
stock of the Corporation. The Board may appoint, or authorize
any officer or officers to appoint, one or more transfer
agents or one or more transfer clerks and one or more registrars
and may require all certificates for shares of stock to bear the
signature or signatures of any of them.
SECTION 5. Lost, Destroyed or Mutilated Certificates.
The holder of any certificate representing shares of stock of the
Corporation shall immediately notify the Corporation of its loss,
Destruction or mutilation and the Corporation may issue a new
Certificate of stock in the place of any certificate issued by it
that has been alleged to have been lost or destroyed or that shall
have been mutilated. The Board may, in its discretion, require
the owner (or his legal representative) of a lost, destroyed or
mutilated certificate to give to the Corporation a bond in a sum,
limited or unlimited, and in a form and with any surety or sureties,
as the Board in its absolute discretion shall determine, to
indemnify the Corporation against any claim that may be made
against it on account of the alleged loss or destruction of any such
certificate, or issuance of a new certificate. Anything herein to
the contrary notwithstanding, the Board of Directors, in its absolute
discretion, may refuse to issue any such new certificate, except pursuant
to legal proceedings under the laws of the State of Maryland.
SECTION 6. Fixing of Record Date for Dividends, Distributions,
etc. The Board may fix, in advance, a date not more than ninety
(90) days preceding the date fixed for the payment of any dividend
or the making of any distribution or the allotment of rights to
subscribe for securities of the Corporation, or for the delivery
of evidences of rights or evidences of interests arising out of any
change, conversion or exchange of common stock or other securities,
as the record date for the determination of the stockholders entitled
to receive any such dividend, distribution, allotment, rights or
interests, and in such case only the stockholders of record at the
time so fixed shall be entitled to receive such dividend, distribution,
allotment, rights or interests.
ARTICLE VI
INDEMNIFICATION AND INSURANCE
SECTION 1. Indemnification of Directors and Officers.
Any person who was or is a party or is threatened to be made a party
in any threatened, pending or completed action, suit or proceeding,
whether civil, criminal, administrative or investigative, by reason
of the fact that such person is a current or former director or officer
of the Corporation, or is or was serving while a director or officer of
the Corporation at the request of the Corporation as a director,
officer, partner, trustee, employee, agent or fiduciary of another
corporation, partnership, joint venture, trust, enterprise or employee
benefit plan, shall be indemnified by the Corporation against
judgments, penalties, fines, excise taxes, settlements and reasonable
expenses (including attorneys' fees) actually incurred by such person
in connection with such action, suit or proceeding to the full extent
permissible under the Maryland General Corporation Law, the Securities
Act of 1933, as amended (the "1933 Act"), and the 1940 Act, as those
statutes are now or hereafter in force, except that such indemnity
shall not protect any such person against any liability to the
Corporation or any stockholder thereof to which such person would
otherwise be subject by reason of willful misfeasance, bad faith, gross
negligence or reckless disregard of the duties involved in the
conduct of his office ("disabling conduct"). Any repeal or modification
of the 1933 Act, the 1940 Act or these By-Laws shall not in any way
diminish any rights to indemnification hereunder except as required
by law.
SECTION 2. Advances. Any current or former director or
officer of the Corporation claiming indemnification within the scope
of this Article VI shall be entitled to advances from the Corporation
for payment of the reasonable expenses incurred by him in connection
with proceedings to which he is a party in the manner and to the full
extent permissible under the Maryland General Corporation Law, the 1933
Act, and the 1940 Act, as those statutes are now or hereafter in force;
provided, however, that the person seeking indemnification shall provide
to the Corporation a written affirmation of his good faith belief that
the standard of conduct necessary for indemnification by the Corporation
has been met and a written undertaking to repay any such advance, if
it should ultimately be determined that the standard of conduct has
not been met, and provided further that at least one of the following
additional conditions is met: (a) the person seeking indemnification
shall provide a security in form and amount acceptable to the
Corporation for his undertaking; (b) the Corporation is insured
against losses arising by reason of the advance; or (c) a majority
of a quorum of directors of the Corporation who are neither "interested
persons" as defined in Section 2(a)(19) of the 1940 Act, nor parties
to the proceeding ("disinterested non-party directors"), or
independent legal counsel, in a written opinion, shall determine,
based on a review of facts readily available to the Corporation
at the time the advance is proposed to be made, that there is
reason to believe that the person seeking indemnification will
ultimately be found to be entitled to indemnification.
SECTION 3. Procedure. At the request of any current or former
director or officer, or any employee or agent whom the Corporation
proposes to indemnify, the Board of Directors shall determine, or
cause to be determined, in a manner consistent with the Maryland
General Corporation Law, the 1933 Act, and the 1940 Act, as those
statutes are now or hereafter in force, whether the standards
required by this Article VI have been met; provided, however,
that indemnification shall be made only following: (a) a final
decision on the merits by a court or other body before whom the
proceeding was brought, finding that the person to be indemnified
was not liable by reason of disabling conduct or (b) in the absence
of such a decision, a reasonable determination, based upon
a review of the facts, that the person to be indemnified
was not liable by reason of disabling conduct, by (i) the vote of
a majority of a quorum of disinterested non-party directors or
(ii) an independent legal counsel in a written opinion.
SECTION 4. Indemnification of Employees and Agents. Employees
and agents who are not officers or directors of the Corporation
may be indemnified, and reasonable expenses may be advanced to such
employees or agents, in accordance with the procedures set forth in
this Article VI to the extent permissible under the Maryland General
Corporation Law, the 1933 Act, and the 1940 Act, as those statutes
are now or hereafter in force, and to such further extent, consistent
with the foregoing, as may be provided by action of the Board of
Directors or by contract.
SECTION 5. Other Rights. The indemnification provided
by this Article VI shall not be deemed exclusive of any other right,
with respect to indemnification or otherwise, to which those seeking
such indemnification may be entitled under any insurance or other
agreement, vote of stockholders or disinterested directors or otherwise,
both as to action by a director or officer of the Corporation
in his official capacity and as to action by such person in
another capacity while holding such office or position, and shall
continue as to a person who has ceased to be a director or officer
and shall inure to the benefit of the heirs, executors and
administrators of such a person.
SECTION 6. Insurance. The Corporation shall have the power
to purchase and maintain insurance on behalf of any person who is or was
a director, officer, employee or agent of the Corporation, or who,
while a director, officer, employee or agent of the Corporation,
is or was serving at the request of the Corporation as a director,
officer, partner, trustee, employee, agent or fiduciary of another
corporation, partnership, joint venture, trust, enterprise or employee
benefit plan, against any liability asserted against and incurred by
him in any such capacity, or arising out of his status as such,
provided that no insurance may be obtained by the Corporation
for liabilities against which it would not have the power to
indemnify him under this Article VI or applicable law.
ARTICLE VII
SEAL
The seal of the Corporation shall be circular in form
and shall bear the name of the Corporation, the year of its
incorporation, the words "Corporate Seal" and "Maryland" and
any emblem or device approved by the Board of Directors. The seal
may be used by causing it or a facsimile to be impressed or affixed
or in any other manner reproduced. In lieu of affixing the seal, it
shall be sufficient to meet the requirements of any law, rule
or regulation relating to a corporate seal to place the word
"(seal)" adjacent to the signature of the person authorized to sign
the document on behalf of the Corporation.
ARTICLE VIII
AMENDMENTS
These By-Laws may be amended by the Board of Directors,
subject to the requirements of the 1940 Act; provided, however, that
no amendment of these By-Laws shall affect any right of any person
under Article VI hereof based on any event, omission or proceeding
prior to the amendment. These By-Laws may not be amended by the
stockholders of the Corporation.
Report of Independent Accountants
To the Shareholders and Board of Directors of
Municipal Advantage Fund Inc.
In planning and performing our audit of the financial statements of
Municipal Advantage Fund Inc. (the "Fund") for the year ended
October 31, 1998, we considered its internal control, including control
activities for safeguarding securities, in order to determine
our auditing procedures for the purpose of expressing our
opinion on the financial statements and to comply
with the requirements of Form N-SAR, not to provide assurance
on internal control. The management of the Fund is responsible
for establishing and maintaining internal control. In
fulfilling this responsibility, estimates and judgments by management
are required to assess the expected benefits and related costs
of controls. Generally, controls that are relevant to an audit
pertain to the entity's objective of preparing financial statements
for external purposes that are fairly presented in conformity with
generally accepted accounting principles. Those controls
include the safeguarding of assets against unauthorized acquisition,
use or disposition. Because of inherent limitations in internal
control, errors or fraud may occur and not be detected. Also,
projection of any evaluation of internal control to future
periods is subject to the risk that it may become inadequate because
of changes in conditions or that the effectiveness of the design
and operation may deteriorate. Our consideration of internal control
would not necessarily disclose all matters in internal control that
might be material weaknesses under standards established by the
American Institute of Certified Public Accountants. A material
weakness is a condition in which the design or operation of one or
more of the internal control components does not reduce to a
relatively low level the risk that misstatements caused by
error or fraud in amounts that would be material in
relation to the financial statements being audited may
occur and not be detected within a timely period by employees
in the normal course of performing their assigned functions.
However, we noted no matters involving internal control
and its operation, including control activities for safeguarding
securities, that we consider to be material weaknesses as defined
above as of October 31, 1998. This report is intended solely for the
information and use of management and the Board of
Directors of the Fund and the Securities and Exchange Commission.
PricewaterhouseCoopers LLP
December 18, 1998
To the Shareholders and Board of Directors of
XYZ Fund
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