<PAGE>
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE
SECURITIES EXCHANGE ACT OF 1934
[x] Filed by the Registrant
[ ] 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 Rule 14a-11(c) or Rule 14a-12
MUNICIPAL ADVANTAGE FUND INC.
(Name of Registrant as Specified In Its Charter)
Payment of Filing Fee (check the appropriate box):
[x] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) 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 is determined):
-----------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
-----------------------------------------------------------------------
(5) Total fee paid:
-----------------------------------------------------------------------
<PAGE>
[ ] 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:
-----------------------------------------------------------------------
<PAGE>
MUNICIPAL ADVANTAGE FUND INC.
1345 Avenue of the Americas
New York, New York 10105
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
January 12, 2001
To the Stockholders:
The Annual Meeting of Stockholders of Municipal Advantage Fund Inc. (the
"Fund") will be held at 1345 Avenue of the Americas, New York, New York on the
49th floor, on Monday, February 26, 2001, at 11:00 a.m., for the purposes of
considering and voting upon:
1. The election of directors (Proposal 1).
2. The ratification of the selection of PricewaterhouseCoopers LLP as the
independent accountants of the Fund for the fiscal year ending October
31, 2001 (Proposal 2).
3. Any other business that may properly come before the meeting.
The close of business on December 29, 2000 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,
/s/ Newton B. Schott, Jr.
----------------------------------------
Newton B. Schott, Jr.
Executive Vice President and 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:
REGISTRATION
<TABLE>
<S> <C>
CORPORATE ACCOUNTS VALID SIGNATURE
(1) ABC Corp. .............................. ABC Corp. (by John Doe, Treasurer)
(2) ABC Corp. .............................. John Doe, Treasurer
(3) ABC Corp. c/o John Doe, Treasurer ...... John Doe
(4) ABC Corp. Profit Sharing Plan .......... John Doe, Trustee
TRUST ACCOUNTS
(1) ABC Trust .............................. Jane B. Doe, Trustee
(2) Jane B. Doe, Trustee u/t/d/ 12/28/78 ... Jane B. Doe
CUSTODIAL OR ESTATE ACCOUNTS
(1) John B. Smith, Cust.
f/b/o John B. Smith, Jr. UGMA .......... John B. Smith
(2) John B. Smith .......................... John B. Smith, Jr., Executor
</TABLE>
<PAGE>
MUNICIPAL ADVANTAGE FUND INC.
1345 Avenue of the Americas
New York, New York 10105
--------------------------
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 1345 Avenue of the Americas, New York, New York on the
49th floor, on Monday, February 26, 2001, at 11:00 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 12,
2001. THE FUND'S ANNUAL REPORT CONTAINING FINANCIAL STATEMENTS FOR THE FISCAL
YEAR ENDED OCTOBER 31, 2000 IS AVAILABLE, FREE OF CHARGE, BY CONTACTING THE
FUND AT THE ADDRESS LISTED ABOVE OR BY CALLING 1-800-223-2413. 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 December
29, 2000 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 at 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.
PIMCO Advisors L.P. ("PIMCO Advisors" or the "Investment Manager"), whose
principal business address is 800 Newport Center Drive, Newport Beach, CA
92660, is the Fund's investment manager. OpCap Advisors ("OpCap"), whose
principal business address is 1345 Avenue of the Americas, New York, New York
10105, is the Fund's investment adviser and administrator.
<PAGE>
SUMMARY OF PROPOSALS
<TABLE>
<CAPTION>
PROPOSAL CLASS OF STOCKHOLDER SOLICITED
-------- ------------------------------
<S> <C>
1. Election of Directors:
Robert E. Connor Holders of Preferred Stock
Wendy W. Luers 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 I Directors to hold
office until the 2004 Annual Meeting of Stockholders or thereafter when their
successors are elected and qualified. The terms of office of the Class II and
Class III Directors expire at the Annual Meetings of Stockholders in 2002 and
2003, 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. Under the
Fund's Charter and the Investment Company Act of 1940, as amended ("1940 Act"),
the holders of the shares of the Fund's Preferred Stock and Common Stock,
voting together as a single class, will vote on whether to elect Ms. Luers as a
director of the Fund, and the holders of the shares of the Fund's Preferred
Stock only will vote on whether to elect Mr. Connor as a director of the Fund.
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
listed below. Each nominee has indicated that he or she will serve if elected,
but if either 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. Robert E. Connor is currently a member of the Board of
Directors of the Fund. Mr. Connor was elected to the Board of Directors by the
directors of the Fund effective February 24, 2000.
The following table provides information concerning each nominee for
election as a director:
2
<PAGE>
<TABLE>
<CAPTION>
COMMON STOCK PREFERRED STOCK
BENEFICIALLY OWNED, BENEFICIALLY OWNED,
DIRECTLY OR INDIRECTLY, DIRECTLY OR INDIRECTLY,
ON DECEMBER 29, 2000 ON DECEMBER 29, 2000
------------------------- ------------------------
NOMINEES AND PRINCIPAL OCCUPATIONS DIRECTOR
DURING THE PAST FIVE YEARS SINCE AGE SHARES (A) SHARES (A)
--------------------------------------- ---------- ----- ---------- ----------
<S> <C> <C> <C> <C>
CLASS I NOMINEES TO SERVE UNTIL 2004
ANNUAL MEETING OF STOCKHOLDERS
Robert E. Connor, Member of Audit 2000 66 -0- -0-
Committee; Senior Officer, Corporate
Communications, Travelers/Smith
Barney Inc.
Wendy W. Luers, Founder and -- 60 -0- -0-
President, The Foundation for a Civil
Society, New York, Prague, Bratislava
(a non-profit foundation which
sponsors various organizations and
programs in the Czech and Slovak
Republics); Presidential Appointee to
the National Council on the Arts
(1988-1996).
</TABLE>
The following table provides information concerning the directors serving
until the 2002 and 2003 Annual Meetings of Stockholders:
<TABLE>
<CAPTION>
COMMON STOCK PREFERRED STOCK
BENEFICIALLY OWNED, BENEFICIALLY OWNED,
DIRECTLY OR INDIRECTLY, DIRECTLY OR INDIRECTLY,
ON DECEMBER 29, 2000 ON DECEMBER 29, 2000
------------------------- ------------------------
DIRECTORS AND PRINCIPAL OCCUPATIONS DIRECTOR
DURING THE PAST FIVE YEARS SINCE AGE SHARES (A) SHARES (A)
--------------------------------------- ---------- ----- ---------- ----------
<S> <C> <C> <C> <C>
CLASS II DIRECTORS TO SERVE UNTIL 2002
ANNUAL MEETING OF STOCKHOLDERS
Raymond D. Horton, Member of Audit 1994 61 -0- -0-
Committee; Professor, Columbia
University Graduate School of
Business; President, Citizens Budget
Commission, Inc. (1986-1998).
Stephen J. Treadway*, Chairman; 1997 53 -0- -0-
Executive Vice President of PIMCO
Advisors L.P. and Chairman and
President of PIMCO Funds
Distributors LLC and its predecessor;
formerly, employed by Smith Barney
Inc. for over 18 years, serving in
various senior officer positions.
</TABLE>
----------
* "Interested person" as defined in the 1940 Act because of a relationship
with PIMCO Advisors, the Fund's investment manager.
3
<PAGE>
<TABLE>
<CAPTION>
COMMON STOCK PREFERRED STOCK
BENEFICIALLY OWNED, BENEFICIALLY OWNED,
DIRECTLY OR INDIRECTLY, DIRECTLY OR INDIRECTLY,
ON DECEMBER 29, 2000 ON DECEMBER 29, 2000
------------------------- ------------------------
DIRECTORS AND PRINCIPAL OCCUPATIONS DIRECTOR
DURING THE PAST FIVE YEARS SINCE AGE SHARES (A) SHARES (A)
--------------------------------------- ---------- ----- ---------- ----------
CLASS III DIRECTOR SERVING UNTIL 2003
ANNUAL MEETING OF STOCKHOLDERS
<S> <C> <C> <C> <C>
Jeswald W. Salacuse, Member of Audit 1994 62 282 -0-
Committee; Henry J. Braker
Professor of Commercial Law, The
Fletcher School of Law & Diplomacy,
Tufts University (1990-Present);
Dean, The Fletcher School of Law &
Diplomacy, Tufts University
(1986-1994).
</TABLE>
----------
(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.
Each of Messrs. Connor, Salacuse and Treadway serves as a director of
certain other U.S. registered investment companies, as described below. Mr.
Connor serves as a trustee for one other investment company advised by PIMCO
Advisors. Mr. Salacuse is a director of six other registered investment
companies co-advised by PIMCO Advisors and Salomon Brothers Asset Management
Inc ("SBAM"), four other registered investment companies advised by SBAM, two
other registered investment companies advised by Advantage Advisers, Inc. and
of one other registered investment company advised by CIBC Oppenheimer
Advisers, L.L.C. Mr. Treadway is a director of six other registered investment
companies advised by both PIMCO Advisors and SBAM and of one other investment
company advised by PIMCO Advisors.
At December 29, 2000, 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, except that Cede & Co.,
a nominee for participants in Depository Trust Company, held of record
6,744,705 shares of Common Stock equal to approximately 93% 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. In addition to Mr. Treadway, the current executive officers of the
Fund are:
4
<PAGE>
<TABLE>
<CAPTION>
OFFICER
NAME OFFICE AGE SINCE
---- ------ --- -----
<S> <C> <C> <C>
Bernard H. Garil President 60 1997
Matthew Greenwald Executive Vice President 46 1997
Newton B. Schott, Jr. Executive Vice President 58 1997
and Secretary 2001
Brian S. Shlissel Treasurer 36 1999
</TABLE>
Mr. Garil is an employee of PIMCO Advisors. Previously, he was a Managing
Director of Oppenheimer Capital. Mr. Greenwald is Senior Vice President and
Portfolio Manager of Oppenheimer Capital. Mr. Schott has served as Senior Vice
President of PIMCO Advisors Mutual Fund Division since November 1997. He also
currently serves as the Executive Vice President, Chief Administrative Officer,
Secretary and General Counsel to PIMCO Funds Distributors LLC, and has held
such positions or other senior office positions in the company since May 1990.
Mr. Schott served as Assistant Secretary of the Fund from February 1999 to
January 2001. From November 1994 to December 1996, Mr. Schott served as Senior
Vice President-Legal and Secretary to PIMCO Advisors. Mr. Shlissel has been a
Vice President of PIMCO Advisors since July 1999. He currently serves as
Treasurer of OCC Accumulation Trust, OCC Cash Reserves and Fixed Income SHares
and served as Assistant Treasurer of the Fund from September 1999 to February
2000. From 1993 to 1999, Mr. Shlissel was a Vice President with Mitchell
Hutchins Asset Management. From 1997-1999, Mr. Shlissel was Treasurer and
Secretary of Jardine Fleming India Fund, Inc, From 1998-1999, Mr. Shlissel was
Assistant Treasurer of PaineWebber PACE Select Advisors Trust.
The Fund's Audit Committee is composed entirely of Directors who are not
"interested persons" of the Fund or of PIMCO Advisors, OpCap or its affiliates
within the meaning of the 1940 Act, and who are "independent" as defined in the
New York Stock Exchange listing standards. Currently, Messrs. Connor, Horton
and Salacuse are members of the Audit Committee. The Audit Committee convened
twice during the fiscal year ended October 31, 2000. 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,
performance and anticipated cost of their audit and to receive and consider a
report from the independent accountants concerning their conduct of the audit,
including the form of the opinion proposed to be rendered and any comments or
recommendations the independent accountants might want to make in that
connection. The Fund adopted an Audit Committee Charter in May 2000. A copy of
the Audit Committee Charter is attached to this Proxy Statement as Exhibit A.
The Audit Committee has received written disclosures and the letter
required by Independence Standards Board No. 1 from PricewaterhouseCoopers LLP
("PwC"), the Fund's independent accountants, and has discussed with PwC its
independence. The Audit Committee has also reviewed and discussed the audited
financial statements with Fund management and PwC, and discussed certain
matters with PwC required to be discussed by Statements on
5
<PAGE>
Auditing Standards No. 61. Based on the foregoing, the Audit Committee
recommended to the Board of Directors that the Fund's audited financial
statements be included in the Fund's Annual Report for the fiscal year ended
October 31, 2000. The Fund has no nominating or compensation committees.
During the fiscal year ended October 31, 2000, the Board of Directors met
five times. With the exception of Mr. Treadway, 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 U.S.
registered investment companies advised by PIMCO Advisors during the past
fiscal year. The following table provides information concerning the
approximate compensation paid during the fiscal year ended October 31, 2000 to
each director of the Fund. Please note that the Fund does not provide any
pension or retirement benefits to directors. No remuneration was paid during
the fiscal year ended October 31, 2000 by the Fund to Mr. Treadway, who was a
director of the Fund during the period and an "interested person" as defined in
the 1940 Act because of his relationship with PIMCO Advisors.
<TABLE>
<CAPTION>
AGGREGATE TOTAL COMPENSATION FROM OTHER
COMPENSATION FROM FUNDS ADVISED BY PIMCO
NAME OF DIRECTOR FUND ADVISORS TOTAL COMPENSATION
--------------------- ------------------- ------------------------------ ----------------------
<S> <C> <C> <C>
Directorships (A) Directorships (A)
Robert E. Connor $6,550 $ 2,000(1) $ 8,550(2)
Raymond D. Horton $8,500 $ 0 $ 8,500(1)
Jeswald W. Salacuse $8,500 $44,600(4) $53,100(5)
</TABLE>
----------
(A) The numbers in parentheses indicate the applicable number of investment
company directorships held by that director.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 and Section 30(h) 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, the Fund's investment
advisers and their respective directors and certain officers, to file reports
of ownership and changes in ownership of the Fund's securities 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, 2000.
REQUIRED VOTE
Election of Ms. Luers as a director 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. Election of Mr. Connor as a director
requires the affirmative vote of the holders of a plurality of the shares
6
<PAGE>
of the Preferred Stock of the Fund 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 PricewaterhouseCoopers LLP
("PwC") as independent accountants of the Fund for the fiscal year ending
October 31, 2001. 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 PwC that at October
31, 2000, neither the firm nor any of its partners had any direct or material
indirect financial interest in the Fund. A representative of PwC will be
available 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, RECOMMEND THAT
THE STOCKHOLDERS VOTE "FOR" RATIFICATION OF THE SELECTION OF INDEPENDENT
ACCOUNTANTS.
REQUIRED VOTE
Ratification of the selection of PwC 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.
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 the
year 2002, must be received by the Fund (addressed to Municipal Advantage Fund
Inc., 1345 Avenue of the Americas, New York, New York 10105) for inclusion in
the Fund's proxy statement and proxy relating to that meeting no later than
September 16, 2001. Any stockholder who desires to bring a proposal at the
Fund's year 2002 Annual Meeting of Stockholders without including such proposal
in the Fund's proxy statement must deliver written notice thereof to the
Secretary of the Fund (addressed to Municipal Advantage Fund Inc., 1345 Avenue
of the Americas, New York, New York 10105) during the thirty-day period from
November 28, 2001 to December 28, 2001.
7
<PAGE>
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 PIMCO
Advisors 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. Georgeson Shareholder Communications Inc.
will provide certain services in connection with the solicitation of proxies at
a fee to be paid by the Fund and estimated at $3,500 plus disbursements.
January 12, 2001
8
<PAGE>
Exhibit A
MUNICIPAL ADVANTAGE FUND INC.
AUDIT COMMITTEE CHARTER
STATEMENT OF POLICY
-------------------
The Audit Committee shall oversee the Fund's accounting and financial
reporting policies and practices and its internal controls. The Audit Committee
shall oversee the quality and objectivity of the Fund's financial statements
and the independent audit of the financial statements. The Audit Committee
shall also act as a liaison between the Fund's independent accountants and the
Board of Directors.
The Audit Committee's role is limited to oversight. Fund management is
responsible for Fund accounting and internal control systems, and the
independent accountants are responsible for conducting a proper audit of the
Fund's financial statements. The independent accountants are ultimately
accountable to the Fund's Board of Directors and the Audit Committee.
MEMBERSHIP
----------
The Audit Committee shall be comprised of as many directors as the Board
of Directors shall determine, but in any event no less than three. No member
shall be an "interested person" of the Fund, as defined in Section 2(a)(19) of
the Investment Company Act of 1940, as amended. In addition, each member of the
Audit Committee shall also meet the requirements of being "Independent," as
defined in the New York Stock Exchange Listed Company Manual Section 303.01,
and shall be free of any relationship that, in the judgment of the Board of
Directors, may interfere with the exercise of his or her independent judgment.
Each member of the Audit Committee shall be financially literate, as such
qualification is interpreted by the Fund's Board of Directors in its business
judgment under the NYSE listing requirements.
At least one member of the Audit Committee must have accounting or related
financial management expertise, as the Board of Directors interprets such
qualification in its business judgment under the NYSE listing requirements.
RESPONSIBILITIES AND DUTIES
---------------------------
The Audit Committee policies and procedures shall remain flexible to
facilitate the Audit Committee's ability to react to changing conditions and to
generally discharge its functions. The following responsibilities describe
areas of attention in broad terms.
The Audit Committee shall:
1. Recommend the selection, retention or termination of the Fund's
independent accountants based on an evaluation of their independence and the
nature and performance of
A-1
<PAGE>
the audit and other services. The Audit Committee and the Board of Directors
have the ultimate authority and responsibility to select, evaluate and, where
appropriate, replace the outside auditor (or to nominate the outside auditor to
be proposed for shareholder approval in any proxy statement).
2. Receive on a periodic basis formal written disclosures and letters from
the independent accountants as required by the Independence Standards Board
Standard No. 1.(1)
3. Engage in a dialog with the independent accountants and the Board of
Directors concerning any relationships between the independent accountants and
the Fund or any other relationships that might adversely affect the objectivity
and independence of the independent accountants.
4. Review the fees charged by the independent accountants for audit and
other services.
5. Review with the independent accountants arrangements for and the scope
of the annual audit and any special audits including the form of any opinion
proposed to be rendered to the Board of Directors and stockholders.
6. Review with management and the independent accountants the annual
financial statements, including a discussion with the independent accountants
of matters required by Statement of Accounting Standards No. 61.(2)
7. Discuss with the independent accountants any matters of concern
relating to the Fund's financial statements.
8. Consider with the independent accountants their comments on the Fund's
accounting and financial reporting policies, practices and internal controls
and management's responses thereto, including the effect on the Fund of any
recommendation of changes in accounting principles or practices by management
or the independent accountants.
9. Investigate any improprieties or suspected improprieties in the Fund's
financial and accounting operations.
10. Provide a report in the Fund's proxy statement disclosing whether the
Audit Committee has fulfilled the duties set forth above in items #2, #3 and
#6.
11. Provide a statement whether, based on its review of the Fund's audited
financial statements,(1) the Audit Committee recommends to the Board of
Directors that the audited financial statements be included in the Fund's
Annual Report.
----------
(1) ISB Standard No. 1 generally requires, among other things, that an
auditor (i) disclose to the Audit Committee, in writing, all relationships
between the auditor and its related entities and the company and its related
entities that in the auditor's professional judgment may reasonably be thought
to bear on independence; (ii) confirm in the letter that, in its professional
judgment, it is independent of the company within the meaning of the Securities
Act of 1933, as amended and the Securities Exchange Act of 1934; and (iii)
discuss the auditor's independence with the audit committee.
(2) SAS No. 61 ("Communication with Audit Committees") requires independent
auditors to inform the audit committee of certain matters, including among
others, (i) methods used to account for significant unusual transactions, (ii)
the process used by management in formulating sensitive accounting estimates on
the basis of the auditors' conclusion as to the reasonableness of those
estimates and (iii) disagreements with management over the application of
accounting principles.
A-2
<PAGE>
12. Report to the Board of Directors regularly on the Audit Committee's
activities and make any necessary recommendations as to the Fund's accounting
and financial reporting policies, practices and its internal controls.
13. Review and reassess the adequacy of this Charter at least annually and
recommend any changes to the Board of Directors.
14. Review with counsel legal and regulatory matters that have a material
impact on the Fund's financial and accounting reporting policies, practices or
its internal controls.
15. Perform such other functions consistent with this Charter, the Fund's
By-laws and governing law, as the Audit Committee or the Board of Directors
deems necessary or appropriate.
MEETINGS
--------
The Audit Committee shall meet at least once annually with the independent
accountants (outside the presence of Fund management) and at least once
annually with the representatives of Fund management responsible for the
financial and accounting operations of the Fund. The Audit Committee shall hold
special meetings when and if circumstances require.
OUTSIDE RESOURCES AND ASSISTANCE FROM MANAGEMENT
------------------------------------------------
The appropriate officers of the Fund shall provide or arrange to provide
such information, data and services as the Audit Committee may request. The
Audit Committee shall have the authority to discharge its responsibility,
including the authority to retain counsel and other experts and consultants
whose expertise would be considered helpful to the Audit Committee, at the
expense of the Fund.
Dated: May 22, 2000
A-3
<PAGE>
[THIS PAGE INTENTIONALLY LEFT BLANK.]
<PAGE>
MVFCM--PS--01
<PAGE>
MUNICIPAL ADVANTAGE FUND INC.
COMMON STOCK
ANNUAL MEETING OF STOCKHOLDERS -- FEBRUARY 26, 2001
THIS PROXY IS SOLICITED ON BEHALF OF THE DIRECTORS
The undersigned hereby appoints Stephen J. Treadway, Bernard H. Garil and Newton
B. Schott, Jr. and each of them, attorneys and proxies for the undersigned, with
full power of substitution and revocation, to represent the undersigned at the
Annual Meeting of Stockholders of the Fund to be held at 1345 Avenue of the
Americas, New York, New York 10105 on February 26, 2001, at 11:00 a.m., and at
any adjournments thereof, upon the matters set forth in the Notice of Meeting
and Proxy Statement dated January 12, 2001, and upon all other matters properly
before said Meeting.
Please indicate your vote by an "X" in the appropriate box on the reverse side.
This proxy, if properly executed, will be voted in the manner directed by the
stockholder. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED FOR PROPOSALS 1
(INCLUDING THE NOMINEE FOR DIRECTOR) AND 2. Please refer to the Proxy Statement
for a discussion of the Proposals.
--------------------------------------------------------------------------------
PLEASE VOTE, DATE AND SIGN ON OTHER SIDE AND RETURN PROMPTLY IN THE ENCLOSED
ENVELOPE.
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Note: Please sign exactly as your name appears on this Proxy. If joint owners,
EITHER may sign this Proxy. When signing as attorney, executor, administrator,
trustee, guardian or corporate officer, please give your full title.
--------------------------------------------------------------------------------
---------------------------------------
HAS YOUR ADDRESS CHANGED? DO YOU HAVE ANY COMMENTS?
--------------------------------------- ---------------------------------------
--------------------------------------- ---------------------------------------
--------------------------------------- ---------------------------------------
<PAGE>
[X] PLEASE MARK VOTES AS
IN THIS EXAMPLE
--------------------------------------------------------------------------------
MUNICIPAL ADVANTAGE FUND INC.
--------------------------------------------------------------------------------
COMMON STOCK
Mark box at right if an address change or comment has been noted on the
reverse side of this card [ ]
Mark box at right if you plan to attend the meeting. [ ]
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" PROPOSALS 1 (INCLUDING THE
NOMINEE FOR DIRECTOR) AND 2
For the Withhold
Nominee
1. Election of Director. [ ] [ ]
CLASS I TO SERVE
UNTIL YEAR 2004 ANNUAL
MEETING OF STOCKHOLDERS:
WENDY W. LUERS
For Against Abstain
2. The ratification of the selection of [ ] [ ] [ ]
PricewaterhouseCoopers LLP as independent
accountants of the Fund for the year
ending October 31, 2001.
3. Any other business that may properly come before the meeting.
Please be sure to sign and date this Proxy. Date
----------------------
--------------------------------------- ---------------------------------------
Stockholder Co-owner sign
sign here here
<PAGE>
MUNICIPAL ADVANTAGE FUND INC.
PREFERRED STOCK
ANNUAL MEETING OF STOCKHOLDERS -- FEBRUARY 26, 2001
THIS PROXY IS SOLICITED ON BEHALF OF THE DIRECTORS
The undersigned hereby appoints Stephen J. Treadway, Bernard H. Garil and Newton
B. Schott, Jr. and each of them, attorneys and proxies for the undersigned, with
full power of substitution and revocation, to represent the undersigned at the
Annual Meeting of Stockholders of the Fund to be held at 1345 Avenue of the
Americas, New York, New York 10105 on February 26, 2001, at 11:00 a.m., and at
any adjournments thereof, upon the matters set forth in the Notice of Meeting
and Proxy Statement dated January 12, 2001, and upon all other matters properly
before said Meeting.
Please indicate your vote by an "X" in the appropriate box on the reverse side.
This proxy, if properly executed, will be voted in the manner directed by the
stockholder. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED FOR PROPOSALS 1
(INCLUDING THE NOMINEES FOR DIRECTOR) AND 2. Please refer to the Proxy Statement
for a discussion of the Proposals.
--------------------------------------------------------------------------------
PLEASE VOTE, DATE AND SIGN ON OTHER SIDE AND RETURN PROMPTLY IN THE ENCLOSED
ENVELOPE.
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Note: Please sign exactly as your name appears on this Proxy. If joint owners,
EITHER may sign this Proxy. When signing as attorney, executor, administrator,
trustee, guardian or corporate officer, please give your full title.
--------------------------------------------------------------------------------
---------------------------------------
HAS YOUR ADDRESS CHANGED? DO YOU HAVE ANY COMMENTS?
--------------------------------------- ---------------------------------------
--------------------------------------- ---------------------------------------
--------------------------------------- ---------------------------------------
<PAGE>
[X] PLEASE MARK VOTES AS
IN THIS EXAMPLE
--------------------------------------------------------------------------------
MUNICIPAL ADVANTAGE FUND INC.
--------------------------------------------------------------------------------
PREFERRED STOCK
Mark box at right if an address change or comment has been noted on the
reverse side of this card [ ]
Mark box at right if you plan to attend the meeting. [ ]
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" PROPOSALS 1 (INCLUDING ALL
NOMINEES FOR DIRECTOR) AND 2
For All With- For All
Nominees hold Except
1. Election of Directors. [ ] [ ] [ ]
CLASS I TO SERVE
UNTIL YEAR 2004 ANNUAL
MEETING OF STOCKHOLDERS:
ROBERT E. CONNOR;
WENDY W. LUERS
NOTE: If you do not wish your shares voted "For" a particular nominee, mark the
"For All Except" box and strike a line through the name(s) of the nominee(s) in
the list above.
For Against Abstain
2. The ratification of the selection of [ ] [ ] [ ]
PricewaterhouseCoopers LLP as independent
accountants of the Fund for the year
ending October 31, 2001.
3. Any other business that may properly come before the meeting.
Please be sure to sign and date this Proxy. Date
----------------------
--------------------------------------- ---------------------------------------
Stockholder Co-owner sign
sign here here
