<DOCUMENT>
<TYPE>EX-99.K(3)
<SEQUENCE>7
<FILENAME>dex99k3.txt
<DESCRIPTION>FORM OF ADDITIONAL COMPENSATION AGREEMENT
<TEXT>
<PAGE>

                        ADDITIONAL COMPENSATION AGREEMENT

     ADDITIONAL COMPENSATION AGREEMENT (the "Agreement"), dated as of [ ], 2003,
between Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner & Smith Incorporated
("Merrill Lynch") and Fund Asset Management, L.P. (the "Investment Adviser").

     WHEREAS, Floating Rate Income Strategies Fund, Inc. (including any
successor by merger or otherwise, the "Fund") is a newly organized, diversified,
closed-end management investment company registered under the Investment Company
Act of 1940, as amended (the "1940 Act"), and its shares of common stock, par
value $.10 per share ("Common Stock") are registered under the Securities Act of
1933, as amended; and

     WHEREAS, the Investment Adviser is the investment adviser of the Fund;

     WHEREAS, Merrill Lynch is acting as lead underwriter in an offering of the
Common Stock;

     WHEREAS, the Investment Adviser desires to provide additional compensation
to Merrill Lynch for acting as lead underwriter in an offering of the Common
Stock; and

     WHEREAS, the Investment Adviser desires to retain Merrill Lynch to provide
after-market support services designed to maintain the visibility of the Fund on
an ongoing basis, and Merrill Lynch is willing to render such services;

     NOW, THEREFORE, in consideration of the mutual terms and conditions set
forth below, the parties hereto agree as follows:

1.   (a) The Investment Adviser hereby employs Merrill Lynch, for the period and
     on the terms and conditions set forth herein, to provide the following
     services at the reasonable request of the Investment Adviser:

          (1)  after-market support services designed to maintain the visibility
               of the Fund on an ongoing basis;

          (2)  relevant information, studies or reports regarding general trends
               in the closed-end investment company and asset management
               industries, if reasonably obtainable, and consult with
               representatives of the Investment Adviser in connection
               therewith; and

          (3)  information to and consult with the Investment Adviser with
               respect to applicable strategies designed to address market value
               discounts, if any.

     (b)  At the request of the Investment Adviser, Merrill Lynch shall limit or
          cease any action or service provided hereunder to the extent and for
          the time period requested by the Investment Adviser; provided,
          however, that pending termination of this Agreement as provided for in
          Section 5 hereof, any such limitation or cessation shall not relieve
          the Investment Adviser of its payment obligations pursuant to Section
          2 hereof.

     (c)  Merrill Lynch will promptly notify the Investment Adviser if it learns
          of any material inaccuracy or misstatement in, or material omission
          from, any written information, as of the date such information was
          published, provided by Merrill Lynch to the Investment Adviser in
          connection with the performance of services by Merrill Lynch under
          this Agreement.

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2.   The Investment Adviser shall pay Merrill Lynch a fee computed weekly and
     payable quarterly in arrears commencing [ ], 2003 at an annualized rate of
     .15% of the Fund's average daily net assets (including any assets
     attributable to any preferred stock that may be outstanding), as defined in
     the Fund's prospectus dated October [ ], 2003 (the "Prospectus"), plus the
     proceeds of any outstanding borrowings used for leverage for a term as
     described in Section 5 hereof; provided that the sum total amount of the
     fee hereunder plus the amount of the expense reimbursement of $0.00667 per
     share of common stock payable by the Fund to the underwriters pursuant to
     the Purchase Agreement, dated [ ], 2003, by and among the Fund, the
     Investment Adviser and each of the Underwriters named therein (the
     "Purchase Agreement"), shall not exceed 4.5% of the total price (including
     all Initial Securities and Option Securities as such terms are described in
     the Purchase Agreement) to the public of the Common Stock offered by the
     Prospectus. All quarterly fees payable hereunder shall be paid to Merrill
     Lynch within 15 days following the end of each calendar quarter.

3.   The Investment Adviser acknowledges that the services of Merrill Lynch
     provided for hereunder do not include any advice as to the value of
     securities or regarding the advisability of purchasing or selling any
     securities for the Fund's portfolio. No provision of this Agreement shall
     be considered as creating, nor shall any provision create, any obligation
     on the part of Merrill Lynch, and Merrill Lynch is not hereby agreeing, to:
     (i) furnish any advice or make any recommendations regarding the purchase
     or sale of portfolio securities or (ii) render any opinions, valuations or
     recommendations of any kind or to perform any such similar services in
     connection with providing the services described in Section 1 hereof.

4.   Nothing herein shall be construed as prohibiting Merrill Lynch or its
     affiliates from providing similar or other services to any other clients
     (including other registered investment companies or other investment
     managers), so long as Merrill Lynch's services to the Investment Adviser
     are not impaired thereby.

5.   The term of this Agreement shall commence upon the date referred to above
     and shall be in effect so long as the Investment Adviser acts as the
     investment manager to the Fund pursuant to the Advisory Agreement (as such
     term is defined in the Purchase Agreement) or other subsequent advisory
     agreement.

6.   The Investment Adviser will furnish Merrill Lynch with such information as
     Merrill Lynch believes appropriate to its assignment hereunder (all such
     information so furnished being the "Information"). The Investment Adviser
     recognizes and confirms that Merrill Lynch (a) will use and rely primarily
     on the Information and on information available from generally recognized
     public sources in performing the services contemplated by this Agreement
     without having independently verified the same and (b) does not assume
     responsibility for the accuracy or completeness of the Information and such
     other information. To the best of the Investment Adviser's knowledge, the
     Information to be furnished by the Investment Adviser when delivered, will
     be true and correct in all material respects and will not contain any
     material misstatement of fact or omit to state any material fact necessary
     to make the statements contained therein not misleading. The Investment
     Adviser will promptly notify Merrill Lynch if it learns of any material
     inaccuracy or misstatement in, or material omission from, any Information
     delivered to Merrill Lynch.

7.   It is understood that Merrill Lynch is being engaged hereunder solely to
     provide the services described above to the Investment Adviser and that
     Merrill Lynch is not acting as an agent or fiduciary of, and shall have no
     duties or liability to the current or future shareholders of the Fund

                                       2

<PAGE>

or any other third party in connection with its engagement hereunder, all of
which are hereby expressly waived.

8.   The Investment Adviser agrees that Merrill Lynch shall have no liability to
     the Investment Adviser or the Fund for any act or omission to act by
     Merrill Lynch in the course of its performance under this Agreement, in the
     absence of gross negligence or willful misconduct on the part of Merrill
     Lynch.

9.   This Agreement and any claim, counterclaim or dispute of any kind or nature
     whatsoever arising out of or in any way relating to this Agreement
     ("Claim") shall be governed by and construed in accordance with the laws of
     the State of New York.

10.  No Claim may be commenced, prosecuted or continued in any court other than
     the courts of the State of New York located in the City and County of New
     York or in the United States District Court for the Southern District of
     New York, which courts shall have exclusive jurisdiction over the
     adjudication of such matters, and the Investment Adviser and Merrill Lynch
     consent to the jurisdiction of such courts and personal service with
     respect thereto. Each of Merrill Lynch and the Investment Adviser waives
     all right to trial by jury in any proceeding (whether based upon contract,
     tort or otherwise) in any way arising out of or relating to this Agreement.
     The Investment Adviser agrees that a final judgment in any proceeding or
     counterclaim brought in any such court shall be conclusive and binding upon
     the Investment Adviser and may be enforced in any other courts to the
     jurisdiction of which the Investment Adviser is or may be subject, by suit
     upon such judgment.

11.  This Agreement may not be assigned by either party without the prior
     written consent of the other party.

12.  This Agreement embodies the entire agreement and understanding between the
     parties hereto and supersedes all prior agreements and understandings
     relating to the subject matter hereof. If any provision of this Agreement
     is determined to be invalid or unenforceable in any respect, such
     determination will not affect such provision in any other respect or any
     other provision of this Agreement, which will remain in full force and
     effect. This Agreement may not be amended or otherwise modified or waived
     except by an instrument in writing signed by both Merrill Lynch and the
     Investment Adviser.

13.  All notices required or permitted to be sent under this Agreement shall be
     sent, if to the Investment Adviser:

     Fund Asset Management, L.P.
     P.O. Box 9011
     Princeton, New Jersey 08543-9011
     Attention: Robert C. Doll, Jr., President

     or if to Merrill Lynch:

     Merrill Lynch & Co.
     Merrill Lynch, Pierce, Fenner & Smith
                    Incorporated
     Debt and Equity New Issues
     4 World Financial Center
     New York, New York 10080

     Attention:  Doug Bond

     or such other name or address as may be given in writing to the other
     parties. Any notice shall be deemed to be given or received on the third
     day after deposit in the US mail with certified postage prepaid or when
     actually received, whether by hand, express delivery service or facsimile
     transmission, whichever is earlier.

14.  This Agreement may be executed in separate counterparts, each of which is
     deemed to be an original and all of which taken together constitute one and
     the same agreement.

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<PAGE>

     IN WITHESS WHEREOF, the parties hereto have duly executed this Additional
Compensation Agreement as of the date first above written.

FUND ASSET MANAGEMENT, L.P.                MERRILL LYNCH & CO.
                                           MERRILL LYNCH, PIERCE, FENNER & SMITH
                                                          INCORPORATED


By:  PRINCETON SERVICES, INC.
       General Partner

By: _____________________________          By: ________________________________
     Name:                                      Name:
     Title:                                     Title:

                                       4

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</DOCUMENT>
