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<SEC-DOCUMENT>0000891092-02-000391.txt : 20020415
<SEC-HEADER>0000891092-02-000391.hdr.sgml : 20020415
ACCESSION NUMBER:		0000891092-02-000391
CONFORMED SUBMISSION TYPE:	DEF 14A
PUBLIC DOCUMENT COUNT:		1
CONFORMED PERIOD OF REPORT:	20020425
FILED AS OF DATE:		20020322

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			MUNIYIELD INSURED FUND INC
		CENTRAL INDEX KEY:			0000883412
		STATE OF INCORPORATION:			NJ
		FISCAL YEAR END:			1031

	FILING VALUES:
		FORM TYPE:		DEF 14A
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	811-06540
		FILM NUMBER:		02581952

	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>e13122.htm
<DESCRIPTION>DEFINITIVE PROXY STATEMENT
<TEXT>
<html>
<head>
<title>Proxy </title>
</head>
<body>





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<!-- MARKER LABEL="sheet: 1, page: 1" -->




<p><table width=600><tr>
    <td  align=center><font size=2>As filed with the Securities and Exchange <br>
      Commission on March 22, 2002</font></td>
  </tr></table>

<p><table width=600><tr>
    <td  align=center><font size=2>PROXY STATEMENT PURSUANT <br>
      TO SECTION 14(A) OF THE SECURITIES <br>
      EXCHANGE ACT OF 1934</font></td>
  </tr></table>

<p>
<table width="600" border="0" cellspacing="0" cellpadding="0">
  <tr valign="top">
    <td width="256"><font size="2">Filed by the Registrants [X]</font></td>
    <td width="40">&nbsp;&nbsp;&nbsp;&nbsp;</td>
    <td colspan="2"><font size="2">Check the appropriate box:</font></td>
  </tr>
  <tr valign="top">
    <td width="256">&nbsp;</td>
    <td width="40">&nbsp;</td>
    <td width="29">&nbsp;</td>
    <td width="275">&nbsp;</td>
  </tr>
  <tr valign="top">
    <td width="256"><font size="2">Filed by a Party other than the Registrant
      [&nbsp;&nbsp;&nbsp;] </font></td>
    <td width="40">&nbsp;</td>
    <td width="29"><font size="2">[&nbsp;&nbsp;&nbsp;]</font></td>
    <td width="275"><font size="2">Preliminary Proxy Statement </font></td>
  </tr>
  <tr valign="top">
    <td width="256">&nbsp;</td>
    <td width="40">&nbsp;</td>
    <td width="29"><font size="2">[X]</font></td>
    <td width="275"><font size="2">Definitive Proxy Statement</font></td>
  </tr>
  <tr valign="top">
    <td width="256">&nbsp;</td>
    <td width="40">&nbsp;</td>
    <td width="29"><font size="2">[&nbsp;&nbsp;&nbsp;]</font></td>
    <td width="275"><font size="2">Definitive Additional Materials</font></td>
  </tr>
  <tr valign="top">
    <td width="256">&nbsp;</td>
    <td width="40">&nbsp;</td>
    <td width="29"><font size="2">[&nbsp;&nbsp;&nbsp;]</font></td>
    <td width="275"><font size="2">Soliciting Material Pursuant to Rule 14a-12</font></td>
  </tr>
</table>
<p><table width=600><tr>
    <td  align=center><font size=2>MUNIYIELD INSURED FUND, INC. <br>
      P.O. Box 9011, Princeton, New Jersey 08543-9011</font></td>
  </tr></table>


<p><table width=600><tr>
    <td  align=center>
      <hr size="1" noshade>
      <font size=2>(Name of Registrant as Specified in Its Charter)</font> </td>
  </tr></table>

<p><table width=600><tr><td  align=center><hr size="1" noshade>
      <font size=2>(Name of Person(s) Filing Proxy Statement, if other than the
      Registrant)</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=5%><font size="2">[X]</font></td>
    <td width=95%><font size=2> No fee required.</font></td>
  </tr>
</table>

<table width=600>
  <tr>
    <td width=5%><font size="2">[&nbsp;&nbsp;&nbsp;]</font></td>
    <td width=95%><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% valign="top"><font size="2">(1)</font></td>
    <td width=95%><font size="2">Title of each class of securities to which transaction
      applies:<br>
      <br>
      </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% valign="top"><font size="2">(2)</font></td>
    <td width=95%><font size="2">Aggregate number of securities to which transaction
      applies:<br>
      <br>
      </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% 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.):<br>
      <br>
      </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% valign="top"><font size="2">(4)</font></td>
    <td width=95%><font size="2">Proposed maximum aggregate value of transaction:
      <br>
      <br>
      </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% valign="top"><font size="2">(5)</font></td>
    <td width=95%><font size="2">Total fee paid:<br>
      <br>
      </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><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: 2, page: 2" -->
<p>&nbsp;
<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">Fee paid previously with preliminary materials:
      <br>
      <br>
      </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.<br>
      </font></td>
  </tr>
</table>
<br>
<table width=600>
  <tr>
    <td width=2% align=right valign=top>&nbsp;</td>
    <td width=5% valign="top" align="right"><font size="2">(1)</font></td>
    <td width=93%><font size="2">Amount previously paid:<br>
      <br>
      </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" align="right"><font size="2">(2)</font></td>
    <td width=93%><font size="2">Form, Schedule or Registration Statement No.:<br>
      <br>
      </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" align="right"><font size="2">(2)</font></td>
    <td width=93%><font size="2">Filing Party:<br>
      <br>
      </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" align="right"><font size="2">(2)</font></td>
    <td width=93%><font size="2">Date Filed: <br>
      <br>
      </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>
<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">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>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 2002 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>April 25, 2002</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</FONT>
      <font size="1">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 2002 Annual Meeting of Stockholders (the &#147;Meeting&#148;) of MuniYield
      Insured Fund, Inc. (the &#147;Fund&#148;) will be held at the offices of
      Fund Asset Management, L.P., <br>
      800 Scudders Mill Road, Plainsboro, New Jersey, on Thursday, April 25, 2002
      at 10:40 a.m. (Eastern time) for the following purposes:</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)
To elect a Board of Directors to serve for the ensuing year;</font></td></tr></table>

<table width=600>
<tr><td width=30>&nbsp;</td>
    <td width=570><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) To consider a
      stockholder proposal recommending the implementation of a Directors&#146;
      stock purchase
      program; and</font></td>
  </tr></table>

<table width=600>
<tr><td width=30>&nbsp;</td>
    <td width=570><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3) To transact such
      other business as may properly come before the Meeting or any adjournments thereof. </font></td>
  </tr></table>

<br>
<table width="600">
  <tr>
    <td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Board of Directors has
      fixed the close of business on February 28, 2002 as the record date for
      the determination of stockholders entitled to notice of and to vote at the
      Meeting or any adjournments 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 April 11, 2002,
      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 align="right">
    <td width="380">&nbsp;</td>
    <td width="208" align="left"><FONT SIZE="2"> By Order of the Board of Directors<br>
      <BR>
      S<font size="1">TEPHEN</font> B<font size="1">ENHAM</font><BR>
      <i>Secretary</i></FONT></td>
  </tr>
</table>

<p><table width=600><tr><td><FONT SIZE="2">
Plainsboro, New Jersey<BR>
      Dated: March 22, 2002</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: 2, page: 2" -->





<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>

<table width=600><tr><td  align=center><font size=2><B>2002 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>April 25, 2002</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 2002 Annual Meeting of
Stockholders of the Fund (the &#147;Meeting&#148;), to be held at the offices of Fund
Asset Management, L.P. (&#147;FAM&#148;), 800 Scudders Mill Road, Plainsboro, New Jersey,
on Thursday, April 25, 2002 at 10:40 a.m. (Eastern time). The approximate
mailing date of this Proxy Statement is March 26, 2002.</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 and
      <i>against</i> the stockholder proposal recommending the implementation
      of a Directors&#146; stock purchase program. 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 February 28, 2002 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 62,099,095 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 and Item 2 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: 3, page: 3" -->



<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   persons designated as Directors to be elected by
holders of AMPS; and</font></td>
  </tr></table>

<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 seven 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>

<P>
<TABLE   CELLSPACING=0 CELLPADDING=0 WIDTH=600>
  <TR align="center" valign="bottom">
    <TD WIDTH="135" align="left"> <FONT SIZE=1> <b>Name, Address and Age<br>
      of AMPS Nominees </b></FONT>
      <hr noshade align="left" width="100%" size="1">
    </TD>
    <TD WIDTH="10">&nbsp;</TD>
    <TD WIDTH="67"> <FONT SIZE=1> <b>Position(s) Held <BR>
      with Fund <br>
      and Length of <BR>
      Time Served</b> </FONT>
      <hr noshade align="left" width="100%" size="1">
    </TD>
    <TD WIDTH="11">&nbsp;</TD>
    <TD WIDTH="215"> <FONT SIZE=1> <b>Principal Occupation During <BR>
      Past Five Years</b> </FONT>
      <hr noshade align="left" width="100%" size="1">
    </TD>
    <TD WIDTH="11">&nbsp;</TD>
    <TD WIDTH="81"> <FONT SIZE=1> <b>Number of FAM/ <BR>
      MLIM-Advised <BR>
      Funds* Overseen</b> </FONT>
      <hr noshade align="left" width="100%" size="1">
    </TD>
    <TD WIDTH="11">&nbsp;</TD>
    <TD WIDTH="60"> <FONT SIZE=1> <b>Public <br>
      Directorships</b> </FONT>
      <hr noshade align="left" width="100%" size="1">
    </TD>
  </TR>
  <TR>
    <TD VALIGN="TOP" WIDTH="135"> <font size="2"> Robert S. Salomon, Jr. <br>
      (64)<br>
      106 Dolphin Cove Quay<br>
      Stamford, Connecticut 06902 </font></TD>
    <TD VALIGN="TOP" WIDTH="10"><font size="2"></font></TD>
    <TD VALIGN="TOP" WIDTH="67"> <font size="2"> Director since <br>
      1996 </font></TD>
    <TD VALIGN="TOP" WIDTH="11"><font size="2"></font></TD>
    <TD VALIGN="TOP" WIDTH="215"> <font size="2"> Principal of STI Management
      (investment adviser) since 1994; Chairman and Chief Executive Officer of
      Salomon Brothers Asset Management Inc. from 1992 to 1995; Chairman of Salomon
      Brothers Equity Mutual Funds from 1992 to 1995; regular columnist with Forbes
      Magazine since 1992; Director of Stock Research and U.S. Equity Strategist
      at Salomon Brothers Inc. from 1975 to 1991; Trustee, Commonfund from 1980
      to 2001. </font></TD>
    <TD VALIGN="TOP" WIDTH="11"><font size="2"></font></TD>
    <TD VALIGN="TOP" WIDTH="81"> <font size="2"> 16 registered investment companies
      consisting of <br>
      36 portfolios </font></TD>
    <TD VALIGN="TOP" WIDTH="11"><font size="2"></font></TD>
    <TD VALIGN="TOP" WIDTH="60"> <font size="2"> None </font></TD>
  </TR>
  <TR>
    <TD VALIGN="TOP" WIDTH="135"><font size="2"></font></TD>
    <TD VALIGN="TOP" WIDTH="10"><font size="2"></font></TD>
    <TD VALIGN="TOP" WIDTH="67"><font size="2"></font></TD>
    <TD VALIGN="TOP" WIDTH="11"><font size="2"></font></TD>
    <TD VALIGN="TOP" WIDTH="215"><font size="2"></font></TD>
    <TD VALIGN="TOP" WIDTH="11"><font size="2"></font></TD>
    <TD VALIGN="TOP" WIDTH="81"><font size="2"></font></TD>
    <TD VALIGN="TOP" WIDTH="11"><font size="2"></font></TD>
    <TD VALIGN="TOP" WIDTH="60"><font size="2"></font></TD>
  </TR>
  <TR>
    <TD VALIGN="TOP" WIDTH="135"> <font size="2"> Melvin R. Seiden (71)<br>
      780 Third Avenue<br>
      New York, New York <br>
      10017 </font></TD>
    <TD VALIGN="TOP" WIDTH="10"><font size="2"></font></TD>
    <TD VALIGN="TOP" WIDTH="67"> <font size="2"> Director since <br>
      1992 </font></TD>
    <TD VALIGN="TOP" WIDTH="11"><font size="2"></font></TD>
    <TD VALIGN="TOP" WIDTH="215"> <font size="2"> Director of Silbanc Properties,
      Ltd. (real estate, investment and consulting) since 1987; Chairman and President
      of Seiden &amp; de Cuevas, Inc. (private investment firm) from 1964 to 1987.
      </font></TD>
    <TD VALIGN="TOP" WIDTH="11"><font size="2"></font></TD>
    <TD VALIGN="TOP" WIDTH="81"> <font size="2"> 16 registered investment companies
      consisting of<br>
      36 portfolios </font></TD>
    <TD VALIGN="TOP" WIDTH="11"><font size="2"></font></TD>
    <TD VALIGN="TOP" WIDTH="60"> <font size="2"> None </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% align=left valign=top><font size="1">*</font></td>
    <td width=2%>&nbsp;</td>
    <td width=95% align="left" valign="top"><font size="1">The complex of investment companies advised by FAM and its affiliate, Merrill Lynch Investment Managers, L.P. (&#147;MLIM&#148;).</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><p>&nbsp;





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



<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>

<p><table width=600><tr>
    <td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Certain
biographical and other information relating to the nominee who is an
&#147;interested person,&#148; as defined in the Investment Company Act of 1940, as amended  (the
&#147;Investment Company Act&#148;), of the Fund is set forth below:</font></td>
  </tr></table>

<P>
<TABLE CELLSPACING=0 BORDER=0 CELLPADDING=0 WIDTH=600>
  <tr valign="bottom">
    <td width="129" align="left"> <font size=1> <b>Name, Address and Age <br>
      of AMPS Nominees </b></font>
      <hr noshade align="left" width="100%" size="1">
    </td>
    <td width="10" align="center">&nbsp;</td>
    <td width="69" align="center"> <font size=1> <b>Position(s)<br>
      Held <br>
      with Fund <br>
      and Length of <br>
      Time Served </b></font>
      <hr noshade align="left" width="100%" size="1">
    </td>
    <td width="9">&nbsp;</td>
    <td width="219" align="center"> <font size=1> <b>Principal Occupation During
      <br>
      Past Five Years</b> </font>
      <hr noshade align="left" width="100%" size="1">
    </td>
    <td width="7" align="center">&nbsp;</td>
    <td width="75" align="center"> <font size=1> <b>Number of FAM/<br>
      MLIM-Advised <br>
      Funds Overseen</b> </font>
      <hr noshade align="left" width="100%" size="1">
    </td>
    <td width="8" align="center">&nbsp;</td>
    <td width="77" align="center"> <font size=1> <b>Public <br>
      Directorships</b> </font>
      <hr noshade align="left" width="100%" size="1">
    </td>
  </tr>
  <TR>
    <TD VALIGN="TOP" WIDTH="129"> <font size="2"> Terry K. Glenn (61)*<SUP>(1)</SUP>
      P.O. Box 9011 <br>
      Princeton, New Jersey <br>
      08543-9011</font></TD>
    <TD VALIGN="TOP" WIDTH="10"><font size="2"></font></TD>
    <TD VALIGN="TOP" WIDTH="69"> <font size="2"> Director and<br>
      President since <br>
      1999</font></TD>
    <TD VALIGN="TOP" WIDTH="9"><font size="2"></font></TD>
    <TD VALIGN="TOP" WIDTH="219"> <font size="2"> Chairman (Americas Region) since
      2001 and Executive Vice President since 1983 of FAM and MLIM (the terms FAM and MLIM, as used herein,
      include their corporate predecessors); President of Merrill Lynch Mutual
      Funds since 1999; President of FAM Distributors, Inc. (&#147;FAMD&#148;)
      since 1986 and Director thereof since 1991; Executive Vice President and
      Director of Princeton Services, Inc. (Princeton Services&#148;) since&nbsp;1993;
      President of Princeton Administrators, L.P. (&#147;Princeton Administrators&#148;)
      since 1988; Director&nbsp;of Financial Data Services, Inc. (&#147;FDS&#148;)
      since 1985.</font></TD>
    <TD VALIGN="TOP" WIDTH="7"><font size="2"></font></TD>
    <TD VALIGN="TOP" WIDTH="75"> <font size="2"> 127 registered investment companies
      consisting of 184&nbsp;portfolios</font></TD>
    <TD VALIGN="TOP" WIDTH="8"><font size="2"></font></TD>
    <TD VALIGN="TOP" WIDTH="77"> <font size="2"> None</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% align=left valign=top><font size="1">*</font></td>
    <td width=2%>&nbsp;</td>
    <td width=95%><font size="1">Mr. Glenn is an &#147;interested person,&#148;
      as defined in the Investment Company Act of the Fund based on his positions
      with FAM, MLIM, FAMD, Princeton Services and Princeton Administrators.</font></td>
  </tr>
  <tr>
    <td width=3% align=left valign=top><font size="1">(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 of the Fund.</font></td>
  </tr>
</table>

<p><table width=600><tr>
    <td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Certain
biographical and other information relating to the nominees who are not
&#147;interested persons,&#148; as defined in the Investment Company Act,  of the Fund is
set forth below:</font></td>
  </tr></table>

<P>
<TABLE CELLSPACING=0 BORDER=0 CELLPADDING=0 WIDTH=600>
  <tr valign="bottom">
    <td align="left" width="126"> <font size=1> <b>Name, Address and Age <br>
      of AMPS Nominees </b></font>
      <hr noshade align="left" width="100%" size="1">
    </td>
    <td align="center" width="10">&nbsp;</td>
    <td align="center" width="66"><font size=1><b>Position(s)<br>
      Held <br>
      with Fund <br>
      and Length of <br>
      Time Served</b> </font>
      <hr noshade align="left" width="100%" size="1">
    </td>
    <td width="10">&nbsp;</td>
    <td align="center" width="227"> <font size=1> <b>Principal Occupation During
      <br>
      Past Five Years</b> </font>
      <hr noshade align="left" width="100%" size="1">
    </td>
    <td align="center" width="11">&nbsp;</td>
    <td align="center" width="77"> <font size=1> <b>Number of FAM/<br>
      MLIM-Advised <br>
      Funds Overseen</b> </font>
      <hr noshade align="left" width="100%" size="1">
    </td>
    <td align="center" width="11">&nbsp;</td>
    <td align="center" width="62"> <font size=1> <b>Public <br>
      Directorships</b> </font>
      <hr noshade align="left" width="100%" size="1">
    </td>
  </tr>
  <TR>
    <TD VALIGN="TOP" WIDTH="126"> <font size="2"> James H. Bodurtha (58)<br>
      36 Popponesset Road<br>
      Cotuit, Massachusetts <br>
      02635</font></TD>
    <TD VALIGN="TOP" WIDTH="10">&nbsp;</TD>
    <TD VALIGN="TOP" WIDTH="66"> <font size="2"> Nominee</font></TD>
    <TD VALIGN="TOP" WIDTH="10">&nbsp;</TD>
    <TD VALIGN="TOP" WIDTH="227"> <font size="2"> Director and Executive Vice
      President, The China Business Group, Inc. since 1995; Chairman and Chief
      Executive Officer, China Enterprise Management Corporation from 1993 to
      1996; Chairman, Berkshire Holdings Corporation since 1980; Partner, Squire,
      Sanders &amp; Dempsey from 1980 to 1993.</font></TD>
    <TD VALIGN="TOP" WIDTH="11">&nbsp;</TD>
    <TD VALIGN="TOP" WIDTH="77"> <font size="2"> 33 registered investment companies
      consisting of 37&nbsp;portfolios</font></TD>
    <TD VALIGN="TOP" WIDTH="11">&nbsp;</TD>
    <TD VALIGN="TOP" WIDTH="62"> <font size="2"> None</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;





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

<P>
<TABLE CELLSPACING=0 BORDER=0 CELLPADDING=0 WIDTH=600>
  <tr valign="bottom">
    <td align="left" width="107"> <font size=1> <b>Name, Address and Age <br>
      of AMPS Nominees </b></font>
      <hr noshade align="left" width="100%" size="1">
    </td>
    <td align="center" width="10">&nbsp;</td>
    <td align="center" width="74"> <font size=1> <b>Position(s) Held <br>
      with Fund <br>
      and Length of <br>
      Time Served</b> </font>
      <hr noshade align="left" width="100%" size="1">
    </td>
    <td width="10">&nbsp;</td>
    <td align="center" width="218"> <font size=1> <b>Principal Occupation During
      <br>
      Past Five Years</b> </font>
      <hr noshade align="left" width="100%" size="1">
    </td>
    <td align="center" width="10">&nbsp;</td>
    <td align="center" width="98"> <font size=1> <b>Number of FAM/<br>
      MLIM-Advised <br>
      Funds Overseen</b> </font>
      <hr noshade align="left" width="100%" size="1">
    </td>
    <td align="center" width="11">&nbsp;</td>
    <td align="center" width="62"> <font size=1> <b>Public <br>
      Directorships</b> </font>
      <hr noshade align="left" width="100%" size="1">
    </td>
  </tr>
  <TR>
    <TD VALIGN="TOP" WIDTH="107"> <font size="2"> Joe Grills (66) <br>
      P.O. Box 98 <br>
      Rapidan, Virginia 22733</font></TD>
    <TD VALIGN="TOP" WIDTH="10"><font size="2"></font></TD>
    <TD VALIGN="TOP" WIDTH="74"> <font size="2"> Director since <br>
      1994</font></TD>
    <TD VALIGN="TOP" WIDTH="10"><font size="2"></font></TD>
    <TD VALIGN="TOP" WIDTH="218"> <font size="2"> Member of the Committee of Investment
      of Employee Benefit Assets of the Association of Financial Professionals
      (&#147;CIEBA&#148;) since 1986; Member of CIEBA&#146;s Executive Committee
      since 1988 and its Chairman from 1991 to 1992; Assistant Treasurer of International
      Business Machines Corporation (&#147;IBM&#148;) and Chief Investment Officer
      of IBM Retirement Funds from 1986 to 1993; Member of the Investment Advisory
      Committee of the State of New York Common Retirement Fund since 1989; Member
      of the Investment Advisory Committee of the Howard Hughes Medical Institute
      from 1997 to 2000; Director, Duke Management Company since 1992 and Vice
      Chairman thereof since 1998; Director, LaSalle Street Fund from 1995 to
      2001; Director, Kimco Realty Corporation since 1997; Member of the Investment
      Advisory Committee of the Virginia Retirement System since 1998; Director,
      Montpelier Foundation since 1998 and its Vice Chairman since 2000; Member
      of the Investment Committee of the Woodberry Forest School since 2000; Member
      of the Investment Committee of the National Trust for Historic Preservation
      since 2000.</font></TD>
    <TD VALIGN="TOP" WIDTH="10"><font size="2"></font></TD>
    <TD VALIGN="TOP" WIDTH="98"> <font size="2"> 20 registered investment companies
      consisting of 49&nbsp;portfolios</font></TD>
    <TD VALIGN="TOP" WIDTH="11"><font size="2"></font></TD>
    <TD VALIGN="TOP" WIDTH="62"> <font size="2"> Kimco Realty Corporation</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;





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



<P>
<table cellspacing=0 border=0 cellpadding=0 width=600>
  <tr valign="bottom">
    <td align="left" width="135"> <font size=1> <b>Name, Address and Age <br>
      of AMPS Nominees </b></font>
      <hr noshade align="left" width="100%" size="1">
    </td>
    <td align="center" width="9">&nbsp;</td>
    <td align="center" width="68"> <font size=1> <b>Position(s) Held <br>
      with Fund <br>
      and Length of <br>
      Time Served</b> </font>
      <hr noshade align="left" width="100%" size="1">
    </td>
    <td width="8">&nbsp;</td>
    <td align="center" width="220"> <font size=1> <b>Principal Occupation During
      <br>
      Past Five Years</b> </font>
      <hr noshade align="left" width="100%" size="1">
    </td>
    <td align="center" width="12">&nbsp;</td>
    <td align="center" width="75"> <font size=1> <b>Number of FAM/<br>
      MLIM-Advised <br>
      Funds Overseen</b> </font>
      <hr noshade align="left" width="100%" size="1">
    </td>
    <td align="center" width="10">&nbsp;</td>
    <td align="center" width="63"> <font size=1> <b>Public <br>
      Directorships</b> </font>
      <hr noshade align="left" width="100%" size="1">
    </td>
  </tr>
  <tr>
    <td valign="TOP" width="135"> <font size="2"> Herbert I. London (62)<br>
      2 Washington Square <br>
      Village <br>
      New York, New York <br>
      10012</font></td>
    <td valign="TOP" width="9"><font size="2"></font></td>
    <td valign="TOP" width="68"> <font size="2"> Nominee</font></td>
    <td valign="TOP" width="8"><font size="2"></font></td>
    <td valign="TOP" width="220"> <font size="2"> John M. Olin Professor of Humanities,
      New York University since 1993 and Professor thereof since 1980; President,
      Hudson Institute since 1997 and Trustee thereof since 1980; Dean, Gallatin
      Division of New York University from 1976 to 1993; Distinguished Fellow,
      Herman Kahn Chair, Hudson Institute from 1984 to 1985; Director, Damon Corp.
      from 1991 to 1995; Overseer, Center for Naval Analyses from 1983 to 1993;
      Limited Partner, Hypertech LP since 1996.</font></td>
    <td valign="TOP" width="12"><font size="2"></font></td>
    <td valign="TOP" width="75"> <font size="2"> 33 registered investment companies
      consisting of 37&nbsp;portfolios</font></td>
    <td valign="TOP" width="10"><font size="2"></font></td>
    <td valign="TOP" width="63"> <font size="2"> None </font></td>
  </tr>
  <tr>
    <td valign="TOP" width="135">&nbsp;<font size="2"></font></td>
    <td valign="TOP" width="9"><font size="2"></font></td>
    <td valign="TOP" width="68"><font size="2"></font></td>
    <td valign="TOP" width="8"><font size="2"></font></td>
    <td valign="TOP" width="220"><font size="2"></font></td>
    <td valign="TOP" width="12"><font size="2"></font></td>
    <td valign="TOP" width="75"><font size="2"></font></td>
    <td valign="TOP" width="10"><font size="2"></font></td>
    <td valign="TOP" width="63"><font size="2"></font></td>
  </tr>
  <tr>
    <td valign="TOP" width="135"> <font size="2"> Andr&eacute; F. Perold (49)
      <br>
      Morgan Hall<br>
      Soldiers Field <br>
      Boston, Massachusetts <br>
      02163</font></td>
    <td valign="TOP" width="9"><font size="2"></font></td>
    <td valign="TOP" width="68"> <font size="2"> Nominee</font></td>
    <td valign="TOP" width="8"><font size="2"></font></td>
    <td valign="TOP" width="220"> <font size="2"> Harvard Business School: George
      Gund Professor of Finance and Banking since 2000; Senior Associate Dean,
      Director of Faculty Recruiting since 2001; Finance Area Chair from 1996
      to 2001; Sylvan C. Coleman Professor of Financial Management from 1993 to
      2000; Director, Genbel Securities Limited and Gensec Bank since 1999; Director,
      Stockback.com since 2000; Director, Sanlam Limited since 2001; Director,
      Sanlam Investment Management from 1999 to 2001; Director, Bulldogresearch.com
      from 2000 to 2001; Director, Quantec Limited from 1991 to 1999.</font></td>
    <td valign="TOP" width="12"><font size="2"></font></td>
    <td valign="TOP" width="75"> <font size="2"> 33 registered investment companies
      consisting of 37&nbsp;portfolios</font></td>
    <td valign="TOP" width="10"><font size="2"></font></td>
    <td valign="TOP" width="63"> <font size="2"> None</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: 7, page: 7" -->



<P>
<table cellspacing=0 border=0 cellpadding=0 width=600>
  <tr valign="bottom">
    <td align="left" width="128"> <font size=1> <b>Name, Address and Age <br>
      of AMPS Nominees </b></font>
      <hr noshade align="left" width="100%" size="1">
    </td>
    <td align="center" width="11">&nbsp;</td>
    <td align="center" width="77"> <font size=1> <b>Position(s) Held <br>
      with Fund <br>
      and Length of <br>
      Time Served</b> </font>
      <hr noshade align="left" width="100%" size="1">
    </td>
    <td width="10">&nbsp;</td>
    <td align="center" width="218"> <font size=1> <b>Principal Occupation During
      <br>
      Past Five Years</b> </font>
      <hr noshade align="left" width="100%" size="1">
    </td>
    <td align="center" width="10">&nbsp;</td>
    <td align="center" width="75"> <font size=1> <b>Number of FAM/<br>
      MLIM-Advised <br>
      Funds Overseen</b> </font>
      <hr noshade align="left" width="100%" size="1">
    </td>
    <td align="center" width="10">&nbsp;</td>
    <td align="center" width="61"> <font size=1> <b>Public <br>
      Directorships</b> </font>
      <hr noshade align="left" width="100%" size="1">
    </td>
  </tr>
  <tr>
    <td valign="TOP" width="128"> <font size="2"> Roberta Cooper Ramo<br>
      (58) <br>
      P.O. Box 2168 <br>
      500 Fourth Street, N.W. <br>
      Albuquerque, New Mexico<br>
      87107</font></td>
    <td valign="TOP" width="11">&nbsp;</td>
    <td valign="TOP" width="77"> <font size="2"> Nominee </font></td>
    <td valign="TOP" width="10">&nbsp;</td>
    <td valign="TOP" width="218"> <font size="2"> Shareholder, Modrall, Sperling,
      Roehl, Harris &amp; Sisk, P.A. since 1993; President, American Bar Association
      from 1995 to 1996 and Member of the Board of Governors thereof from 1994
      to 1997; Partner, Poole, Kelly &amp; Ramo, Attorneys at Law, P.C. from 1977
      to 1993; Director, Coopers, Inc. since 1999; Director of ECMC Group (service
      provider to students, schools and lenders) since 2001; Director, United
      New Mexico Bank (now Wells Fargo) from 1983 to 1988; Director, First National
      Bank of New Mexico (now First Security) from 1975 to&nbsp;1976.</font></td>
    <td valign="TOP" width="10">&nbsp;</td>
    <td valign="TOP" width="75"> <font size="2"> 33 registered investment companies
      consisting of 37&nbsp;portfolios</font></td>
    <td valign="TOP" width="10">&nbsp;</td>
    <td valign="TOP" width="61"> <font size="2"> None</font></td>
  </tr>
  <tr>
    <td valign="TOP" width="128">&nbsp;</td>
    <td valign="TOP" width="11">&nbsp;</td>
    <td valign="TOP" width="77">&nbsp;</td>
    <td valign="TOP" width="10">&nbsp;</td>
    <td valign="TOP" width="218">&nbsp;</td>
    <td valign="TOP" width="10">&nbsp;</td>
    <td valign="TOP" width="75">&nbsp;</td>
    <td valign="TOP" width="10">&nbsp;</td>
    <td valign="TOP" width="61">&nbsp;</td>
  </tr>
  <tr>
    <td valign="TOP" width="128"> <font size="2"> Stephen B. Swensrud (68)<br>
      88 Broad Street, <br>
      2nd Floor <br>
      Boston, Massachusetts 02110</font></td>
    <td valign="TOP" width="11">&nbsp;</td>
    <td valign="TOP" width="77"> <font size="2"> Director since 1992</font></td>
    <td valign="TOP" width="10">&nbsp;</td>
    <td valign="TOP" width="218"> <font size="2"> Chairman of Fernwood Advisors
      (investment adviser) since 1996; Principal of Fernwood Associates (financial
      consultant) since 1975; Chairman of RPP Corporation (manufacturing) since
      1978; Director, International Mobile Communications, Inc. (telecommunications)
      since 1998. </font></td>
    <td valign="TOP" width="10">&nbsp;</td>
    <td valign="TOP" width="75"> <font size="2"> 42 registered investment companies
      consisting of 87&nbsp;portfolios</font></td>
    <td valign="TOP" width="10">&nbsp;</td>
    <td valign="TOP" width="61"> <font size="2"> None</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">
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: 8, page: 8" -->



<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, 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) review on a periodic basis a
formal written statement from the independent auditors 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 to this statement 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.</FONT></td></tr></table>

<p><table width=600><tr><td><FONT SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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 A.
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><table width=600><tr>
    <td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;At its meeting held on December
      12, 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. At
      the same meeting, the Committee recommended to the Board of Directors that
      the Fund&#146;s audited financial statements for the fiscal year ended October
      31, 2001 be included in the Fund&#146;s 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 Directors. The Committee generally will not consider
nominees recommended by stockholders of the Fund. The non-interested Directors
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, 2001, the Board of Directors held
      eight meetings and the Audit Committee held four meetings. 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</FONT> <font size=2>and</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">
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><p>&nbsp;





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



<p><table width=600><tr>
    <td><font size=2> 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 based on
his positions as Chairman (Americas Region) and Executive Vice President of FAM
and MLIM, President of FAMD, Executive Vice President of Princeton Services,
and President of Princeton Administrators.</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 Merrill Lynch &amp;
      Co., Inc. (&#147;ML &amp; Co.&#148;) or its subsidiaries. The Fund pays
      each Director not affiliated with FAM (each a &#147;non-interested Director&#148;)
      an annual fee of $4,000 plus a fee of $1,000 for each Board meeting attended
      in person, 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 of $4,000 plus a fee of $1,000 for each Audit Committee meeting
      attended in person, together with such Director&#146;s out-of-pocket expenses
      relating to attendance at meetings. These fees and expenses aggregated $80,593
      for the fiscal year ended October 31, 2001.</FONT></td>
  </tr></table>

<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, 2001 compensation paid by the Fund
      to the non-interested Directors and, for the calendar year ended December
      31, 2001, the aggregate compensation paid by all FAM/MLIM-Advised Funds
      to the non-interested Directors.</font></td>
  </tr></table>

<P><TABLE   CELLSPACING=0 CELLPADDING=0 WIDTH=600>
  <TR valign="bottom">
    <TD WIDTH="184"> <FONT SIZE=2>
      <P><b><font size="1">Name of Director</font></b>
      </FONT>
      <hr noshade size="1" width="45%" align="left">
    </TD>
    <TD WIDTH="104" align="center"> <FONT SIZE=2>
      <P><b><font size="1">Compensation <BR>
        From Fund</font></b>
      </FONT>
      <hr noshade size="1" width="60%">
    </TD>
    <TD WIDTH="132" align="center"> <FONT SIZE=2>
      <P><b><font size="1">Pension or <BR>
        Retirement Benefits<BR>
        Accrued as Part <BR>
        of Fund Expenses</font></b>
      </FONT>
      <hr noshade size="1" width="60%">
    </TD>
    <TD WIDTH="178" align="center"> <FONT SIZE=2>
      <P><b><font size="1">Aggregate <BR>
        Compensation <BR>
        From Fund And Other <BR>
        FAM/MLIM-Advised <BR>
        Funds Paid to Directors</font></b>
      </FONT>
      <hr noshade size="1" width="55%">
    </TD>
  </TR>
  <TR valign="bottom">
    <TD WIDTH="184"> <FONT SIZE=2>
      <P>James H. Bodurtha
      </FONT></TD>
    <TD WIDTH="104" align="center"> <FONT SIZE=2>
      <P>N/A
      </FONT></TD>
    <TD WIDTH="132" align="center"> <FONT SIZE=2>
      <P>None
      </FONT></TD>
    <TD WIDTH="178" align="center"> <FONT SIZE=2>
      <P>$160,000
      </FONT></TD>
  </TR>
  <TR valign="bottom">
    <TD WIDTH="184"> <FONT SIZE=2>
      <P>Joe Grills
      </FONT></TD>
    <TD WIDTH="104" align="center"> <FONT SIZE=2>
      <P>$16,000
      </FONT></TD>
    <TD WIDTH="132" align="center"> <FONT SIZE=2>
      <P>None
      </FONT></TD>
    <TD WIDTH="178" align="center"> <FONT SIZE=2>
      <P>$259,500
      </FONT></TD>
  </TR>
  <TR valign="bottom">
    <TD WIDTH="184"> <FONT SIZE=2>
      <P>Herbert I. London
      </FONT></TD>
    <TD WIDTH="104" align="center"> <FONT SIZE=2>
      <P>N/A
      </FONT></TD>
    <TD WIDTH="132" align="center"> <FONT SIZE=2>
      <P>None
      </FONT></TD>
    <TD WIDTH="178" align="center"> <FONT SIZE=2>
      <P>$160,000
      </FONT></TD>
  </TR>
  <TR valign="bottom">
    <TD WIDTH="184"> <FONT SIZE=2>
      <P>Andr&eacute; F. Perold
      </FONT></TD>
    <TD WIDTH="104" align="center"> <FONT SIZE=2>
      <P>N/A
      </FONT></TD>
    <TD WIDTH="132" align="center"> <FONT SIZE=2>
      <P>None
      </FONT></TD>
    <TD WIDTH="178" align="center"> <FONT SIZE=2>
      <P>$160,000
      </FONT></TD>
  </TR>
  <TR valign="bottom">
    <TD WIDTH="184"> <FONT SIZE=2>
      <P>Roberta Cooper Ramo
      </FONT></TD>
    <TD WIDTH="104" align="center"> <FONT SIZE=2>
      <P>N/A
      </FONT></TD>
    <TD WIDTH="132" align="center"> <FONT SIZE=2>
      <P>None
      </FONT></TD>
    <TD WIDTH="178" align="center"> <FONT SIZE=2>
      <P>$160,000
      </FONT></TD>
  </TR>
  <TR valign="bottom">
    <TD WIDTH="184"> <FONT SIZE=2>
      <P>Robert S. Salomon, Jr.
      </FONT></TD>
    <TD WIDTH="104" align="center"> <FONT SIZE=2>
      <P>$16,000
      </FONT></TD>
    <TD WIDTH="132" align="center"> <FONT SIZE=2>
      <P>None
      </FONT></TD>
    <TD WIDTH="178" align="center"> <FONT SIZE=2>
      <P>$222,000
      </FONT></TD>
  </TR>
  <TR valign="bottom">
    <TD WIDTH="184"> <FONT SIZE=2>
      <P>Melvin R. Seiden
      </FONT></TD>
    <TD WIDTH="104" align="center"> <FONT SIZE=2>
      <P>$16,000
      </FONT></TD>
    <TD WIDTH="132" align="center"> <FONT SIZE=2>
      <P>None
      </FONT></TD>
    <TD WIDTH="178" align="center"> <FONT SIZE=2>
      <P>$222,000
      </FONT></TD>
  </TR>
  <TR valign="bottom">
    <TD WIDTH="184"> <FONT SIZE=2>
      <P>Stephen B. Swensrud
      </FONT></TD>
    <TD WIDTH="104" align="center"> <FONT SIZE=2>
      <P>$16,000
      </FONT></TD>
    <TD WIDTH="132" align="center"> <FONT SIZE=2>
      <P>None
      </FONT></TD>
    <TD WIDTH="178" align="center"> <FONT SIZE=2>
      <P>$406,083
      </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: 10, page: 10" -->



<p><table width=600><tr>
    <td><font size=2><i>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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>

<P>
<table cellspacing=0 cellpadding=0 width=620>
  <tr valign="bottom">
    <td width="119"> <font size=2>
      <p><b><font size="1">Name, Address* and Age <br>
        of Officers </font></b>
      </font>
      <hr size="1" noshade width="100%">
    </td>
    <td align="center" width="11">&nbsp;</td>
    <td align="center" width="70"> <font size=2>
      <p><b><font size="1">Position(s)<br>
        Held <br>
        with the Fund <br>
        and Length of <br>
        Time Served** </font></b>
      </font>
      <hr size="1" noshade width="100%">
      <font size=2></font></td>
    <td align="center" width="10">&nbsp;</td>
    <td align="center" width="225"> <font size=2>
      <p><b><font size="1">Principal Occupation During <br>
        Past Five Years </font></b>
      </font>
      <hr size="1" noshade width="100%">
    </td>
    <td align="center" width="10">&nbsp;</td>
    <td align="center" width="83"> <font size=2>
      <p><b><font size="1">Number of FAM/ <br>
        MLIM-Advised <br>
        Funds Overseen </font></b>
      </font>
      <hr size="1" noshade width="100%">
      <font size=2></font></td>
    <td align="center" width="14">&nbsp;</td>
    <td align="center" width="56"> <font size=2>
      <p><b><font size="1">Public <br>
        Directorships </font></b>
      </font>
      <hr size="1" noshade width="100%">
    </td>
  </tr>
  <tr valign="top">
    <td width="119"> <font size=2>
      <p><font size="2">Stephen Benham (42)</font>
      </font></td>
    <td width="11"><font size="2"></font></td>
    <td width="70"> <font size=2>
      <p><font size="2">Secretary since <br>
        2002</font>
      </font></td>
    <td width="10"><font size="2"></font></td>
    <td width="225"> <font size=2>
      <p><font size="2">Vice President of MLIM since 2000; attorney in private
        practice from 1997 to 2000.</font>
      </font></td>
    <td width="10"><font size="2"></font></td>
    <td width="83"> <font size=2>
      <p><font size="2">10 registered investment companies consisting of 10&nbsp;portfolios</font>
      </font></td>
    <td width="14"><font size="2"></font></td>
    <td width="56"> <font size=2>
      <p><font size="2">None</font>
      </font></td>
  </tr>
  <tr valign="top">
    <td width="119"><font size="2">&nbsp;</font></td>
    <td width="11"><font size="2"></font></td>
    <td width="70"><font size="2"></font></td>
    <td width="10"><font size="2"></font></td>
    <td width="225"><font size="2"></font></td>
    <td width="10"><font size="2"></font></td>
    <td width="83"><font size="2"></font></td>
    <td width="14"><font size="2"></font></td>
    <td width="56"><font size="2"></font></td>
  </tr>
  <tr valign="top">
    <td width="119"> <font size=2>
      <p><font size="2">William R. Bock (66)</font>
      </font></td>
    <td width="11"><font size="2"></font></td>
    <td width="70"> <font size=2>
      <p><font size="2">Vice President since <br>
        1997</font>
      </font></td>
    <td width="10"><font size="2"></font></td>
    <td width="225"> <font size=2>
      <p><font size="2">Vice President of MLIM since 1989.</font>
      </font></td>
    <td width="10"><font size="2"></font></td>
    <td width="83"> <font size=2>
      <p><font size="2">6 registered investment companies consisting of 6&nbsp;portfolios</font>
      </font></td>
    <td width="14"><font size="2"></font></td>
    <td width="56"> <font size=2>
      <p><font size="2">None</font>
      </font></td>
  </tr>
  <tr valign="top">
    <td width="119"><font size="2">&nbsp;</font></td>
    <td width="11"><font size="2"></font></td>
    <td width="70"><font size="2"></font></td>
    <td width="10"><font size="2"></font></td>
    <td width="225"><font size="2"></font></td>
    <td width="10"><font size="2"></font></td>
    <td width="83"><font size="2"></font></td>
    <td width="14"><font size="2"></font></td>
    <td width="56"><font size="2"></font></td>
  </tr>
  <tr valign="top">
    <td width="119"> <font size=2>
      <p><font size="2">Donald C. Burke (41)</font>
      </font></td>
    <td width="11"><font size="2"></font></td>
    <td width="70"> <font size=2>
      <p><font size="2">Vice President <br>
        since 1993 and <br>
        Treasurer since <br>
        1999</font>
      </font></td>
    <td width="10"><font size="2"></font></td>
    <td width="225"> <font size=2>
      <p><font size="2">First Vice President of FAM and MLIM since 1997 and Treasurer
        thereof since 1999; Senior Vice President and Treasurer of Princeton Services
        since 1999; Vice President of FAMD since 1999; Vice President of FAM and
        MLIM from 1990 to 1997; Director of Taxation of MLIM since 1990.</font>
      </font></td>
    <td width="10"><font size="2"></font></td>
    <td width="83"> <font size=2>
      <p><font size="2">128 registered investment companies consisting of 185&nbsp;portfolios</font>
      </font></td>
    <td width="14"><font size="2"></font></td>
    <td width="56"> <font size=2>
      <p><font size="2">None</font>
      </font></td>
  </tr>
  <tr valign="top">
    <td width="119"><font size="2">&nbsp;</font></td>
    <td width="11"><font size="2"></font></td>
    <td width="70"><font size="2"></font></td>
    <td width="10"><font size="2"></font></td>
    <td width="225"><font size="2"></font></td>
    <td width="10"><font size="2"></font></td>
    <td width="83"><font size="2"></font></td>
    <td width="14"><font size="2"></font></td>
    <td width="56"><font size="2"></font></td>
  </tr>
  <tr valign="top">
    <td width="119"> <font size=2>
      <p><font size="2">Terry K. Glenn (61)</font>
      </font></td>
    <td width="11"><font size="2"></font></td>
    <td width="70"> <font size=2>
      <p><font size="2">President&#134; since<br>
        1999</font>
      </font></td>
    <td width="10"><font size="2"></font></td>
    <td width="225"> <font size=2>
      <p><font size="2">Chairman (Americas Region) since 2001, and Executive Vice
        President since 1983 of FAM and MLIM; President of Merrill Lynch Mutual
        Funds since 1999; President of FAMD since 1986 and Director thereof since
        1991; Executive Vice President and Director of Princeton Services since
        1993; President of Princeton Administrators since 1988; Director of FDS
        since 1985. </font>
      </font></td>
    <td width="10"><font size="2"></font></td>
    <td width="83"> <font size=2>
      <p><font size="2">127 registered investment companies consisting of 184&nbsp;portfolios</font>
      </font></td>
    <td width="14"><font size="2"></font></td>
    <td width="56"> <font size=2>
      <p><font size="2">None</font>
      </font></td>
  </tr>
  <tr valign="top">
    <td width="119"><font size="2">&nbsp;</font></td>
    <td width="11"><font size="2"></font></td>
    <td width="70"><font size="2"></font></td>
    <td width="10"><font size="2"></font></td>
    <td width="225"><font size="2"></font></td>
    <td width="10"><font size="2"></font></td>
    <td width="83"><font size="2"></font></td>
    <td width="14"><font size="2"></font></td>
    <td width="56"><font size="2"></font></td>
  </tr>
  <tr valign="top">
    <td width="119"> <font size=2>
      <p><font size="2">Kenneth A. Jacob (51)</font>
      </font></td>
    <td width="11"><font size="2"></font></td>
    <td width="70"> <font size=2>
      <p><font size="2">Senior Vice <br>
        President&#134;&#134; <br>
        since 2002</font>
      </font></td>
    <td width="10"><font size="2"></font></td>
    <td width="225"> <font size=2>
      <p><font size="2">Managing Director of MLIM since 2000; First Vice President
        of MLIM from 1997 to 2000; Vice President of MLIMfrom 1984 to 1997. </font>
      </font></td>
    <td width="10"><font size="2"></font></td>
    <td width="83"> <font size=2>
      <p><font size="2">38 registered investment companies consisting of 61&nbsp;portfolios</font>
      </font></td>
    <td width="14"><font size="2"></font></td>
    <td width="56"> <font size=2>
      <p><font size="2">None</font>
      </font></td>
  </tr>
  <tr valign="top">
    <td width="119"><font size="2">&nbsp;</font></td>
    <td width="11"><font size="2"></font></td>
    <td width="70"><font size="2"></font></td>
    <td width="10"><font size="2"></font></td>
    <td width="225"><font size="2"></font></td>
    <td width="10"><font size="2"></font></td>
    <td width="83"><font size="2"></font></td>
    <td width="14"><font size="2"></font></td>
    <td width="56"><font size="2"></font></td>
  </tr>
  <tr valign="top">
    <td width="119"> <font size=2>
      <p><font size="2">John M. Loffredo (38)</font>
      </font></td>
    <td width="11"><font size="2"></font></td>
    <td width="70"> <font size=2>
      <p><font size="2">Senior Vice <br>
        President since <br>
        2002</font>
      </font></td>
    <td width="10"><font size="2"></font></td>
    <td width="225"> <font size=2>
      <p><font size="2">Managing Director of MLIM since 2000; First Vice President
        of MLIM from 1997 to 2000; Vice President of MLIM from 1991 to 1997; Portfolio
        Manager of FAM and MLIM since&nbsp;1997. </font>
      </font></td>
    <td width="10"><font size="2"></font></td>
    <td width="83"> <font size=2>
      <p><font size="2">38 registered investment companies consisting of 61&nbsp;portfolios</font>
      </font></td>
    <td width="14"><font size="2"></font></td>
    <td width="56"> <font size=2>
      <p><font size="2">None</font>
      </font></td>
  </tr>
</table>
<p><table width=600><tr>
    <td align=right><FONT SIZE="2"><I><font size="1">(footnotes on following page)</font></I></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: 11, page: 11" -->


<table width=600><tr><td><hr size=1 noshade align=left  width=75></td></tr></table>
<table width=600>
  <tr>
    <td width=3% align=right valign=top><font size="1">* </font></td>
    <td width=97% colspan="2"><font size="1"></font><font size="1">The address
      of each officer listed above is P.O. Box 9011, Princeton, New Jersey 085430-9011.</font></td>
  </tr>
</table>
<table width=600>
  <tr>
    <td width=3% align=right valign=top><font size="1">** </font></td>
    <td width=97% colspan="2"><font size="1"></font><font size="1">Elected by
      and serves at the pleasure of the Board of Directors of the Fund.</font></td>
  </tr>
</table>
<table width=600>
  <tr>
    <td width=3% align=right valign=top><font size="1">&#134; </font></td>
    <td width=97% colspan="2"><font size="1"></font><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>
<table width=600>
  <tr>
    <td width=3% align=right valign=top><font size="1">&#134;&#134; </font></td>
    <td width=97% colspan="2"><font size="1"></font><font size="1">Mr. Jacob was
      elected Senior Vice President of the Fund in 2002. Prior to that he served
      as Vice President of the Fund from 1992 to 2002.</font></td>
  </tr>
</table>
<p><table width=600><tr>
    <td><font size=2><i>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Stock Ownership.</i> Information
      relating to each Director nominee&#146;s ownership in the Fund and in all registered
      FAM/MLIM-Advised Funds overseen or to be overseen by each Director nominee
      is set forth below:</font></td>
  </tr></table>

<P>
<table cellspacing=0 cellpadding=0 width=600>
  <tr valign="bottom">
    <td colspan="2"> <font size=2>
      <p><b><font size="1">Name of Director Nominee</font></b>
      </font>
      <hr noshade size="1" width="53%" align="left">
    </td>
    <td width="94" align="center"> <font size=2>
      <p><b><font size="1">No. of <br>
        Fund Shares </font></b>
      </font>
      <hr noshade size="1" width="90%">
      <font size=2></font></td>
    <td width="99" align="center"> <font size=2>
      <p><b><font size="1">Dollar Range of <br>
        Equity Securities <br>
        in the Fund </font></b>
      </font>
      <hr noshade size="1" width="90%">
    </td>
    <td align="center" colspan="2"> <font size=2>
      <p><b><font size="1">Aggregate Dollar Range of Equity <br>
        Securities in All FAM/MLIM-Advised <br>
        Funds Overseen by each Director or Nominee <br>
        in Merrill Lynch Family of Funds </font></b>
      </font>
      <hr noshade size="1" width="90%">
    </td>
  </tr>
  <tr valign="bottom">
    <td colspan="2"> <font size=2>
      <p><i>Interested Director:</i>
      </font></td>
    <td width="94" align="center">&nbsp;</td>
    <td width="99" align="center">&nbsp;</td>
    <td width="55" align="center">&nbsp;</td>
    <td width="146" align="center">&nbsp;</td>
  </tr>
  <tr valign="bottom">
    <td width="21">&nbsp;</td>
    <td width="183"> <font size=2>
      <p>Terry K. Glenn
      </font></td>
    <td width="94" align="center"> <font size=2>
      <p>None
      </font></td>
    <td width="99" align="center"> <font size=2>
      <p>None
      </font></td>
    <td width="55" align="center">&nbsp;</td>
    <td width="146" align="left"> <font size=2>
      <p>Over $100,000
      </font></td>
  </tr>
  <tr valign="bottom">
    <td colspan="2"> <font size=2>
      <p><i>Non-Interested Director:</i>
      </font></td>
    <td width="94" align="center">&nbsp;</td>
    <td width="99" align="center">&nbsp;</td>
    <td width="55" align="center">&nbsp;</td>
    <td width="146" align="left">&nbsp;</td>
  </tr>
  <tr valign="bottom">
    <td width="21">&nbsp;</td>
    <td width="183"> <font size=2>
      <p>James H. Bodurtha
      </font></td>
    <td width="94" align="center"> <font size=2>
      <p>None
      </font></td>
    <td width="99" align="center"> <font size=2>
      <p>None
      </font></td>
    <td width="55" align="center">&nbsp;</td>
    <td width="146" align="left"> <font size=2>
      <p>$50,001 - $100,000
      </font></td>
  </tr>
  <tr valign="bottom">
    <td width="21">&nbsp;</td>
    <td width="183"> <font size=2>
      <p>Joe Grills
      </font></td>
    <td width="94" align="center"> <font size=2>
      <p>None
      </font></td>
    <td width="99" align="center"> <font size=2>
      <p>None
      </font></td>
    <td width="55" align="center">&nbsp;</td>
    <td width="146" align="left"> <font size=2>
      <p>Over $100,000
      </font></td>
  </tr>
  <tr valign="bottom">
    <td width="21">&nbsp;</td>
    <td width="183"> <font size=2>
      <p>Herbert I. London
      </font></td>
    <td width="94" align="center"> <font size=2>
      <p>None
      </font></td>
    <td width="99" align="center"> <font size=2>
      <p>None
      </font></td>
    <td width="55" align="center">&nbsp;</td>
    <td width="146" align="left"> <font size=2>
      <p>$50,001 - $100,000
      </font></td>
  </tr>
  <tr valign="bottom">
    <td width="21">&nbsp;</td>
    <td width="183"> <font size=2>
      <p>Andr&eacute; F. Perold
      </font></td>
    <td width="94" align="center"> <font size=2>
      <p>None
      </font></td>
    <td width="99" align="center"> <font size=2>
      <p>None
      </font></td>
    <td width="55" align="center">&nbsp;</td>
    <td width="146" align="left"> <font size=2>
      <p>Over $100,000
      </font></td>
  </tr>
  <tr valign="bottom">
    <td width="21">&nbsp;</td>
    <td width="183"> <font size=2>
      <p>Roberta Cooper Ramo
      </font></td>
    <td width="94" align="center"> <font size=2>
      <p>None
      </font></td>
    <td width="99" align="center"> <font size=2>
      <p>None
      </font></td>
    <td width="55" align="center">&nbsp;</td>
    <td width="146" align="left"> <font size=2>
      <p>None
      </font></td>
  </tr>
  <tr valign="bottom">
    <td width="21">&nbsp;</td>
    <td width="183"> <font size=2>
      <p>Robert S. Salomon, Jr.
      </font></td>
    <td width="94" align="center"> <font size=2>
      <p>None
      </font></td>
    <td width="99" align="center"> <font size=2>
      <p>None
      </font></td>
    <td width="55" align="center">&nbsp;</td>
    <td width="146" align="left"> <font size=2>
      <p>None
      </font></td>
  </tr>
  <tr valign="bottom">
    <td width="21">&nbsp;</td>
    <td width="183"> <font size=2>
      <p>Melvin R. Seiden
      </font></td>
    <td width="94" align="center"> <font size=2>
      <p>None
      </font></td>
    <td width="99" align="center"> <font size=2>
      <p>None
      </font></td>
    <td width="55" align="center">&nbsp;</td>
    <td width="146" align="left"> <font size=2>
      <p>$1 - $10,000
      </font></td>
  </tr>
  <tr valign="bottom">
    <td width="21">&nbsp;</td>
    <td width="183"> <font size=2>
      <p>Stephen B. Swensrud
      </font></td>
    <td width="94" align="center"> <font size=2>
      <p>None
      </font></td>
    <td width="99" align="center"> <font size=2>
      <p>None
      </font></td>
    <td width="55" align="center">&nbsp;</td>
    <td width="146" align="left"> <font size=2>
      <p>None
      </font></td>
  </tr>
</table>
<p><table width=600><tr>
    <td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As of February 28, 2002, other
      than Mr. Glenn, no Director nominee or his or her immediate family members
      owned beneficially or of record any securities of ML &amp; Co. As of the
      Record Date, the Directors and officers of the Fund as a group owned an
      aggregate of less than 1% of the Fund&#146;s outstanding shares. 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><FONT SIZE="2"><B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Board of Directors recommends that the stockholders vote &#147;FOR&#148; each of the
nominees for Director.</B></FONT></td></tr></table>

<p><table width=600><tr><td  align=center><font size=2><B>ITEM 2. STOCKHOLDER
PROPOSAL RECOMMENDING IMPLEMENTATION<BR>OF A DIRECTORS&#146; STOCK PURCHASE PROGRAM</B></font></td></tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A
beneficial owner (the &#147;proponent&#148;) of Common Stock of the Fund has informed the
Fund that she intends to present a proposal for action at the Meeting. The
proponent&#146;s name, address and number of shares of Common Stock beneficially
owned will be furnished by the Secretary of the Fund upon request.</font></td></tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
proponent&#146;s formal proposal is as follows:</font></td></tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Recommend
that the Board of Directors take the necessary steps to implement a Directors&#146;
stock purchase program as follows: Effective 30 days after approval, salaried
(&#147;non-interested&#148;) Directors would be expected to invest at least 10% of their
compensation from the Fund in common shares of the Fund. The program would
apply only to future compensation from the Fund.</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: 12, page: 12" -->



<p><table width=600><tr><td><FONT SIZE="2">
STATEMENT IN SUPPORT OF PROPOSAL</FONT></td></tr></table>

<p><table width=600><tr><td><font size=2>Surely the Directors would be better
able to understand and represent the interests of the shareholders if they were
shareholders themselves. However, <u>not one Director owns one share of our Fund</u>!
Please support this proposal and encourage the Directors to join us as
shareholders.</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><font size=2><b>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Board of Directors opposes
      the proposal described above and urges all stockholders to vote &#147;AGAINST&#148;
      the proposal.</b></font></td>
  </tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
proposal is, as required by Maryland law, advisory only and asks the Board of
Directors to take the steps necessary to implement the proposal. Should the
proposal be approved by the Fund&#146;s stockholders, the Board of Directors will
meet to determine if such a recommendation is advisable.</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;The case was transferred on
      defendants&#146; motion to the United States District Court for the District
      of New Jersey. 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 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 </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;





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



<p><table width=600><tr><td><font size=2>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. Oral argument was heard
on March 4, 2002 and a decision is pending. 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
      they 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 $500.</FONT></td></tr></table>

<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:</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)
&#147;FOR&#148; the Director nominees; and</font></td></tr></table>

<table width=600>
<tr><td width=30>&nbsp;</td>
<td width=570><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2)
&#147;AGAINST&#148; the stockholder proposal recommending the implementation of a
Directors&#146; stock purchase program.</font></td></tr></table>

<p><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 herein 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 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 AMPS represented at the Meeting and entitled to vote, voting together
      as a single class.</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">
12</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: 14, page: 14" -->



<p><table width=600><tr>
    <td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Assuming a quorum is present,
      approval of Item 2, &#147;Stockholder Proposal Recommending the Implementation
      of a Directors&#146; Stock Purchase Program&#148; requires the affirmative
      vote of a majority of the votes cast by holders of Common Stock and AMPS
      represented at the Meeting and entitled to vote, voting together as a single
      class.</font></td>
  </tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Management
knows of no other matters to be presented at the 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>

<p><table width=600><tr><td><font size=2><B>Broker Non-Votes and Abstentions</B></font></td></tr></table>

<p><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. Broker-dealer
      firms will not be permitted to grant authority to the proxies designated
      to vote on Item 2 without instructions with respect to the stockholder proposal
      (Item 2). 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 if it votes shares held in its name
      for which no instructions have been received, except as limited by agreement
      or applicable law, it will do so 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. Therefore, abstentions and broker non-votes
      will not have an effect on Item 1 and Item 2.</font></td>
  </tr></table>

<p><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, 2001 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 stockholders; and (ii)
      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. For the Fund&#146;s most recent fiscal year, the independent auditors
      did not render any professional services for financial information systems
      design and implementation services 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 non-audit services
      under clause (ii) is compatible with maintaining the independence of the
      independent auditors. Representatives of E&amp;Y are expected to be present
      at the meeting and will have an opportunity to make a statement if they
      so desire and to respond to questions from stockholders.</font></td>
  </tr></table>

<P>
<TABLE   CELLSPACING=0 CELLPADDING=0 WIDTH=600>
  <TR valign="bottom" align="center">
    <TD WIDTH="111">&nbsp;</TD>
    <TD WIDTH="111"> <FONT SIZE=2>
      <P><font size="1"><b>Audit Fees Charged <BR>
        to the Fund</b> </font>
      </FONT>
      <hr noshade size="1" width="60%">
    </TD>
    <TD WIDTH="111"> <FONT SIZE=2>
      <P><font size="1"><b>Other <br>
        Non-Audit Fees</b> </font>
      </FONT>
      <hr noshade size="1" width="50%">
      <FONT SIZE=2></FONT></TD>
    <td width="111">&nbsp;</td>
  </TR>
  <TR valign="bottom" align="center">
    <TD WIDTH="111">&nbsp;</TD>
    <TD WIDTH="111"> <FONT SIZE=2>
      <P>$43,050
      </FONT></TD>
    <TD WIDTH="111"> <FONT SIZE=2> $23,520 </FONT></TD>
    <td width="111">&nbsp;</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">
13</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><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><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><b>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Fund will furnish, without
      charge, a copy of its annual report for the fiscal year ended October 31,
      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: Stephen Benham, Secretary, or to <br>
      1-800-637-3863. </font></td>
  </tr></table>

<br>
<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 2003 Annual Meeting of
Stockholders of the Fund, which is anticipated to be held in April 2003, 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 25, 2002. The persons named as proxies in the
proxy materials for the 2003 Annual Meeting of Stockholders may exercise
discretionary authority with respect to any stockholder proposal presented at
such meeting if written notice of such proposal has not been received by the
Fund by February 10, 2003. Written proposals and notices should be sent to the
Secretary of the Fund (addressed to 800 Scudders Mill Road, Plainsboro, New
Jersey 08543).</font></td>
  </tr></table>

<p>
<table width=600>
  <tr align="right">
    <td width="402">&nbsp;</td>
    <td width="186" align="left"><FONT SIZE="2"> By Order of the Board of Directors</FONT></td>
  </tr>
</table>

<p>
<table width=600>
  <tr align="right">
    <td width="403">&nbsp;</td>
    <td width="185" align="left"><FONT SIZE="2"> S<font size="1">TEPHEN </font>B<font size="1">ENHAM
      </font><br>
      <i>Secretary</i></FONT></td>
  </tr>
</table>

<p><table width=600><tr>
    <td><FONT SIZE="2"> Dated: March 22, 2002</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">
14</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: 1, page: 1" -->



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

<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>

<table width=600>
  <tr>
    <td width=30 align="right" valign="top"><font size=2>(a)</font></td>
    <td width=570><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>
<p>
<table width=600>
  <tr>
    <td width=30 align="right" valign="top"><font size=2>(b)</font></td>
    <td width=570><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>
<p>
<table width=600>
  <tr>
    <td width=30 align="right" valign="top"><font size=2>(c)</font></td>
    <td width=570><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>
<p>
<table width=600>
  <tr>
    <td width=30 align="right" valign="top"><font size=2>(d)</font></td>
    <td width=570><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>
<p>
<table width=600>
  <tr>
    <td width=30 align="right" valign="top"><font size=2>(e)</font></td>
    <td width=570><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>

<table width=600>
  <tr>
    <td width=30 align="right" valign="top"><font size=2>(a)</font></td>
    <td width=570><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>
<p>
<table width=600>
  <tr>
    <td width=30 align="right"><font size=2>&nbsp;(b)</font></td>
    <td width=570><font size=2>in its oversight of the Fund&#146;s financial statements
      and the independent audit thereof; and</font></td>
  </tr>
</table>
<p>
<table width=600>
  <tr>
    <td width=30 align="right"><font size=2>(c)</font></td>
    <td width=570><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>&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: 2, page: 2" -->



<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><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>

<table width=600>
  <tr>
    <td width=30 align="right" valign="top"><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)</font></td>
    <td width=570><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>
<p>
<table width=600>
  <tr>
    <td width=30 align="right" valign="top"><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)</font></td>
    <td width=570><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>
<p>
<table width=600>
  <tr>
    <td width=30 align="right" valign="top"><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)</font></td>
    <td width=570><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>
<p>
<table width=600>
  <tr>
    <td width=30 align="right"><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)</font></td>
    <td width=570><font size=2> to review the fees charged by independent accountants
      for audit and other services;</font></td>
  </tr>
</table>
<p>
<table width=600>
  <tr>
    <td width=30 align="right" valign="top"><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)</font></td>
    <td width=570><font size=2> to review with the independent accountants arrangements
      for annual audits and special audits and the scope thereof;</font></td>
  </tr>
</table>
<p>
<table width=600>
  <tr>
    <td width=30 align="right" valign="top"><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f)</font></td>
    <td width=570><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>
<p>
<table width=600>
  <tr>
    <td width=30 align="right" valign="top"><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g)</font></td>
    <td width=570><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>
<p>
<table width=600>
  <tr>
    <td width=30 align="right" valign="top"><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h)</font></td>
    <td width=570><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>
<p>
<table width=600>
  <tr>
    <td width=30 align="right" valign="top"><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)</font></td>
    <td width=570><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>
<p>
<table width=600>
  <tr>
    <td width=30 align="right" valign="top"><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(j)</font></td>
    <td width=570><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>

<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><p>&nbsp;





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



<p>
<table width=600>
  <tr>
    <td width=30 align="right" valign="top"><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(k)</font></td>
    <td width=570><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>
<table width=600>
  <tr>
    <td width=30 align="right" valign="top"><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(l)</font></td>
    <td width=570><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>
<p>
<table width=600>
  <tr>
    <td width=30 align="right" valign="top"><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(m)</font></td>
    <td width=570><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">
</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: 3, page: 3" -->






<p><table width=600>
  <tr align="right">
    <td><font size=2><B><font size="3">COMMON STOCK</font></B></font></td>
  </tr></table>

<p><table width=600><tr>
    <td  align=center><font size=2><B><font size="3">MUNlYIELD INSURED FUND, INC.<br>
      P.O. Box 9011 <br>
      Princeton, New Jersey 08543-9011 </font></B></font></td>
  </tr></table>

<p>
<p>
<p><table width=600><tr>
    <td  align=center><font size=2><B><font size="3">PROXY</font></B></font></td>
  </tr></table>

<p><table width=600><tr>
    <td  align=center height="16"><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 Insured
      Fund, Inc. (the &#147;Fund&#148;) held of record by the undersigned on February
      28, 2002 at the annual meeting of stockholders of the Fund to be held on
      April 25, 2002 or any adjournment thereof.</font></td>
  </tr></table>

<p><table width=600><tr><td width=30>&nbsp;</td>
    <td width=570><FONT SIZE="2"><B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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 and AGAINST Proposal 2.</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 each proposal as marked, or if not marked,
      to vote &#147;FOR&#148; Proposal 1 and &#147;AGAINST&#148; Proposal 2, 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 align="right">
    <td><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">
</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: 4, page: 4" -->

<p>
<table width=600>
  <tr>
    <td><font size=2>Please mark boxes <font size="5">&#149;</font> 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>
      James H. Bodurtha, Terry K.  Glenn, Joe Grills, Herbert I. London, Andr&eacute;
      F. Perold, Roberta Cooper Ramo and Stephen B. Swensrud </b></font></td>
  </tr>
</table>
<br>
<table width=600>
  <tr>
    <td width=2% valign=top><font size="2">2.</font></td>
    <td width=1%>&nbsp;</td>
    <td colspan="3"><font size="2">Stockholder proposal recommending the implementation
      of a Directors&#146; stock purchase program.</font></td>
  </tr>
  <tr>
    <td width=2% valign=top><font size="2"> </font></td>
    <td width=1%>&nbsp;</td>
    <td width=20%><font size="2"><b>FOR&nbsp; </b> |_|</font></td>
    <td width=26%><font size="2"><b>AGAINST&nbsp; </b> |_|</font></td>
    <td width=51%><font size="2"><b>ABSTAIN&nbsp; </b> |_|</font></td>
  </tr>
</table>
<br>
<table width=600>
  <tr>
    <td width=2% valign=top><font size="2">3.</font></td>
    <td width=1%>&nbsp;</td>
    <td colspan="3"><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 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 align="left" valign="bottom"> <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></td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td><font size="1">Dated: ________________________________________________,
      2002 </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>
    </td>
  </tr>
</table>
<p><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><p>&nbsp;





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



<p><table width=600>
  <tr align="right">
    <td><font size=2><B><font size="3">AUCTION MARKET <br>
      PREFERRED STOCK</font></B></font></td>
  </tr></table>

<p><table width=600><tr>
    <td  align=center><font size=2><B><font size="3">MUNIYIELD INSURED FUND, INC.<br>
      P.O. Box 9011 <br>
      Princeton, New Jersey 08543-9011 </font></B></font></td>
  </tr></table>

<p>
<p>
<p><table width=600><tr>
    <td  align=center><font size=2><B><font size="3">PROXY</font></B></font></td>
  </tr></table>

<p><table width=600><tr>
    <td  align=center><FONT SIZE="2"><B><font size="3">This proxy is solicited
      on behalf of the Board of Directors</font></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
      of MuniYield Insured Fund, Inc. (the &#147;Fund&#148;) held of record by
      the undersigned on February 28, 2002 at the annual meeting of stockholders
      of the Fund to be held on April 25, 2002 or any adjournment thereof.</font></td>
  </tr></table>

<p><table width=600><tr><td width=30>&nbsp;</td>
    <td width=570><FONT SIZE="2"><B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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 and AGAINST Proposal 2.</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 each proposal as marked, or if not marked,
      to vote &#147;FOR&#148; Proposal 1 and &#147;AGAINST&#148; Proposal 2, 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 align="right">
    <td><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">
</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: 6, page: 6" -->



<p>
<table width=600>
  <tr>
    <td><font size=2>Please mark boxes <font size="5">&#149;</font> 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>
      James H. Bodurtha, Terry K. Glenn, Joe Grills, Herbert I. London, Andr&eacute;
      F. Perold, Roberta Cooper Ramo, Robert S. Salomon, Jr., Melvin R. Seiden
      and Stephen B. Swensrud </b></font></td>
  </tr>
</table>
<br>
<table width=600>
  <tr>
    <td width=2% valign=top><font size="2">2.</font></td>
    <td width=1%>&nbsp;</td>
    <td colspan="3"><font size="2">Stockholder proposal recommending the implementation
      of a Directors&#146; stock purchase program.</font></td>
  </tr>
  <tr>
    <td width=2% valign=top><font size="2"> </font></td>
    <td width=1%>&nbsp;</td>
    <td width=20%><font size="2"><b>FOR&nbsp; </b> |_|</font></td>
    <td width=26%><font size="2"><b>AGAINST&nbsp; </b> |_|</font></td>
    <td width=51%><font size="2"><b>ABSTAIN&nbsp; </b> |_|</font></td>
  </tr>
</table>
<br>
<table width=600>
  <tr>
    <td width=2% valign=top><font size="2">3.</font></td>
    <td width=1%>&nbsp;</td>
    <td colspan="3"><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 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 align="left" valign="bottom"> <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></td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td><font size="1">Dated: ________________________________________________,
      2002 </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>
    </td>
  </tr>
</table>
<p>
<p>&nbsp;
<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><p>&nbsp;





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