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<SEC-DOCUMENT>0000891092-01-500443.txt : 20010725
<SEC-HEADER>0000891092-01-500443.hdr.sgml : 20010725
ACCESSION NUMBER:		0000891092-01-500443
CONFORMED SUBMISSION TYPE:	DEF 14A
PUBLIC DOCUMENT COUNT:		1
CONFORMED PERIOD OF REPORT:	20010822
FILED AS OF DATE:		20010724

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			MUNIYIELD INSURED FUND INC
		CENTRAL INDEX KEY:			0000883412
		STANDARD INDUSTRIAL CLASSIFICATION:	UNKNOWN SIC - 0000 [0000]
		STATE OF INCORPORATION:			NJ
		FISCAL YEAR END:			1031

	FILING VALUES:
		FORM TYPE:		DEF 14A
		SEC ACT:		
		SEC FILE NUMBER:	811-06540
		FILM NUMBER:		1687005

	BUSINESS ADDRESS:	
		STREET 1:		800 SCUDDERS MILL ROAD
		CITY:			PLAINSBORO
		STATE:			NJ
		ZIP:			08530
		BUSINESS PHONE:		6092822800
</SEC-HEADER>
<DOCUMENT>
<TYPE>DEF 14A
<SEQUENCE>1
<FILENAME>file001.htm
<DESCRIPTION>DEFINITIVE PROXY STATEMENT
<TEXT>



<HTML>
<head>
<TITLE> Notice and Proxy> </TITLE>
</head>
<body>






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<p>&nbsp;</p>















<table width=600>
  <tr>
    <td  align=center><font size=2><b>As filed with the Securities and Exchange
      <br>
      Commission on July 24, 2001</b></font></td>
  </tr>
</TABLE>
<table width=600>
  <tr>
    <td  align=center><font size=2><b>PROXY STATEMENT PURSUANT <br>
      TO SECTION 14(A) OF THE SECURITIES <br>
      EXCHANGE ACT OF 1934 (AMENDMENT NO.&nbsp;&nbsp;&nbsp;)</b></font></td>
  </tr>
</TABLE>
<p></p>
<p>
<p></p>
<p>
<table width=600>
  <tr>
    <td><font size=2>Filed by the Registrant [X]&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Filed
      by a party other than the Registrant [&nbsp;&nbsp;&nbsp;]</font></td>
  </tr>
</TABLE>
<p></p>
<p>
<p></p>
<p>
<table width=600>
  <tr>
    <td><font size=2>Check the appropriate box:</font></td>
  </tr>
</TABLE>
<p></p>
<table width=600>
  <tr>
    <td width=2% align=right valign=top>&nbsp;</td>
    <td width=5%><font size="2">[&nbsp;&nbsp;&nbsp;]</font></td>
    <td width=47% valign="top"><font size="2">Preliminary Proxy Statement</font></td>
    <td width=5% valign="top">&nbsp;</td>
    <td width=41% valign="top"><font size="2"> </font></td>
  </tr>
</TABLE>
<table width=600>
  <tr>
    <td width=2% align=right valign=top>&nbsp;</td>
    <td width=5% valign="top"><font size="2">[X]</font></td>
    <td width=93%><font size="2"> Definitive Proxy Statement </font></td>
  </tr>
</TABLE>
<table width=600>
  <tr>
    <td width=2% align=right valign=top>&nbsp;</td>
    <td width=5%><font size="2">[&nbsp;&nbsp;&nbsp;]</font></td>
    <td width=93%><font size="2"> Definitive Additional Materials</font></td>
  </tr>
</TABLE>
<table width=600>
  <tr>
    <td width=2% align=right valign=top height="24">&nbsp;</td>
    <td width=5% height="24"><font size="2">[ &nbsp;&nbsp;]</font></td>
    <td width=93% height="24"><font size="2"> Soliciting Material Pursuant to
      Rule 14a-12</font></td>
  </tr>
</TABLE>
<table width=600>
  <tr>
    <td width=2% align=right valign=top height="24">&nbsp;</td>
    <td width=5% height="24"><font size="2">[ &nbsp;&nbsp;]</font></td>
    <td width=93% height="24"><font size="2"> Confidential, for Use of the Commission
      Only <br>
      (as permitted by Rule 14a-6(e)(2))</font></td>
  </tr>
</TABLE>
<br>
<table width=600>
  <tr>
    <td  align=center><font size=3><b>MUNIYIELD INSURED FUND, INC. <br>
      P.O. Box 9011, Princeton, New Jersey 08543-9011</b></font></td>
  </tr>
</TABLE>
<table width=600>
  <tr>
    <td align=center>
      <hr size="1" noshade>
    </td>
  </tr>
</TABLE>
<table width=600>
  <tr>
    <td align=center><font size=1><font size="2">(Name of Registrant as Specified
      in Its Charter) </font></font></td>
  </tr>
</TABLE>
<br>
<table width=600>
  <tr>
    <td align=center>
      <hr size="1" noshade>
    </td>
  </tr>
</TABLE>
<table width=600>
  <tr align="center">
    <td width=100% height="24" colspan="3"><font size=1><font size="2">(Name of
      Person(s) Filing Proxy Statement if other than the Registrant)</font></font></td>
  </tr>
</TABLE>
<p>
<table width=600>
  <tr>
    <td><font size=2>Payment of filing fee (Check the appropriate box):</font></td>
  </tr>
</TABLE>
<table width=600>
  <tr>
    <td width=2% align=right valign=top>&nbsp;</td>
    <td width=5%><font size="2">[X]</font></td>
    <td width=93%><font size="2">No fee required.</font></td>
  </tr>
</TABLE>
<br>
<table width=600>
  <tr>
    <td width=2% align=right valign=top height="24">&nbsp;</td>
    <td width=5% height="24"><font size="2">[&nbsp;&nbsp; ]</font></td>
    <td width=93% height="24"><font size="2"> Fee computed on table below per
      Exchange Act Rules 14a-6(i)(1) and 0-11.</font></td>
  </tr>
</TABLE>
<p>

<table width=600>
  <tr>
    <td width=3% valign=top><font size="2"> </font></td>
    <td width=2%><font size="2">(1)</font></td>
    <td width=95%><font size="2">Title of each class of securities to which transaction
      applies:</font></td>
  </tr>
  <tr>
    <td width=3% valign=top>&nbsp;</td>
    <td width=2%>&nbsp;</td>
    <td width=95%>
      <hr size="1" noshade>
    </td>
  </tr>
</TABLE>
<br>
<table width=600>
  <tr>
    <td width=3% valign=top><font size="2"> </font></td>
    <td width=2%><font size="2">(2)</font></td>
    <td width=95%><font size="2">Aggregate number of securities to which transaction
      applies:</font></td>
  </tr>
  <tr>
    <td width=3% valign=top>&nbsp;</td>
    <td width=2%>&nbsp;</td>
    <td width=95%>
      <hr size="1" noshade>
    </td>
  </tr>
</TABLE>
<br>

<table width=600>
  <tr>
    <td width=3% valign=top>&nbsp;</td>
    <td width=2% valign="top"><font size="2">(3)</font></td>
    <td width=95%><font size="2">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.):</font></td>
  </tr>
  <tr>
    <td width=3% valign=top>&nbsp;</td>
    <td width=2%>&nbsp;</td>
    <td width=95%>
      <hr size="1" noshade>
    </td>
  </tr>
</TABLE>
<br>
<table width=600>
  <tr>
    <td width=3% valign=top>&nbsp;</td>
    <td width=2%><font size="2">(4) </font></td>
    <td width=95%><font size="2">Proposed maximum aggregate value of transaction:</font></td>
  </tr>
  <tr>
    <td width=3% valign=top>&nbsp;</td>
    <td width=2%>&nbsp;</td>
    <td width=95%>
      <hr size="1" noshade>
    </td>
  </tr>
</TABLE>
<br>
<table width=600>
  <tr>
    <td width=3% valign=top><font size="2"> </font></td>
    <td width=2%><font size="2">(5)</font></td>
    <td width=95%><font size="2">Total fee paid:</font></td>
  </tr>
  <tr>
    <td width=3% valign=top>&nbsp;</td>
    <td width=2%>&nbsp;</td>
    <td width=95%>
      <hr size="1" noshade>
    </td>
  </tr>
</TABLE>
<p>&nbsp;</p>
<table width=600>
  <tr>
    <td width=60 align=left><font size=1>&nbsp;</font></td>
    <td width=480 align=center>&nbsp;</td>
    <td width=60 align=right><font size="1">&nbsp;</font></td>
  </tr>
</TABLE>
<p>&nbsp;
<hr size=5 noshade width=600 align=LEFT>




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<p>&nbsp;</p>
<table width=600>
  <tr>
    <td width=2% align=right valign=top>&nbsp;</td>
    <td width=5%><font size="2">[&nbsp;&nbsp;&nbsp;]</font></td>
    <td width=93%><font size="2">Fee paid previously with preliminary materials:</font></td>
  </tr>
  <tr>
    <td width=2% align=right valign=top>&nbsp;</td>
    <td width=5%>&nbsp;</td>
    <td width=93%>
      <hr size="1" noshade>
    </td>
  </tr>
</TABLE>
<br>
<table width=600>
  <tr>
    <td width=2% align=right valign=top>&nbsp;</td>
    <td width=5% valign="top"><font size="2">[&nbsp;&nbsp;&nbsp;]</font></td>
    <td width=93%><font size=2>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.</font></td>
  </tr>
</TABLE>
<p></p>
<p>
<table width=600>
  <tr>
    <td width=60>&nbsp;</td>
    <td width=540><font size=2>(1) Amount previously paid:</font></td>
  </tr>
  <tr>
    <td width=60>&nbsp;</td>
    <td width=540>
      <hr size="1" noshade>
    </td>
  </tr>
</TABLE>
<p>
<table width=600>
  <tr>
    <td width=60>&nbsp;</td>
    <td width=540><font size=2>(2) Form, Schedule or Registration Statement No.:</font></td>
  </tr>
  <tr>
    <td width=60>&nbsp;</td>
    <td width=540>
      <hr size="1" noshade>
    </td>
  </tr>
</TABLE>
<p>
<table width=600>
  <tr>
    <td width=60>&nbsp;</td>
    <td width=540><font size=2>(3) Filing Party:</font></td>
  </tr>
  <tr>
    <td width=60>&nbsp;</td>
    <td width=540>
      <hr size="1" noshade>
    </td>
  </tr>
</TABLE>
<p>
<table width=600>
  <tr>
    <td width=60>&nbsp;</td>
    <td width=540><font size=2>(4) Date Filed:</font></td>
  </tr>
  <tr>
    <td width=60>&nbsp;</td>
    <td width=540>
      <hr size="1" noshade>
    </td>
  </tr>
</TABLE>
<p>&nbsp;


<p>&nbsp;
<table width=600>
  <tr>
    <td width=60 align=left><font size=1>&nbsp;</font></td>
    <td width=480 align=center><font size="2">
</font></td>
    <td width=60 align=right><font size="1">&nbsp;</font></td>
  </tr>
</TABLE>














<p>&nbsp;
<hr size=5 noshade width=600 align=LEFT>









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<p>&nbsp;</p>






<table width=600><tr><td  align=center><font size=3><B>MUNIYIELD INSURED
FUND, INC. <BR>P.O. Box 9011  <BR>Princeton, New Jersey 08543-9011</B></font></td></tr></TABLE>

<table width=600><tr><td><hr size=1 noshade align=CENTER width=150></td></tr></table>


<table width=600><tr><td  align=center><font size=2><B>NOTICE OF 2001 ANNUAL
MEETING OF STOCKHOLDERS</B></font></td></tr></TABLE>


<table width=600><tr><td><hr size=1 noshade align=CENTER width=150></td></tr></table>


<table width=600><tr><td  align=center><font size=2><B>August 22, 2001</B></font></td></tr></TABLE>


<p><table width=600><tr><td><FONT SIZE="2">T<FONT SIZE="1">O</FONT> T<FONT SIZE="1">HE</FONT> S<FONT SIZE="1">TOCKHOLDERS OF</FONT> M<FONT SIZE="1">UNIYIELD</FONT>
I<FONT SIZE="1">NSURED</FONT> F<FONT SIZE="1">UND</FONT>, I<FONT SIZE="1">NC</FONT>.:</FONT></td></tr></TABLE>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;NOTICE
IS HEREBY GIVEN that the 2001 Annual Meeting of Stockholders (the &#147;Meeting&#148;) of
MuniYield Insured Fund, Inc. (the &#147;Fund&#148;) will be held at the offices of
Merrill Lynch Investment Managers, L.P., 800 Scudders Mill Road, Plainsboro,
New Jersey, on Wednesday, August 22, 2001 at 9:40 a.m. (Eastern time) for the
following purposes:</font></td></tr></TABLE>

<table width=600><tr>
    <td width=3% valign=top><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      </font></td>
    <td width=2%><font size="2">(1)</font><font size="1"></font></td>
    <td width=95%><font size="2">To
elect a Board of Directors to serve for the ensuing year; and</font></td></tr></TABLE>

<table width=600><tr>
    <td width=3% valign=top><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      </font></td>
    <td width=2% valign="top"><font size="2">(2)</font><font size="1"></font></td>
    <td width=95%><font size="2">To
transact such other business as may properly come before the Meeting or any
adjournment thereof.</font></td></tr></TABLE>
<p>
<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Board of Directors has fixed the close of business on June 27, 2001 as the
record date for the determination of stockholders entitled to notice of and to
vote at the Meeting or any adjournment thereof.</font></td></tr></TABLE>

<p><table width=600><tr>
    <td><FONT SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A complete list of the stockholders
      of the Fund entitled to vote at the Meeting will be available and open to
      the examination of any stockholder of the Fund for any purpose germane to
      the Meeting during ordinary business hours from and after August 8, 2001,
      at the office of the Fund, 800 Scudders Mill Road, Plainsboro, New Jersey.
      You are cordially invited to attend the Meeting. <B>Stockholders who do
      not expect to attend the meeting in person are requested to complete, date
      and sign the enclosed form of proxy and return it promptly in the envelope
      provided for this purpose. If you have been provided with the opportunity
      on your proxy card or voting instruction form to provide voting instructions
      via telephone or the Internet, please take advantage of these prompt and
      efficient voting options</B>. The enclosed proxy is being solicited on behalf
      of the Board of Directors of the Fund.</FONT></td>
  </tr></TABLE>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If you
have any questions regarding the enclosed proxy material or need assistance in
voting your shares, please contact our proxy solicitor, Georgeson Shareholder
at 1-800-645-4519.</font></td></tr></TABLE>

<p><table width=600><tr><td align=right><font size=2>By Order of the Board
of Directors</font></td></tr></TABLE>


<br>
<table width="600" border="0" cellspacing="0" cellpadding="0">
  <tr>
    <td width="414">&nbsp;&nbsp;&nbsp;</td>
    <td width="186"><font size="2">B<font size="1">RADLEY</font> J. L<font size="1">UCIDO</font>
      <br>
      <i> Secretary</i> </font></td>
  </tr>
</TABLE>
<br>
<p><table width=600><tr><td><font size=2>Plainsboro, New Jersey  <BR>
      Dated: July 24, 2001</font></td>
  </tr></TABLE>




<p>&nbsp;
<table width=600><tr><td width=60 align=left><font size=1>&nbsp;</font></td><td width=480 align=center><font size="2">
</font></td><td width=60 align=right><font size="1">&nbsp;</font></td></tr></TABLE><p>&nbsp;<hr size=5 noshade width=600 align=LEFT><p>&nbsp;










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<p><table width=600><tr><td  align=center><font size=3><B>PROXY STATEMENT</B></font></td></tr></TABLE>

<table width=600><tr><td><hr size=1 noshade align=CENTER width=150></td></tr></table>


<table width=600><tr><td  align=center><font size=3><B>MUNIYIELD INSURED
FUND, INC. <BR>P.O. Box 9011 <BR>Princeton, New Jersey 08543-9011</B></font></td></tr></TABLE>


<table width=600><tr><td><hr size=1 noshade align=CENTER width=150></td></tr></table>


<br>
<table width=600><tr><td  align=center><font size=2><B>2001 ANNUAL MEETING
OF STOCKHOLDERS</B></font></td></tr></TABLE>


<br>
<table width=600><tr><td><hr size=1 noshade align=CENTER width=150></td></tr></table>



<p><table width=600><tr><td  align=center><font size=2><B>August 22, 2001</B></font></td></tr></TABLE>


<p><table width=600><tr><td  align=center><font size=2><B>INTRODUCTION</B></font></td></tr></TABLE>

<p><table width=600><tr>
    <td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This Proxy Statement is furnished
      in connection with the solicitation of proxies on behalf of the Board of
      Directors of MuniYield Insured Fund, Inc., a Maryland corporation (the &#147;Fund&#148;),
      to be voted at the 2001 Annual Meeting of Stockholders of the Fund (the
      &#147;Meeting&#148;), to be held at the offices of Merrill Lynch Investment
      Managers, L.P. (&#147;MLIM&#148;), 800 Scudders Mill Road, Plainsboro, New
      Jersey, on Wednesday, August 22, 2001 at 9:40 a.m. (Eastern time). The approximate
      mailing date of this Proxy Statement is July 26, 2001.</font></td>
  </tr></TABLE>

<p><table width=600><tr>
    <td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;All properly executed proxies
      received prior to the Meeting will be voted at the Meeting in accordance
      with the instructions marked thereon or otherwise as provided therein. Unless
      instructions to the contrary are marked, proxies will be voted <i>for</i>
      the election of the Board of Directors to serve for the ensuing year. Any
      proxy may be revoked at any time prior to the exercise thereof by giving
      written notice to the Secretary of the Fund at the Fund&#146;s address indicated
      above or by voting in person at the Meeting.</font></td>
  </tr></TABLE>

<p><table width=600><tr>
    <td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Board of Directors has
      fixed the close of business on June 27, 2001 as the record date (the &#147;Record
      Date&#148;) for the determination of stockholders entitled to notice of
      and to vote at the Meeting and at any adjournment thereof. Stockholders
      on the Record Date will be entitled to one vote for each share held, with
      no shares having cumulative voting rights. As of the Record Date, the Fund
      had outstanding 61,945,880 shares of common stock, par value $.10 per share
      (&#147;Common Stock&#148;), and 17,600 shares of auction market preferred
      stock, par value $.05 per share and liquidation preference of $25,000 per
      share plus an amount equal to accumulated but unpaid dividends thereon (&#147;AMPS&#148;).
      To the knowledge of the Fund, as of the Record Date, no person is the beneficial
      owner of more than five percent of the outstanding shares of Common Stock
      or five percent of the outstanding AMPS.</font></td>
  </tr></TABLE>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Board of Directors of the Fund knows of no business other than that mentioned
in Item 1 of the Notice of Meeting that will be presented for consideration at
the Meeting. If any other matter is properly presented, it is the intention of
the persons named in the enclosed proxy to vote in accordance with their best
judgment.</font></td></tr></TABLE>





<p>&nbsp;
<table width=600><tr><td width=60 align=left><font size=1>&nbsp;</font></td><td width=480 align=center><font size="2">
</font></td><td width=60 align=right><font size="1">&nbsp;</font></td></tr></TABLE><p>&nbsp;<hr size=5 noshade width=600 align=LEFT><p>&nbsp;











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<!-- MARKER LABEL="sheet: 5, page: 5" -->






<p><table width=600><tr><td  align=center><font size=2><B>ITEM 1. ELECTION OF
DIRECTORS</B></font></td></tr></TABLE>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;At the
Meeting, the Board of Directors will be elected to serve until the next Annual
Meeting of Stockholders and until their successors are elected and qualified.
It is intended that all properly executed proxies will be voted (unless such
authority has been withheld in the proxy) as follows:</font></td></tr></TABLE>

<p><table width=600>
<tr><td width=30>&nbsp;</td>
<td width=570><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1)
All such proxies of the holders of shares of AMPS, voting separately as a
class, in favor of the two (2) persons designated as Directors to be elected by
holders of AMPS; and</font></td></tr></TABLE>

<p><table width=600>
<tr><td width=30>&nbsp;</td>
<td width=570><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2)
All such proxies of the holders of shares of Common Stock and AMPS, voting
together as a single class, will be voted in favor of the four (4) persons
designated as Directors to be elected by holders of Common Stock and AMPS.</font></td></tr></TABLE>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Board of Directors of the Fund knows of no reason why any of these nominees
will be unable to serve, but in the event of any such unavailability, the
proxies received will be voted for such substitute nominee or nominees as the
Board of Directors may recommend.</font></td></tr></TABLE>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Certain
information concerning the nominees, including their designated classes, is set
forth as follows:</font></td></tr></TABLE>

<p><table width=600><tr><td><font size=2><B>To Be Elected by Holders of AMPS,
Voting Separately as a Class:</B></font></td></tr></TABLE>


<br>
<table cellspacing=0 border=0 cellpadding=0 width=600>
  <tr valign="bottom" align="center">
    <td width="173">&nbsp;</td>
    <td width="15">&nbsp;</td>
    <td width="34">&nbsp;</td>
    <td width="15">&nbsp;</td>
    <td width="194">&nbsp;</td>
    <td width="15">&nbsp;</td>
    <td width="45">&nbsp;</td>
    <td width="14">&nbsp;</td>
    <td width="95" colspan="3"><font size="1"><b>Shares Beneficially <br>
      Owned at the <br>
      Record Date</b></font><font size="2"><b> </b></font>
      <hr size="1" noshade>
    </td>
  </tr>
  <tr valign="bottom" align="center">
    <td width="173" align="left"><font size="2"><b><font size="1">Name and Address
      of Nominee</font></b></font>
      <hr size="1" align="left" noshade width="140">
    </td>
    <td width="15">&nbsp;</td>
    <td width="34"><font size="2"><b><font size="1">Age</font></b></font>
      <hr size="1" noshade>
    </td>
    <td width="15">&nbsp;</td>
    <td width="194"><font size="2"><b><font size="1">Principal Occupation During
      Past<br>
      </font><font size="2"><b><font size="1">Five Years and Public Directorships(1)</font></b></font><font size="1">
      </font></b></font>
      <hr size="1" noshade>
      <font size="2"><b><font size="1"> </font></b></font></td>
    <td width="15">&nbsp;</td>
    <td width="45"><font size="2"><b><font size="1">Director<br>
      </font><font size="2"><b><font size="1"> Since </font></b></font></b></font>
      <hr size="1" noshade>
    </td>
    <td width="14">&nbsp;</td>
    <td width="45"><font size="2"><b><font size="1">Common<br>
      </font><font size="2"><b><font size="1"> Stock</font></b></font><font size="1">
      </font></b></font>
      <hr size="1" noshade>
      <font size="2"><b><font size="1"> </font></b></font></td>
    <td width="16">&nbsp;</td>
    <td width="34"><font size="2"><b><font size="1">AMPS</font></b></font>
      <hr size="1" noshade>
    </td>
  </tr>
  <tr valign="top">
    <td width="173"> <font size="2">Walter Mintz<font size="1"><sup>(1)(2)</sup></font>
      <br>
      1114 Avenue of the Americas <br>
      New York, New York 10036</font></td>
    <td width="15"> <font size="2">&nbsp;&nbsp;&nbsp;</font></td>
    <td width="34" align="center"> <font size="2">72</font></td>
    <td width="15"> <font size="2">&nbsp;&nbsp;&nbsp;</font></td>
    <td width="194"> <font size="2">Special Limited Partner of <br>
      &nbsp;&nbsp;&nbsp; Cumberland Associates <br>
      &nbsp;&nbsp;&nbsp; (investment partnership) since <br>
      &nbsp;&nbsp;&nbsp; 1982.</font></td>
    <td width="15"> <font size="2">&nbsp;&nbsp;&nbsp;</font></td>
    <td width="45" valign="top" align="center"> <font size="2">1992</font></td>
    <td width="14" valign="top" align="center"> <font size="2">&nbsp;&nbsp;&nbsp;</font></td>
    <td width="45" valign="top" align="center"> <font size="2">-0-</font></td>
    <td width="16" valign="top" align="center"> <font size="2">&nbsp;&nbsp;&nbsp;</font></td>
    <td width="34" valign="top" align="center"> <font size="2">-0-</font></td>
  </tr>
  <tr valign="top">
    <td width="173">&nbsp;</td>
    <td width="15">&nbsp;</td>
    <td width="34" align="center">&nbsp;</td>
    <td width="15">&nbsp;</td>
    <td width="194">&nbsp;</td>
    <td width="15">&nbsp;</td>
    <td width="45" valign="top" align="center">&nbsp;</td>
    <td width="14" valign="top" align="center">&nbsp;</td>
    <td width="45" valign="top" align="center">&nbsp;</td>
    <td width="16" valign="top" align="center">&nbsp;</td>
    <td width="34" valign="top" align="center">&nbsp;</td>
  </tr>
  <tr valign="top">
    <td width="173"> <font size="2">Melvin R. Seiden<font size="1"><sup>(1)(2)</sup></font><br>
      780 Third Avenue <br>
      Suite 2502 <br>
      New York, New York 10017</font></td>
    <td width="15">&nbsp;</td>
    <td width="34" align="center"> <font size="2">70</font></td>
    <td width="15">&nbsp;</td>
    <td width="194"> <font size="2">Director of Silbanc Properties, Ltd. <br>
      &nbsp;&nbsp;&nbsp; (real estate, investment and <br>
      &nbsp;&nbsp;&nbsp; consulting) since 1987; <br>
      &nbsp;&nbsp;&nbsp; Chairman and President of <br>
      &nbsp;&nbsp;&nbsp; Seiden &amp; de Cuevas, Inc. <br>
      &nbsp;&nbsp;&nbsp; (private investment firm) from <br>
      &nbsp;&nbsp;&nbsp; 1964 to 1987.</font></td>
    <td width="15">&nbsp;</td>
    <td width="45" valign="top" align="center"> <font size="2">1992</font></td>
    <td width="14" valign="top" align="center">&nbsp;</td>
    <td width="45" valign="top" align="center"> <font size="2">-0-</font></td>
    <td width="16" valign="top" align="center">&nbsp;</td>
    <td width="34" valign="top" align="center"> <font size="2">-0-</font></td>
  </tr>
</TABLE>
<br>
<br>
<table width=600><tr><td width=60 align=left><font size=1>&nbsp;</font></td><td width=480 align=center><font size="2">
2</font></td><td width=60 align=right><font size="1">&nbsp;</font></td></tr></TABLE><p>&nbsp;<hr size=5 noshade width=600 align=LEFT><p>&nbsp;









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<!-- MARKER LABEL="sheet: 6, page: 6" -->







<p><table width=600><tr><td><font size=2><B>To Be Elected by Holders of Common
Stock and AMPS, Voting Together as a Single Class:</B></font></td></tr></TABLE>


<br>
<table cellspacing=0 border=0 cellpadding=0 width=600>
  <tr valign="bottom" align="center">
    <td width="173">&nbsp;</td>
    <td width="15">&nbsp;</td>
    <td width="34">&nbsp;</td>
    <td width="15">&nbsp;</td>
    <td width="194">&nbsp;</td>
    <td width="15">&nbsp;</td>
    <td width="45">&nbsp;</td>
    <td width="14">&nbsp;</td>
    <td width="95" colspan="3"><font size="1"><b>Shares Beneficially <br>
      Owned at the <br>
      Record Date</b></font><font size="2"><b> </b></font>
      <hr size="1" noshade>
    </td>
  </tr>
  <tr valign="bottom" align="center">
    <td width="173" align="left"><font size="2"><b><font size="1">Name and Address
      of Nominee</font></b></font>
      <hr size="1" align="left" noshade width="140">
    </td>
    <td width="15">&nbsp;</td>
    <td width="34"><font size="2"><b><font size="1">Age</font></b></font>
      <hr size="1" noshade>
    </td>
    <td width="15">&nbsp;</td>
    <td width="194"><font size="2"><b><font size="1">Principal Occupation During
      Past<br>
      </font><font size="2"><b><font size="1">Five Years and Public Directorships(1)</font></b></font><font size="1">
      </font></b></font>
      <hr size="1" noshade>
      <font size="2"><b><font size="1"> </font></b></font></td>
    <td width="15">&nbsp;</td>
    <td width="45"><font size="2"><b><font size="1">Director<br>
      </font><font size="2"><b><font size="1"> Since </font></b></font></b></font>
      <hr size="1" noshade>
    </td>
    <td width="14">&nbsp;</td>
    <td width="45"><font size="2"><b><font size="1">Common<br>
      </font><font size="2"><b><font size="1"> Stock</font></b></font><font size="1">
      </font></b></font>
      <hr size="1" noshade>
      <font size="2"><b><font size="1"> </font></b></font></td>
    <td width="16">&nbsp;</td>
    <td width="34"><font size="2"><b><font size="1">AMPS</font></b></font>
      <hr size="1" noshade>
    </td>
  </tr>
  <tr valign="top">
    <td width="173"> <font size="2">Terry K. Glenn<sup><font size="1">(1)</font></sup>*
      <br>
      P.O. Box 9011 <br>
      Princeton, New Jersey <br>
      08543-9011</font></td>
    <td width="15">&nbsp;</td>
    <td width="34" align="center"> <font size="2">60</font></td>
    <td width="15">&nbsp;</td>
    <td width="194"> <font size="2">Executive Vice President of MLIM<br>
      &nbsp;&nbsp;&nbsp; and Fund Asset Management, <br>
      &nbsp;&nbsp;&nbsp; L.P. (&#147;FAM&#148;) (which terms as <br>
      &nbsp;&nbsp;&nbsp; used herein include their <br>
      &nbsp;&nbsp;&nbsp; corporate predecessors) since <br>
      &nbsp;&nbsp;&nbsp; 1983; Executive Vice President <br>
      &nbsp;&nbsp;&nbsp; and Director of Princeton <br>
      &nbsp;&nbsp;&nbsp; Services, Inc. (&#147;Princeton <br>
      &nbsp;&nbsp;&nbsp; Services&#148;) since 1993; President <br>
      &nbsp;&nbsp;&nbsp; of FAM Distributors, Inc. <br>
      &nbsp;&nbsp;&nbsp; (&#147;FAMD&#148;) since 1986 and <br>
      &nbsp;&nbsp;&nbsp; Director thereof since 1991; <br>
      &nbsp;&nbsp;&nbsp; President of Princeton <br>
      &nbsp;&nbsp;&nbsp; Administrators, L.P. since 1988; <br>
      &nbsp;&nbsp;&nbsp; Director of Financial Data <br>
      &nbsp;&nbsp;&nbsp; Services, Inc. since 1985.</font></td>
    <td width="15">&nbsp;</td>
    <td width="45" valign="top" align="center"> <font size="2">1999</font></td>
    <td width="14" valign="top" align="center">&nbsp;</td>
    <td width="45" valign="top" align="center"> <font size="2">-0-</font></td>
    <td width="16" valign="top" align="center">&nbsp;</td>
    <td width="34" valign="top" align="center"> <font size="2">-0-</font></td>
  </tr>
  <tr valign="top">
    <td width="173">&nbsp;</td>
    <td width="15">&nbsp;</td>
    <td width="34" align="center">&nbsp;</td>
    <td width="15">&nbsp;</td>
    <td width="194">&nbsp;</td>
    <td width="15">&nbsp;</td>
    <td width="45" valign="top" align="center">&nbsp;</td>
    <td width="14" valign="top" align="center">&nbsp;</td>
    <td width="45" valign="top" align="center">&nbsp;</td>
    <td width="16" valign="top" align="center">&nbsp;</td>
    <td width="34" valign="top" align="center">&nbsp;</td>
  </tr>
  <tr valign="top">
    <td width="173"> <font size="2">Joe Grills<font size="1"><sup>(1)(2)</sup></font>
      <br>
      P.O. Box 98 <br>
      Rapidan, Virginia 22733</font></td>
    <td width="15">&nbsp;</td>
    <td width="34" align="center"> <font size="2">66 </font></td>
    <td width="15">&nbsp;</td>
    <td width="194"> <font size="2">Member of the Committee of <br>
      &nbsp;&nbsp;&nbsp; Investment of Employee Benefit <br>
      &nbsp;&nbsp;&nbsp; Assets of the Association for <br>
      &nbsp;&nbsp;&nbsp; Financial Professionals <br>
      &nbsp;&nbsp;&nbsp; (&#147;CIEBA&#148;) since 1986; Member <br>
      &nbsp;&nbsp;&nbsp; of CIEBA&#146;s Executive <br>
      &nbsp;&nbsp;&nbsp; Committee since 1988 and its <br>
      &nbsp;&nbsp;&nbsp; Chairman from 1991 to 1993; <br>
      &nbsp;&nbsp;&nbsp; Assistant Treasurer of <br>
      &nbsp;&nbsp;&nbsp; International Business <br>
      &nbsp;&nbsp;&nbsp; Machines Corporation (&#147;IBM&#148;) <br>
      &nbsp;&nbsp;&nbsp; and Chief Investment Officer of <br>
      &nbsp;&nbsp;&nbsp; IBM Retirement Funds from <br>
      &nbsp;&nbsp;&nbsp; 1986 until 1993; Member of the <br>
      &nbsp;&nbsp;&nbsp; Investment Advisory <br>
      &nbsp;&nbsp;&nbsp; Committee of the State of New <br>
      &nbsp;&nbsp;&nbsp; York Common Retirement Fund <br>
      &nbsp;&nbsp;&nbsp; since 1989; Member of the <br>
      &nbsp;&nbsp;&nbsp; Investment Advisory <br>
      &nbsp;&nbsp;&nbsp; Committee of the Howard <br>
      &nbsp;&nbsp;&nbsp; Hughes Medical Institute from <br>
      &nbsp;&nbsp;&nbsp; 1997 to 2000; Director, Duke <br>
      &nbsp;&nbsp;&nbsp; Management Company <br>
      &nbsp;&nbsp;&nbsp; since 1992 and</font></td>
    <td width="15">&nbsp;</td>
    <td width="45" valign="top" align="center"> <font size="2">1994</font></td>
    <td width="14" valign="top" align="center">&nbsp;</td>
    <td width="45" valign="top" align="center"> <font size="2">-0-</font></td>
    <td width="16" valign="top" align="center">&nbsp;</td>
    <td width="34" valign="top" align="center"> <font size="2">-0-</font></td>
  </tr>
</TABLE>
<br>
<br>
<table width=600><tr><td width=60 align=left><font size=1>&nbsp;</font></td><td width=480 align=center><font size="2">
3</font></td><td width=60 align=right><font size="1">&nbsp;</font></td></tr></TABLE><p>&nbsp;<hr size=5 noshade width=600 align=LEFT>
<p>&nbsp;





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<!-- MARKER LABEL="sheet: 7, page: 7" -->


<p>
<table cellspacing=0 border=0 cellpadding=0 width=600>
  <tr valign="bottom" align="center">
    <td width="173">&nbsp;</td>
    <td width="15">&nbsp;</td>
    <td width="34">&nbsp;</td>
    <td width="15">&nbsp;</td>
    <td width="194">&nbsp;</td>
    <td width="15">&nbsp;</td>
    <td width="45">&nbsp;</td>
    <td width="14">&nbsp;</td>
    <td width="95" colspan="3"><font size="1"><b>Shares Beneficially <br>
      Owned at the <br>
      Record Date</b></font><font size="2"><b> </b></font>
      <hr size="1" noshade>
    </td>
  </tr>
  <tr valign="bottom" align="center">
    <td width="173" align="left"><font size="2"><b><font size="1">Name and Address
      of Nominee</font></b></font>
      <hr size="1" align="left" noshade width="140">
    </td>
    <td width="15">&nbsp;</td>
    <td width="34"><font size="2"><b><font size="1">Age</font></b></font>
      <hr size="1" noshade>
    </td>
    <td width="15">&nbsp;</td>
    <td width="194"><font size="2"><b><font size="1">Principal Occupation During
      Past<br>
      </font><font size="2"><b><font size="1">Five Years and Public Directorships(1) </font></b></font><font size="1">
      </font></b></font>
      <hr size="1" noshade>
      <font size="2"><b><font size="1"> </font></b></font></td>
    <td width="15">&nbsp;</td>
    <td width="45"><font size="2"><b><font size="1">Director<br>
      </font><font size="2"><b><font size="1"> Since </font></b></font></b></font>
      <hr size="1" noshade>
    </td>
    <td width="14">&nbsp;</td>
    <td width="45"><font size="2"><b><font size="1">Common<br>
      </font><font size="2"><b><font size="1"> Stock</font></b></font><font size="1">
      </font></b></font>
      <hr size="1" noshade>
      <font size="2"><b><font size="1"> </font></b></font></td>
    <td width="16">&nbsp;</td>
    <td width="34"><font size="2"><b><font size="1">AMPS</font></b></font>
      <hr size="1" noshade>
    </td>
  </tr>
  <tr valign="top">
    <td width="173"> <font size="2">Joe Grills (continued)</font></td>
    <td width="15">&nbsp;</td>
    <td width="34" align="center">&nbsp;</td>
    <td width="15">&nbsp;</td>
    <td width="194"> <font size="2"> &nbsp;&nbsp;&nbsp; Vice Chairman since 1998;
      <br>
      &nbsp;&nbsp;&nbsp; Director, LaSalle Street Fund <br>
      &nbsp;&nbsp;&nbsp; since 1995; Director, Kimco <br>
      &nbsp;&nbsp;&nbsp; Realty Corporation since 1997; <br>
      &nbsp;&nbsp;&nbsp; Member of the Investment <br>
      &nbsp;&nbsp;&nbsp; Advisory Committee of the <br>
      &nbsp;&nbsp;&nbsp; Virginia Retirement System <br>
      &nbsp;&nbsp;&nbsp; since 1998; Director, Montpelier <br>
      &nbsp;&nbsp;&nbsp; Foundation since 1998 and its <br>
      &nbsp;&nbsp;&nbsp; Vice Chairman since 2000; <br>
      &nbsp;&nbsp;&nbsp; Member of the Investment <br>
      &nbsp;&nbsp;&nbsp; Committee of the Woodberry <br>
      &nbsp;&nbsp;&nbsp; Forest School since 2000; <br>
      &nbsp;&nbsp;&nbsp; Member of the Investment <br>
      &nbsp;&nbsp;&nbsp; Committee of the National Trust <br>
      &nbsp;&nbsp;&nbsp; for Historic Preservation since <br>
      &nbsp;&nbsp;&nbsp; 2000.</font></td>
    <td width="15">&nbsp;</td>
    <td width="45" valign="top" align="center">&nbsp;</td>
    <td width="14" valign="top" align="center">&nbsp;</td>
    <td width="45" valign="top" align="center"> <font size="2">-0-</font></td>
    <td width="16" valign="top" align="center">&nbsp;</td>
    <td width="34" valign="top" align="center"> <font size="2">-0-</font></td>
  </tr>
  <tr valign="top">
    <td width="173">&nbsp;</td>
    <td width="15">&nbsp;</td>
    <td width="34" align="center">&nbsp;</td>
    <td width="15">&nbsp;</td>
    <td width="194">&nbsp;</td>
    <td width="15">&nbsp;</td>
    <td width="45" valign="top" align="center">&nbsp;</td>
    <td width="14" valign="top" align="center">&nbsp;</td>
    <td width="45" valign="top" align="center">&nbsp;</td>
    <td width="16" valign="top" align="center">&nbsp;</td>
    <td width="34" valign="top" align="center">&nbsp;</td>
  </tr>
  <tr valign="top">
    <td width="173"> <font size="2">Robert S. Salomon, Jr.<sup><font size="1">(1)(2)</font></sup>
      <br>
      106 Dolphin Cove Quay <br>
      Stamford, Connecticut 06902</font></td>
    <td width="15">&nbsp;</td>
    <td width="34" align="center"> <font size="2">64 </font></td>
    <td width="15">&nbsp;</td>
    <td width="194"> <font size="2">Principal of STI Management <br>
      &nbsp;&nbsp;&nbsp; (investment adviser) since <br>
      &nbsp;&nbsp;&nbsp; 1994; Chairman and CEO of <br>
      &nbsp;&nbsp;&nbsp; Salomon Brothers Asset <br>
      &nbsp;&nbsp;&nbsp; Management from 1992 until <br>
      &nbsp;&nbsp;&nbsp; 1995; Chairman of Salomon <br>
      &nbsp;&nbsp;&nbsp; Brothers equity mutual funds <br>
      &nbsp;&nbsp;&nbsp; from 1992 until 1995; Regular <br>
      &nbsp;&nbsp;&nbsp; columnist with <i>Forbes</i> Magazine <br>
      &nbsp;&nbsp;&nbsp; since 1992; Director of Stock <br>
      &nbsp;&nbsp;&nbsp; Research and U.S. Equity <br>
      &nbsp;&nbsp;&nbsp; Strategist at Salomon Brothers <br>
      &nbsp;&nbsp;&nbsp; Inc. from 1975 until 1991; <br>
      &nbsp;&nbsp;&nbsp; Trustee, Commonfund since <br>
      &nbsp;&nbsp;&nbsp; 1980.<br>
      </font></td>
    <td width="15">&nbsp;</td>
    <td width="45" valign="top" align="center"> <font size="2">1996</font></td>
    <td width="14" valign="top" align="center">&nbsp;</td>
    <td width="45" valign="top" align="center"> <font size="2">-0-</font></td>
    <td width="16" valign="top" align="center">&nbsp;</td>
    <td width="34" valign="top" align="center"> <font size="2">-0-</font></td>
  </tr>
</TABLE>
<p><br>
<table width=600><tr><td width=60 align=left><font size=1>&nbsp;</font></td><td width=480 align=center><font size="2">
4</font></td><td width=60 align=right><font size="1">&nbsp;</font></td></tr></TABLE><p>&nbsp;<hr size=5 noshade width=600 align=LEFT>




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<p>&nbsp;
<table cellspacing=0 border=0 cellpadding=0 width=600>
  <tr valign="bottom" align="center">
    <td width="173">&nbsp;</td>
    <td width="15">&nbsp;</td>
    <td width="34">&nbsp;</td>
    <td width="15">&nbsp;</td>
    <td width="194">&nbsp;</td>
    <td width="15">&nbsp;</td>
    <td width="45">&nbsp;</td>
    <td width="14">&nbsp;</td>
    <td width="95" colspan="3"><font size="1"><b>Shares Beneficially <br>
      Owned at the <br>
      Record Date</b></font><font size="2"><b> </b></font>
      <hr size="1" noshade>
    </td>
  </tr>
  <tr valign="bottom" align="center">
    <td width="173" align="left"><font size="2"><b><font size="1">Name and Address
      of Nominee</font></b></font>
      <hr size="1" align="left" noshade width="140">
    </td>
    <td width="15">&nbsp;</td>
    <td width="34"><font size="2"><b><font size="1">Age</font></b></font>
      <hr size="1" noshade>
    </td>
    <td width="15">&nbsp;</td>
    <td width="194"><font size="2"><b><font size="1">Principal Occupation During
      Past<br>
      </font><font size="2"><b><font size="1">Five Years and Public Directorships(1)</font></b></font><font size="1">
      </font></b></font>
      <hr size="1" noshade>
      <font size="2"><b><font size="1"> </font></b></font></td>
    <td width="15">&nbsp;</td>
    <td width="45"><font size="2"><b><font size="1">Director<br>
      </font><font size="2"><b><font size="1"> Since </font></b></font></b></font>
      <hr size="1" noshade>
    </td>
    <td width="14">&nbsp;</td>
    <td width="45"><font size="2"><b><font size="1">Common<br>
      </font><font size="2"><b><font size="1">Stock</font></b></font><font size="1">
      </font></b></font>
      <hr size="1" noshade>
      <font size="2"><b></b></font></td>
    <td width="16">&nbsp;</td>
    <td width="34"><font size="2"><b><font size="1">AMPS</font></b></font>
      <hr size="1" noshade>
    </td>
  </tr>
  <tr valign="top">
    <td width="173"> <font size="2">Stephen B. Swensrud<sup><font size="1">(1)(2)</font></sup>
      <br>
      88 Broad Street, 2nd Floor <br>
      Boston, Massachusetts 02110</font></td>
    <td width="15">&nbsp;</td>
    <td width="34" align="center"> <font size="2">68</font></td>
    <td width="15">&nbsp;</td>
    <td width="194"> <font size="2">Chairman of Fernwood Advisors <br>
      &nbsp;&nbsp;&nbsp; (investment adviser) since 1996; <br>
      &nbsp;&nbsp;&nbsp; Principal of Fernwood <br>
      &nbsp;&nbsp;&nbsp; Associates (financial <br>
      &nbsp;&nbsp;&nbsp; consultant) since 1975; <br>
      &nbsp;&nbsp; Chairman of RPP Corporation <br>
      &nbsp;&nbsp;&nbsp; (manufacturing) since 1978; <br>
      &nbsp;&nbsp;&nbsp; Director of International Mobile <br>
      &nbsp;&nbsp;&nbsp; Communications, Inc. <br>
      &nbsp;&nbsp;&nbsp; (telecommunications) since 1998.</font></td>
    <td width="15">&nbsp;</td>
    <td width="45" valign="top" align="center"> <font size="2">1992</font></td>
    <td width="14" valign="top" align="center">&nbsp;</td>
    <td width="45" valign="top" align="center"> <font size="2">-0-</font></td>
    <td width="16" valign="top" align="center">&nbsp;</td>
    <td width="34" valign="top" align="center"> <font size="2">-0-</font></td>
  </tr>
</TABLE>
<table width=600><tr><td><hr size=1 noshade align=left  width=75></td></tr></table>

<table width=600><tr><td width=3% valign=top><font size="1">(1)
</font></td><td width=2%><font size="1"></font></td><td width=95%><font size="1">Each
of the nominees is a director, trustee or member of an advisory board of
certain other investment companies for which FAM or MLIM acts as investment
adviser. See &#147;Compensation of Directors&#148; below.</font></td></tr></TABLE>

<table width=600><tr><td width=3% valign=top><font size="1">(2)
</font></td><td width=2%><font size="1"></font></td><td width=95%><font size="1">Member
of the Audit Committee of the Board of Directors.</font></td></tr></TABLE>

<table width=600><tr><td width=3% valign=top><font size="1">*
</font></td><td width=2%><font size="1"></font></td><td width=95%><font size="1">Interested
person, as defined in the Investment Company Act of 1940, as amended (the
&#147;Investment Company Act&#148;), of the Fund.</font></td></tr></TABLE>


<p><table width=600><tr>
    <td><FONT SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Audit Committee Report</I>.
      The Board of Directors has a standing Audit Committee, which consists of
      the Directors who are not &#147;interested persons&#148; of the Fund within
      the meaning of the Investment Company Act and who are &#147;independent&#148;
      as defined in the listing standards of the New York Stock Exchange. Currently,
      Messrs. Grills, Mintz, Salomon, Seiden and Swensrud are members of the Committee.
      The principal responsibilities of the Committee are to: (i) recommend to
      the Board the selection, retention or termination of the Fund&#146;s independent
      auditors; (ii) review with the independent auditors the scope, performance
      and anticipated cost of their audit; (iii) discuss with the independent
      auditors certain matters relating to the Fund&#146;s financial statements,
      including any adjustment to such financial statements recommended by such
      independent auditors, or any other results of any audit; (iv) ensure that
      the independent auditors submit on a periodic basis a formal written statement
      with respect to their independence, discuss with the independent auditors
      any relationships or services disclosed in the statement that may impact
      the objectivity and independence of the Fund&#146;s independent auditors
      and recommend that the Board take appropriate action in response thereto
      to satisfy itself of the independent auditors&#146; independence; and (v)
      consider the comments of the independent auditors and management&#146;s
      responses thereto with respect to the quality and adequacy of the Fund&#146;s
      accounting and financial reporting policies and practices and internal controls.
      The Fund adopted an Audit Committee Charter (the &#147;Charter&#148;) at
      a meeting held on June 6, 2000. The Board of Directors revised and reapproved
      the Charter on April 11, 2001. A copy of the Charter is attached to this
      Proxy Statement as Exhibit B. The Committee also has (a) received written
      disclosures and the letter required by Independence Standards Board Standard
      No. 1 from Ernst &amp; Young <font size="1">LLP</font> (&#147;E&amp;Y&#148;),
      independent auditors for the Fund, and (b) discussed certain matters required
      to be discussed by Statements on Auditing Standards No. 61 with E&amp;Y.
      The Committee has considered whether the provision of non-audit services
      by the Fund&#146;s independent auditors is compatible with maintaining the
      independence of those auditors.</FONT></td>
  </tr></TABLE>




<p>&nbsp;
<table width=600><tr><td width=60 align=left><font size=1>&nbsp;</font></td><td width=480 align=center><font size="2">
5</font></td><td width=60 align=right><font size="1">&nbsp;</font></td></tr></TABLE><p>&nbsp;<hr size=5 noshade width=600 align=LEFT><p>&nbsp;









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<!-- MARKER LABEL="sheet: 9, page: 9" -->






<p><table width=600><tr>
    <td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;At its meeting held on January
      10, 2001, the Committee reviewed and discussed the audit of the Fund&#146;s
      financial statements with Fund management and E&amp;Y. Had any material
      concerns arisen during the course of the audit and the preparation of the
      audited financial statements mailed to stockholders and included in the
      Fund&#146;s Annual Report, the Committee would have been notified by Fund
      management or E&amp;Y. The Committee received no such notifications. Beginning
      with the Fund&#146;s fiscal year ending October 31, 2001, the Committee
      will recommend to the Board whether or not each Fund&#146;s audited financial
      statements should be included in its Annual Report to Stockholders.</font></td>
  </tr></TABLE>

<p><table width=600><tr>
    <td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In addition to the above, the
      Committee also reviews and nominates candidates to serve as non-interested
      Board members. The Committee generally will not consider nominees recommended
      by stockholders of a Fund. The non-interested Board members have retained
      independent legal counsel to assist them in connection with these duties.</font></td>
  </tr></TABLE>

<p><table width=600><tr><td><FONT SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Committee
and Board Meetings</I>. During the fiscal year ended October 31, 2000, each of the
Directors then in office attended at least 75% of the aggregate of the total
number of meetings of the Board of Directors and, if a member, of the total
number of meetings of the Audit Committee held during such period.</FONT></td></tr></TABLE>

<p><table width=600><tr><td><FONT SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Compliance
with Section 16(a) of the Securities Exchange Act of 1934</I>. Section 16(a) of the
Securities Exchange Act of 1934, as amended (the &#147;Exchange Act&#148;), requires the
Fund&#146;s officers and directors and persons who own more than ten percent of a
registered class of the Fund&#146;s equity securities, to file reports of ownership
and changes in ownership on Forms 3, 4 and 5 with the Securities and Exchange
Commission (&#147;SEC&#148;) and the New York Stock Exchange. Officers, directors and
greater than ten percent stockholders are required by SEC regulations to
furnish the Fund with copies of all Forms 3, 4 and 5 they file.</FONT></td></tr></TABLE>

<p><table width=600><tr>
    <td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Based solely on the Fund&#146;s
      review of the copies of such forms, and amendments thereto, furnished to
      it during or with respect to its most recent fiscal year, and written representations
      from certain reporting persons that they were not required to file Form
      5 with respect to the most recent fiscal year, the Fund believes that, all
      of its officers, directors, greater than ten percent beneficial owners and
      other persons subject to Section 16 of the Exchange Act due to the requirements
      of Section 30 of the Investment Company Act (<i>i.e</i>., any advisory board
      member, investment adviser or affiliated person of the Fund&#146;s investment
      adviser), have complied with all filing requirements applicable to them
      with respect to transactions during the Fund&#146;s most recent fiscal year.</font></td>
  </tr></TABLE>

<p><table width=600><tr>
    <td><FONT SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Interested Persons</I>.
      The Fund considers Mr. Glenn to be an &#147;interested person&#148; of the
      Fund within the meaning of Section 2(a)(19) of the Investment Company Act
      due to the positions he holds with FAM and its affiliates and/or due to
      his ownership of securities issued by Merrill Lynch &amp; Co., Inc. (&#147;ML
      &amp; Co.&#148;). Mr. Glenn is the President of the Fund.</FONT></td>
  </tr></TABLE>

<p><table width=600><tr><td><FONT SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Compensation
of Directors</I>. FAM, the Fund&#146;s investment adviser, pays all compensation to all
officers and all Directors of the Fund who are affiliated with ML &amp; Co. or
its subsidiaries. The Fund pays each Director not affiliated with FAM (each a
&#147;non-interested Director&#148;) an annual fee plus a fee for each meeting attended,
together with such Director&#146;s actual out-of-pocket expenses relating to
attendance at meetings. The Fund also pays each member of its Audit Committee,
which consists of all the non-interested Directors, an annual fee plus a fee
for each meeting attended, together with such Director&#146;s out-of-pocket expenses
relating to attendance at meetings. These fees and expenses aggregated $75,246
for the fiscal year ended October 31, 2000.</FONT></td></tr></TABLE>

<p>
<p>&nbsp;
<table width=600><tr><td width=60 align=left><font size=1>&nbsp;</font></td><td width=480 align=center><font size="2">
6</font></td><td width=60 align=right><font size="1">&nbsp;</font></td></tr></TABLE><p>&nbsp;<hr size=5 noshade width=600 align=LEFT><p>&nbsp;









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<!-- MARKER LABEL="sheet: 10, page: 10" -->





<p><table width=600><tr>
    <td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following table sets forth
      for the fiscal year ended October 31, 2000 compensation paid by the Fund
      to the non-interested Directors and, for the calendar year ended December
      31, 2000, the aggregate compensation paid by all investment companies advised
      by FAM and its affiliate, MLIM (&#147;FAM/MLIM Advised Funds&#148;), to
      the non-interested Directors.</font></td>
  </tr></TABLE>


<br>
<table cellspacing=0 border=0 cellpadding=0 width=600>
  <tr valign="bottom">
    <td width="197"> <b><font size="1">Name of Director</font></b>
      <hr size="1" noshade align="left" width="73">
    </td>
    <td width="83"><b></b></td>
    <td align="center" width="76"> <b><font size="1">Compensation <br>
      From Fund </font></b>
      <hr size="1" noshade>
    </td>
    <td align="center" width="20"><b></b></td>
    <td align="center" width="95"> <b><font size="1">Pension or <br>
      Retirement Benefits <br>
      Accrued as Part <br>
      of Fund Expenses </font></b>
      <hr size="1" noshade>
    </td>
    <td align="center" width="19"><b></b></td>
    <td align="center" width="110"> <b><font size="1">Aggregate <br>
      Compensation <br>
      From Fund And Other <br>
      FAM/MLIM Advised <br>
      Funds Paid to Directors </font></b>
      <hr size="1" noshade>
    </td>
  </tr>
  <tr>
    <td valign="TOP" width="197"> <font size="2">Joe Grills<sup>(1)</sup></font></td>
    <td valign="TOP" width="83"> <font size="2">&nbsp;&nbsp;&nbsp;</font></td>
    <td valign="TOP" align="center" width="76"> <font size="2">$8,000</font></td>
    <td valign="TOP" align="center" width="20"> <font size="2">&nbsp;&nbsp;&nbsp;</font></td>
    <td valign="TOP" align="center" width="95"> <font size="2">None</font></td>
    <td valign="TOP" align="center" width="19"> <font size="2">&nbsp;&nbsp;&nbsp;</font></td>
    <td valign="TOP" align="center" width="110"> <font size="2">$224,500</font></td>
  </tr>
  <tr>
    <td valign="TOP" width="197"> <font size="2">Walter Mintz<sup>(1)</sup></font></td>
    <td valign="TOP" width="83"><font size="2"></font></td>
    <td valign="TOP" align="center" width="76"> <font size="2">$8,000</font></td>
    <td valign="TOP" align="center" width="20"><font size="2"></font></td>
    <td valign="TOP" align="center" width="95"> <font size="2">None</font></td>
    <td valign="TOP" align="center" width="19"><font size="2"></font></td>
    <td valign="TOP" align="center" width="110"> <font size="2">$184,000</font></td>
  </tr>
  <tr>
    <td valign="TOP" width="197"> <font size="2">Robert S. Salomon, Jr.<sup>(1)</sup></font></td>
    <td valign="TOP" width="83"><font size="2"></font></td>
    <td valign="TOP" align="center" width="76"> <font size="2">$8,000</font></td>
    <td valign="TOP" align="center" width="20"><font size="2"></font></td>
    <td valign="TOP" align="center" width="95"> <font size="2">None</font></td>
    <td valign="TOP" align="center" width="19"><font size="2"></font></td>
    <td valign="TOP" align="center" width="110"> <font size="2">$184,000</font></td>
  </tr>
  <tr>
    <td valign="TOP" width="197"> <font size="2">Melvin R. Seiden<sup>(1)</sup></font></td>
    <td valign="TOP" width="83"><font size="2"></font></td>
    <td valign="TOP" align="center" width="76"> <font size="2">$8,000</font></td>
    <td valign="TOP" align="center" width="20"><font size="2"></font></td>
    <td valign="TOP" align="center" width="95"> <font size="2">None </font></td>
    <td valign="TOP" align="center" width="19"><font size="2"></font></td>
    <td valign="TOP" align="center" width="110"> <font size="2">$184,000</font></td>
  </tr>
  <tr>
    <td valign="TOP" width="197"> <font size="2">Stephen B. Swensrud<sup>(1)</sup></font></td>
    <td valign="TOP" width="83"><font size="2"></font></td>
    <td valign="TOP" align="center" width="76"> <font size="2">$8,000</font></td>
    <td valign="TOP" align="center" width="20"><font size="2"></font></td>
    <td valign="TOP" align="center" width="95"> <font size="2">None</font></td>
    <td valign="TOP" align="center" width="19"><font size="2"></font></td>
    <td valign="TOP" align="center" width="110"> <font size="2">$280,233</font></td>
  </tr>
</TABLE>
<table width=600><tr><td><hr size=1 noshade align=left  width=75></td></tr></table>

<table width=600><tr><td width=3% valign=top><font size="1">(1)
</font></td><td width=2%><font size="1"></font></td><td width=95%><font size="1">The
Directors serve on the boards of other FAM/MLIM Advised Funds as follows: Mr.
Grills (30 registered investment companies consisting of 46 portfolios); Mr.
Mintz (16 registered investment companies consisting of 36 portfolios); Mr.
Salomon (16 registered investment companies consisting of 36 portfolios); Mr.
Seiden (16 registered investment companies consisting of 36 portfolios); Mr.
Swensrud (42 registered investment companies consisting of 87 portfolios).</font></td></tr></TABLE>

<p><table width=600><tr><td><FONT SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Officers
of the Fund</I>. The Board of Directors has elected six officers of the Fund. The
following sets forth information concerning each of these officers:</FONT></td></tr></TABLE>


<br>
<table cellspacing=0 border=0 cellpadding=0 width=600>
  <tr valign="bottom" align="center">
    <td align="left" width="320"> <b><font size="1">Name and Principal Occupation
      </font></b>
      <hr size="1" noshade align="left" width="140">
    </td>
    <td width="46">&nbsp;</td>
    <td width="85"> <b><font size="1">Office </font></b>
      <hr size="1" noshade width="40">
    </td>
    <td width="24">&nbsp;</td>
    <td width="36" align="center"> <b><font size="1">Age </font></b>
      <hr size="1" noshade>
    </td>
    <td width="19">&nbsp;</td>
    <td colspan="2"> <b><font size="1">Officer Since </font></b>
      <hr size="1" noshade>
    </td>
  </tr>
  <tr valign="top">
    <td width="320" align="left"> <font size="2">Terry K. Glenn <br>
      &nbsp;&nbsp;&nbsp; Executive Vice President of FAM and MLIM since <br>
      &nbsp;&nbsp;&nbsp; 1983; Executive Vice President and Director of <br>
      &nbsp;&nbsp;&nbsp; Princeton Services since 1993; President of FAMD <br>
      &nbsp;&nbsp;&nbsp; since 1986 and Director thereof since 1991; President
      of <br>
      &nbsp;&nbsp;&nbsp; Princeton Administrators, L.P. since 1988; Director <br>
      &nbsp;&nbsp;&nbsp; of Financial Data Services, Inc. since 1985. </font></td>
    <td width="46" align="left"> <font size="2">&nbsp;&nbsp;&nbsp; </font></td>
    <td width="85" align="left"> <font size="2">President </font></td>
    <td width="24"> <font size="2">&nbsp;&nbsp;&nbsp; </font></td>
    <td width="36" align="center"> <font size="2">60 </font></td>
    <td width="19"> <font size="2">&nbsp;&nbsp;&nbsp; </font></td>
    <td width="45" valign="top" align="right"> <font size="2">1992 </font></td>
    <td width="25"> <font size="2">* </font></td>
  </tr>
  <tr valign="top">
    <td width="320" align="left">&nbsp;</td>
    <td width="46" align="left">&nbsp;</td>
    <td width="85" align="left">&nbsp;</td>
    <td width="24">&nbsp;</td>
    <td width="36" align="center">&nbsp;</td>
    <td width="19">&nbsp;</td>
    <td width="45" valign="top" align="right">&nbsp;</td>
    <td width="25">&nbsp;</td>
  </tr>
  <tr valign="top">
    <td width="320" align="left"> <font size="2">Vincent R. Giordano <br>
      &nbsp;&nbsp;&nbsp; Senior Vice President of FAM and MLIM since 1984; <br>
      &nbsp;&nbsp;&nbsp; Senior Vice President of Princeton Services since 1993.
      </font></td>
    <td width="46" align="left">&nbsp;</td>
    <td width="85" align="left"> <font size="2">Managing <br>
      Director </font></td>
    <td width="24">&nbsp;</td>
    <td width="36" align="center"> <font size="2">56 </font></td>
    <td width="19">&nbsp;</td>
    <td width="45" valign="top" align="right"> <font size="2">1992 </font></td>
    <td width="25">&nbsp;</td>
  </tr>
  <tr valign="top">
    <td width="320" align="left">&nbsp;</td>
    <td width="46" align="left">&nbsp;</td>
    <td width="85" align="left">&nbsp;</td>
    <td width="24">&nbsp;</td>
    <td width="36" align="center">&nbsp;</td>
    <td width="19">&nbsp;</td>
    <td width="45" valign="top" align="right">&nbsp;</td>
    <td width="25">&nbsp;</td>
  </tr>
  <tr valign="top">
    <td width="320" align="left"><font size="2">Kenneth A. Jacob <br>
      &nbsp;&nbsp;&nbsp;First Vice President of MLIM since 1997; Vice President <br>
      &nbsp;&nbsp;&nbsp;of MLIM from 1984 to 1997; Vice President of FAM <br>
      &nbsp;&nbsp;&nbsp;since 1984. </font></td>
    <td width="46" align="left">&nbsp;</td>
    <td width="85" align="left"><font size="2">Vice President </font></td>
    <td width="24">&nbsp;</td>
    <td width="36" align="center"><font size="2">50</font></td>
    <td width="19">&nbsp;</td>
    <td width="45" valign="top" align="right"><font size="2">1992 </font></td>
    <td width="25">&nbsp;</td>
  </tr>
  <tr valign="top">
    <td width="320" align="left">&nbsp;</td>
    <td width="46" align="left">&nbsp;</td>
    <td width="85" align="left">&nbsp;</td>
    <td width="24">&nbsp;</td>
    <td width="36" align="center">&nbsp;</td>
    <td width="19">&nbsp;</td>
    <td width="45" valign="top" align="right">&nbsp;</td>
    <td width="25">&nbsp;</td>
  </tr>
  <tr valign="top">
    <td width="320" align="left"> <font size="2">William R. Bock <br>
      &nbsp;&nbsp;&nbsp; Vice President of MLIM since 1989. </font></td>
    <td width="46" align="left">&nbsp;</td>
    <td width="85" align="left"> <font size="2">Vice President </font></td>
    <td width="24">&nbsp;</td>
    <td width="36" align="center"> <font size="2">65 </font></td>
    <td width="19">&nbsp;</td>
    <td width="45" valign="top" align="right"> <font size="2">1997 </font></td>
    <td width="25">&nbsp;</td>
  </tr>
</TABLE>
<p>&nbsp; </p>
<table width=600><tr><td width=60 align=left><font size=1>&nbsp;</font></td><td width=480 align=center><font size="2">
7</font></td><td width=60 align=right><font size="1">&nbsp;</font></td></tr></TABLE><p>&nbsp;<hr size=5 noshade width=600 align=LEFT>




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<p>&nbsp;
<table cellspacing=0 border=0 cellpadding=0 width=600>
  <tr valign="bottom" align="center">
    <td align="left" width="320"> <b><font size="1">Name and Principal Occupation</font></b>
      <hr size="1" noshade align="left" width="140">
    </td>
    <td width="46">&nbsp;</td>
    <td width="85"> <b><font size="1">Office</font></b>
      <hr size="1" noshade width="40">
    </td>
    <td width="24">&nbsp;</td>
    <td width="36" align="center"> <b><font size="1">Age</font></b>
      <hr size="1" noshade>
    </td>
    <td width="19">&nbsp;</td>
    <td colspan="2"> <b><font size="1">Officer Since</font></b>
      <hr size="1" noshade>
    </td>
  </tr>
  <tr valign="top">
    <td width="320" align="left"> <font size="2">Donald C. Burke <br>
      &nbsp;&nbsp;&nbsp; First Vice President of FAM and MLIM since 1997 and &nbsp;&nbsp;&nbsp;&nbsp;Treasurer
      thereof since 1999; Senior Vice President and &nbsp;&nbsp;&nbsp;&nbsp;Treasurer
      of Princeton Services since 1999; Vice <br>
      &nbsp;&nbsp;&nbsp;&nbsp;President of FAMD since 1999; Vice President of
      FAM <br>
      &nbsp;&nbsp;&nbsp;&nbsp;and MLIM from 1990 to 1997; Director of Taxation
      of <br>
      &nbsp;&nbsp;&nbsp;&nbsp;MLIM since 1990.</font></td>
    <td width="46" align="left">&nbsp;</td>
    <td width="85" align="left"> <font size="2">Vice President <br>
      and Treasurer</font></td>
    <td width="24">&nbsp;</td>
    <td width="36" align="center"> <font size="2">41</font></td>
    <td width="19">&nbsp;</td>
    <td width="45" valign="top" align="right"> <font size="2">1993</font></td>
    <td width="25">&nbsp;</td>
  </tr>
  <tr valign="top">
    <td width="320" align="left">&nbsp;</td>
    <td width="46" align="left">&nbsp;</td>
    <td width="85" align="left">&nbsp;</td>
    <td width="24">&nbsp;</td>
    <td width="36" align="center">&nbsp;</td>
    <td width="19">&nbsp;</td>
    <td width="45" valign="top" align="right">&nbsp;</td>
    <td width="25">&nbsp;</td>
  </tr>
  <tr valign="top">
    <td width="320" align="left"> <font size="2">Bradley J. Lucido <br>
      &nbsp;&nbsp;&nbsp; Vice President of MLIM since 1999; attorney with <br>
      &nbsp;&nbsp;&nbsp; MLIM since 1995; attorney in private practice from <br>
      &nbsp;&nbsp;&nbsp; 1991 to 1995.</font></td>
    <td width="46" align="left">&nbsp;</td>
    <td width="85" align="left"> <font size="2">Secretary</font></td>
    <td width="24">&nbsp;</td>
    <td width="36" align="center"> <font size="2">35</font></td>
    <td width="19">&nbsp;</td>
    <td width="45" valign="top" align="right"> <font size="2">1999</font></td>
    <td width="25">&nbsp;</td>
  </tr>
</TABLE>
<table width=600><tr><td><hr size=1 noshade align=left  width=75></td></tr></table>

<table width=600><tr><td width=3% valign=top><font size="1">*
</font></td><td width=2%><font size="1"></font></td><td width=95%><font size="1">Mr.
Glenn was elected President of the Fund in 1999. Prior to that he served as
Executive Vice President.</font></td></tr></TABLE>


<p><table width=600><tr>
    <td><FONT SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Stock Ownership</I>. At
      the Record Date, the Directors and officers of the Fund as a group (11 persons)
      owned an aggregate of less than 1% of the Common Stock of the Fund outstanding
      at such date and owned none of the AMPS outstanding at such date. At such
      date, Mr. Glenn, President and a Director of the Fund, and the other officers
      of the Fund owned an aggregate of less than 1% of the outstanding shares
      of common stock of ML &amp; Co.</FONT></td>
  </tr></TABLE>

<p><table width=600><tr><td  align=center><font size=2><B>LEGAL PROCEEDINGS</B></font></td></tr></TABLE>

<p><table width=600><tr>
    <td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On June 21, 1996, a putative
      class action titled <i>Green v. Fund Asset Management, L.P</i>., was filed
      in the United States District Court for the District of Massachusetts. Among
      the named defendants in the action are seven of the leveraged closed-end
      municipal bond funds (including the Fund) for which FAM serves as the investment
      adviser. In addition to the named defendants, plaintiffs also purport to
      assert claims against a defendant class consisting of all other publicly
      traded, closed-end investment companies for which FAM serves as investment
      adviser and which, among other things, have issued AMPS. The named plaintiffs,
      who claim to be investors in the seven named funds, purport to bring the
      action on behalf of a class consisting of all holders of the common stock
      of the subject funds.</font></td>
  </tr></TABLE>

<p><table width=600><tr>
    <td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Plaintiffs claim, among other
      things, that the registration statements, annual reports and other documents
      filed by the funds with the SEC were misleading because such documents allegedly
      failed to disclose that proceeds arising from the issuance of AMPS would
      be included in a fund&#146;s net assets for the purposes of calculating
      the investment advisory fee payable to FAM. In addition, plaintiffs allege
      that a conflict of interest existed because it would always be in the defendants&#146;
      interest to keep the funds fully leveraged to maximize the advisory fees
      and collateral compensation notwithstanding adverse market conditions. Plaintiffs
      also allege an additional conflict of interest arising from the receipt
      by such affiliates of underwriting discounts, or other revenues in connection
      with the sale of the AMPS by the funds. The complaint attempted to assert
      claims under Sections 8(e), 34(b), 36(a) and 36(b) of the Investment Company
      Act and the common law. Plaintiffs seek unspecified monetary damages as
      well as injunctive relief.</font></td>
  </tr></TABLE>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On
September 17, 1997, defendants moved to dismiss plaintiffs&#146; complaint on the
ground that plaintiffs had failed to state a claim upon which relief could be
granted. On February 23, 1998, the Court granted defendants&#146; motion in
substantial part and dismissed plaintiffs&#146; claims under Sections 8(e), 34(b)
and 36(a) of </font></td></tr></TABLE>




<p>&nbsp;
<table width=600><tr><td width=60 align=left><font size=1>&nbsp;</font></td><td width=480 align=center><font size="2">
8</font></td><td width=60 align=right><font size="1">&nbsp;</font></td></tr></TABLE><p>&nbsp;<hr size=5 noshade width=600 align=LEFT><p>&nbsp;










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<!-- MARKER LABEL="sheet: 12, page: 12" -->





<p><table width=600><tr>
    <td><font size=2>the Investment Company Act with prejudice, but declined to
      dismiss plaintiffs&#146; claims under Section 36(b) and state law. Defendants
      filed an Answer on April 30, 1998, denying the substantive allegations in
      the First Amended Complaint.</font></td>
  </tr></TABLE>

<p><table width=600><tr>
    <td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On February 4, 1999, defendants
      moved to dismiss plaintiffs&#146; state law claims for breach of fiduciary
      duty and deceit on the ground that they are preempted by Section 36(b) of
      the Investment Company Act. On June 14, 1999, the District Court granted
      defendants&#146; motion and dismissed plaintiffs&#146; state law claims.
      At the same time, the District Court granted plaintiffs permission to immediately
      file an interlocutory appeal to the United States Court of Appeals for the
      Third Circuit. On March 16, 2001, the Third Circuit reversed the District
      Court&#146;s decision and reinstated plaintiffs&#146; state law claims.
      </font></td>
  </tr></TABLE>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On
February 5, 2001, while plaintiffs&#146; appeal before the Third Circuit was still
pending, defendants moved in the District Court for summary judgment as to
plaintiffs&#146; remaining federal claim under Section 36(b). On March 16, 2001,
plaintiffs cross-moved for partial summary judgment on liability. On June 5,
2001, the District Court granted defendants&#146; motion for summary judgement,
denied plaintiffs&#146; motion for partial summary judgment, and dismissed the case
in its entirety. In doing so, the Court refused to exercise supplemental
jurisdiction over plaintiffs&#146; remaining (and recently reinstated) state law
claims.</font></td></tr></TABLE>

<p><table width=600><tr>
    <td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Plaintiffs have filed a Notice
      of Appeal seeking review of the District Court&#146;s decision before the
      U.S. Court of Appeal for the Third Circuit. Defendants believe that the
      plaintiffs&#146; allegations are without merit and intend to continue to
      defend the action vigorously.</font></td>
  </tr></TABLE>

<p><table width=600><tr>
    <td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;FAM has agreed to indemnify
      the named defendant funds (including the Fund) for any liabilities or expenses
      that may incur in connection with this litigation.</font></td>
  </tr></TABLE>


<p><table width=600><tr><td  align=center><font size=2><B>ADDITIONAL INFORMATION</B></font></td></tr></TABLE>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
expenses of preparation, printing and mailing of the enclosed form of proxy and
accompanying Notice and Proxy Statement will be borne by the Fund. The Fund
will reimburse banks, brokers and others for their reasonable expenses in
forwarding proxy solicitation material to the beneficial owners of the shares
of the Fund.</font></td></tr></TABLE>

<p><table width=600><tr>
    <td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In order to obtain the necessary
      quorum at the Meeting (<i>i.e</i>., a majority of the shares of each class
      of the Fund&#146;s securities entitled to vote at the Meeting, present in
      person or by proxy), supplementary solicitation may be made by mail, telephone,
      telegraph or personal interview by officers of the Fund. The Fund has retained
      Georgeson Shareholder, 17 State Street, New York, New York 10004, to assist
      in the solicitation of proxies at a cost to the Fund of approximately $3,500,
      plus out-of-pocket expenses estimated to be $200.</font></td>
  </tr></TABLE>

<p>
<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;All
shares represented by properly executed proxies, unless such proxies have
previously been revoked, will be voted at the Meeting in accordance with the
directions on the proxies; if no direction is indicated, the shares will be
voted &#147;FOR&#148; the Director nominees.</font></td></tr></TABLE>




<br>
<table width=600>
  <tr>
    <td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;With respect to Item 1, &#147;Election
      of Directors,&#148; holders of AMPS, voting separately as a class, are entitled
      to elect the two Directors designated above and holders of Common Stock
      and AMPS, voting together as a single class, are entitled to elect the remaining
      Directors. Assuming a quorum is present, (i) election of the two Directors
      to be elected by the holders of AMPS, voting separately as a class, will
      require a majority of the </font></td>
  </tr>
</TABLE>
<p>&nbsp;
<table width=600><tr><td width=60 align=left><font size=1>&nbsp;</font></td><td width=480 align=center><font size="2">
9</font></td><td width=60 align=right><font size="1">&nbsp;</font></td></tr></TABLE><p>&nbsp;<hr size=5 noshade width=600 align=LEFT><p>&nbsp;









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<!-- MARKER LABEL="sheet: 13, page: 13" -->






<p><table width=600><tr>
    <td><font size=2>votes cast by the holders of AMPS represented at the Meeting
      and entitled to vote; and (ii) election of the remaining Directors will
      require a majority of the votes cast by the holders of Common Stock and
      the AMPS represented at the Meeting and entitled to vote, voting together
      as a single class.</font></td>
  </tr></TABLE>

<br>
<table width=600>
  <tr>
    <td><font size=2><b>Broker Non-Votes and Abstentions</b></font></td>
  </tr>
</TABLE>
<br>
<table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Broker-dealer
firms, including Merrill Lynch, Pierce, Fenner &amp; Smith Incorporated (&#147;MLPF&amp;S&#148;),
holding Fund shares in &#147;street name&#148; for the benefit of their customers and
clients, will request the instructions of such customers and clients on how to
vote their shares on each Item before the Meeting. The Fund understands that,
under the rules of the New York Stock Exchange, such broker-dealer firms may,
without instructions from their customers and clients, grant authority to the
proxies designated to vote on the election of Directors (Item 1) if no
instructions have been received prior to the date specified in the
broker-dealer firm&#146;s request for voting instructions. The Fund will include
shares held of record by broker-dealers as to which such authority has been
granted in its tabulation of the total number of votes present for purposes of
determining whether the necessary quorum of stockholders exists. Proxies that
are returned but that are marked &#147;abstain&#148; or on which a broker-dealer has
declined to vote on any proposal (&#147;broker non-votes&#148;) will be counted as
present for the purposes of a quorum. MLPF&amp;S has advised the Fund that it
intends to vote shares held in its name for which no instructions have been
received, except as limited by agreement or applicable law, in the same
proportion as the votes received from beneficial owners of those shares for
which instructions have been received, whether or not held in nominee name.
Abstentions and broker non-votes will not be counted as votes cast. Abstentions
and broker non-votes, therefore, will not have an effect on the vote.</font></td></tr></TABLE>

<br>
<table width=600>
  <tr>
    <td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Management knows of no other
      matters to be presented at the special meeting. However, if other matters
      are presented for a vote at the meeting or any adjournments thereof, the
      proxy holders will vote the shares represented by properly executed proxies
      according to their judgment on those matters.</font></td>
  </tr>
</TABLE>
<br>
<table width=600><tr><td><font size=2><B>Independent Auditor&#146;s Fees</B></font></td></tr></TABLE>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
following table sets forth the aggregate fees paid to E&amp;Y for the Fund&#146;s
fiscal year ended October 31, 2000 for professional services rendered for: (i)
the audit of the Fund&#146;s annual financial statements and the review of financial
statements included in the Fund&#146;s reports to shareholders; (ii) financial
information systems design and implementation services provided to the Fund,
FAM and entities controlling, controlled by or under common control with FAM
that provide services to the Fund; and (iii) all other non-audit services
provided to the Fund, FAM, and entities controlling, controlled by or under
common control with FAM that provide services to the Fund. The Committee
determined that the provision of information technology services under clause
(ii) and the provision of non-audit services under clause (iii) are compatible
with maintaining the independence of the independent auditors.</font></td></tr></TABLE>


<br>
<table cellspacing=0 border=0 cellpadding=0 width=600>
  <tr valign="bottom" align="center">
    <td width="72">&nbsp;</td>
    <td width="94"> <b><font size="1"> Audit Fees Charged <br>
      to the Fund </font></b>
      <hr size="1" noshade>
    </td>
    <td width="89">&nbsp;</td>
    <td width="111"> <b><font size="1">Financial Information <br>
      Systems Design and <br>
      Implementation Fees </font></b>
      <hr size="1" noshade>
    </td>
    <td width="94">&nbsp;</td>
    <td width="57" align="center" valign="bottom"> <b><font size="1">Other Fees
      </font></b>
      <hr size="1" noshade>
    </td>
    <td width="83">&nbsp;&nbsp;&nbsp;</td>
  </tr>
  <tr align="center">
    <td valign="TOP" width="72"> <font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
    <td valign="TOP" width="94"> <font size="2">$43,050</font></td>
    <td valign="TOP" width="89"> <font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
    <td valign="TOP" width="111"> <font size="2">$&nbsp;&nbsp;&nbsp;&#151;</font></td>
    <td valign="TOP" width="94"> <font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
    <td valign="TOP" width="57" align="center"> <font size="2">$&nbsp;&nbsp;&nbsp;&nbsp;&#151;</font></td>
    <td valign="TOP" width="83">&nbsp;</td>
  </tr>
</TABLE>
<br>
<table width=600><tr><td><font size=2><B>Address of Investment Adviser</B></font></td></tr></TABLE>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
principal office of FAM is located at 800 Scudders Mill Road, Plainsboro, New
Jersey 08536.</font></td></tr></TABLE>




<p>&nbsp;
<table width=600><tr><td width=60 align=left><font size=1>&nbsp;</font></td><td width=480 align=center><font size="2">
10</font></td><td width=60 align=right><font size="1">&nbsp;</font></td></tr></TABLE><p>&nbsp;<hr size=5 noshade width=600 align=LEFT><p>&nbsp;









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<!-- MARKER LABEL="sheet: 14, page: 14" -->





<p><table width=600><tr><td><font size=2><B>Annual Report Delivery</B></font></td></tr></TABLE>

<p><table width=600><tr><td><FONT SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>The Fund
will furnish, without charge, a copy of its annual report for the fiscal year
ended October 31, 2000 or its semi-annual report for the six months ended April
30, 2001 to any stockholder upon request</B>. Such requests should be directed to
MuniYield Insured Fund, Inc., P.O. Box 9011, Princeton, New Jersey 08543-9011,
Attention: Bradley J. Lucido, Secretary, or to 1-800-637-3863.</FONT></td></tr></TABLE>

<p><table width=600><tr><td><font size=2><B>Stockholder Proposals</B></font></td></tr></TABLE>

<p><table width=600><tr>
    <td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If a stockholder intends to
      present a proposal at the 2002 Annual Meeting of Stockholders of the Fund,
      which is anticipated to be held in April 2002, and desires to have the proposal
      included in the Fund&#146;s proxy statement and form of proxy for that meeting,
      the stockholder must deliver the proposal to the offices of the Fund by
      November 16, 2001. Any stockholder of a Fund who desires to bring a proposal
      at the Fund&#146;s 2002 Annual Meeting of Stockholders without including
      such proposal in the Fund&#146;s proxy statement must deliver written notice
      thereof to the Secretary of the Fund (addressed to 800 Scudders Mill Road,
      Plainsboro, New Jersey 08543) by February 1, 2002.</font></td>
  </tr></TABLE>

<p>
<table width=600>
  <tr>
    <td align=right><font size=2>By Order of the Board of Directors</font></td>
  </tr>
</TABLE>
<br>
<table width="600" border="0" cellspacing="0" cellpadding="0">
  <tr>
    <td width="414">&nbsp;&nbsp;&nbsp;</td>
    <td width="186"><font size="2">B<font size="1">RADLEY</font> J. L<font size="1">UCIDO</font>
      <br>
      <i> Secretary</i> </font></td>
  </tr>
</TABLE>
<p>
<p>
<table width=600><tr>
    <td><font size=2>Dated: July 24, 2001</font></td>
  </tr></TABLE>



<p>&nbsp;
<table width=600><tr><td width=60 align=left><font size=1>&nbsp;</font></td><td width=480 align=center><font size="2">
11</font></td><td width=60 align=right><font size="1">&nbsp;</font></td></tr></TABLE><p>&nbsp;<hr size=5 noshade width=600 align=LEFT><p>&nbsp;









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<!-- MARKER LABEL="sheet: 15, page: 15" -->




<p><table width=600><tr><td  align=center><font size=2><B>CHARTER OF THE AUDIT
COMMITTEE <BR>OF THE BOARD OF DIRECTORS/TRUSTEES <BR>FOR EXCHANGE LISTED FUNDS</B></font></td></tr></TABLE>

<p><table width=600><tr>
    <td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Although each investment company
      audit committee also serves as a nominating committee, the following charter
      pertains only to each audit and nominating committee&#146;s duties as an
      audit committee. The Board of Directors of each investment company listed
      on Appendix A hereto, has adopted the following audit committee charter:</font></td>
  </tr></TABLE>

<p><table width=600><tr><td><FONT SIZE="2"><B>I. <I>Composition of the Audit
Committee</I></B></FONT></td></tr></TABLE>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Audit Committee shall be composed of at least three Directors:</font></td></tr></TABLE>

<br>
<table width=600><tr>
    <td width=3% valign=top><font size="2"> </font></td>
    <td width=2% valign="top"><font size="2">(a)&nbsp;</font><font size="1"></font></td>
    <td width=95%><font size="2">each
of whom shall not be an &#147;interested person&#148; of the Fund, as defined in Section
2(a)(19) of the Investment Company Act of 1940, as amended;</font></td></tr></TABLE>

<table width=600><tr>
    <td width=3% valign=top><font size="2"> </font></td>
    <td width=2% valign="top"><font size="2">(b)&nbsp;</font><font size="1"></font></td>
    <td width=95%><font size="2">each
of whom shall not have any relationship to the Fund that may interfere with the
exercise of their independence from Fund management and the Fund;</font></td></tr></TABLE>

<table width=600><tr>
    <td width=3% valign=top><font size="2"> </font></td>
    <td width=2% valign="top"><font size="2">(c)&nbsp;</font><font size="1"></font></td>
    <td width=95%><font size="2">each
of whom shall otherwise satisfy the applicable independence requirements for
any stock exchange or market quotation system on which Fund shares are listed
or quoted;</font></td></tr></TABLE>

<table width=600><tr>
    <td width=3% valign=top><font size="2"> </font></td>
    <td width=2% valign="top"><font size="2">(d)&nbsp;</font><font size="1"></font></td>
    <td width=95%><font size="2">each
of whom shall be financially literate, as such qualification is interpreted by
the Board of Directors in its business judgment, or shall become financially
literate within a reasonable period of time after his or her appointment to the
Audit Committee; and</font></td></tr></TABLE>

<table width=600><tr>
    <td width=3% valign=top><font size="2"> </font></td>
    <td width=2% valign="top"><font size="2">(e)&nbsp;</font><font size="1"></font></td>
    <td width=95%><font size="2">at
least one of whom shall have accounting or related financial management
expertise as the Board of Directors interprets such qualification in its
business judgment.</font></td></tr></TABLE>

<p><table width=600><tr><td><FONT SIZE="2"><B>II. <I>Purposes of the Audit Committee</I></B></FONT></td></tr></TABLE>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
purposes of the Audit Committee are to assist the Board of Directors:</font></td></tr></TABLE>

<br>
<table width=600><tr>
    <td width=3% valign=top><font size="2"> </font></td>
    <td width=2% valign="top"><font size="2">(a)&nbsp;</font><font size="1"></font></td>
    <td width=95%><font size="2">in
its oversight of the Fund&#146;s accounting and financial reporting policies and
practices, the Fund&#146;s internal audit controls and procedures and, as
appropriate, the internal audit controls and procedures of certain of the
Fund&#146;s service providers;</font></td></tr></TABLE>

<table width=600><tr>
    <td width=3% valign=top><font size="2"> </font></td>
    <td width=2%><font size="2">(b)&nbsp;</font><font size="1"></font></td>
    <td width=95%><font size="2">in
its oversight of the Fund&#146;s financial statements and the independent audit
thereof; and</font></td></tr></TABLE>

<table width=600><tr>
    <td width=3% valign=top><font size="2"> </font></td>
    <td width=2%><font size="2">(c)&nbsp;</font><font size="1"></font></td>
    <td width=95%><font size="2">in
acting as a liaison between the Fund&#146;s independent accountants and the Board of
Directors.</font></td></tr></TABLE>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
function of the Audit Committee is oversight. Fund management is responsible
for maintaining appropriate systems for accounting. The independent accountants
of the Fund are responsible for conducting a proper audit of the Fund&#146;s
financial statements.</font></td></tr></TABLE>

<p><table width=600><tr><td><FONT SIZE="2"><B>III. <I>Responsibilities and Duties of
the Audit Committee</I></B></FONT></td></tr></TABLE>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
policies and procedures of the Audit Committee shall remain flexible to
facilitate its ability to react to changing conditions and to generally
discharge its functions. The following listed responsibilities describe areas
of attention in broad terms.</font></td></tr></TABLE>





<p>&nbsp;
<table width=600><tr><td width=60 align=left><font size=1>&nbsp;</font></td><td width=480 align=center><font size="2">
</font></td><td width=60 align=right><font size="1">&nbsp;</font></td></tr></TABLE><p>&nbsp;<hr size=5 noshade width=600 align=LEFT><p>&nbsp;









<!-- *************************************************************************** -->
<!-- MARKER LABEL="sheet: 16, page: 16" -->






<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;To carry
out its purposes, the Audit Committee shall have the following responsibilities
and duties:</font></td></tr></TABLE>

<br>
<table width=600><tr>
    <td width=3% valign=top><font size="2"> </font></td>
    <td width=2% valign="top"><font size="2">(a)&nbsp;</font><font size="1"></font></td>
    <td width=95%><font size="2">to
recommend the selection, retention or termination of the Fund&#146;s independent
accountants based on an evaluation of their independence and the nature and
performance of audit services and other services;</font></td></tr></TABLE>

<table width=600><tr>
    <td width=3% valign=top><font size="2"> </font></td>
    <td width=2% valign="top"><font size="2">(b)&nbsp;</font><font size="1"></font></td>
    <td width=95%><font size="2">to
ensure that the independent accountants for the Fund submit on a periodic basis
to the Audit Committee a formal written statement delineating all relationships
between such independent accountants and the Fund, consistent with Independence
Standards Board Standard No. 1, and actively engage in a dialogue with the
independent accountants for the Fund with respect to any disclosed
relationships or services that may impact the objectivity and independence of
such independent accountants and, if deemed appropriate by the Audit Committee,
to recommend that the Board of Directors take appropriate action in response to
the report of such independent accountants to satisfy itself of the
independence of such independent accountants;</font></td></tr></TABLE>

<table width=600><tr>
    <td width=3% valign=top><font size="2"> </font></td>
    <td width=2% valign="top"><font size="2">(c)&nbsp;</font><font size="1"></font></td>
    <td width=95%><font size="2">to receive specific representations from the
      independent accountants with respect to their independence and to consider
      whether the provision of any disclosed non-audit services by the independent
      accountants is compatible with maintaining the independence of those accountants;</font></td>
  </tr></TABLE>

<table width=600><tr>
    <td width=3% valign=top><font size="2"> </font></td>
    <td width=2%><font size="2">(d)&nbsp;</font><font size="1"></font></td>
    <td width=95%><font size="2">to
review the fees charged by independent accountants for audit and other services;</font></td></tr></TABLE>

<table width=600><tr>
    <td width=3% valign=top><font size="2"> </font></td>
    <td width=2% valign="top"><font size="2">(e)&nbsp;</font><font size="1"></font></td>
    <td width=95%><font size="2">to
review with the independent accountants arrangements for annual audits and
special audits and the scope thereof;</font></td></tr></TABLE>

<table width=600><tr>
    <td width=3% valign=top><font size="2"> </font></td>
    <td width=2% valign="top"><font size="2">(f)&nbsp;</font><font size="1"></font></td>
    <td width=95%><font size="2">to
discuss with the independent accountants those matters required by SAS No. 61
and SAS No. 90 relating to the Fund&#146;s financial statements, including, without
limitation, any adjustment to such financial statements recommended by such
independent accountants, or any other results of any audit;</font></td></tr></TABLE>

<table width=600><tr>
    <td width=3% valign=top><font size="2"> </font></td>
    <td width=2% valign="top"><font size="2">(g)&nbsp;</font><font size="1"></font></td>
    <td width=95%><font size="2">to
consider with the independent accountants their comments with respect to the
quality and adequacy of the Fund&#146;s accounting and financial reporting policies,
practices and internal controls and management&#146;s responses thereto, including,
without limitation, the effect on the Fund of any recommendation of changes in
accounting principles or practices by management or the independent accountants;</font></td></tr></TABLE>

<table width=600><tr>
    <td width=3% valign=top><font size="2"> </font></td>
    <td width=2% valign="top"><font size="2">(h)&nbsp;</font><font size="1"></font></td>
    <td width=95%><font size="2">to
report to the Board of Directors regularly with respect to the Audit
Committee&#146;s activities and to make any recommendations it believes necessary or
appropriate with respect to the Fund&#146;s accounting and financial reporting
policies, practices and the Fund&#146;s internal controls;</font></td></tr></TABLE>

<table width=600><tr>
    <td width=3% valign=top><font size="2"> </font></td>
    <td width=2% valign="top"><font size="2">(i)&nbsp;</font><font size="1"></font></td>
    <td width=95%><font size="2">to
review and reassess the adequacy of this Charter on an annual basis and
recommend any changes to the Board of Directors;</font></td></tr></TABLE>

<table width=600><tr>
    <td width=3% valign=top><font size="2"> </font></td>
    <td width=2% valign="top"><font size="2">(j)&nbsp;</font><font size="1"></font></td>
    <td width=95%><font size="2">to
review legal and regulatory matters presented by counsel and the independent
accountants for the Fund that may have a material impact on the Fund&#146;s
financial statements;</font></td></tr></TABLE>

<table width=600><tr>
    <td width=3% valign=top><font size="2"> </font></td>
    <td width=2% valign="top"><font size="2">(k)&nbsp;</font><font size="1"></font></td>
    <td width=95%><font size="2">to
cause to be prepared and to review and submit any report, including any
recommendation of the Audit Committee, required to be included in the Fund&#146;s
annual proxy statement by the rules of the Securities and Exchange Commission;</font></td></tr></TABLE>




<p>&nbsp;
<table width=600><tr><td width=60 align=left><font size=1>&nbsp;</font></td><td width=480 align=center><font size="2">
2</font></td><td width=60 align=right><font size="1">&nbsp;</font></td></tr></TABLE><p>&nbsp;<hr size=5 noshade width=600 align=LEFT>




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<!-- MARKER LABEL="sheet: 17, page: 17" -->

<p>&nbsp;
<table width=600><tr>
    <td width=3% valign=top><font size="2"> </font></td>
    <td width=2% valign="top"><font size="2">(l)&nbsp; </font><font size="1"></font></td>
    <td width=95%><font size="2">to
assist the Fund, if necessary, in preparing any written affirmation or written
certification required to be filed with any stock exchange on which Fund shares
are listed; and</font></td></tr></TABLE>

<table width=600><tr>
    <td width=3% valign=top>&nbsp;</td>
    <td width=2% valign="top"><font size="2">(m) </font><font size="1"></font></td>
    <td width=95%><font size="2">to
perform such other functions consistent with this Charter, the Fund&#146;s By-laws
and governing law, as the Audit Committee or the Board of Directors deems
necessary or appropriate.</font></td></tr></TABLE>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In
fulfilling their responsibilities hereunder, it is recognized that members of
the Audit Committee are not full-time employees of the Fund and are not, and do
not represent themselves to be, accountants or auditors by profession or
experts in the field of accounting or auditing. As such, it is not the duty or
responsibility of the Audit Committee or its members to conduct &#147;field work&#148; or
other types of auditing or accounting reviews or procedures, and each member of
the Audit Committee shall be entitled to rely on (i) the integrity of those
persons and organizations inside and outside the Fund from which the Audit
Committee receives information and (ii) the accuracy of the financial and other
information provided to the Audit Committee by such persons or organizations
absent actual knowledge to the contrary (which actual knowledge shall be
promptly reported to the Board of Directors).</font></td></tr></TABLE>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
independent accountants for the Fund are ultimately accountable to the Board of
Directors and the Audit Committee. The Board of Directors and the Audit
Committee have the ultimate authority and responsibility to select, evaluate
and, where appropriate, replace the independent accountants for the Fund (or to
nominate the independent accountants to be proposed for shareholder approval in
the proxy statement).</font></td></tr></TABLE>

<p><table width=600><tr><td><FONT SIZE="2"><B>IV. <I>Meetings</I></B></FONT></td></tr></TABLE>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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 at such times as the Audit Committee believes appropriate.
Members of the Audit Committee may participate in a meeting of the Audit
Committee by means of conference call or similar communications equipment by
means of which all persons participating in such meeting can hear each other.</font></td></tr></TABLE>

<p><table width=600><tr><td><FONT SIZE="2"><B>V. <I>Outside Resources and Assistance
from Fund Management</I></B></FONT></td></tr></TABLE>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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 power and authority to take all action it believes
necessary or appropriate to discharge its responsibilities, including the
authority to retain at the expense of the Fund their own counsel and other
experts and consultants whose expertise would be considered helpful to the
Audit Committee.</font></td></tr></TABLE>


<p><table width=600><tr><td><font size=2>Dated June 6, 2000 <BR>
      Revised April 11, 2001</font></td>
  </tr></TABLE>




<p>&nbsp;
<table width=600><tr><td width=60 align=left><font size=1>&nbsp;</font></td><td width=480 align=center><font size="2">
3</font></td><td width=60 align=right><font size="1">&nbsp;</font></td></tr></TABLE><p>&nbsp;<hr size=5 noshade width=600 align=LEFT><p>&nbsp;










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<p><table width=600><tr><td align=right><font size=2><B>APPENDIX A</B></font></td></tr></TABLE>

<p><table width=600><tr><td><font size=2>APEX MUNICIPAL FUND, INC.</font></td></tr></TABLE>

<table width=600><tr><td><font size=2>CORPORATE HIGH YIELD FUND, INC.</font></td></tr></TABLE>

<table width=600><tr><td><font size=2>CORPORATE HIGH YIELD FUND II, INC.</font></td></tr></TABLE>

<table width=600><tr><td><font size=2>CORPORATE HIGH YIELD FUND III, INC.</font></td></tr></TABLE>

<table width=600><tr><td><font size=2>MUNIHOLDINGS INSURED FUND II, INC.</font></td></tr></TABLE>

<table width=600><tr><td><font size=2>MUNIINSURED FUND, INC.</font></td></tr></TABLE>

<table width=600><tr><td><font size=2>MUNIYIELD INSURED FUND, INC.</font></td></tr></TABLE>



<p>&nbsp;
<table width=600><tr><td width=60 align=left><font size=1>&nbsp;</font></td><td width=480 align=center><font size="2">
</font></td><td width=60 align=right><font size="1">&nbsp;</font></td></tr></TABLE><p>&nbsp;<hr size=5 noshade width=600 align=LEFT><p>&nbsp;








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<!-- MARKER LABEL="sheet: 1, page: 1" -->
<p>&nbsp;</p>




<table width=600><tr><td align=right><font size=3><B>COMMON STOCK</B></font></td></tr></TABLE>

<p><table width=600><tr>
    <td  align=center><font size=3><B>MUNIYIELD INSURED FUND, INC. <BR>
      P.O. Box 9011 <BR>
      Princeton, New Jersey 08543-9011</B></font></td>
  </tr></TABLE>

<p><table width=600><tr><td  align=center><font size=3><B>PROXY</B></font></td></tr></TABLE>

<p><table width=600><tr><td  align=center><font size=3><B>This proxy is
solicited on behalf of the Board of Directors</B></font></td></tr></TABLE>

<p><table width=600><tr>
    <td><font size=2>The undersigned hereby appoints Donald C. Burke, Terry K.
      Glenn and Bradley J. Lucido as proxies, each with the power to appoint his
      substitute, and hereby authorizes each of them to represent and to vote,
      as designated on the reverse hereof, all the Common Stock of MuniYield Fund,
      Inc. (the &#147;Fund&#148;) held of record by the undersigned on June 27,
      2001 at the annual meeting of stockholders of the Fund to be held on August
      22, 2001 or any adjournment thereof.</font></td>
  </tr></TABLE>

<p><table width=600>
<tr><td width=60>&nbsp;</td>
<td width=540><FONT SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>This
proxy when properly executed will be voted in the manner directed herein by the
undersigned stockholder. If no direction is made, this proxy will be voted FOR
Proposal 1.</B></FONT></td></tr></TABLE>

<p><table width=600><tr><td><font size=2>By signing and dating the reverse side
of this card, you authorize the proxies to vote Proposal 1 as marked, or if not
marked, to vote &#147;FOR&#148; Proposal 1, and to use their discretion to vote for any
other matter as may properly come before the meeting or any adjournment
thereof. If you do not intend to personally attend the meeting, please complete
and return this card at once in the enclosed envelope.</font></td></tr></TABLE>

<p><table width=600><tr>
    <td align=right><font size=2><font size="1">(Continued and to be signed on
      the reverse side)</font></font></td>
  </tr></TABLE>




<p>&nbsp;
<table width=600><tr><td width=60 align=left><font size=1>&nbsp;</font></td><td width=480 align=center><font size="2">
</font></td><td width=60 align=right><font size="1">&nbsp;</font></td></tr></TABLE><p>&nbsp;<hr size=5 noshade width=600 align=LEFT>




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<!-- MARKER LABEL="sheet: 2, page: 2" -->

<p>&nbsp;
<p>


<p><table width=600><tr>
    <td><font size=2>Please mark boxes /X/ or |X| in blue
or black ink. &nbsp;</font></td>
  </tr></TABLE>



<br>
<table border="0" cellspacing="0" cellpadding="0" width="600">
  <tr align="left" valign="top">
    <td><font size="2">1. ELECTION OF DIRECTORS </font></td>
    <td>&nbsp;</td>
    <td><font size="2"><b>FOR</b> all nominees listed below <br>
      (except as marked to the contrary <br>
      below) |_| </font></td>
    <td>&nbsp;</td>
    <td><font size="2"><b>WITHHOLD AUTHORITY</b> <br>
      to vote for all nominees listed <br>
      below |_| </font></td>
  </tr>
</TABLE>
<br>
<table width=600><tr>
    <td><FONT SIZE="1"><B><I>(INSTRUCTION: To withhold authority to vote for any
      individual nominee, strike a line through the nominee&#146;s name in the
      list below.) </I><br>
      Terry K. Glenn, Joe Grills, Robert S. Salomon, Jr. and
      Stephen B. Swensrud </B></FONT></td>
  </tr></TABLE>

<br>
<table width=600>
  <tr>
    <td width=3% valign=top><font size="2"> 2. </font></td>
    <td width=97% colspan="2"><font size="2">In the discretion of such proxies,
      upon such other business as may properly come before the meeting or any
      adjournment thereof.</font></td>
  </tr>
</TABLE>



<br>
<table border="0" cellspacing="0" cellpadding="0" width="600">
  <tr>
    <td>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</td>
    <td><font size="1">Please sign exactly as name appears hereon. When stock
      is held by joint tenants, both should sign. When signing as attorney or
      as executor, administrator, trustee or guardian, please give full title
      as such. If a corporation, please sign in full corporate name by president
      or other authorized officer. If a partnership, please sign in partnership
      name by authorized person</font><font size="2">. </font></td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td><font size="1">Dated: ________________________________________________,
      2001</font></td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td><font size="1">X</font> ____________________________________</td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td align="left" valign="top"><font size="1">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Signature</font></td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td><font size="1">X __________________________________________________________</font></td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td align="left" valign="top">
      <p><font size="1">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Signature,
        if held jointly </font></p>
      <p>
    </td>
  </tr>
</TABLE>
<br>
<table width=600><tr><td><font size=1><B>Sign, Date and Return the Proxy
Card Promptly Using the Enclosed Envelope.</B></font></td></tr></TABLE>





<p>&nbsp;
<table width=600><tr><td width=60 align=left><font size=1>&nbsp;</font></td><td width=480 align=center><font size="2">
2</font></td><td width=60 align=right><font size="1">&nbsp;</font></td></tr></TABLE><p>&nbsp;<hr size=5 noshade width=600 align=LEFT>




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<!-- MARKER LABEL="sheet: 3, page: 3" -->

<p>&nbsp;
<p>
<table width=600>
  <tr>
    <td align=right width="417">&nbsp;</td>
    <td align=left width="171"><font size=3><B>AUCTION MARKET <br>
      PREFERRED STOCK</B></font></td>
  </tr>
</TABLE>

<p><table width=600><tr>
    <td  align=center><font size=3><B>MUNIYIELD INSURED FUND, INC. <BR>
      P.O. Box 9011 <BR>
      Princeton, New Jersey 08543-9011</B></font></td>
  </tr></TABLE>

<p><table width=600><tr><td  align=center><font size=3><B>PROXY</B></font></td></tr></TABLE>

<p><table width=600><tr><td  align=center><font size=3><B>This proxy is
solicited on behalf of the Board of Directors</B></font></td></tr></TABLE>

<p><table width=600><tr>
    <td><font size=2>The undersigned hereby appoints Donald
C. Burke, Terry K. Glenn and Bradley J. Lucido as proxies, each with the power
to appoint his substitute, and hereby authorizes each of them to represent and
to vote, as designated on the reverse hereof, all the Auction Market Preferred Stock  (&#147;AMPS&#148;)   of MuniYield Insured Fund, Inc.  (the &#147;Fund&#148;) held of record by the undersigned on
June 27, 2001 at the annual meeting of stockholders of the Fund to be held on
August 22, 2001 or any adjournment thereof.</font></td>
  </tr></TABLE>

<p><table width=600>
<tr><td width=60>&nbsp;</td>
<td width=540><FONT SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>This
proxy when properly executed will be voted in the manner directed herein by the
undersigned stockholder. If no direction is made, this proxy will be voted FOR
Proposal 1.</B></FONT></td></tr></TABLE>

<p><table width=600><tr><td><font size=2>By signing and dating the reverse side
of this card, you authorize the proxies to vote Proposal 1 as marked, or if not
marked, to vote &#147;FOR&#148; Proposal 1, and to use their discretion to vote for any
other matter as may properly come before the meeting or any adjournment
thereof. If you do not intend to personally attend the meeting, please complete
and return this card at once in the enclosed envelope.</font></td></tr></TABLE>

<p><table width=600><tr>
    <td align=right><font size=1>(Continued and to be signed on the reverse side)</font></td>
  </tr></TABLE>



<p>&nbsp;
<table width=600><tr><td width=60 align=left><font size=1>&nbsp;</font></td><td width=480 align=center><font size="2">
3</font></td><td width=60 align=right><font size="1">&nbsp;</font></td></tr></TABLE><p>&nbsp;<hr size=5 noshade width=600 align=LEFT>




<!-- *************************************************************************** -->
<!-- MARKER LABEL="sheet: 4, page: 4" -->

<p>&nbsp;
<p>

<p><table width=600><tr>
    <td><font size=2>Please mark boxes /X/ or |X| in blue
or black ink. </font></td>
  </tr></TABLE>


<br>
<table border="0" cellspacing="0" cellpadding="0" width="600">
  <tr align="left" valign="top">
    <td><font size="2">1. ELECTION OF DIRECTORS </font></td>
    <td>&nbsp;</td>
    <td><font size="2"><b>FOR</b> all nominees listed below <br>
      (except as marked to the contrary <br>
      below) |_| </font></td>
    <td>&nbsp;</td>
    <td><font size="2"><b>WITHHOLD AUTHORITY</b> <br>
      to vote for all nominees listed <br>
      below |_| </font></td>
  </tr>
</TABLE>
<br>
<table width=600><tr>
    <td><FONT SIZE="1"><B><I>(INSTRUCTION: To withhold authority to vote for any
      individual nominee, strike a line through the nominee&#146;s name in the
      list below.) </I><br>
      Terry K. Glenn, Joe Grills, Walter Mintz, Robert S. Salomon,
      Jr., Melvin R. Seiden and Stephen B. Swensrud </B></FONT></td>
  </tr></TABLE>

<br>
<table width=600><tr><td width=3% valign=top><font size="2"> 2.
</font></td><td width=2%><font size="1"></font></td>
    <td width=95%><font size="2">In the discretion of such proxies, upon such
      other business as may properly come before the meeting or any adjournment
      thereof.</font></td>
  </tr></TABLE>

<p>
<table width=400>
  <tr>
    <td><font size="1">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
    <td><font size="1">If the undersigned is a broker-dealer, it hereby instructs
      the proxies, pursuant to rule 452 of the New York Stock Exchange, to vote
      any uninstructed Auction Market Preferred Stock in the same proportion as
      votes cast by holders of Auction Market Preferred Stock who have responded
      to this proxy solicitation.</font></td>
  </tr>
</TABLE>


<br>
<table border="0" cellspacing="0" cellpadding="0" width="600">
  <tr>
    <td>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</td>
    <td><font size="1">Please sign exactly as name appears hereon. When stock
      is held by joint tenants, both should sign. When signing as attorney or
      as executor, administrator, trustee or guardian, please give full title
      as such. If a corporation, please sign in full corporate name by president
      or other authorized officer. If a partnership, please sign in partnership
      name by authorized person</font><font size="2">. </font></td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td><font size="1">Dated: ________________________________________________,
      2001</font></td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td><font size="1">X</font> ____________________________________</td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td align="left" valign="top"><font size="1">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Signature</font></td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td><font size="1">X __________________________________________________________</font></td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td align="left" valign="top">
      <p><font size="1">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Signature,
        if held jointly </font></p>
      <p>
    </td>
  </tr>
</TABLE>
<br>
<table width=600><tr><td><font size=1><B>Sign, Date and Return the Proxy
Card Promptly Using the Enclosed Envelope.</B></font></td></tr></TABLE>




<p>&nbsp;
<table width=600><tr><td width=60 align=left><font size=1>&nbsp;</font></td><td width=480 align=center><font size="2">
4</font></td><td width=60 align=right><font size="1">&nbsp;</font></td></tr></TABLE><p>&nbsp;<hr size=5 noshade width=600 align=LEFT><p>&nbsp;

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