<PAGE> 1
As filed with the Securities and Exchange Commission on April 27, 1995.
File No. 811-2631
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT /X/
OF 1940
AMENDMENT No. 18
CHESTNUT STREET EXCHANGE FUND
-----------------------------
(Exact Name of Registrant as Specified in Charter)
400 Bellevue Parkway, Suite 100
Wilmington, Delaware 19809
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(Address of Principal Executive Offices)
Registrant's Telephone Number: (302) 792-2555
Edward J. Roach
400 Bellevue Parkway, Suite 100
Wilmington, Delaware 19809
--------------------------
(Name and Address of Agent for Service)
Copy to:
Vernon Stanton, Jr., Esq.
Drinker Biddle & Reath
Philadelphia National Bank Building
1345 Chestnut Street
Philadelphia, Pennsylvania 19107-3496
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CONTENTS OF FORM N-1A
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PART A. INFORMATION REQUIRED IN A PROSPECTUS 1
Item 1. Cover Page . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Item 2. Synopsis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Item 3. Condensed Financial Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Item 4. General Description of Registrant . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Item 5. Management of the Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Item 5A. Management's Discussion of Fund Performance . . . . . . . . . . . . . . . . . . . . . . . . . 8
Item 6. Capital Stock and Other Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Item 7. Purchase of Securities Being Offered . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Item 8. Redemption or Repurchase . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Item 9. Pending Legal Proceedings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
PART B. STATEMENT OF ADDITIONAL INFORMATION 14
Item 10. Cover Page . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Item 11. Table of Contents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Item 12. General Information and History . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Item 13. Investment Objective and Policies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Item 14. Management of the Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Item 15. Control Persons and Principal Holders
of Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Item 16. Investment Advisory and Other
Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Item 17. Brokerage Allocation and Other
Practices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Item 18. Capital Stock and Other Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Item 19. Purchase, Redemption, and Pricing of
Securities Being Offered . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Item 20. Tax Status . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Item 21. Underwriters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Item 22. Calculation of Performance Data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Item 23. Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
PART C. OTHER INFORMATION C-1
Item 24. Financial Statements and Exhibits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . C-1
Item 25. Persons Controlled by or under Common Control with Registrant . . . . . . . . . . . . . . . . C-4
Item 26. Number of Holders of Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . C-4
Item 27. Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . C-5
Item 28. Business and Other Connections of Investment Adviser . . . . . . . . . . . . . . . . . . . . . C-5
Item 29. Principal Underwriters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . C-17
Item 30. Location of Accounts and Records . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . C-17
Item 31. Management Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . C-17
SIGNATURE C-19
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PART A. INFORMATION REQUIRED IN A PROSPECTUS
Item 1. Cover Page
Inapplicable.
Item 2. Synopsis
Inapplicable.
Item 3. Condensed Financial Information
Inapplicable.
Item 4. General Description of Registrant
(i) Registrant is a limited partnership organized as
of March 23, 1976 under The Uniform Limited
Partnership Act of California. Registrant is an
open-end diversified management investment
company.
(ii) Registrant's investment objectives are to seek
long-term growth of capital and, secondarily,
current income. Registrant will invest in a
portfolio of common stocks and securities
convertible into common stocks of issuers included
in the "List of Representative Companies" on pages
10 to 12 of Post- Effective Amendment No. 1 to
Registrant's Registration Statement on Form S-5
filed under the Securities Act of 1933 on October
28, 1976, which is incorporated herein by
reference, and of other issuers of comparable
quality. Registrant may also invest in other
types of securities for temporary or defensive
purposes, including preferred stocks, investment
grade bonds and money market obligations such as
U.S. Government securities, certificates of
deposit and commercial paper.
Up to 10% of the value of Registrant's total
assets may be invested in securities which are
subject to legal or contractual restrictions on
resale and which Registrant reasonably believes
will be saleable after a two year holding period
pursuant to Rule 144 under the Securities Act of
1933.
The Registrant may write exchange-traded covered
call options on portfolio securities up to 25% of
the value of its assets and may loan portfolio
<PAGE> 4
securities as permitted under subpart (8) of this
Item 4(ii). The Registrant will not sell securities
covered by outstanding options and will endeavor to
liquidate its position as an option writer in a
closing purchase transaction rather than deliver
portfolio securities upon exercise of the option.
The extent to which the Registrant may be able to
write such options will depend in part on state
securities regulations as amended from time to
time.
The investment objectives stated above may be
changed by the Board of Managing General Partners
without the approval of a majority of Registrant's
outstanding voting securities.
Registrant's fundamental policies which may not be
changed without the approval of a majority of
Registrant's outstanding voting securities are as
follows:
(1) Registrant will not issue any senior
securities (as defined in the Investment
Company Act of 1940).
(2) Registrant will not purchase securities on
margin or sell any securities short.
Registrant will not purchase or write
puts, calls, straddles or spreads with
respect to any security except that (i)
Registrant may write call options on
securities constituting not more than 25%
of the value of its assets if the option
is listed on a national securities
exchange and, at all times while the
option is outstanding, Registrant owns the
securities against which the option is
written or owns securities convertible
into such securities, and (ii) Registrant
may purchase call options in closing
purchase transactions to liquidate its
position as an option writer.
(3) Registrant will not borrow money except
from banks in amounts which in the
aggregate do not exceed 10% of the value
of its assets at the time of borrowing.
This borrowing provision is not for
purposes of leverage but is intended to
facilitate the orderly sale of portfolio
securities to accommodate abnormally heavy
redemption requests, and to pay
subscription fees due with respect to
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the exchange without having to sell
portfolio securities. Securities may be
purchased for Registrant's portfolio while
borrowings are outstanding.
(4) Registrant will not act as an underwriter
(except as it may be deemed such in a sale
of restricted securities owned by it).
(5) It is not the policy of Registrant to
concentrate its investments in any
particular industry, but if it is deemed
advisable in light of Registrant's
investment objectives, up to 25% of the
value of its assets may be invested in any
one industry. Registrant will not be
required to reduce holdings in a
particular industry if, solely as a result
of price changes, the value of such
holdings exceeds 25% of the value of
Registrant's total assets.
(6) Registrant will not purchase or sell real
estate or real estate mortgage loans.
(7) Registrant will not purchase or sell
commodities or commodity contracts.
(8) Registrant will not make loans except by
(i) the purchase of debt securities in
accordance with its investment objectives
and (ii) the loaning of securities against
collateral consisting of cash or
securities issued or guaranteed by the
U.S. Government, its agencies or
instrumentalities, which is equal at all
times to at least 100% of the value of the
securities loaned. Registrant will lend
portfolio securities only when its
investment adviser believes that the net
return to Registrant in consideration of
the loan is reasonable, that any fee paid
for placing the loan is reasonable and
based solely upon services rendered, that
the loan is consistent with Registrant's
investment objectives, and that no
affiliate of Registrant or of its
investment adviser is involved in the
lending transaction or is receiving any
fees in connection therewith. Registrant
will not have the right to vote securities
loaned, but will have the right to
terminate such a loan at any time and
receive back equivalent securities and to
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receive amounts equivalent to all dividends
and interest paid on the securities loaned.
(9) Registrant will not:
(A) Mortgage, pledge or hypothecate
its assets except to secure
borrowings described in Item
4(ii)(3) and in amounts not
exceeding 10% of the value of its
assets.
(B) Invest more than 5% of its assets
at the time of purchase in the
securities of any one issuer
(exclusive of securities issued
or guaranteed by the U.S.
Government, its agencies or
instrumentalities).
(C) Purchase securities if such
purchase would result in its
owning more than 10% of the
outstanding voting securities of
any one issuer at the time of
purchase.
(D) Invest in securities of companies
which have a record, together
with their predecessors, of less
than five years of continuous
operation.
(E) Purchase or hold securities of
any company if, to its knowledge,
those General Partners of
Registrant and those directors
and officers above the level of
Senior Vice President of its
investment adviser beneficially
owning more than 1/2 of 1% of the
securities of that company,
together own beneficially more
than 5% of the securities of such
company taken at market value.
(F) Purchase the securities of other
investment companies except that
Registrant has accepted for
exchange shares of common stock
of Coca-Cola International
Corporation in accordance with
the limitations imposed by the
Investment Company Act of 1940.
(G) Purchase oil, gas or other
mineral leases or partnership
interests in oil,
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gas or other mineral exploration
programs.
(H) Knowingly purchase or otherwise
acquire any equity or debt
securities which are subject to
legal or contractual restrictions
on resale if, as a result
thereof, more than 10% of the
value of its assets would be
invested in such securities.
(I) Invest in companies for the
purpose of exercising control or
management.
Any investment policy or restriction in
these Items (1)-(9) which involves a
maximum percentage of securities or assets
shall not be considered to be violated
unless an excess over the percentage
occurs immediately after an acquisition of
securities or utilization of assets and
results therefrom.
Registrant's investment policies which are not
deemed fundamental and may be changed without
shareholder approval are as follows:
Registrant does not intend to engage in any
significant degree in short-term trading.
Portfolio turnover is not expected to exceed 15%,
although Registrant reserves the right to exceed
this turnover rate. The tax consequences of a
sale of portfolio securities will be considered
prior to a sale, but sales will be effected when
the investment adviser believes a sale would be in
the best interests of Registrant's shareholders
even though capital gains will be realized.
Registrant will not sell securities covered by
outstanding options and will endeavor to liquidate
its position as an option writer in a closing
purchase transaction rather than by delivering
portfolio securities upon exercise of the option.
* * *
Limited Partners generally are not personally
liable for liabilities of the Fund. However, if
the Fund were unable to pay its liabilities,
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recipients of distributions from the Fund could be
liable to creditors of the Fund to the extent of
such distributions, plus interest.
A Limited Partner has no right to take any part in
the control of the Partnership business, and the
exercise of such control would subject a Limited
Partner to the personal liability of a General
Partner for obligations of the Fund. Although no
absolute assurance can be given due to the lack of
specific statutory authority and the fact that
there are no authoritative judicial decisions on
the matter, the Fund received an opinion from
California Counsel that the existence and exercise
by the Limited Partners of the voting rights
provided for in the Partnership Agreement do not
subject the Limited Partners to liability as
general partners under the California Act. It is
possible, however, that the existence or exercise
of such rights, might subject the Limited Partners
to such liability under the laws of another state.
In the event that a Limited Partner should be
found to be liable as a general partner, then, to
the extent the assets and insurance of the Fund
and of the General Partners were insufficient to
reimburse a Limited Partner, he would be required
to personally satisfy claims of creditors against
the Fund.
The net asset value of the Shares on redemption or
repurchase may be more or less than the initial
offering price of the Shares depending upon the
market value of the Fund's portfolio securities at
the time of redemption or repurchase.
Item 5. Management of the Fund
(a) The business and affairs of the Fund are managed
by its four Managing General Partners. Their
addresses and principal occupations for the past
five years are stated at Item 14.
(b) Registrant's investment advisers are PNC Bank,
National Association ("PNC Bank") which has
banking offices at Broad and Chestnut Streets,
Philadelphia, Pennsylvania 19101 and PNC
Institutional Management Corporation ("PIMC"),
located at 103 Bellevue Parkway, Wilmington,
Delaware 19809. PNC Bank and its predecessors
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<PAGE> 9
have been in the business of managing the investments
of fiduciary and other accounts in the Philadelphia
area since 1847. Investment advisory services are
provided to the Registrant by PNC Bank through its
Trust Division. PIMC was organized by PNC Bank in
June 1977 to perform investment advisory services for
Registrant and certain other regulated investment
companies advised by PNC Bank.
All of the capital stock of PIMC is owned by PNC
Bank. All of the capital stock of PNC Bank is owned
by PNC Bancorp, Inc. with principal offices in
Wilmington, Delaware. All of the capital stock of
PNC Bancorp, Inc. is owned by PNC Bank Corp., a
publicly held bank holding corporation with principal
offices in Pittsburgh, Pennsylvania.
(i) The investment advisers, subject to the
authority of the Managing General
Partners, are responsible for the overall
management of the Fund's business affairs.
(ii) For the services provided by PNC Bank and
PIMC and the expenses assumed by them
under the Advisory Agreement, Registrant
has agreed to pay PIMC a fee, computed
daily and payable monthly, at the annual
rate of 1/2 of 1% of the first
$100,000,000 of the Registrant's net
assets, plus 4/10ths of 1% of the net
assets exceeding $100,000,000. In the
Advisory Agreement, PIMC has agreed to pay
PNC Bank a monthly fee equal to 75% of
each month's advisory fee paid by
Registrant to PIMC under the agreement,
adjusted quarterly to assure that PIMC has
income before taxes from all sources of at
least $22,500 during each quarter. The
fee paid by PIMC to PNC Bank does not
affect the amount of the advisory fee
payable by Registrant. In 1994, the Fund
paid $878,636, or approximately .45% of
its average net assets for 1994, to PIMC.
(c) Inapplicable.
(d) The Fund's transfer agent and dividend disbursing
agent is PFPC Inc. ("PFPC"). Its principal business
address is 103 Bellevue Parkway, Wilmington, DE
19809.
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<PAGE> 10
(e) In 1994, the Fund's expenses totalled $1,055,782, or
approximately .54% of its average net assets.
(f) Inapplicable.
(g) Inapplicable.
Item 5A. Management's Discussion of Fund Performance
Inapplicable.
Item 6. Capital Stock and Other Securities
(a) Registrant has one class of partnership
interest, no par value ("Shares"). All Shares
are entitled to participate equally in
distributions declared by the Board of Managing
General Partners. Each full Share entitles the
record holder thereof, other than the
Non-Managing General Partner, to one full vote,
and each fractional Share to a fractional vote,
on all matters submitted to the shareholders.
The Partnership Agreement provides that the
Non-Managing General Partner shall take no part
in the management, conduct or operation of the
Fund's business and shall not have the right to
vote its Shares. Shareholders are not entitled
to cumulative voting in elections for General
Partners. Each Share has equal liquidation
rights. There are no pre-emptive rights or
conversion rights.
Registrant is a limited partnership formed under
The Uniform Limited Partnership Act of
California. Limited Partners generally are not
personally liable for liabilities of Registrant.
However, if Registrant were unable to pay its
liabilities, recipients of distributions from
Registrant could be liable to certain creditors
of Registrant to the extent of such
distributions, plus interest. Registrant
believes that, because of the nature of
Registrant's business, the assets and insurance
of Registrant and of the General Partners, and
Registrant's ability to contract with third
parties to prevent recourse by the party against
a Limited Partner, it is unlikely that Limited
Partners will receive distributions which have
to be returned or that they will be subject to
liability as General Partners. In the event
that a Limited
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Partner should be found to be liable as a General
Partner, then, to the extent the assets and
insurance of Registrant and of the General Partners
were insufficient to reimburse a Limited Partner,
he would be required to personally satisfy claims
of creditors against Registrant.
(b) Inapplicable.
(c) The rights of the holders of Shares may not be
modified otherwise than by the vote of a majority
of outstanding shares, but "outstanding shares"
for this purpose excludes those shares held by the
non- voting Non-Managing General Partner.
(d) Inapplicable.
(e) Shareholder inquiries should be made to the Fund,
400 Bellevue Parkway, Suite 100, Wilmington,
Delaware 19809, telephone (302) 792-2555.
(f) Registrant intends to distribute from its net
investment income such amounts as the Managing
General Partners determine after the end of each
of the first three quarters of each year
(currently such distributions are at the rate of
$.50 per share), and the remainder of its net
investment income and 30% of its realized net
capital gains at the end of each fiscal year.
Distributions will be made in cash except to those
shareholders who elect to receive income or
capital gains distributions in additional Shares
computed at their net asset value as of the record
date for the distribution. In the discretion of
the Managing General Partners, the amount of
income distributions for the first three quarters
may be changed and distributions may be made at
other times, and the percentage of realized net
capital gains distributed may be more or less than
30%. Investors who elect to participate in the
Registrant's Systematic Withdrawal Plan will
receive quarterly in cash as a partial redemption
of their Shares up to 3/4 of 1% of the net asset
value of their Shares determined as of the last
trading day of each calendar quarter.
(g) Since inception, the Registrant has been
classified as a partnership for federal income tax
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purposes. As a partnership, Registrant itself
does not pay any federal income or capital gains
tax. Instead, each partner is required, in
determining his own federal income tax
liability, to take into account his allocable
share of each item of Registrant's income, gain,
loss, deduction and credit (whether or not
distributed to him) for the taxable year of the
Registrant ending within or with his taxable
year.
In general, distributions by the Registrant,
whether received in additional shares of
partnership interest ("Shares") or cash, will
not be taxable to a partner. Instead, as
previously described, each partner will take
into account in determining his federal income
tax liability his allocable share of
Registrant's income, gain, loss, deduction and
credit. In the event that distributions to a
partner exceed his basis for his aggregate
partnership interest immediately prior to the
distribution, the partner would recognize a
capital gain in the amount of such excess. Such
event is unlikely since distributions normally
will be made from his allocable share of items
of net income and capital gains which had the
initial effect of increasing his aggregate
basis. A cash distribution will reduce the
aggregate basis for all of a partner's Shares
(but not below zero) by the amount of the
distribution. If the distribution is taken in
the form of additional Shares, a partner's
aggregate basis, as increased by his share of
the income and gain, will remain unchanged. It
is not contemplated that any distributions will
be made in portfolio securities.
It should be noted that the Registrant has
considered the possible applicability to the
Registrant of certain provisions of the Revenue
Act of 1987 which treat publicly traded
partnerships as corporations. Although it is
not totally clear, the Registrant believes, as
of the date hereof, that the Registrant would be
classified for federal tax purposes as a
publicly traded partnership eligible for a
transitional rule which would postpone treatment
as a corporation until 1998. See the Statement
of Additional Information for further
information.
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Item 7. Purchase of Securities Being Offered
(a) Inapplicable.
(b) Inapplicable.
(c) Investors who have not exchanged restricted
securities for Shares or received certificates
for their Shares may, by notice in writing to
the transfer agent, elect to participate in the
Systematic Withdrawal Plan (the "Plan").
Participants in the Plan will receive quarterly
in cash as a partial redemption of their Shares
up to 3/4 of 1% of the net asset value of their
Shares as of the close of trading on the New
York Stock Exchange on the last trading day of
each calendar quarter. Registrant does not
intend to impose a charge upon investors for
participating in the Plan. Participants may
withdraw from the Plan at any time by written
notice to the transfer agent.
(d) Inapplicable.
(e) Inapplicable.
(f) Inapplicable.
Item 8. Redemption or Repurchase
(a) Shares may be redeemed at the option of the
investor at any time without charge at their net
asset value next computed after receipt by PFPC
of a written request for redemption setting
forth the name of the Registrant and the
investor's account number. The request must be
accompanied by certificates (if issued) or if
certificates have not been issued, by stock
powers. The certificate or stock powers must be
endorsed by the record owner(s) exactly as the
Shares are registered and the signature(s) must
be guaranteed by a commercial bank or trust
company or member of a registered national
securities exchange. The Registrant reserves
the right to require that additional documents
be furnished in the case of redemptions by other
than the registered owner of the Shares.
Except to the extent Shares are redeemed for
cash pursuant to the Systematic Withdrawal Plan,
Registrant intends to distribute upon redemption
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<PAGE> 14
securities in kind valued at the same value used
for purposes of next determining Registrant's
net asset value after the receipt of the request
for redemption in proper form. Registrant may
in its discretion pay part or all of redemption
proceeds in cash.
The proceeds of redemption will be paid as soon
as possible but not later than seven days after
the request for redemption is received with the
required documentation. The Registrant may
suspend the right of redemption or delay payment
during any period when the New York Stock
Exchange is closed (other than customary weekend
and holiday closings); when trading on that
exchange is restricted or an emergency exists
which makes disposal or valuation of portfolio
securities impracticable; or during such other
period as the Securities and Exchange Commission
may by order permit.
(b) In addition to redeeming Shares, the Registrant
will also repurchase its Shares upon request
through PFPC from brokers or dealers acting on
behalf of their customers. The repurchase price
will be the net asset value of the Shares next
determined after receipt of the order by PFPC.
A repurchase order received by PFPC from a
broker or dealer before PFPC's close of business
will be considered to have been received before
the close of trading on the New York Stock
Exchange on that day if the broker or dealer
received the order from its customer prior to
such close of trading. It is the broker's or
dealer's responsibility to transmit the
repurchase order promptly to PFPC. No charge is
imposed by the Registrant or PFPC in connection
with Share repurchases, although a customer's
broker or dealer may impose a charge for its
services. Distribution of the proceeds of a
repurchase will be made as soon as possible but
no later than seven days after the date PFPC
receives the repurchase order provided that
stock powers or certificates for the Shares (if
issued) have been received with signature(s)
guaranteed as described above for redemptions.
The net asset value of the Shares on redemption
or repurchase may be more or less than the
initial offering price of the Shares depending
upon the market value of the Fund's portfolio
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<PAGE> 15
securities at the time of redemption or
repurchase.
(c) Inapplicable.
(d) Inapplicable.
Item 9. Pending Legal Proceedings
Inapplicable.
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PART B. STATEMENT OF ADDITIONAL INFORMATION
Item 10. Cover Page
Inapplicable.
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<CAPTION>
Item 11. Table of Contents Page No.
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<S> <C>
General Information and History . . . . . . . . . . . . . . . . . . . . . . . . . 14
Investment Objectives and Policies . . . . . . . . . . . . . . . . . . . . . . . . 14
Management of the Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Control Persons and Principal Holders
of Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Investment Advisory and Other Services . . . . . . . . . . . . . . . . . . . . . . 18
Brokerage Allocation and Other Practices . . . . . . . . . . . . . . . . . . . . . 20
Capital Stock and Other Securities . . . . . . . . . . . . . . . . . . . . . . . . 21
Purchase, Redemption and Pricing of
Securities Being Offered . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Tax Status . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Underwriters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Calculation of Performance Data . . . . . . . . . . . . . . . . . . . . . . . . . 24
Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
</TABLE>
Item 12. General Information and History
Inapplicable.
Item 13. Investment Objective and Policies
(a) See Item 4(ii).
(b) See Item 4(ii).
(c) See Item 4(ii).
(d) For the fiscal years ended December 31, 1994 and
1993, Registrant's portfolio turnover rates were
3.88% and 0%, respectively.
Item 14. Management of the Fund
(a) Managing General Partners and officers of the
Fund:
-14-
<PAGE> 17
<TABLE>
<CAPTION>
Principal Occupations
Position with During Past 5 Years and
Name and Address Age with Registrant and Current Affiliations
- ---------------- ---- --------------- ------------------------
<S> <C> <C> <C>
Robert R. Fortune 70 President and Financial Consultant; Chairman,
2920 Ritter Lane Chairman of the President and Chief Executive
Allentown, PA 18104 Managing General Officer, Associated Electric &
Partners Gas Insurance Services Limited from 1984 to 1993; Member
of the Financial Executives Institute and American
Institute of Certified Pubic Accountants; Director,
Trustee or Managing General Partner of a number of
investment companies advised by PIMC; Director,
Prudential Utility Fund, Inc., Prudential Income
Vertible Fund, Inc., and Prudential Structured Maturity
Fund, Inc.
G. Willing Pepper 87 Managing Retired; Chairman of the Board,
128 Springton Lake Rd. General Specialty Composites Corporation
Media, PA 19063 Partner until May 1984; Chairman of the Board, The Institute for
Cancer Research until 1979; Director, Philadelphia
National Bank until 1978; President, Scott Paper
Company, 1971-1973; Director, Marmon Group, Inc. until
April 1986; Director, Trustee or Managing General
Partner of a number of investment companies advised by
PIMC.
David R. Wilmerding, Jr. 59 Managing President, Gates Wilmerding,
Aldwyn Center General Carper & Rawlings, Inc.
Villanova, PA 19085 Partner (investment advisers) since February 1989; Director,
Beaver Management Corporation; Until September 1988,
President, Treasurer and Trustee, The Mutual Assurance
Company; Until September 1988, Chairman, President,
Treasurer and Director, The Green Tree Insurance Company
(a wholly-owned subsidiary of The Mutual Assurance
Company); Until September 1988, Director, Keystone State
Life Insurance Company; Director, Trustee or Managing
</TABLE>
-15-
<PAGE> 18
<TABLE>
<CAPTION>
Principal Occupations
Position with During Past 5 Years and
Name and Address Age with Registrant and Current Affiliations
- ---------------- ---- --------------- ------------------------
<S> <C> <C> <C>
General Partner of a number of investment companies
advised by PIMC.
R. Stewart Rauch 80 Managing Honorary Trustee, Committee for
928 Merion Square Road General Economic Development; Advisory
Gladwyne, PA 19035 Partner Council, The Greater Philadelphia Urban Affairs
Partnership; Chairman of the Board, The Philadelphia
Contributionship for the Insurance of Houses from Loss
by Fire until 1986; Chairman of the Board, The
Philadelphia Contributionship Insurance Company
until 1986; Director, The Philadelphia Orchestra
Association until 1986; Director, Independence Square
Income Securities, Inc.
Edward J. Roach 70 Treasurer Certified Public Accountant; Partner
400 Bellevue Parkway of the accounting firm of Main
Suite 100 Hurdman until 1981; Vice
Wilmington, DE 19809 Chairman of the Board, Fox Chase Cancer Center; Former
Vice President and Trustee Emeritus, Pennsylvania
School for the Deaf; Former Trustee, Immaculata
College; Former Director, Biotrol USA, Inc.; President,
Vice-President and/or Treasurer of a number of
investment companies advised by PIMC.
Morgan R. Jones 45 Secretary Chairman of the law firm of
PNB Building Drinker Biddle & Reath,
1345 Chestnut Street Philadelphia, Pennsylvania.
Philadelphia, PA 19107-3496
</TABLE>
(b) See item (a) above.
-16-
<PAGE> 19
(c) The Registrant pays Managing General Partners $6,000 annually,
and pays the Chairman an additional $4,000 annually. The
following table provides information concerning the
compensation of each of the Registrant's Managing General
Partners for services rendered during the Company's last
fiscal year ended December 31, 1994:
<TABLE>
<CAPTION>
Aggregate Pension or Retirement Estimated Annual Total Compensation
Name of Person/ Compensation Benefits Accrued as Benefits Upon from Registrant and
Position From Registrant From Registrant Retirement Fund Complex (1)
- --------------- --------------- --------------------- ---------------- --------------------
<S> <C> <C> <C> <C>
Henry M. Watts, Jr. (2) $2,500 None None (8)(3) $31,875
Former President
and Chairman of the
Managing General Partners
Robert R. Fortune $8,000 None None (6)(3) $59,625
President and Chairman
of the Managing General
Partners
G. Willing Pepper $6,000 None None (7)(3) $98,275
Managing General Partner
David R. Wilmerding, Jr. $6,000 None None (6)(3) $60,625,04
Managing General Partner
R. Stewart Rauch $6,000 None None (2)(3) $12,000
Managing General Partner
</TABLE>
- -----------------------
(1) A Fund Complex means two or more investment
companies that hold themselves out to
investors as related companies for purposes
of investment and investor services, or have
a common investment adviser or have an
investment adviser that is an affiliated
person of the investment adviser of any of
the other investment companies.
(2) Mr. Watts resigned as President, Chairman and
Managing General Partner in May 1994.
(3) Total number of such other investment
companies within the Fund Complex of which
the managing general partner serves as
director, trustee or managing general
partner.
-17-
<PAGE> 20
Item 15. Control Persons and Principal Holders of Securities
(a) Inapplicable.
(b) Inapplicable.
(c) As of April 2, 1995, all officers and Managing General
Partners of Registrant as a group beneficially owned less
than 1% of the Registrant's outstanding equity
securities.
Item 16. Investment Advisory and Other Services
(a) All of the capital stock of PIMC is owned by PNC Bank.
All of the capital stock of PNC Bank is owned by PNC
Bancorp, Inc., with principal offices in Wilmington,
Delaware. All of the capital stock of PNC Bancorp, Inc.
is owned by PNC Bank Corp., a publicly held bank holding
corporation with principal offices in Pittsburgh,
Pennsylvania. The Registrant paid $892,578, $881,140 and
$878,636 for investment advisory services for the years
ended December 31, 1992, 1993, and 1994, respectively.
The method of computing the advisory fee payable by the
Registrant is determined as in Item 5(b)(ii) above.
(b) Subject to the supervision of Registrant's Managing
General Partners, PIMC manages the Registrant's portfolio
and is responsible for, makes decisions with respect to,
and places orders for, all purchases and sales of the
Registrant's portfolio securities. PIMC is also required
to compute the Registrant's net asset value and net
income.
The Advisory Agreement also provides that, subject to the
supervision of the Registrant's Managing General Partners
and without additional charge to Registrant, PNC Bank
will, through its Trust Division and on behalf of
Registrant: (i) provide PIMC investment research and
credit analysis concerning prospective and existing
investments of the Registrant, (ii) make recommendations
to PIMC with respect to the Registrant's continuous
investment program, (iii) make recommendations to PIMC
regarding the amount of the Registrant's assets to be
invested or held uninvested in cash or cash equivalents,
(iv)
-18-
<PAGE> 21
supply PIMC with computer facilities and operating
personnel, (v) provide PIMC with such statistical
services as PIMC may reasonably request, and (vi)
maintain or cause PIMC to maintain Registrant's financial
accounts and records.
PNC Bank has agreed that unless and until two years'
prior notice has been given to Registrant and Registrant
has chosen a successor non-Managing General Partner, PNC
Bank will provide to Registrant a Non-Managing General
Partner, who (i) will own at all times at least 1% of the
Registrant's outstanding Shares, (ii) will continue to
stand for re-election as a Non-Managing General Partner,
and (iii) will not withdraw as Non- Managing General
Partner. PNC Bank has agreed to provide such a
Non-Managing General Partner as a result of the tax
ruling received by Registrant which conditions the
Registrant's classification as a partnership for federal
income tax purposes upon the Registrant's General
partners maintaining in the aggregate an interest of at
least 1% in each material item of the Registrant's
income, gain, loss, deduction and credit. Pursuant to an
agreement dated October 22, 1976 between PNC Bank and The
Sandridge Corporation ("Sandridge"), Sandridge has agreed
that unless and until two years' notice is given and
Registrant has chosen a successor Non-Managing General
Partner, it will act as the Registrant's Non-Managing
General Partner in the manner described above. In
consideration thereof, PNC Bank has agreed to pay
Sandridge during the period it acts as the Registrant's
Non-Managing General Partner a fee, computed daily and
payable monthly, at the annual rate of 1/10 of 1% of the
Registrant's net assets.
PNC Bank and PIMC have agreed to bear all expenses
incurred by them in connection with their activities
other than the cost of securities (including brokerage
commissions, if any) purchased for Registrant.
(c) Inapplicable.
(d) Inapplicable.
-19-
<PAGE> 22
(e) Inapplicable.
(f) Inapplicable.
(g) Inapplicable.
(h) The custodian of Registrant's portfolio securities is the
Wilmington Trust Company, located at Wilmington Trust
Center, Rodney Square North, Wilmington, Delaware 19890.
The custodian has agreed to provide certain services as
depository and custodian for the Registrant.
Registrant's independent accountants are Coopers &
Lybrand, located at 2400 Eleven Penn Center,
Philadelphia, Pennsylvania 19103. The following is a
general description of the services performed by Coopers
& Lybrand: auditing and reporting upon financial
statements; reviewing semi-annual report; and reporting
on internal control structure for inclusion in Form
N-SAR.
(i) Inapplicable.
Item 17. Brokerage Allocation and Other Practices
(a) Registrant effects transactions in portfolio securities
through brokers and dealers. Registrant paid aggregate
brokerage commissions of $0, $0 and $9,569 for the years
ended December 31, 1992, 1993, and 1994, respectively.
(b) Inapplicable.
(c) In placing orders with brokers and dealers for purchases
and sales of securities, PIMC attempts to obtain the best
net price and the most favorable execution of its orders.
In seeking best execution, PIMC uses its best judgment to
evaluate the terms of a transaction, giving consideration
to all relevant factors including the nature of the
transaction and of the markets for the security, the
financial condition and execution and settlement
capabilities of the broker-dealer, and the reasonableness
of any brokerage commission. Where the terms of a
transaction are comparable, PIMC may give consideration
to firms which supply investment research, statis-
-20-
<PAGE> 23
tical and other services to Registrant or to PNC Bank,
although there are no agreements to that effect with any
such firm. Research and statistical material furnished by
brokers without cost to PNC Bank and PIMC may tend to
benefit the Fund or other clients of PNC Bank and PIMC by
improving the quality of advice given.
(d) Inapplicable.
(e) Inapplicable.
Item 18. Capital Stock and Other Securities
(a) Inapplicable.
(b) Inapplicable.
Item 19. Purchase, Redemption, and Pricing of Securities
Being Offered
(a) Inapplicable.
(b) Net asset value per share for purposes of both
redemptions and repurchases of Shares is determined by
PIMC as of the close of business on each day (other than
a day during which no Shares are tendered for redemption
and no order to sell Shares is received by the
Registrant) in which there is a sufficient degree of
trading in the Registrant's portfolio securities that the
current net asset value of the Registrant's Shares might
be materially affected by changes in the value of the
portfolio securities. The net asset value per share is
computed by taking the total value of all assets of
Registrant less its liabilities and dividing by the
number of Shares outstanding. Securities for which
market quotations are readily available are valued at
their current market value in the principal market in
which such securities are normally traded. These values
are normally determined by (i) the last sales price, if
the principal market is on the New York Stock Exchange or
other securities exchange (or the closing bid price, if
there has been no sales on such exchange on that day), or
(ii) the most recent
-21-
<PAGE> 24
bid price, if the principal market is other than an
exchange. Securities and other assets for which market
quotations are not readily available (including
restricted securities) are valued at their fair value as
determined in good faith under procedures established by
and under the general supervision of the Managing General
Partners. With respect to call options written on
portfolio securities, the amount of the premium received
is treated as an asset and amortized over the life of the
option, and the price of an option to purchase identical
securities upon the same terms and conditions is treated
as a liability marked to the market daily. The price of
options are normally determined by the last sales price
on the principal exchange on which such options are
normally traded (or the closing asked price if there has
been no sales on such exchange on that day).
(c) Inapplicable.
Item 20. Tax Status
In 1976, the Registrant received a ruling from the Internal Revenue
Service that for federal income tax purposes the Registrant will be
classified as a partnership and not as an association taxable as a
corporation. Such ruling is based upon the accuracy of certain
representations and the satisfaction of certain conditions throughout
the existence of the Registrant. If the Registrant fails (or is
unable) to comply with any required representations made by it in
obtaining the ruling or if any conditions of the ruling are not
satisfied, the ruling may become inapplicable retroactively to the
date of its issuance, and the Registrant may be treated as an
association for federal income tax purposes. If the Registrant were
treated as an association, it would be taxable as a corporation
paying corporate income tax on its income; its partners would be
treated as shareholders thereof; and distributions of income to
partners would be taxed to them as dividends.
The ruling that the Registrant will be treated as a partnership for
federal income tax purposes is conditioned upon the General Partners
maintaining in the aggregate an interest of at least 1% in each
material item of partnership income, gain, loss,
-22-
<PAGE> 25
deduction and credit. The General Partners met this requirement initially
by investing in the aggregate as General Partners not less than 1% of the
Fund's total capital outstanding. Substantially all of such investment
has been made by The Sandridge Corporation, the Non-Managing General
Partner. To ensure continued satisfaction of this requirement, the
Registrant's investment adviser, PNC Bank, has agreed that unless and
until two years' prior notice has been given to the Registrant and the
Registrant has chosen a successor Non-Managing General Partner, it will
provide the Registrant a Non-Managing General Partner who (i) will own at
least 1% of the Registrant's outstanding Shares, (ii) will continue to
stand for re-election as the Non- Managing General Partner, and (iii) will
not withdraw as the Non-Managing General Partner. No additional Shares of
the Registrant may be issued, except in payment of distributions to
holders of Shares and in connection with the admission of additional
general partners.
Furthermore, for the Registrant to be treated as a partnership for federal
income tax purposes, the Internal Revenue Service requires that its
General Partners have and maintain substantial net worth (in excess of
their partnership interests) which can be reached by creditors of the
Registrant. The meaning of "substantial" in these circumstances has not
been defined by Internal Revenue Service tax rulings. While there is no
assurance that the Registrant will be able to do so, it will attempt to
have at all times General Partners who meet such net worth requirements.
It should be noted that the Registrant has considered the possible
applicability of certain provisions of the Revenue Act of 1987 (the "Act")
to the Registrant with regard to its classification as a partnership for
federal tax purposes entitled to the tax treatment described above. The
Act added section 7704 to the Internal Revenue Code of 1986, as amended
(the "Code"). Section 7704 provides that a publicly traded partnership is
to be treated as a corporation for federal tax purposes. A publicly
traded partnership is defined to include any partnership whose interests
are (1) traded on an established securities market, or (2) readily
tradeable on a secondary market (or the substantial equivalent thereof).
A transitional rule postpones the application of section 7704 to a
partnership which was a publicly traded partnership on
-23-
<PAGE> 26
December 17, 1987 until its first taxable year beginning after
December 31, 1997 provided that the partnership does not add a
substantial new line of business. Although it is not totally clear,
the Registrant believes, as of the date of this Statement of
Additional Information, that the Registrant would be classified for
federal tax purposes as a publicly traded partnership eligible for
the transitional rule. In 1998, upon its deemed incorporation under
the transitional rule, the Registrant may elect to be taxed as a
regulated investment company in which case it would have to comply
with the qualifying income, asset diversification and other
requirements of Subchapter M of the Code. This election would permit
the Registrant to receive pass through tax treatment similar to that
of a regular partnership. If the Registrant did not make the
election or failed to meet the requirements of Subchapter M of the
Code, it would be taxed as a regular corporation; any distributions
to its partners would be taxed as ordinary dividend income to the
extent of the Registrant's earnings and profits.
Item 21. Underwriters
Inapplicable.
Item 22. Calculation of Performance Data
Inapplicable.
Item 23. Financial Statements
The following financial statements contained in the Registrant's 1994
Annual Report to Partners dated February 2, 1995 and filed with the Commission
on March 9, 1995 are incorporated herein by reference:
1. Financial Highlights for the years ended December 31, 1990,
1991, 1992, 1993 and 1994.
2. Statement of Net Assets as of December 31, 1994.
3. Statement of Operations for the year ended December 31, 1994.
4. Statement of Changes in Net Assets for the years ended
December 31, 1993 and 1994.
5. Notes to Financial Statements.
6. Report of Independent Accountants.
-24-
<PAGE> 27
PART C. OTHER INFORMATION
Item 24. Financial Statements and Exhibits
(a) Financial Statements:
(1) Part I:
*Financial Highlights for the years ended
December 31, 1990, 1991, 1992, 1993 and
1994.
*Statement of Net Assets as of December 31,
1994.
*Statement of Operations for the year ended
December 31, 1994.
*Statement of Changes in Net Assets for the
years ended December 31, 1993 and 1994.
*Notes to Financial Statements.
*Report of Independent Accountants.
(2) Part II:
The Consent of Independent Accountants is
attached.
Other statements and schedules have been
omitted because the required material is
not present, or the conditions requiring
the filing thereof do not exist.
(b) Exhibits:
Pursuant to Rule 8b-32 under the Investment
Company Act of 1940 and Rule 24 of the
Commission's Rules of Practice, Exhibits
(1)(a),(b), (c), (d), (e), (f), (g) and (h),
(2)(a) and (b), (4), (5), (7), (8) and (13)(a) and
(b) are incorporated herein by reference.
- ----------------------------------
* Incorporated into this Post-Effective Amendment No. 18 by
reference to the Financial Statements contained in
Registrant's Annual Report to Partners dated February 2,
1995 and filed with the Commission on March 9, 1995.
C-1
<PAGE> 28
(1) (a) Restated Certificate and Agreement
of Limited Partnership dated October
22, 1976 is incorporated herein by
reference to Exhibit A of Post
Effective Amendment No. 1 to
Registrant's Registration Statement
on Form S-5, filed on October 28,
1976.
(b) Amendment to Registrant's Restated
Certificate and Agreement of Limited
Partnership filed on June 16, 1983
is incorporated by reference to
Exhibit No. 1(b) of Amendment No. 7
to Registrant's Registration
Statement on Form N-1 filed on April
30, 1984.
(c) Certificate of Limited Partnership
filed November 14, 1984, and
Amendment to Restated Certificate
and Agreement of Limited Partnership
dated November 12, 1984 is
incorporated by reference to Exhibit
No. (1)(c) of Amendment No. 8 to
Registrant's Registration Statement
on Form N-1A filed on April 30,
1985.
(d) Amendment to Restated Certificate of
Limited Partnership dated January 4,
1988 is incorporated by reference to
Exhibit No. (1)(d) of Amendment No.
11 to Registrant's Registration
Statement on Form N-1A filed on
April 27, 1988.
(e) Amendment to Restated Certificate of
Limited Partnership dated September
14, 1987 is incorporated by
reference to Exhibit No. (1)(e) of
Amendment No. 11 to Registrant's
Registration Statement on Form N-1A
filed on April 27, 1988.
(f) Amendment to Restated Certificate of
Limited Partnership dated October
12, 1978 is incorporated by
reference to Exhibit No. (1)(f) of
Amendment No. 11 to Registrant's
Registration Statement on Form N-1A
filed on April 27, 1988.
(g) Amendment to Restated Certificate of
Limited Partnership dated October
26, 1977 is incorporated by
reference to Exhibit No. (1)(g) of
Amendment No. 11
C-2
<PAGE> 29
to Registrant's Registration
Statement on Form N-1A filed on
April 27, 1988.
(h) Amendment to Restated Certificate of
Limited Partnership dated April 24,
1992 is incorporated by reference to
Exhibit No. (1)(h) of Amendment No.
15 of Registrant's Registration
Statement on Form N-1A filed on
April 29, 1992.
(2) (a) Code of Regulations of Registrant is
incorporated herein by reference to
Exhibit No. 2 of Registrant's
Registration Statement on Form S-5,
filed on March 25, 1976.
(b) Amendment No. 1 to Registrant's Code
of Regulations adopted December 16,
1982 is incorporated by reference to
Exhibit 2(b) of Amendment No. 6 to
Registrant's Registration Statement
filed on April 29, 1983.
(3) Inapplicable.
(4) Specimen certificate for units of
partnership interest in Registrant is
incorporated herein by reference to Exhibit
No. (4)(a)(1) of Amendment No. 2 to
Registrant's Registration Statement on Form
S-5, filed on September 16, 1976.
(5) Advisory Agreement dated January 19, 1983
among Registrant, PNC Bank and PIMC, which
was approved by the partners of Registrant
on April 13, 1983 is incorporated herein by
reference to Exhibit No. 5 of
Post-Effective Amendment No. 12 to
Registrant's Registration Statement, filed
on April 28, 1989.
(6) Inapplicable.
(7) Chestnut Street Exchange Fund - Fund Office
Retirement Profit-Sharing Plan and Trust
Agreement as approved Fall of 1990 is
incorporated herein by reference to Exhibit
No. 7 of Post-Effective Amendment No. 49 to
Temporary Investment Fund, Inc.'s
Registration Statement (No. 2-47015)
C-3
<PAGE> 30
(TempFund Portfolio) filed on December 12,
1990.
(8) Amended and Restated Custodian Agreement
dated October 15, 1983, between Registrant
and Wilmington Trust Company, incorporated
herein by reference to Exhibit No. 8 of
Amendment No. 7 to Registrant's Statement
on Form N-1 filed on April 30, 1984.
(9) Inapplicable.
(10) Inapplicable.
(11) Inapplicable.
(12) Inapplicable.
(13) (a) Agreement dated September 15, 1976
between Registrant and The Sandridge
Corporation relating to Initial
Capitalization is incorporated
herein by reference to Exhibit No.
4(a)(2) of Amendment No. 2 to
Registrant's Registration Statement
on Form S-5, filed on September 16,
1976.
(b) Amendment No. 1 to Agreement dated
September 15, 1976 relating to
Initial Capitalization is
incorporated herein by reference to
Exhibit No. 4(a)(2) of
Post-Effective Amendment No. 1 to
Registrant's Registration Statement
on Form S-5, filed on October 28,
1976.
(14) Inapplicable.
(15) Inapplicable.
(16) Inapplicable.
(17) Financial Date Schedule of the Registrant
as Exhibit (27).
(18) Inapplicable.
Item 25. Persons Controlled by or under Common Control with
Registrant
Inapplicable.
C-4
<PAGE> 31
Item 26. Number of Holders of Securities
(1) (2)
Title of Number of Record Holders
Class as of March 31, 1995
Shares of partnership
interest (no par value) 358
Item 27. Indemnification
The answer to Item 19 of Amendment No. 2 to Registrant's
Registration Statement on Form N-8B-1 filed on September
16, 1976 is incorporated herein by reference.
Item 28. Business and Other Connections of Investment Adviser
PIMC performs investment advisory services for the
Registrant and certain other investment companies. PNC Bank
and its predecessors have been in the business of managing
the investments of fiduciary and other accounts in the
Philadelphia area since 1847. In addition to its trust
business, PNC Bank provides commercial banking services.
The information required by Item 28 with respect to each
director and officer of PIMC is incorporated by reference
to Form ADV and Schedule A and D filed with the SEC
pursuant to the Securities and Exchange Act of 1934 (File
No. 801-13304).
To the knowledge of Registrant, none of the directors or
officers of PNC Bank, except those set forth below, is
engaged in any business, profession, vocation or employment
of a substantial nature other than serving as a director or
officer of PNC Bank, respectively, except that certain
directors and officers and certain executives of PNC Bank
also hold various positions with, and engage in business
for, PNC Bank Corp. and various subsidiaries of PNC Bank
Corp., including PNC Bancorp, Inc., which owns all the
outstanding stock of PNC Bank. Set forth below are the
names and principal businesses of the directors and
officers of PNC Bank who are, or have been at any time
during the Registrant's last two fiscal years, engaged in
any business, profession, vocation or employment of a
substantial nature other than serving as a director or
officer of PNC Bank.
C-5
<PAGE> 32
PNC BANK, NATIONAL ASSOCIATION
DIRECTORS
<TABLE>
<CAPTION>
POSITION WITH OTHER BUSINESS TYPE OF
PNC BANK NAME CONNECTIONS BUSINESS
-------- ---- ----------- --------
<S> <C> <C> <C>
Director B.R. Brown President and C.E.O. of Coal
Consol, Inc.
Consol Plaza
Pittsburgh, PA 15241
Director Constance E. Clayton Chief, Div. of Community Health Care Medical
Medical College of Pennsylvania
3300 Hinley Avenue
Office 4338
Philadelphia, PA 19129
Director Eberhard Faber, IV Chairman and C.E.O. Manufacturing
E.F.L., Inc.
450 Hedge Road
P.O. Box 49
Bearcreek, PA 17822
Director Dr. Stuart Heydt President and C.E.O. Medical
Geisinger Foundation
100 N. Academy Avenue
Danville, PA 17822
Director Edward P. Junker, III Vice Chairman Banking
PNC Bank, N.A.
Ninth and State Streets
Erie, PA 16553
Director Thomas A. McConomy President, C.E.O. and Manufacturing
Chairman, Calgon Carbon
Corporation
P.O. Box 717
Pittsburgh, PA 15230-0717
Director Robert C. Milsom Retired
PNC Bank, National Association
One PNC Plaza, Suite 2310
Pittsburgh, PA 15265
Director Thomas H. O'Brien Chairman Banking
PNC Bank, National Association
One PNC Plaza, 30th Floor
Pittsburgh, PA 15265
Director Dr. J. Dennis O'Connor Chancellor, University Education
of Pittsburgh
107 Cathedral of Learning
Pittsburgh, PA 15260
Director Rocco A. Ortenzio Chairman and C.E.O. Medical
Continental Medical
Systems, Inc.
P.O. Box 715
Mechanicsburg, PA 17055
</TABLE>
C-6
<PAGE> 33
<TABLE>
<CAPTION>
POSITION WITH OTHER BUSINESS TYPE OF
PNC BANK NAME CONNECTIONS BUSINESS
-------- ---- ----------- --------
<S> <C> <C> <C>
Director Jane G. Pepper President Horticulture
Pennsylvania Horticultural
Society
325 Walnut Street
Philadelphia, PA 19106
Director Robert C. Robb, Jr. Partner, Lewis, Eckert, Financial and
Robb & Company Management
425 One Plymouth Meeting Consultants
Plymouth Meeting, PA 19462
Director James E. Rohr President and C.E.O. Bank Holding
PNC Bank, National Association Company
One PNC Plaza, 30th Floor
Pittsburgh, PA 15265
Director Daniel M. Rooney President, Pittsburgh Steelers Football
Football Club of the National Football
League
300 Stadium Circle
Pittsburgh, PA 15212
Director Seth E. Schofield Chairman, President and C.E.O. Airline
USAir Group, Inc. and
USAir, Inc.
2345 Crystal Drive
Arlington, VA 22227
Director Robert M. Valentini President and C.E.O. Communications
Bell Atlantic - Pennsylvania,
Inc.
One Parkway, 18th Floor
Philadelphia, PA 19102
</TABLE>
C-7
<PAGE> 34
PNC BANK, NATIONAL ASSOCIATION
OFFICERS
<TABLE>
<CAPTION>
POSITION
WITH
NAME PNC BANK OTHER BUSINESS CONNECTIONS
---- -------- --------------------------
<S> <C> <C>
John W. Atkinson Executive Vice President None
Richard C. Caldwell Executive Vice President Director, D.R. Corp.
Investment Officer, J.L. Caldwell Company
Council Member, Pennsylvania
Horticultural Society
Director, PFPC
Executive Vice President, Investment
Management and Trust, PNC Bank Corp.
J. Richard Carnall Executive Vice President Director, Franklin Institute (The)
Director, Hayden Bolts, Inc.
Director, Parkway Real Estate Company
Director, PNC Trust Company of New York
Director, Provident Capital Management,
Inc.
Chairman and Director, PFPC
Chairman and Director, PIMC
Frederick C. Frank, III Executive Vice President Director, PNC National Bank
Director, PNC National Bank of New Jersey
</TABLE>
C-8
<PAGE> 35
<TABLE>
<CAPTION>
POSITION
WITH
NAME PNC BANK OTHER BUSINESS CONNECTIONS
---- -------- --------------------------
<S> <C> <C>
William J. Friel Executive Vice President Director, Cedarbrook Country Club
Advisory Board Member, Chicago Title & Abstract
Director, National Adoption Agency
G. Robert Hoffman Executive Vice President Director, J.W. Pepper & Sons, Inc.
Director, Land Holding Corp. of PA
Chairman, President and Director,
Provident Realty Management, Inc.
Chairman, President and Director,
Provident Realty, Inc.
Joe R. Irwin Executive Vice President Member of the Executive Committee and
Director Blue Cross of Western Pennsylvania
Director Civil Light Opera
(Non-Profit Enterprise)
Chairman of the Board Dinamo
(Non-Profit Enterprise)
Treasurer and Director
Girls' Hope
(Non-Profit Organization)
Member of the Executive Committee and Director
Greater Pittsburgh Chamber of Commerce
Member of the Governing Council
Pennsylvania Bankers Association
Chairman
Pennsylvania Economy League, Inc.
Chairman, Annual Sustaining
fund Campaign Pittsburgh Opera
</TABLE>
C-9
<PAGE> 36
<TABLE>
<CAPTION>
POSITION
WITH
NAME PNC BANK OTHER BUSINESS CONNECTIONS
---- -------- --------------------------
<S> <C> <C>
Executive Vice President and Chief
Investment Officer
PNC Bank Corp.
Chairman, Chief Executive Officer and Director
PNC Funding Corp.
Chairman and Director
PNC International Bank
Chairman and Director
PNC International Bank (New York)
Chairman and Director
PNC International Investment Corporation
Director
PNC Mortgage Bank, N.A.
Director
PNC Mortgage Corp. of America
Director
Ruffed Grouse Society, The
(Non-Profit Enterprise)
Edward P. Junker, III Vice Chairman Vice Chairman, PNC Bank Corp.
and Director
Director, PNC Mortgage Bank, N.A.
Director, PNC Mortgage Corp. of America
Louis J. Myers President and CEO, PNC None
Bank, Northeast, PA
Thomas H. O'Brien Chairman and Director Director, Allegheny Club
(Non-Profit Corporation)
Chairman and Director,
Allegheny Conference on Community
Development
(Non-Profit Organization)
Director, Alpine Indemnity Limited
Director, Bell Atlantic Corporation
Trustee, Carnegie (The)
</TABLE>
C-10
<PAGE> 37
<TABLE>
<CAPTION>
POSITION
WITH
NAME PNC BANK OTHER BUSINESS CONNECTIONS
---- -------- --------------------------
<S> <C> <C>
Director, Central Bancorporation, Inc. (The)
Director, Children's Hospital
(Non-Profit Corporation)
Director, Governor Casey's Pennsylvania
Economic Development Partnership
Director, Hilb, Rogal and Hamilton Co.
Chairman - Board of Visitors, Katz
Graduate School of Business
Director, Laurel Valley Golf Club
Director, Pittsburgh Baseball, Inc.
Co-Chairman of the Board of Directors,
Pittsburgh Opera (The)
President, PNC Bancorp, Inc.
Chairman, CEO & Director, PNC Bank Corp.
Director, PNC Investment Corp.
Chairman and Director, PNC Trust Company
of Florida, N.A.
Director, United Way of S.W. PA
(Non-Profit Organization)
Trustee, University of Pittsburgh
Charles C. Pearson, Jr. President and CEO, PNC Director and Chairman, Chamber of
Bank, Central, PA Business and Industry of Centre County
Partner, Charrob Investments
Trustee, Juniata College
Partner, LPNS c/o Cir Realty
Director, Second Mile
Director, Uni-Marts, Inc.
</TABLE>
C-11
<PAGE> 38
<TABLE>
<CAPTION>
POSITION
WITH
NAME PNC BANK OTHER BUSINESS CONNECTIONS
---- -------- --------------------------
<S> <C> <C>
Partner, University Drive Associates
John V. Petrycki President and CEO, PNC Director, Allied Arts Fund, Inc. (of
Bank, Southcentral, PA Harrisburg)
Director, Capital Region Economic
Development Corporation
Director, Channels
Director, Keystone Sports Foundation
Director, West Short YMCA
Edward V. Randall, Jr. President and CEO, PNC Board of Trustees, Carlow College
Bank, Pittsburgh
Board Member, Cities in Schools
Board of Trustees, Landmarks Financial
Corporation
Board of Trustees, Landmarks Real Estate
Corporation
Board Member, Pittsburgh Downtown
Partnership
Board Member, Pittsburgh History &
Landmarks Foundation
Director Emeritus, Pittsburgh Partnership
for Neighborhood Development
Member, Advisory Committee Transportation
& Technology Museum
Member, Board of Visitors University of
Pittsburgh School of Social Work
(Non-Profit Organization)
James E. Rohr President, CEO and Director, Allegheny Ludlum Corporation
Director
Director, Alpine Indemnity Limited
</TABLE>
C-12
<PAGE> 39
<TABLE>
<CAPTION>
POSITION
WITH
NAME PNC BANK OTHER BUSINESS CONNECTIONS
---- -------- --------------------------
<S> <C> <C>
Committee Member, American Bankers
Association Commercial Lending Div. Exec.
Com.
Director, American Cancer Society
Director, Boy Scouts of America
Business Advisory Council, Graduate
School of Industrial Adm. Carnegie Mellon
University
Trustee, Penn's Southwest Association
President and Director, Pittsburgh
National Bank Foundation
Chairman and Director, PNB Holdings, Inc.
President and Director, PNC Bank Corp.
Director, PNC International Bank (New
York)
Chairman, President, CEO and Director,
PNC Mortgage Bank, N.A.
Director, PNC Mortgage Corp. of America
Director, River City Brass Bank (Non-
Profit Corporation)
Chairman - Advisory Board, Salvation Army
(Non-Profit Organization)
Director, Shady Side Health, Education
and Research Center
Director, St. Vincent College
A. William Schenck, III Vice Chairman Board of Directors, Allegheny General
Hospital (Non-Profit Organization)
Director, Consumer Bankers Association
Board of Directors, Forward Products,
Inc.
</TABLE>
C-13
<PAGE> 40
<TABLE>
<CAPTION>
POSITION
WITH
NAME PNC BANK OTHER BUSINESS CONNECTIONS
---- -------- --------------------------
<S> <C> <C>
Board of Directors, Health & Welfare
Planning Association (Non-Profit
Organization)
Chairman, Leadership Pittsburgh Steering
Committee
Director, Massachusetts Company (The)
Board of Directors, Metropolitan
Pittsburgh Public Broadcasting, Inc.
(Non-Profit Organization)
Joint Ownership with wife Mikell Schenck,
Mikell Schenck Associates
1989 PBA Convention Committee Member,
Pennsylvania Bankers Association Group 8
(Non-Profit Organization)
Chairman and Director, Pinaco, Inc.
Board of Trustees, Pittsburgh Ballet
Theater (Non-Profit Organization)
Regional Advisory Council Member,
Pittsburgh Cancer Institute (Non-Profit
Organization)
Board of Trustees, Pittsburgh Center for
the Arts (Non-Profit Organization)
Vice President and Director, Pittsburgh
National Bank Foundation
Chairman and Director, Pittsburgh
National Life Insurance Co.
Director, Pittsburgh Theological Seminary
Committee Member, Pittsburgh Trust for
Cultural Resources (Non-Profit
Organization)
Executive Vice President - PNC Retail
Banking, PNC Bank Corp.
Director, PNC Mortgage Bank, N.A.
</TABLE>
C-14
<PAGE> 41
<TABLE>
<CAPTION>
POSITION
WITH
NAME PNC BANK OTHER BUSINESS CONNECTIONS
---- -------- --------------------------
<S> <C> <C>
Director, PNC Mortgage Corp. of America
Board of Trustee, Three Rivers
Shakespeare Festival (Non-Profit
Organization)
Board of Directors, Urban League of
Pittsburgh, Inc. (Non-Profit
Organization)
Director, Visa U.S.A., Inc.
Director, Wiser Oil Company
Board of Trustees, YMCA of Pittsburgh
(Non-Profit Organization)
Richard L. Smoot President and CEO of PNC Trustee, Agnes Irwin School
Bank, Philadelphia
Board of Council, Episcopal Community
Services
Director, Greater Philadelphia Chamber of
Commerce
Director, Greater Philadelphia First
Corporation (The)
Director, Greater Philadelphia Urban
Affairs Coalition (The)
Director, Pennsylvania Ballet
Director, Philadelphia Orchestra (The)
Chairman and Director, PNC Credit Corp.
Chairman, CEO and Director, PNC National
Bank
Chairman, President and Director, PNC
National Bank of New Jersey
Director, PNC Service Corp.
Director, PNC Trust Company of New York
Director, Police Athletic League of
Philadelphia
Director, PFPC
</TABLE>
C-15
<PAGE> 42
<TABLE>
<CAPTION>
POSITION
WITH
NAME PNC BANK OTHER BUSINESS CONNECTIONS
---- -------- --------------------------
<S> <C> <C>
Director, PIMC
Director, Settlement Music School
Director, St. John's College
Director, United Negro College Fund
Director, Widener University
Director, World Affairs Council of
Philadelphia
Herbert G. Summerfield, Jr. Executive Vice President Director, CBM-Old York Associates, Inc.
Director, CBM-Walnut Hill, Inc.
Director, Pennsylvania Mountain, Inc.
Executive Vice President - PNC Real
Estate, PNC Bank Corp.
Chairman and Director, PNC Realty Holding
Corp.
Director, PNC Realty Holding Corp. of
Georgia
Director, PNC Realty Holding Corp. of
Florida
Director, PNC Realty Holding Corp. of
Kentucky
Director, PNC Realty Holding Corp. of
Mississippi
Director, PNC Realty Holding Corp. of New
Jersey
Director, PNC Realty Holding Corp. of
Ohio
Director, PNC Realty Holding Corp. of
Pennsylvania
Director, PNC Realty Holding Corp. of
Texas
Director, PNC Realty Mortgage Company
Director, Regional Industrial Development
Corp. of Southwestern, PA
</TABLE>
C-16
<PAGE> 43
<TABLE>
<CAPTION>
POSITION
WITH
NAME PNC BANK OTHER BUSINESS CONNECTIONS
---- -------- --------------------------
<S> <C> <C>
Director, Special Asset Holdings of
Michigan, Inc.
Malcolm C. Wilson Executive Vice President Board of Trustees, People's Light &
Theatre Company
Senior Vice President and Director, PNC
National Bank of New Jersey
</TABLE>
Item 29. Principal Underwriters
Inapplicable.
Item 30. Location of Accounts and Records
Books or other documents required to be maintained by Section
31(a) of the Investment Company Act of 1940 and the Rules (17 CFR 270.31a-1 to
31a-3) promulgated thereunder, are maintained by PIMC at 400 Bellevue Parkway,
Suite 100, Wilmington, Delaware 19809 except for the Certificate and Agreement
of Limited Partnership and Code of Regulations which are maintained by the
Secretary of the Registrant at Philadelphia National Bank Building, 1345
Chestnut Street, Philadelphia, Pennsylvania 19107-3496.
Item 31. Management Services
None.
C-17
<PAGE> 44
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the following with respect to
Amendment No. 18 to the Registration Statement (No. 811-2631) on Form N-1A
under the Investment Company Act of 1940, as amended, of Chestnut Street
Exchange Fund:
1. The incorporation by reference of our report dated February
15, 1995 accompanying the financial statements of Chestnut
Street Exchange Fund.
2. The reference to our Firm under the heading "Investment
Advisory and Other Services."
/s/ Coopers & Lybrand L.L.P.
----------------------------
COOPERS & LYBRAND L.L.P.
2400 Eleven Penn Center
Philadelphia, PA 19103
April 27, 1995
C-18
<PAGE> 45
SIGNATURE
Pursuant to the requirements of the Investment Company Act
of 1940, the Registrant has duly caused this Amendment No. 18 to its
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Philadelphia, and State of Pennsylvania, on the
27th day of April, 1995.
CHESTNUT STREET EXCHANGE FUND
By /s/ Edward J. Roach
-------------------
Edward J. Roach
Treasurer
C-19
<PAGE> 46
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit Number Description
- ------- ------ -----------
<S> <C> <C>
(27) Financial Data Schedule for the Registrant.
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000019780
<NAME> EX 27 CHESTNUT STREET EXCHANGE
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-END> DEC-31-1994
<INVESTMENTS-AT-COST> 58357389
<INVESTMENTS-AT-VALUE> 196313820
<RECEIVABLES> 517308
<ASSETS-OTHER> 205343
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 197036471
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 5688445
<TOTAL-LIABILITIES> 5688445
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 45807684
<SHARES-COMMON-STOCK> 1324862
<SHARES-COMMON-PRIOR> 1377897
<ACCUMULATED-NII-CURRENT> 5144
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 7578767
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 137956431
<NET-ASSETS> 191348026
<DIVIDEND-INCOME> 4774668
<INTEREST-INCOME> 382727
<OTHER-INCOME> 0
<EXPENSES-NET> 1055782
<NET-INVESTMENT-INCOME> 4101613
<REALIZED-GAINS-CURRENT> 17462853
<APPREC-INCREASE-CURRENT> (11850330)
<NET-CHANGE-FROM-OPS> 9714136
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 4098493
<DISTRIBUTIONS-OF-GAINS> 3484592
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 0
<NUMBER-OF-SHARES-REDEEMED> 7795029
<SHARES-REINVESTED> 264119
<NET-CHANGE-IN-ASSETS> (5399859)
<ACCUMULATED-NII-PRIOR> 2024
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 878636
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 1055782
<AVERAGE-NET-ASSETS> 194659231
<PER-SHARE-NAV-BEGIN> 142.79
<PER-SHARE-NII> 3.07
<PER-SHARE-GAIN-APPREC> 4.27
<PER-SHARE-DIVIDEND> 3.07
<PER-SHARE-DISTRIBUTIONS> 2.63
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 144.43
<EXPENSE-RATIO> .54
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
