<PAGE>
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SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934
(AMENDMENT NO. )
Filed by the Registrant /x/
Filed by a Party other than the Registrant / /
Check the appropriate box:
/x/ Preliminary Proxy Statement
/ / Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
/ / Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
LIQUID INSTITUTIONAL RESERVES
PAINEWEBBER CASHFUND, INC.
PAINEWEBBER MANAGED MUNICIPAL TRUST
PAINEWEBBER RMA MONEY FUND, INC.
PAINEWEBBER RMA TAX-FREE FUND, INC.
PAINEWEBBER/KIDDER, PEABODY MUNICIPAL MONEY MARKET SERIES
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(Name of Registrant as Specified in its Charter)
[INSERT NAME OF FILER WHEN APPLICABLE]
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/x/ $125 per Exchange Act Rule 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2) or Item
22(a)(2) of Schedule 14A.
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed pursuant to
Exchange Act
Rule 0-11 (Set forth the amount on which the filing fee is calculated and
state how it was determined):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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<PAGE>
PAINEWEBBER FUNDS
1285 Avenue of the Americas
New York, New York 10019
February , 1996
Dear Shareholder:
Enclosed is a proxy statement asking you to vote in favor of several
proposals relating to the management and operation of your Fund.
As I wrote to you in my letter of January 22, after we acquired the Kidder,
Peabody mutual funds last February, our enlarged menu of funds was
confusing--too many had overlapping objectives or were too narrowly focused. We
consolidated 33 long-term, open-end funds into 21 by focusing on those types of
funds most investors want. This consolidation allowed us to lower expense ratios
(in most cases) and to clarify fund names. These votes are the final phase of
that fund consolidation.
Special meetings of your Fund and of other Funds within the PaineWebber
fund complex are being held on April 10, 1996 to consider these proposals and to
transact any other business that may properly come before the meetings. In the
past, when we have solicited proxies for your Fund, we usually have enclosed a
proxy statement directed solely to the shareholders of your Fund. This time,
however, shareholders of several Funds are being asked to approve many of the
same proposals, so most of the information that must be included in a proxy
statement for your Fund needs to be included in a proxy statement for the other
Funds as well. Therefore, in order to save money, one proxy statement has been
prepared for the Funds. This proxy statement contains detailed information about
each of the proposals relating to your Fund, and we recommend that you read it
carefully. However, we have also attached some Questions and Answers that we
hope will assist you in evaluating the proposals that apply to all of the Funds.
We have retained an outside firm that specializes in proxy solicitation to
assist us with any necessary follow-up. If we have not received your vote as the
meeting date approaches, you may receive a telephone call from Shareholder
Communications Corporation to ask for your vote. We hope that their telephone
call does not inconvenience you.
Thank you for your attention to this matter and for your continuing
investment in the Funds.
Very truly yours,
Margo N. Alexander
President
PROXY CARDS FOR EACH OF YOUR FUNDS ARE ENCLOSED ALONG WITH THE PROXY STATEMENT.
PLEASE VOTE YOUR SHARES TODAY BY SIGNING AND RETURNING EACH ENCLOSED PROXY CARD
IN THE POSTAGE PREPAID ENVELOPE PROVIDED. THE BOARD OF YOUR FUND RECOMMENDS THAT
YOU VOTE 'FOR' EACH PROPOSAL.
<PAGE>
QUESTIONS AND ANSWERS
<TABLE>
<S> <C>
Q: WHAT IS THE PURPOSE OF THIS PROXY SOLICITATION?
A: The purpose of this proxy is to ask you to vote on several issues.
Shareholders of each of the Funds listed in the proxy statement are
being asked to vote on two primary issues: to elect eleven Board
members and to approve changes to their Fund's fundamental investment
restrictions. All shareholders also are being asked to ratify the
selection of their Fund's independent auditors.
In addition, shareholders of several Funds are being asked to vote on
proposals that relate only to their Funds. These include proposals to
amend the charters of PaineWebber Cashfund, Inc., PaineWebber RMA
Tax-Free Fund, Inc., PaineWebber RMA Money Fund, Inc. and
PaineWebber/Kidder, Peabody Municipal Money Market Series; a proposal
to amend the bylaws of PaineWebber Cashfund, Inc., and a proposal to
approve a new sub-advisory agreement for Liquid Institutional
Reserves. Only shareholders of those Funds will vote on those
proposals.
Q: WHY AM I RECEIVING PROXY INFORMATION ON FUNDS THAT I DO NOT OWN?
A: In the past, when we have solicited proxies for your Fund, we have
usually enclosed a proxy statement directed solely to the shareholders
of one Fund. This time, however, shareholders of several Funds are
being asked to approve many of the same proposals, so most of the
information that must be included in a proxy statement for your Fund
needs to be included in a proxy statement for the other Funds as well.
Therefore, in order to save money, one proxy statement has been prepared
for all the Funds.
Q: WHY ARE YOU RECOMMENDING A UNIFIED BOARD FOR THE FUNDS?
A: A Corporate Governance Task Force, comprised of a number of the Funds'
existing Board members, assisted by Mitchell Hutchins representatives,
recommended to the Fund Boards, and they agreed, that PaineWebber
funds should be governed by larger Boards composed of the same
members. The Task Force concluded that this 'unified' Board structure
benefits the Funds by creating a diverse, experienced group of Board
members who understand the operations of the PaineWebber funds and are
exposed to the wide variety of issues that arise from overseeing
different types of funds.
Q: WHY HAS THE BOARD BEEN EXPANDED TO ELEVEN MEMBERS?
A: At the recommendation of the Corporate Governance Task Force, each
Fund's Board has been expanded to include eleven members, eight of
whom would be independent. The Task Force considered issues relating
to the management and long-term welfare of the Funds. It recommended,
and the Boards agreed to adopt, an expanded Board as part of an
overall plan to coordinate and enhance the efficiency of the
governance of the Funds. Expanding the size of the Boards is intended
to facilitate the increased use of Board committees for different
purposes, including the periodic review of the Funds' contractual and
audit arrangements. The Fund Boards approved the Task Force
recommendations and nominated eleven individuals drawn primarily from
the existing Boards.
Q: WILL THE PROPOSED CHANGES RESULT IN HIGHER ADVISORY FEES?
A: No. The advisory and administrative fees charged to each Fund will
remain the same. However, shareholders of Liquid Institutional
Reserves are being asked to approve an increasure in the sub-advisory
fees paid by PaineWebber (not the Funds) to Mitchell Hutchins.
Q: WHAT ARE 'FUNDAMENTAL' INVESTMENT RESTRICTIONS, AND WHY ARE THEY BEING
CHANGED?
A: A Fund's 'fundamental' investment restrictions are limitations placed
on a Fund's investment policies that can be changed only by a
shareholder vote--even if the changes are minor. The law requires
certain investment policies to be designated as fundamental. Each Fund
adopted a number of fundamental investment restrictions when the Fund
was created, and many of those fundamental restrictions reflect
regulatory, business or industry conditions, practices or requirements
that are no longer in effect. Others reflect regulatory requirements
that, while still in effect, do not need to be classified as
fundamental restrictions.
</TABLE>
<PAGE>
<TABLE>
<S> <C>
The Funds' Boards believe that fundamental investment restrictions
that are not legally required should be eliminated and that the
remaining fundamental restrictions should be modernized and made more
uniform. The Boards believe that the proposed changes to the Funds'
fundamental investment restrictions will provide greater flexibility.
The proposed changes also will eliminate minor differences in wording
that may give rise to unintended differences in effect or
interpretation.
Q: DO THE PROPOSED CHANGES TO FUNDAMENTAL INVESTMENT RESTRICTIONS MEAN
THAT MY FUND'S INVESTMENT OBJECTIVE IS BEING CHANGED?
A: No. None of the proposals would change the investment objective of any
Fund.
Q: WHAT WILL BE THE EFFECT OF THE PROPOSED CHANGES TO MY FUND'S
FUNDAMENTAL RESTRICTIONS?
A: The Boards do not believe that the proposed changes to fundamental
investment restrictions will result at this time in a material change
in the level of investment risk for any Fund. However, the changes
will allow each Fund greater flexibility to respond to future
investment opportunities by making changes in non-fundamental
investment policies that, at a future time, its Board considers
desirable. A shareholder vote will not be necessary for future changes
to non-fundamental investment policies or restrictions.
Q: WHY ARE SHAREHOLDERS BEING ASKED TO RATIFY THE SELECTION OF THEIR
FUND'S INDEPENDENT AUDITORS?
A: The law requires that shareholders be asked to ratify the selection of
their Fund's independent auditors at the meetings at which Board
members are elected. The Funds do not hold regular annual meetings
and, therefore, are asking for your ratification at this time. Each
year, a Fund's independent auditors audit the Fund's financial
statements and prepare the Fund's federal and state income tax
returns.
Q: WHAT ARE MY BOARD'S RECOMMENDATIONS?
A: The Board of each Fund has recommended that you vote 'FOR' the
nominees for Board member and 'FOR' each Proposal that applies to your
Fund.
</TABLE>
THE ATTACHED PROXY STATEMENT CONTAINS MORE DETAILED INFORMATION ABOUT EACH OF
THE PROPOSALS RELATING TO YOUR FUND. PLEASE READ IT CAREFULLY.
2
<PAGE>
LIQUID INSTITUTIONAL RESERVES
PAINEWEBBER CASHFUND, INC.
PAINEWEBBER MANAGED MUNICIPAL TRUST
PAINEWEBBER RMA MONEY FUND, INC.
PAINEWEBBER RMA TAX-FREE FUND, INC.
PAINEWEBBER/KIDDER, PEABODY MUNICIPAL MONEY MARKET SERIES
------------------------
NOTICE OF SPECIAL MEETINGS OF SHAREHOLDERS
TO BE HELD ON APRIL 10, 1996
------------------------
TO THE SHAREHOLDERS:
Special meetings of the holders of shares of beneficial interest or common
stock of each of the above-listed investment companies ('Companies') will be
held at 1285 Avenue of the Americas, 38th Floor, New York, New York, on April
10, 1996, at 11:00 a.m., Eastern time, for the purpose of considering the
following proposals with respect to the Companies or with respect to one or more
of their respective series or portfolios ('Funds'):
(1) For each Company, to elect eleven members of its Board of Trustees or
Directors to serve indefinite terms until their successors are duly elected and
qualified;
(2) For each Fund, to ratify the selection of independent auditors for its
current fiscal year;
(3) For each Fund, to approve certain changes to its fundamental investment
restrictions;
(4)(a) For PaineWebber Cashfund, Inc., PaineWebber RMA Tax-Free Fund, Inc.
and PaineWebber RMA Money Fund, Inc., to approve certain amendments to, and a
restatement of, its Articles of Incorporation;
(b) For PaineWebber/Kidder, Peabody Municipal Money Market Series, to
approve certain amendments to, and a restatement of, its Declaration of Trust;
(5) For PaineWebber Cashfund, Inc., to approve certain changes to its
bylaws;
(6) For Liquid Institutional Reserves, to approve a new sub-advisory
agreement between its investment adviser and its investment sub-adviser; and
(7) For each Fund, to transact such other business as may properly come
before the meetings and any adjournments thereof.
You are entitled to vote at the meetings, and at any adjournments thereof,
of each Company in which you owned shares at the close of business on February
9, 1996. If you attend the meetings, you may vote your shares in person. IF YOU
DO NOT EXPECT TO ATTEND THE MEETINGS, PLEASE COMPLETE, DATE, SIGN AND RETURN
EACH ENCLOSED PROXY CARD IN THE ENCLOSED POSTAGE PAID ENVELOPE.
By order of the Boards,
Dianne E. O'Donnell
February , 1996 Secretary
1285 Avenue of the Americas
New York, New York 10019
YOUR VOTE IS IMPORTANT
NO MATTER HOW MANY SHARES YOU OWN
ENCLOSED YOU WILL FIND ONE OR MORE PROXY CARDS RELATING TO EACH OF THE FUNDS
FOR WHICH YOU ARE ENTITLED TO VOTE. PLEASE INDICATE YOUR VOTING INSTRUCTIONS ON
EACH OF THE ENCLOSED PROXY CARDS, DATE AND SIGN THEM, AND RETURN THEM IN THE
ENVELOPE PROVIDED. IF YOU SIGN, DATE AND RETURN A PROXY CARD BUT GIVE NO VOTING
INSTRUCTIONS, YOUR SHARES WILL BE VOTED 'FOR' THE NOMINEES FOR TRUSTEE OR
DIRECTOR NAMED IN THE ATTACHED PROXY STATEMENT AND 'FOR' ALL OTHER PROPOSALS
INDICATED ON THE CARDS. IN ORDER TO AVOID THE ADDITIONAL EXPENSE TO THE FUNDS OF
FURTHER SOLICITATION, WE ASK YOUR COOPERATION IN MAILING IN YOUR PROXY CARDS
PROMPTLY. UNLESS PROXY CARDS ARE SIGNED BY THE APPROPRIATE PERSONS AS INDICATED
IN THE INSTRUCTIONS BELOW, THEY WILL NOT BE VOTED.
<PAGE>
INSTRUCTIONS FOR SIGNING PROXY CARDS
The following general rules for signing proxy cards may be of assistance to
you and avoid the time and expense to the Fund involved in validating your vote
if you fail to sign your proxy card properly.
1. Individual Accounts: Sign your name exactly as it appears in the
registration on the proxy card.
2. Joint Accounts: Either party may sign, but the name of the party signing
should conform exactly to the name shown in the registration on the proxy card.
3. All Other Accounts: The capacity of the individual signing the proxy
card should be indicated unless it is reflected in the form of registration. For
example:
<TABLE>
<CAPTION>
REGISTRATION VALID SIGNATURE
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<S> <C>
Corporate Accounts
(1) ABC Corp..................... ABC Corp.
John Doe, Treasurer
(2) ABC Corp..................... John Doe, Treasurer
(3) ABC Corp. c/o John Doe,
Treasurer...................... John Doe
(4) ABC Corp. Profit Sharing
Plan........................... John Doe, Trustee
Partnership Accounts
(1) The XYZ Partnership.......... Jane B. Smith, Partner
(2) Smith and Jones, Limited
Partnership.................... Jane B. Smith, General Partner
Trust Accounts
(1) ABC Trust Account............ Jane B. Doe, Trustee
(2) Jane B. Doe, Trustee u/t/d
12/28/78....................... Jane B. Doe
Custodial or Estate Accounts
(1) John B. Smith, Cust. f/b/o
John B. Smith, Jr. UGMA/UTMA... John B. Smith
(2) Estate of John B. Smith...... John B. Smith, Jr., Executor
</TABLE>
<PAGE>
LIQUID INSTITUTIONAL RESERVES
PAINEWEBBER CASHFUND, INC.
PAINEWEBBER MANAGED MUNICIPAL TRUST
PAINEWEBBER RMA MONEY FUND, INC.
PAINEWEBBER RMA TAX-FREE FUND, INC.
PAINEWEBBER/KIDDER, PEABODY MUNICIPAL MONEY MARKET SERIES
1285 Avenue of the Americas
New York, New York 10019
------------------------
PROXY STATEMENT
SPECIAL MEETINGS OF SHAREHOLDERS TO BE HELD ON APRIL 10, 1996
------------------------
This proxy statement is being furnished to holders of Shares of each of the
above-listed investment companies ('Companies') in connection with the
solicitation by their respective Boards of proxies to be used at special
meetings ('Meetings') of Shareholders to be held on April 10, 1996, at 11:00
a.m., Eastern time, or any adjournment or adjournments thereof. This proxy
statement is being first mailed to Shareholders on or about February , 1996.
Each Company (other than PaineWebber Cashfund, Inc. and PaineWebber RMA
Tax-Free Fund, Inc.) is composed of one or more separate series or portfolios,
each of which is referred to herein as a 'Fund.' When the context makes it
appropriate, each Company that does not have separate series or portfolios is
also referred to herein as a 'Fund.' Each Company is a registered, management
investment company under the Investment Company Act of 1940, as amended (the
'1940 Act') and is organized either as a Massachusetts business trust or as a
Maryland corporation as described on Exhibit A. The terminology used by the
Companies varies, but for simplicity and clarity each Company's shares of
beneficial interest or common stock are referred to as 'Shares' and the holders
of the Shares are 'Shareholders'; each Company's board of trustees or directors
is referred to as a 'Board' and the trustees and directors are 'Board Members';
and each Company's declaration of trust or articles of incorporation is referred
to as its 'Charter.' A listing of the formal name for each Fund, and of the
shorthand name for each Company and Fund that is used in this proxy statement,
is set forth below. The names of Funds that are series or portfolios of a
Company are indented under the name of the relevant Company.
<TABLE>
<CAPTION>
NAME PROPOSALS
AS USED IN THIS PROXY APPLICABLE TO
COMPANY/FUND NAME STATEMENT COMPANY OR FUND
- --------------------------------------------------------- ------------------------------- -------------------
<S> <C> <C>
LIQUID INSTITUTIONAL RESERVES............................ LIR
Government Securities Fund............................. LIR-Government Securities Fund 1, 2, 3 and 6
Money Market Fund...................................... LIR-Money Market Fund 1, 2, 3 and 6
Treasury Securities Fund............................... LIR-Treasury Securities Fund 1, 2, 3 and 6
PAINEWEBBER CASHFUND, INC. .............................. Cashfund 1, 2, 3, 4.a and 5
PAINEWEBBER MANAGED MUNICIPAL TRUST...................... Managed Municipal Trust
PaineWebber RMA California Fund........................ RMA California 1, 2 and 3
PaineWebber RMA New York Fund.......................... RMA New York 1, 2 and 3
PAINEWEBBER RMA MONEY FUND, INC. ........................ RMA Money Fund
PaineWebber Retirement Money Fund...................... Retirement Money Fund 1, 2, 3 and 4.a
PaineWebber RMA Money Market Portfolio................. RMA Money Market Portfolio 1, 2, 3 and 4.a
PaineWebber RMA U.S. Government Portfolio.............. RMA Government Portfolio 1, 2, 3 and 4.a
PAINEWEBBER RMA TAX-FREE FUND, INC....................... RMA Tax-Free Fund 1, 2, 3 and 4.a
PAINEWEBBER/KIDDER, PEABODY MUNICIPAL MONEY MARKET
SERIES................................................. Municipal Money Series
PaineWebber RMA Connecticut Municipal Money Fund....... RMA Connecticut Fund 1, 2, 3 and 4.b
PaineWebber RMA New Jersey Municipal Money Fund........ RMA New Jersey Fund 1, 2, 3 and 4.b
</TABLE>
<PAGE>
PaineWebber Incorporated ('PaineWebber') is the investment adviser and
administrator for each Fund and Mitchell Hutchins Asset Management Inc.
('Mitchell Hutchins') is the investment sub-adviser and sub-administrator.
Mitchell Hutchins is a wholly owned subsidiary of PaineWebber, which, in turn,
is a wholly owned subsidiary of Paine Webber Group Inc. ('PW Group'), a publicly
held financial services holding company. PaineWebber also is the principal
distributor of each Fund's Shares. The principal business address of each of
Mitchell Hutchins, PaineWebber and PW Group is 1285 Avenue of the Americas, New
York, New York 10019.
VOTING INFORMATION
For each Company other than LIR and Municipal Money Series, the presence,
in person or by proxy, of a majority of the Shares of the Company outstanding
and entitled to vote will constitute a quorum for the transaction of business at
the Meetings. For LIR and Municipal Money Series, the presence of 30% of the
Shares outstanding constitutes a quorum.
In the event that a quorum is not present at a Meeting, or if a quorum is
present at that Meeting but sufficient votes to approve any of the proposals are
not received, the persons named as proxies may propose one or more adjournments
of the Meeting to permit further solicitation of proxies. Any adjournment will
require the affirmative vote of a majority of those Shares represented at the
Meeting in person or by proxy. The persons named as proxies will vote those
proxies which they are entitled to vote FOR any proposal in favor of the
adjournment and will vote those proxies required to be voted AGAINST any
proposal against the adjournment. A Shareholder vote may be taken on one or more
of the proposals in this proxy statement prior to any such adjournment if
sufficient votes have been received and it is otherwise appropriate.
The solicitation of proxies, the cost of which will be borne by the Funds
(and by the other funds within the PaineWebber fund complex that currently are
soliciting proxies on substantially the same matters), will be made primarily by
mail but also may include telephone or oral communications by regular employees
of Mitchell Hutchins or PaineWebber, who will not receive any compensation
therefor from the participating funds, or by Shareholder Communications
Corporation, professional proxy solicitors retained by the participating funds,
who will be paid aggregate fees and expenses of approximately $ for
soliciting services.
Broker non-votes are Shares held in street name for which the broker
indicates that instructions have not been received from the beneficial owners or
other persons entitled to vote and the broker does not have discretionary voting
authority. Abstentions and broker non-votes will be counted as Shares present
for purposes of determining whether a quorum is present but will not be voted
for or against any adjournment or proposal. Accordingly, abstentions and broker
non-votes will have no effect on Proposals 1 and 2, for which the required vote
is a plurality or majority of the votes cast, but effectively will be a vote
against adjournment and against Proposals 3 through 6, for which the required
vote is a percentage of the Shares present or outstanding.
The individuals named as proxies on the enclosed proxy cards will vote in
accordance with your direction as indicated thereon, if your proxy card is
received properly executed by you or by your duly appointed agent or
attorney-in-fact. If you give no voting instructions, your Shares will be voted
FOR the nominees named herein for the Board of the Company to which the proxy
card relates and FOR the remaining proposals described in this proxy statement
and relating to your Fund. If any nominee for the Boards should withdraw or
otherwise become unavailable for election, your Shares will be voted in favor of
such other nominee or nominees as management may recommend. You may revoke any
proxy card by giving another proxy or by letter or telegram revoking the initial
proxy. To be effective, your revocation must be received by the Company prior to
the related Meeting and must indicate your name and account number. In addition,
if you attend a Meeting in person you may, if you wish, vote by ballot at that
Meeting, thereby canceling any proxy previously given.
Information as to the number of outstanding Shares of each Fund as of the
record date, February 9, 1996 ('Record Date'), is set forth in Exhibit A. A
listing of the owners of more than 5% of the Shares of any Fund as of January
31, 1996 is set forth in Exhibit B.
COPIES OF EACH FUND'S MOST RECENT ANNUAL AND SEMI-ANNUAL REPORTS, INCLUDING
FINANCIAL STATEMENTS, HAVE PREVIOUSLY BEEN DELIVERED TO SHAREHOLDERS.
SHAREHOLDERS OF ANY FUND MAY REQUEST COPIES OF THAT
2
<PAGE>
FUND'S ANNUAL AND SEMI-ANNUAL REPORTS BY WRITING THE COMPANY AT 1285 AVENUE OF
THE AMERICAS, NEW YORK, NEW YORK 10019, OR BY CALLING 1-800-647-1568.
Each full Share of each Fund outstanding is entitled to one vote and each
fractional Share of each Fund outstanding is entitled to a proportionate share
of one vote with respect to each matter to be voted upon by the Shareholders of
that Fund. Information about the vote necessary with respect to each proposal is
discussed below in connection with the proposal.
------------------------
PROPOSAL 1--ELECTION OF BOARD MEMBERS
Relevant Companies. All Companies.
Discussion. The Board of each Company has acted to expand its membership
to eleven members, and the nominating committee of each Board has nominated the
eleven individuals identified below for election to the related Company's Board
at its Meeting. Under Proposal 1, Shareholders of each Company are being asked
to vote on those nominees. Pertinent information about each nominee is set forth
in the listing below and in Exhibits C through G hereto. Each nominee has
indicated a willingness to serve if elected. If elected, each nominee will hold
office for an indefinite term until his or her successor is duly elected and
qualified, or until he or she resigns or is otherwise removed.
The increase in the size of the Boards and the nomination of a single group
of nominees to serve as the Board Members for each Fund reflect an overall plan
to coordinate and enhance the efficiency of the governance of the Funds and of
certain other investment companies that are part of the PaineWebber fund
complex. This plan was developed by a Corporate Governance Task Force comprised
of a number of current Board Members who are not 'interested persons' of the
Funds, as defined in the 1940 Act ('independent' Board Members), with the advice
of their counsel, and assisted by representatives of Mitchell Hutchins and Fund
counsel. The Corporate Governance Task Force considered various matters related
to the management and longterm welfare of the Funds and made recommendations to
the Boards, including proposals concerning the size and composition of the
Boards, committee structures, fees and related matters. These proposals, the
substance of which is summarized below, were adopted by the Boards at meetings
in November and December, 1995. For those Funds having nominating committees,
the nominees for independent Board membership were selected by the nominating
committee of each Fund and then by the full Board of each Fund. For each other
Fund, the full Board selected the nominees. With the exception of the
nominations for Board membership, which are the subject of Proposal 1, no
Shareholder action is required with respect to the Corporate Governance Task
Force recommendations.
Consistent with the recommendations of the Corporate Governance Task Force,
and concurrently with this proxy solicitation, shareholders of other funds
within the PaineWebber fund complex are also being asked to elect the
below-listed nominees to the boards of their funds. However, the election of the
nominees for the Board of any Company is not conditioned upon their election to
the Board of any other Company or of any other fund within the PaineWebber fund
complex.
The Boards believe that coordinated governance through a unified group of
Board Members will benefit each of the Funds. Despite some recent
consolidations, the PaineWebber fund complex has grown substantially in size in
the years since the current Board structures were created. This growth has been
due to the creation of new Funds intended to serve a wide variety of investment
needs and the recent acquisition of the asset management business of Kidder,
Peabody Asset Management Inc. ('KPAM'). The PaineWebber fund complex currently
includes [66] portfolios of open-end and closed-end funds having a wide variety
of investment objectives and policies. These include money market funds; bond
funds that invest in corporate and other bonds with varying maturities and risk
characteristics; municipal bond funds; balanced funds that invest in
combinations of debt and equity securities; growth funds that invest in a wide
variety of domestic equity securities; and global funds that invest in debt or
equity securities from around the world. The Boards believe that the Funds will
benefit from the experience that each nominee will gain by serving on the Boards
of such a diverse group of funds. Coordinated governance within the PaineWebber
fund complex also will reduce the possibility that the separate Boards of the
Companies might arrive at conflicting decisions regarding the operations and
management of the Funds and any resulting costs.
3
<PAGE>
The Boards also believe that the Funds will benefit from the diversity and
experience of the nominees that would comprise the expanded Boards. These
nominees have had distinguished careers in government, finance, law, marketing
and other areas and will bring a wide range of expertise to the Boards. Eight of
the eleven nominees have no affiliation or business connection with PaineWebber
or Mitchell Hutchins and would be independent Board Members. Independent Board
Members are charged with special responsibilities to provide an independent
check on management and to approve advisory, distribution and similar agreements
between the Funds and management. They also constitute the members of the
Boards' audit and nominating committees. In the course of their duties, Board
Members must review and understand large amounts of financial and technical
material and must be willing to devote substantial amounts of time. Due to the
demands of service on the Boards, independent nominees may need to reject other
attractive opportunities. With the exception of [ ], each of the
independent nominees already serves as an independent Board Member for one or
more funds within the PaineWebber fund complex and understands the operations of
the complex.
The proposed unified Board structure will require a greater expenditure of
time by each Board Member. Election of the eleven nominees will permit the
Boards to enhance their supervision of the Funds by increased use of a committee
structure. Under the Board structure envisioned by the Corporate Governance Task
Force and adopted by the Boards, each Board's audit committee is being divided
into two sub-committees, each comprised of four of the independent Board
Members. Each sub-committee will function as an audit and contract review
committee that periodically will review the contractual and audit arrangements
for Funds having similar characteristics and will report and make
recommendations to the full Boards. The sub-committee structure will enable
Board members both to develop expertise about particular Funds, while still
benefiting from the experience and knowledge of the full Boards. Other
committees may be used in the future. It is anticipated that the full Boards
will have five regularly scheduled meetings per year.
As recommended by the Corporate Governance Task Force, the compensation
paid to independent Board Members will change. Under the new structure, each
independent Board Member will be paid annual fees of $1,000 per Fund and will
receive an attendance fee of $150 for each Board meeting and for each committee
meeting (other than committee meetings held on the same date as a Board
meeting). The chairman of the audit committee, and chairman of the audit and
contract review subcommittee of which the chairman of the audit committee is not
a member, will receive additional annual compensation from the PaineWebber funds
in the aggregate amount of $15,000. Interested Board Members will continue to
receive no compensation from any Fund. Board Members will continue to be
reimbursed for any expenses incurred in attending meetings. A table setting
forth information relating to the compensation paid to Board Members during the
past fiscal and calendar years is attached as Exhibit D. Pursuant to the
recommendations of the Corporate Governance Task Force, each Board Member will
be subject to mandatory retirement at the end of the year in which he or she
becomes 72 years old.
The nominees for election as Board Members, their ages, and a description
of their principal occupations are listed in the table below. A table indicating
the stock ownership of each nominee is attached as Exhibit E.
<TABLE>
<CAPTION>
BUSINESS EXPERIENCE DURING THE PAST FIVE
NOMINEE; AGE YEARS; OTHER DIRECTORSHIPS
- ------------------------------------- ----------------------------------------
<S> <C>
Margo N. Alexander;* 48.............. Mrs. Alexander is president, chief
executive officer and a director of
Mitchell Hutchins (since January,
1995). Mrs. Alexander is an executive
vice president and director of
PaineWebber. Mrs. Alexander also is a
director or trustee of 3 investment
companies for which Mitchell Hutchins
or PaineWebber serves as investment
adviser.
Richard Q. Armstrong; 60............. Mr. Armstrong is chairman and principal
of RQA Enterprises (management
consulting firm) (since April 1991 and
principal occupation since March
1995). Mr. Armstrong is also a
director of Hi Lo Automotive, Inc. He
was chairman of the board, chief
executive officer and co-owner of
Adirondack Beverages (producer and
distributor of soft drinks and
sparkling/still waters) (October
1993-March 1995). He was a partner of
the New England Consulting Group
(management consulting firm)
</TABLE>
4
<PAGE>
<TABLE>
<CAPTION>
BUSINESS EXPERIENCE DURING THE PAST FIVE
NOMINEE; AGE YEARS; OTHER DIRECTORSHIPS
- ------------------------------------- ----------------------------------------
<S> <C>
(December 1992-September 1993). He was
managing director of LVMH U.S.
Corporation (U.S. subsidiary of the
French luxury goods conglomerate,
Louis Vuitton Moet Hennessey
Corporation) (1987-1991) and chairman
of its wine and spirits subsidiary,
Schieffelin & Somerset Company
(1987-1991). Mr. Armstrong also is a
director or trustee of 6 investment
companies for which Mitchell Hutchins
or PaineWebber serves as investment
adviser.
E. Garrett Bewkes, Jr.;* 69.......... Mr. Bewkes is a director of, and a
consultant to, PW Group. Prior to 1988,
he was chairman of the board,
president and chief executive officer
of American Bakeries Company. Mr.
Bewkes is also a director of
Interstate Bakeries Corporation and
NaPro Bio-Therapeutics, Inc. Mr.
Bewkes also is a director or trustee
of 24 investment companies for which
Mitchell Hutchins or PaineWebber
serves as investment adviser.
Richard Burt; 47..................... Mr. Burt is chairman of International
Equity Partners (international
investments and consulting firm)
(since March 1994) and a partner of
McKinsey & Company (management
consulting firm) (since 1991). He is
also a director of American Publishing
Company. He was the chief negotiator
in the Strategic Arms Reduction Talks
with the former Soviet Union
(1989-1991) and the U.S. Ambassador to
the Federal Republic of Germany
(1985-1989). Mr. Burt also is a
director or trustee of 7 investment
companies for which Mitchell Hutchins
or PaineWebber serves as investment
adviser.
Mary C. Farrell;* 46................. Ms. Farrell is a managing director,
senior investment strategist, and member
of the Investment Policy Committee of
PaineWebber. Ms. Farrell joined
PaineWebber in 1982. She is a member
of the Financial Women's Association
and Women's Economic Roundtable, and
is employed as a regular panelist on
Wall $treet Week with Louis Rukeyser.
She serves on the Board of Overseers
of New York University's Stern School
of Business.
Meyer Feldberg; 53................... Mr. Feldberg is Dean and Professor of
Management of the Graduate School of
Business, Columbia University. Prior
to 1989, he was president of the
Illinois Institute of Technology. Dean
Feldberg is also a director of AMSCO
International Inc., Federated
Department Stores, Inc. and New World
Communications Group Incorporated. Mr.
Feldberg also is a director or trustee
of 19 investment companies for which
Mitchell Hutchins or PaineWebber
serves as investment adviser.
George W. Gowen; 66.................. Mr. Gowen is a partner in the law firm
of Dunnington, Bartholow & Miller. Prior
to May 1994, he was partner in the law
firm of Fryer, Ross & Gowen. Mr. Gowen
is also a director of Columbia Real
Estate Investments, Inc. Mr. Gowen
also is a director or trustee of 17
investment companies for which
Mitchell Hutchins or PaineWebber
serves as investment adviser.
Frederic V. Malek; 59................ Mr. Malek is chairman of Thayer Capital
Partners (investment bank) and a
co-chairman and director of CB
Commercial Group Inc. (real estate).
From January 1992 to November 1992, he
</TABLE>
5
<PAGE>
<TABLE>
<CAPTION>
BUSINESS EXPERIENCE DURING THE PAST FIVE
NOMINEE; AGE YEARS; OTHER DIRECTORSHIPS
- ------------------------------------- ----------------------------------------
<S> <C>
was campaign manager of Bush-Quayle
'92. From 1990 to 1992, he was vice
chairman and, from 1989 to 1990, he
was president of Northwest Airlines
Inc., NWA Inc. (holding company of
Northwest Airlines Inc.) and Wings
Holdings Inc. (holding company of NWA
Inc.). Prior to 1989, he was employed
by the Marriott Corporation (hotels,
restaurants, airline catering and
contract feeding), where he most
recently was an executive vice
president and president of Marriott
Hotels and Resorts. Mr. Malek is also
a director of American Management
Systems, Inc., Automatic Data
Processing, Inc., Avis, Inc., FPL
Group, Inc., National Education
Corporation and Northwest Airlines
Inc. Mr. Malek also is a director or
trustee of 17 investment companies for
which Mitchell Hutchins or PaineWebber
serves as investment adviser.
Carl W. Schafer; 60.................. Mr. Schafer is president of the Atlantic
Foundation (charitable foundation
supporting mainly oceanographic
exploration and research). He also is
a director of Roadway Express, Inc.
(trucking), The Guardian Group of
Mutual Funds, Evans Systems, Inc. (a
motor fuels, convenience store and
diversified company), Hidden Lake Gold
Mines Ltd. (gold mining), Electronic
Clearing House, Inc. (financial
transactions processing), Wainoco Oil
Corporation and Nutraceutix Inc.
(biotechnology). Prior to January
1993, Mr. Schafer was chairman of the
Investment Advisory Committee of the
Howard Hughes Medical Institute. Mr.
Schafer also is a director or trustee
of 7 investment companies for which
Mitchell Hutchins or PaineWebber
serves as investment adviser.
[NAME, AGE AND BIOGRAPHY OF ELEVENTH
NOMINEE TO BE INSERTED]
John R. Torell III; 56............... Mr. Torell is chairman of Torell
Management, Inc. (financial advisory
firm), partner of Zilkha & Company
(merchant banking and private
investment company) and chairman of
Telesphere Corporation (electronic
provider of financial information). He
is the former chairman and chief
executive officer of Fortune Bancorp
(1990-1991 and 1990-1994,
respectively). He is the former
chairman, president and chief
executive officer of CalFed, Inc.
(savings association) (1988 to 1989)
and former president of Manufacturers
Hanover Corp. (bank) (prior to 1988).
Mr. Torell is also a director of
American Home Products Corp., Volt
Information Sciences Inc., and New
Colt Inc. (armament manufacturer). Mr.
Torell also is a director or trustee
of 7 investment companies for which
Mitchell Hutchins or PaineWebber
serves as investment adviser.
</TABLE>
- ------------------
* Indicates 'interested person' of the Funds as defined by the 1940 Act, by
reason of his or her position with Mitchell Hutchins, PaineWebber or PW Group
and/or ownership of shares in PW Group.
6
<PAGE>
During its most recently completed fiscal year, each Board met the number
of times indicated in Exhibit F. Each Board has an audit committee consisting of
independent Board Members. The Boards of Managed Municipal Trust, RMA Money Fund
and RMA Tax-Free Fund also have nominating committees consisting of the
independent Board Members. The Boards of Cashfund, LIR, and Municipal Money
Series do not have nominating committees. Tables indicating the membership of
the audit and nominating committees for each Company, the number of times such
committees met during each Company's last fiscal year, the attendance of Board
Members at Board and committee meetings, and providing additional information
about the Boards and their committees are attached as Exhibits F and G. The
duties of the audit committee are (a) to review reports prepared by the
Company's independent auditors, including reports on the Company's internal
accounting control procedures; (b) to review and recommend approval or
disapproval of audit and non-audit services and the fees charged for such
services; (c) to evaluate the independence of the independent auditors and to
recommend whether to retain such independent auditors for the next fiscal year;
and (d) to report to the Board and make such recommendations as it deems
necessary. Except as indicated in Exhibit F, each Board Member attended 75% or
more of Board meetings during each Company's most recently completed fiscal
year. Information concerning Fund officers is set forth in Exhibit H.
Each nominating committee selects and nominates individuals to serve as
independent Board Members. It is not expected that the nominating committees
ordinarily will consider nominees recommended by Shareholders. The Boards do not
have standing compensation committees.
Required Vote. For each Company, the candidates receiving the affirmative
vote of a plurality of the votes cast for the election of Board Members at the
Meeting will be elected, provided a quorum is present. Shares of all Funds of
each Company vote together as a single class for the Members of the Company's
Board.
EACH BOARD, INCLUDING ITS INDEPENDENT BOARD MEMBERS, RECOMMENDS THAT
SHAREHOLDERS VOTE 'FOR' EACH OF THE NOMINEES UNDER PROPOSAL 1.
------------------
PROPOSAL 2--RATIFICATION OF SELECTION OF
INDEPENDENT AUDITORS OF THE FUNDS
Relevant Funds. All Funds.
Discussion. Under Proposal 2, Shareholders of each Fund are asked to
ratify their Board's selection of independent auditors ('Auditors') for their
Fund. The Auditors for each Fund audit the Fund's financial statements for each
year and prepare the Fund's federal and state annual income tax returns.
During the last fiscal year, Ernst & Young LLP and Deloitte & Touche LLP
served as Auditors for one or more of the Funds. The Boards for which Deloitte &
Touche LLP served as Auditors during the last fiscal year (LIR and Municipal
Money Series), in each case acting upon the recommendation of its audit
committee (which is comprised of independent Board Members), selected Ernst &
Young LLP as Auditors to replace Deloitte & Touche LLP, effective July 20, 1995.
Currently, Ernst & Young LLP serves as Auditors for each of the Funds and has
been selected by the Boards of the Funds to continue to serve in that capacity
for the current fiscal year. The Boards' selections for Auditors for the current
fiscal year are subject to ratification by Shareholders of each of the Funds at
the Meetings.
The selection of Ernst & Young LLP to replace Deloitte & Touche LLP
reflected the relevant Boards' view that using an independent auditing firm that
was already familiar with the PaineWebber fund complex would promote
efficiencies and cost savings for the relevant Funds and their Shareholders. The
reports of Deloitte & Touche LLP on the relevant Funds' financial statements for
their two most recent fiscal years prior to July 20, 1995 did not contain
adverse opinions, disclaimers, qualifications or modifications of opinion.
Deloitte & Touche LLP did not disagree during the two fiscal years and the
subsequent interim periods, prior to July 20, 1995, on any matter of accounting
principles or practices, financial statement disclosure, auditing scope or
procedure, which disagreements, if not resolved to its satisfaction, would have
caused it to make reference to the subject matter of the disagreements in
connection with its reports on those financial statements. The relevant Funds
are not aware of any 'reportable events,' as that term is used in the federal
securities laws, during their two most recent fiscal years or any subsequent
interim periods, prior to July 20, 1995.
7
<PAGE>
Representatives of the Auditors are not expected to be present at the
Meetings but have been given the opportunity to make a statement if they so
desire, and will be available should any matters arise requiring their presence.
Ernst & Young LLP have informed the Funds that they have no material direct or
indirect financial interest in the Funds.
The persons named in the accompanying proxy will vote FOR ratification of
the selection of each Fund's Auditors unless contrary instructions are given.
Required Vote. For each Fund, approval of Proposal 2 requires a majority
of the votes cast with respect to Proposal 2 at the Meeting, provided a quorum
is present.
EACH BOARD, INCLUDING ITS INDEPENDENT BOARD MEMBERS, RECOMMENDS THAT
SHAREHOLDERS VOTE 'FOR' PROPOSAL 2.
------------------
PROPOSAL 3--APPROVAL OF CHANGES TO FUNDAMENTAL INVESTMENT RESTRICTIONS AND
POLICIES OF EACH FUND
Relevant Funds. Changes are proposed for all Funds, but some of the
proposed changes apply only to certain Funds. See 'Proposed Changes,' below, for
listings of the Funds to which each specific change applies.
Reasons for the Proposed Changes. Pursuant to the 1940 Act, each of the
Funds has adopted certain fundamental investment restrictions and policies
('fundamental restrictions'), which are set forth in the Fund's prospectus or
statement of additional information, and which may be changed only with
Shareholder approval. Restrictions and policies that a Fund has not specifically
designated as being fundamental are considered to be 'non-fundamental' and may
be changed by the Fund's Board without Shareholder approval.
Certain of the fundamental restrictions that the Funds have adopted in the
past reflect regulatory, business or industry conditions, practices or
requirements that are no longer in effect. Other fundamental restrictions
reflect regulatory requirements which remain in effect but which are not
required to be stated as fundamental, or in some cases even as non-fundamental,
restrictions. Also, as new Funds have been created over a period of years,
substantially similar fundamental restrictions often have been phrased in
slightly different ways, sometimes resulting in minor but unintended differences
in effect or potentially giving rise to unintended differences in
interpretation.
Accordingly, the Boards have approved revisions to their respective Funds'
fundamental restrictions in order to simplify, modernize and make more uniform
those investment restrictions that are required to be fundamental, and to
eliminate those fundamental restrictions that are not legally required. In most
instances, existing fundamental restrictions that are eliminated because they
are not required to be fundamental would be re-classified as non-fundamental
restrictions.
The Boards believe that eliminating the disparities among the Funds'
fundamental restrictions will enhance management's ability efficiently and
effectively to manage the Funds' assets in changing regulatory and investment
environments. In addition, by reducing to a minimum those policies that can be
changed only by Shareholder vote, each Fund will more often be able to avoid the
costs and delays associated with a Shareholder meeting when making changes to
its investment policies that, at a future time, its Board considers desirable.
Although the proposed changes in fundamental restrictions will allow the Funds
greater investment flexibility to respond to future investment opportunities,
the Boards do not anticipate that the changes, individually or in the aggregate,
will result at this time in a material change in the level of investment risk
associated with an investment in any Fund.
The text and a summary description of each proposed change to the Funds'
fundamental restrictions are set forth below. Shareholders should refer to
Exhibit FR to this proxy statement for the text of the Funds' existing
fundamental restrictions. Shareholders should note, however, that for some Funds
certain of the fundamental restrictions that are treated separately below
currently are combined within a single existing fundamental restriction.
The text below also describes those non-fundamental restrictions that would
be adopted by the Boards in conjunction with the elimination of fundamental
restrictions under Proposal 3. Any non-fundamental restriction
8
<PAGE>
may be modified or eliminated by the appropriate Board at any future date
without any further approval of Shareholders.
If the proposed changes are approved by Shareholders of the respective
Funds at the Meeting, the Funds' prospectuses and statements of additional
information will be revised, as appropriate, to reflect those changes. This will
occur as soon as practicable following the Meetings.
If approved by the Shareholders, these revisions must be filed with the
Securities and Exchange Commission ('SEC') and with various state regulators and
are subject to a comment and review process. To the extent necessary to comply
with regulatory comments or to conform with the definitions and other
terminology used in a Fund's prospectus or statement of additional information,
the language of these provisions may be subject to further modification.
However, any material change would require Shareholder approval.
Proposed Changes. The following is the text and a summary description of
the proposed changes to the Funds' fundamental restrictions, together with the
text of those non-fundamental restrictions that would be adopted in connection
with the elimination of certain of the Funds' current fundamental restrictions.
With respect to each Fund and each proposed fundamental restriction, if a
percentage restriction is adhered to at the time of an investment or
transaction, a later increase or decrease in percentage resulting from a change
in the values of the Fund's portfolio securities or the amount of its total
assets will not be considered a violation of the fundamental restriction.
1. MODIFICATION OF FUNDAMENTAL RESTRICTION ON PORTFOLIO DIVERSIFICATION FOR
DIVERSIFIED FUNDS.
Funds to Which This Change Applies: All Funds other than RMA California
Fund, RMA New York Fund, RMA Connecticut Fund and RMA New Jersey Fund.
Proposed Text of Fundamental Restriction:
'The Fund will not purchase securities of any one issuer if, as a
result, more than 5% of the Fund's total assets would be invested in
securities of that issuer or the Fund would own or hold more than 10% of
the outstanding voting securities of that issuer, except that up to 25% of
the Fund's total assets may be invested without regard to this limitation,
and except that this limitation does not apply to securities issued or
guaranteed by the U.S. government, its agencies and instrumentalities or to
securities issued by other investment companies.'
With respect to Funds that may invest in municipal obligations, the
following interpretation applies to, but is not a part of, this fundamental
restriction: 'Each state (including the District of Columbia and Puerto Rico),
territory and possession of the United States, each political subdivision,
agency, instrumentality and authority thereof, and each multi-state agency of
which a state is a member is a separate 'issuer.' When the assets and revenues
of an agency, authority, instrumentality or other political subdivision are
separate from the government creating the subdivision and the security is backed
only by the assets and revenues of the subdivision, such subdivision would be
deemed to be the sole issuer. Similarly, in the case of an Industrial
Development Bond or Private Activity Bond, if that bond is backed only by the
assets and revenues of the-non-governmental user, then that non-governmental
user would be deemed to be the sole issuer. However, if the creating government
or another entity guarantees a security, then to the extent that the value of
all securities issued or guaranteed by that government or entity and owned by
the Fund exceeds 10% of the Fund's total assets, the guarantee would be
considered a separate security and would be treated as issued by that government
or entity.'
Similarly, with respect to Funds that may invest in mortgage and
asset-backed securities, the following interpretation applies to, but is not a
part of, this fundamental restriction: 'Mortgage- and asset-backed securities
will not be considered to have been issued by the same issuer by reason of the
securities having the same sponsor, and mortgage- and asset-backed securities
issued by a finance or other special purpose subsidiary that are not guaranteed
by the parent company will be considered to be issued by a separate issuer from
the parent company.'
Discussion: All of the above referenced Funds are 'diversified' investment
companies under the 1940 Act and, accordingly, must have fundamental
restrictions or policies establishing the percentage limitations with respect to
investments in individual issuers that they will follow in order to qualify as
'diversified' for that
9
<PAGE>
purpose. These Funds have stated their diversification restrictions in several
different ways, and in many instances their restrictions are somewhat more
limiting than is necessary in order to qualify as 'diversified' funds. For
example, some Funds' restrictions do not reflect exceptions to the legally
required restriction for investments in securities of government agencies or of
other investment companies. Other Funds state restrictions the substance of
which is imposed by SEC regulations relating to money market funds but which are
not required to be part of the fundamental restrictions for diversification
purposes. Of course, the Funds will continue to comply with regulatory
requirements.
2. MODIFICATION OF FUNDAMENTAL RESTRICTION ON CONCENTRATION.
Funds to Which This Change Applies: All Funds.
Proposed Text of Fundamental Restriction:
Except as specified below, the following text will apply to all Funds:
'The Fund will not purchase any security if, as a result of that
purchase, 25% or more of the Fund's total assets would be invested in
securities of issuers having their principal business activities in the
same industry, except that this limitation does not apply to securities
issued or guaranteed by the U.S. government, its agencies or
instrumentalities or to municipal securities or to certificates of deposit
and bankers' acceptances of domestic branches of U.S. banks.'
The following interpretation applies to, but is not a part of, the
fundamental restriction on concentration under Proposal 3:
'With respect to this limitation, domestic and foreign banking will be
considered to be different industries.'
Discussion: The proposed changes to the Funds' fundamental concentration
policy would clarify that the limitation does not apply to securities issued or
guaranteed by the U.S. government, its agencies or instrumentalities, to
municipal securities or to certain obligations of U.S. banks. Proposal 3 also
would eliminate minor inconsistencies in the phraseology of the Funds' existing
restrictions. The proposal reflects a change in the Funds' interpretation as to
the separateness of certain industry groups.
Municipal securities are excluded from the limitations of each Fund's
fundamental restriction on concentration. Proposal 3 would not change the
affirmative fundamental policies of RMA California Fund, RMA New York Fund, RMA
Connecticut Fund and RMA New Jersey Fund to invest, under normal circumstances,
a specified minimum percentage of their assets in municipal securities, or in
the municipal securities of certain states, as currently stated in those Funds'
prospectuses or statements of additional information.
3. MODIFICATION OF FUNDAMENTAL RESTRICTION ON SENIOR SECURITIES AND BORROWING.
Funds to Which This Change Applies: All Funds.
Proposed Text of Fundamental Restriction:
'The Fund will not issue senior securities or borrow money, except as
permitted under the 1940 Act and then not in excess of 33 1/3% of the
Fund's total assets (including the amount of the senior securities issued
but reduced by any liabilities not constituting senior securities) at the
time of the issuance or borrowing, except that the Fund may borrow up to an
additional 5% of its total assets (not including the amount borrowed) for
temporary or emergency purposes.'
Discussion: The 1940 Act establishes limits on the ability of the Funds to
engage in leverage through borrowings or the issuance of other 'senior
securities,' a term that is defined, generally, to refer to Fund obligations
that have a priority over the Fund's Shares with respect to the distribution of
Fund assets or the payment of dividends. Currently, the Funds' fundamental
restrictions are significantly more limiting than the restrictions imposed by
the 1940 Act, in that they provide that a Fund's borrowings are limited to those
that are for temporary or emergency purposes and, for most of the Funds, are
further limited to 10% of the Fund's assets. Most of the Funds' fundamental
borrowing restrictions also provide that the Funds may not purchase additional
10
<PAGE>
portfolio securities at a time when borrowings exceed 5% of total assets.
Shareholders should refer to Exhibit FR for a statement of their Fund's current
fundamental borrowing restriction.
The proposed changes would relax these fundamental restrictions to make
them no more limiting than the limitations that are imposed under the 1940 Act.
The Boards believe that changing the Funds' fundamental restrictions in this
manner will provide flexibility for future contingencies. However, the Boards
are not at this time making any change to the Funds' operating policies with
respect to borrowings. Accordingly, the substance of each Fund's current
fundamental restriction on senior securities and borrowings will be continued as
a matter of non-fundamental, operating policy. These non-fundamental operating
policies for any Fund may be changed by its Board without further Shareholder
approval.
4. MODIFICATION OF FUNDAMENTAL RESTRICTION ON MAKING LOANS.
Funds to Which This Change Applies: All Funds.
Proposed Text of Fundamental Restriction:
'The Fund will not make loans, except through loans of portfolio
securities or through repurchase agreements, provided that for purposes of
this restriction, the acquisition of bonds, debentures or other debt
securities and investments in government obligations, commercial paper,
certificates of deposit, bankers' acceptances or similar instruments will
not be considered the making of a loan.'
Discussion: The proposed change to this fundamental restriction would
eliminate minor differences in the wording of the Funds' current restrictions
for greater uniformity and to avoid unintended limitations. For example, while
the Funds' current restrictions generally contain an exception for investments
in debt securities, some of the restrictions refer only to investments in
'publicly distributed' debt instruments. The Boards of these Funds wish to
clarify that investments in privately placed debt securities also do not
constitute the making of a loan.
The proposed change also clarifies that loans of portfolio securities will
be excluded from the general fundamental restriction on making loans. The
current fundamental restrictions for most of the Funds currently do not contain
such an exception. The Boards believe that the Funds should not be subject to a
fundamental restriction on securities lending and that each Board should be able
to govern the extent of securities lending through a non-fundamental policy.
Subject, where necessary, to approval of Proposal 3 by the Shareholders,
the Boards have authorized the adoption of non-fundamental policies that would
allow each Fund to lend portfolio securities in an amount up to 33 1/3% of its
total assets, which is the maximum level permitted under the 1940 Act. None of
the Funds currently lends any portfolio securities, and the Funds will not do so
unless and until specific securities lending programs are considered and
approved by their respective Boards. Mitchell Hutchins currently is considering
proposals for securities lending programs for the Funds, and it anticipates
presenting a recommendation for such a program to the Boards in the near future.
Lending securities would enable a Fund to earn additional income but could
result in a loss or delay in recovering the securities. Under any securities
lending program that may be approved by the Boards, a Fund would lend portfolio
securities to broker-dealers or institutional investors that Mitchell Hutchins
(or, where applicable, a Fund's sub-adviser) deems qualified, but only when the
borrower maintains acceptable collateral with the Fund's custodian in an amount
at least equal to the market value of the securities loaned, plus accrued
interest and dividends. The Fund would pay reasonable administrative and
custodial fees in connection with any loan and might pay a negotiated portion of
the interest earned on the cash or instruments held as collateral to the
borrower or to the placing broker. The Fund would retain the authority to
terminate any loans at any time. A Fund would regain record ownership of loaned
securities to exercise beneficial rights, such as voting rights, when doing so
is considered to be in the Fund's interest.
11
<PAGE>
5. MODIFICATION OF FUNDAMENTAL RESTRICTION ON UNDERWRITING SECURITIES.
Funds to Which This Change Applies: All Funds.
Proposed Text of Fundamental Restriction:
'The Fund will not engage in the business of underwriting securities
of other issuers, except to the extent that the Fund might be considered an
underwriter under the federal securities laws in connection with its
disposition of portfolio securities.'
Discussion: The proposed changes to this fundamental restriction clarify
that the prohibition applies only to engaging in 'the business of' underwriting
securities and eliminate minor inconsistencies in the wording of the Funds'
current restrictions for greater uniformity.
6. MODIFICATION OF FUNDAMENTAL RESTRICTION ON REAL ESTATE INVESTMENTS.
Funds to Which This Change Applies: All Funds.
Proposed Text of Fundamental Restriction:
'The Fund will not purchase or sell real estate, except that
investments in securities of issuers that invest in real estate and
investments in mortgage-backed securities, mortgage participations or other
instruments supported by interests in real estate are not subject to this
limitation, and except that the Fund may exercise rights under agreements
relating to such securities, including the right to enforce security
interests and to hold real estate acquired by reason of such enforcement
until that real estate can be liquidated in an orderly manner.'
Discussion: The proposed changes to this investment restriction eliminate
minor inconsistencies in the wording of the Funds' current restrictions for
greater uniformity and more completely describe the types of real estate related
securities that are permissible.
7. MODIFICATION OF FUNDAMENTAL RESTRICTION ON INVESTING IN COMMODITIES.
Funds to Which This Change Applies: All Funds.
Proposed Text of Fundamental Restriction:
'The Fund will not purchase or sell physical commodities unless
acquired as a result of owning securities or other instruments, except that
the Fund may purchase, sell or enter into financial options and futures,
forward and spot currency contracts, swap transactions and other financial
contracts or derivative instruments.'
Discussion: The proposed changes to this investment restriction are
intended to ensure that each Fund will have the maximum flexibility to enter
into hedging or other transactions utilizing financial contracts and derivative
products when doing so is permitted by operating policies established for the
Fund by its Board. The Boards believe that this flexibility is necessary for the
Funds to respond to the rapid and continuing development of derivative products.
The proposed changes also allow flexibility in the event of changes in
regulatory standards or limitations.
8. ELIMINATION OF FUNDAMENTAL RESTRICTION ON PLEDGING PORTFOLIO SECURITIES.
Funds to Which This Change Applies: All Funds other than Cashfund.
Proposed Change; Text of Related Non-Fundamental Restriction:
Upon the approval of Proposal 3, the existing fundamental restrictions on
pledging securities would be eliminated, and those Funds that currently have
them would become subject to the following non-fundamental restriction:
'The Fund will not mortgage, pledge or hypothecate any assets except
in connection with permitted borrowings or the issuance of senior
securities.'
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Discussion: The Funds are not required to have a fundamental restriction
on their ability to pledge securities. However, certain state securities rules
or policies require that Funds whose Shares are distributed in those states
provide at least a non-fundamental restriction on this subject. In order to
maximize the Funds' flexibility in the event of future changes in state
securities rules or policies, the Boards believe that the Funds' restrictions on
pledging securities should be made non-fundamental. The non-fundamental
restrictions will have substantially the same substantive effect as the existing
fundamental restrictions.
9. ELIMINATION OF FUNDAMENTAL RESTRICTION ON MARGIN TRANSACTIONS.
Funds to Which This Change Applies: All Funds.
Proposed Change; Text of Related Non-Fundamental Restriction:
Upon the approval of Proposal 3, the existing fundamental restrictions on
engaging in margin transactions would be eliminated, and the Funds would become
subject to the following non-fundamental restriction:
'The Fund will not purchase securities on margin, except for
short-term credit necessary for clearance of portfolio transactions and
except that the Fund may make margin deposits in connection with its use of
financial options and futures, forward and spot currency contracts, swap
transactions and other financial contracts or derivative instruments.'
Discussion: The Funds are not required to have a fundamental restriction
on a Fund's ability to engage in margin transactions. However, certain state
securities rules or policies require that Funds whose Shares are distributed in
those states provide at least a non-fundamental restriction on this subject. In
order to maximize the Funds' flexibility in the event of future changes in state
securities rules or policies, the Boards believe that the Funds' restrictions on
margin transactions should be made non-fundamental.
The non-fundamental restriction eliminates minor differences in wording
among existing fundamental restrictions and contains an exception for margin
deposits in connection with financial contracts or derivative instruments. The
language of that exception conforms with the exception contained in the proposed
change to the Funds' fundamental restriction on investing in commodities.
10. ELIMINATION OF FUNDAMENTAL RESTRICTION ON SHORT SALES.
Funds to Which This Change Applies: All Funds.
Proposed Change; Text of Related Non-Fundamental Restriction:
Upon the approval of Proposal 3, the existing fundamental restrictions on
engaging in short sales would be eliminated, and the Funds would become subject
to the following non-fundamental restriction:
'The Fund will not engage in short sales of securities or maintain a
short position, except that the Fund may (a) sell short 'against the box'
and (b) maintain short positions in connection with its use of financial
options and futures, forward and spot currency contracts, swap transactions
and other financial contracts or derivative instruments.'
Discussion: Under the 1940 Act, the SEC is authorized to limit the ability
of the Funds to engage in short sales, except in connection with an underwriting
in which the Fund is a participant. One type of short sale transaction that is
permitted under SEC policies is a short sale 'against the box,' in which a Fund
engages in a short sale of a security that it already owns or has the right to
own. These transactions generally are entered into in order to defer realization
of gains or losses for tax or other purposes.
Although the Funds may be limited in their ability to engage in short
sales, the Funds are not required to establish a fundamental restriction on
short sales. Consistent with the Boards' determination to promote flexibility
and efficiency in the event of future changes in the law, the Boards believe
that the Funds' fundamental restriction on this subject should be removed and
replaced by a non-fundamental restriction. That non-fundamental restriction will
eliminate minor differences in wording among existing fundamental restrictions
and will contain an exception for short positions in connection with financial
contracts or derivative instruments. The language of that exception conforms
with the exception contained in the proposed change to the Funds'
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fundamental restriction on investing in commodities. Each non-fundamental
restriction will clarify that a Fund may engage in short sales 'against the
box.'
11. ELIMINATION OF FUNDAMENTAL RESTRICTION ON INVESTMENTS IN OIL, GAS AND
MINERAL LEASES AND PROGRAMS.
Funds to Which This Change Applies: All Funds.
Proposed Change; Text of Related Non-Fundamental Restriction:
Upon the approval of Proposal 3, the existing fundamental restrictions on
investments in oil, gas or minerals would be eliminated, and the Funds would
become subject to the following non-fundamental restriction:
'The Fund will not invest in oil, gas or mineral exploration or
development programs or leases, except that investments in securities of
issuers that invest in such programs or leases and investments in asset-
backed securities supported by receivables generated from such programs or
leases are not subject to this prohibition.'
Discussion: The Funds are not required to have a fundamental restriction
with respect to oil, gas or mineral investments, but certain state securities
rules require that Funds establish at least a non-fundamental restriction on
this subject. In order to maximize the Funds' flexibility in the event of future
changes in state securities rules or policies, the Boards believe that the
Funds' restrictions on oil, gas and mineral investments should be made
non-fundamental.
The non-fundamental restriction adopted by the Boards will eliminate minor
differences in wording among existing fundamental restrictions and will
establish uniform exceptions that serve to clarify the limited scope of the
restriction. Also, since the applicable state requirements relate only to oil,
gas and mineral leases and development programs, the non-fundamental restriction
applies only to them and not to other investments relating to oil, gas or
minerals.
12. ELIMINATION OF FUNDAMENTAL RESTRICTION ON INVESTMENTS IN OTHER INVESTMENT
COMPANIES.
Funds to Which This Change Applies: All Funds other than LIR-Government
Securities Fund, LIR-Money Market Fund, and LIR-Treasury Securities Fund.
Proposed Change; Text of Related Non-Fundamental Restriction:
Upon the approval of Proposal 3, the existing fundamental restrictions on
investments in other investment companies would be eliminated, and those Funds
that currently have them would become subject to the following non-fundamental
restriction:
'The Fund will not purchase securities of other investment companies,
except to the extent permitted by the 1940 Act and except that this
limitation does not apply to securities received or acquired as dividends,
through offers of exchange, or as a result of reorganization,
consolidation, or merger.'
Discussion: The ability of the Funds to invest in other investment
companies is limited under the 1940 Act, but the Funds are not required to have
a fundamental restriction on this subject. In order to maximize the Funds'
flexibility in the event of future changes in federal and state securities rules
or policies, the Boards believe that the Funds' restrictions on investments in
other investment companies should be made non-fundamental.
The non-fundamental restriction adopted by the Boards will allow
investments in other investment companies to the full extent permitted under the
1940 Act. The fundamental restrictions for most of the Funds that have
restrictions on this subject are more limiting in that they generally prohibit
any investments in investment companies except for shares acquired in
reorganizations, consolidations, or mergers. The Boards believe that investments
in other investment companies may be desirable under certain circumstances. The
non-fundamental restriction also will eliminate minor differences in wording
among existing fundamental restrictions.
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13. ELIMINATION OF FUNDAMENTAL RESTRICTION ON INVESTING FOR THE PURPOSE OF
CONTROL.
Funds to Which This Change Applies: RMA New Jersey Fund, RMA Connecticut
Fund, LIR-Government Securities Fund, LIR-Money Market Fund and LIR-Treasury
Securities Fund.
Proposed Change; Text of Related Non-Fundamental Restriction:
Upon the approval of Proposal 3, the existing fundamental restrictions on
investing for the purpose of control would be eliminated, and those Funds that
currently have them would become subject to the following non-fundamental
restriction:
'The Fund will not invest in companies for the purpose of exercising
control or management.'
Discussion: There is no legal requirement that a Fund have a fundamental
restriction on this subject, and the Boards of those few Funds that have such a
restriction believe that it should be made non-fundamental. Converting these
fundamental restrictions to non-fundamental restrictions will enable the Boards
to change this policy in the future if they conclude that doing so would be in
the interest of the Fund and its Shareholders.
14. ELIMINATION OF FUNDAMENTAL RESTRICTION ON INVESTING IN WARRANTS.
Funds to Which This Change Applies: LIR-Government Securities Fund,
LIR-Money Market Fund and LIR-Treasury Securities Fund.
Proposed Change; Text of Related Non-Fundamental Restriction:
Upon the approval of Proposal 3, the existing fundamental restrictions on
investing in warrants would be eliminated, and those Funds that currently have
them would become subject to the following non-fundamental restriction:
'The Fund will not invest in warrants, valued at the lower of cost or
market, in excess of 5% of the value of its net assets, which amount may
include warrants that are not listed on the New York or American Stock
Exchange, provided that those unlisted warrants, valued at the lower of
cost or market, do not exceed 2% of the Fund's net assets, and further
provided that this restriction does not apply to warrants attached to, or
sold as a unit with, other securities.'
Discussion: The Funds are not required to have a fundamental restriction
with respect to investments in warrants, but certain states have required the
Funds within LIR to establish at least a non-fundamental restriction on this
subject. In order to maximize these Funds' flexibility in the event of future
changes in state rules or policies, the LIR Board believes that these Funds'
restrictions on investments in warrants should be made non-fundamental and
conformed to current state requirements.
15. ELIMINATION OF FUNDAMENTAL RESTRICTION ON INVESTMENTS IN ILLIQUID
SECURITIES.
Funds to Which This Change Applies: RMA Connecticut Fund and RMA New
Jersey Fund.
Proposed Change; Text of Related Non-Fundamental Restriction:
Upon the approval of Proposal 3, the existing fundamental restrictions on
investing in illiquid securities (including restrictions on entering into
repurchase agreements providing for settlement in more than seven days) would be
eliminated, and those Funds that currently have them would become subject to the
following non-fundamental restriction:
'The Fund may invest up to 10% of its net assets in illiquid
securities.'
Discussion: SEC policies limit the extent to which Funds may invest in
illiquid securities, but there is no legal requirement that a Fund have a
fundamental restriction on this subject. In order to provide flexibility, the
Board of these Funds has determined that the Funds' fundamental restriction with
respect to illiquid securities should be made non-fundamental and should be
stated as an affirmative, non-fundamental policy, rather than as a restriction.
These Funds' existing fundamental restriction on illiquid securities includes a
list of certain types of securities that are considered illiquid. Among these
are repurchase agreements providing for settlement in more
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than seven days. However, since SEC guidelines establish the basis on which
securities are to be determined liquid or illiquid, no such listing is included
in the non-fundamental policy.
16. ELIMINATION OF FUNDAMENTAL RESTRICTION RELATING TO PURCHASES OF CERTAIN
TYPES OF SECURITIES.
Funds to Which This Change Applies: Cashfund, RMA New Jersey Fund and RMA
Connecticut Fund.
Proposed Change:
RMA New Jersey Fund and RMA Connecticut Fund currently have a fundamental
restriction against purchases of 'securities other than Municipal Obligations
and Taxable Investments.' Cashfund currently has a fundamental restriction
against purchases of 'securities other than money market instruments.' Upon the
approval of Proposal 3, these fundamental restrictions would be eliminated. They
would not be replaced by a non-fundamental restriction.
Discussion: The relevant Boards have concluded that the above-referenced
fundamental restrictions are not necessary. In the case of RMA New Jersey Fund
and RMA Connecticut Fund, the restriction has no substantive impact since the
terms 'Municipal Obligations' and 'Taxable Investments' are defined to encompass
all debt securities in which a money market fund could invest. Similarly, the
fundamental restriction requiring Cashfund to invest only in money market
instruments does little more than require the Fund to comply with regulatory
requirements. The need for these Funds to limit their investments in these ways
is implicit in their investment objectives and policies, but there is no legal
requirement that the Funds have a fundamental restriction on the subject.
Accordingly, the Boards have determined that this restriction should be
eliminated, both as a fundamental and as a non-fundamental restriction.
The elimination of these fundamental restrictions would not change the
current, affirmative fundamental policies of RMA Connecticut Fund and RMA New
Jersey Fund to invest at least 80% of their respective net assets in municipal
obligations except when maintaining a temporary defensive position, as stated in
those Funds' prospectus.
Required Vote. Approval of Proposal 3 with respect to a Fund requires the
affirmative vote of a 'majority of the outstanding voting securities' of that
Fund, which for this purpose means the affirmative vote of the lesser of (1)
more than 50% of the outstanding Shares of the Fund or (2) 67% or more of the
Shares of the Fund present at the Meeting if more than 50% of the outstanding
Shares of the Fund are represented at the Meeting in person or by proxy.
IF PROPOSAL 3 IS NOT APPROVED BY SHAREHOLDERS OF A FUND, THE EXISTING
FUNDAMENTAL RESTRICTIONS OF THE FUND WILL CONTINUE IN EFFECT FOR THAT FUND, BUT
DISAPPROVAL OF PROPOSAL 3 BY THE SHAREHOLDERS OF ONE FUND WILL NOT AFFECT ANY
APPROVALS OF PROPOSAL 3 THAT ARE OBTAINED WITH RESPECT TO ANY OTHER FUND. IN THE
CASE OF CASHFUND, APPROVAL OF THE CHANGES TO CASHFUND'S INVESTMENT RESTRICTIONS
UNDER THIS PROPOSAL 3 WILL BE EFFECTIVE ONLY IF SHAREHOLDERS ALSO APPROVE THE
ELIMINATION OF THE STATEMENT OF CURRENT (I.E., UNCHANGED) INVESTMENT
RESTRICTIONS IN THE FUND'S BYLAWS UNDER PROPOSAL 5.
EACH BOARD, INCLUDING ITS INDEPENDENT BOARD MEMBERS, RECOMMENDS THAT
SHAREHOLDERS VOTE 'FOR' PROPOSAL 3.
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PROPOSAL 4--APPROVAL OF CHARTER AMENDMENTS
PROPOSAL 4.A. APPROVAL OF AMENDED AND RESTATED ARTICLES OF INCORPORATION.
Relevant Companies. Cashfund, RMA Money Fund and RMA Tax-Free Fund.
Reason for Proposed Amendments. Proposal 4.a. is to approve Amended and
Restated Articles of Incorporation ('Amended Articles') for Cashfund, RMA
Money Fund and RMA Tax-Free Fund. Each of the Amended Articles would make
certain changes, described in more detail below, that the Boards believe will
benefit these Companies and their Shareholders, including changes to the
provisions on director and officer liability. A copy of each of the Amended
Articles is attached as Exhibits 4a-1, -2 and -3.
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General. Each of these Companies is a Maryland Corporation whose current
Charter includes provisions that their Boards believe are either outdated or
unnecessarily detailed. Accordingly, the Amended Articles would: (1) modify
certain provisions of the Charters, (2) replace certain detailed provisions of
the Charters with less detailed provisions which delegate authority as to such
matters to the relevant Board and (3) eliminate certain provisions that are
unnecessary or already provided for by law. The General Corporation Law of the
State of Maryland does not require that all of the terms and attributes of a
Company's capital stock be contained in the Company's Charter. Therefore, the
specificity presently contained in the Charter is not required. The Amended
Articles will give the Boards greater flexibility to respond to future changes
in circumstances without the necessity of further amendments. The more
significant changes that would be effected under the Amended Articles are
described below.
Authority to Create Separate Series and Classes. The Amended Articles will
enable the Boards of relevant Companies to establish separate series and
separate classes of Shares. The Charters of most of the Companies within the
PaineWebber fund complex already provide their Boards with that authority. The
Charter for RMA Money Fund also already permits that Company's Board to
establish separate series, and the RMA Money Fund Board has used that authority
to create Retirement Money Fund, RMA Money Market Portfolio and RMA Government
Portfolio, each of which is a series of RMA Money Fund. However, the Charters of
Cashfund and RMA Tax-Free Fund do not currently grant their Boards the authority
to establish separate series, and none of the relevant Companies' Charters
authorize their Boards to establish separate classes of Shares.
Under the Amended Articles, the Boards would have the authority, in their
discretion, to create and establish such series and classes, having such
preferences, rights, voting powers, terms of conversion, restrictions,
limitations on dividends and other terms and conditions as are determined by the
Boards. Shares of any series established by a Company's Board would have
separately identifiable assets and liabilities, and the Shareholders of each
series would be exclusively entitled to a pro rata distribution of all dividends
and distributions earned on and payable from the assets allocated to that
series. The liabilities of one series could not be charged against the assets of
any other series. This is the same arrangement as presently exists for RMA Money
Fund and for the other funds in the PaineWebber fund complex that are organized
in series form.
Each class of Shares established by a Company's Board under the Amended
Articles would have the same rights, privileges and preferences as any other
class of Shares within the same series, except that the Amended Articles would
authorize the Boards to allocate expenses on a class-by-class basis, declare and
pay dividends and distributions that may vary among classes, reduce the proceeds
payable with respect to a particular class of shares upon redemption and provide
for voting on a class-by-class basis with respect to matters solely affecting a
particular class. This is the same arrangement as presently exists for the other
open-end funds in the PaineWebber fund complex that provide for separate classes
of Shares.
Although the Amended Articles would authorize the Boards of these Companies
to create new series and establish separate classes of Shares at any time (for
both existing and any future series), they have no present plan to do so. The
relevant Boards believe, however, that it is in the interests of the Companies
and their Shareholders for those Boards to have the flexibility to do so when
they determine that to be appropriate. Adding additional series or creating
separate classes of Shares will allow the Boards to offer investors additional
funds or to offer fund Shares under different distribution systems, for which
differing sales charges and fees might be charged, and may enable the Companies
to allocate certain corporate expenses over a larger base of assets. The
expenses attributable to some classes might be higher than for others, and the
expenses attributable to new classes of existing series might be lower than for
outstanding Shares.
If Proposal 4.a. is adopted by each of the relevant Companies, upon the
effectiveness of the Charter Amendments all of the outstanding Shares of
Cashfund would be converted into shares of an initial series of PaineWebber
Cashfund, Inc. that would be called 'PaineWebber Cashfund' and all of the
outstanding Shares of PaineWebber RMA Tax-Free Fund, Inc. would be converted
into shares of an initial series of PaineWebber RMA Tax-Free Fund, Inc. that
would be called 'PaineWebber RMA Tax-Free Fund,' each having the same rights and
privileges as at present. No additional series of RMA Money Fund would be
created, and there would be no changes to the names or otherwise of any of the
Funds presently within RMA Money Fund. Currently, Cashfund and RMA Tax-Free Fund
each have 20 billion (20,000,000,000) authorized Shares, all of which would be
allocated to their respective initial series upon the adoption of Proposal 4.a.
RMA Money Fund's 30 billion
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(30,000,000,000) authorized shares are classified as follows: 15 billion
(15,000,000,000) for the RMA Money Portfolio, 5 billion (5,000,000,000) for the
RMA Government Portfolio, and 10 billion (10,000,000,000) for Retirement Money
Fund. If Proposal 4.a. is adopted, no changes will be made to those allocations
at this time.
Management of the Companies. The Charter of each of these Companies
currently includes a number of provisions relating to the management of the
Company, including specific provisions relating to: (1) the Company's bylaws;
(2) the payment of compensation to Board Members; (3) the extent to which, and
at what times and places at which, the books and records of the Company must be
open to inspection by Shareholders; (4) the locations of the Company's offices
and of Board and Shareholder meetings; and (5) the determination of net profits.
The Amended Articles do not include these provisions because they are either
unnecessary or already are provided for adequately elsewhere in the Amended
Articles. Each of the Amended Articles includes a provision vesting all
corporate powers and authority in the Boards. The Companies' Charters currently
include a similar provision.
Quorum Requirement; Voting. Under the Charters, in order for business to
be conducted at a Shareholder meeting, at least 50% of the Shares entitled to
vote plus one additional Share must be represented at the meeting either in
person or by proxy. In certain instances the Boards have found it difficult to
solicit sufficient participation on the part of Shareholders to hold such
meetings. To ensure that special meetings duly called and noticed have a
sufficient number of shares represented for business to be conducted at the
meeting, the Amended Articles will reduce the quorum requirement from a majority
of those Shareholders entitled to vote to one-third ( 1/3) of those Shareholders
so entitled. This provision in the Amended Articles would permit the Boards to
act on certain ministerial matters when the holders of less than a majority of
Shares return proxies or attend the meeting. This will be beneficial to the
Company in that operations will not be unnecessarily delayed, and additional
expenses incurred, to solicit sufficient Shareholder participation for the
meeting.
The Amended Articles also would clarify that the Companies may take
advantage of provisions of the Maryland General Corporation Law that allow
certain minor amendments to the Company's Charter, such as a change in corporate
name, to be adopted by a vote of the Board, rather than the Shareholders. Most
Charter amendments, however, would continue to require the approval of a
majority of the Company's outstanding Shares. Other fundamental matters, such as
changing a Fund's fundamental investment restrictions, may only be effected by a
majority of the outstanding shares as defined by the 1940 Act (i.e., 67% or more
of the voting securities present at a meeting if the holders of more than 50% of
the outstanding voting securities are present or represented by proxy, or more
than 50% of the outstanding voting securities, whichever is less). These
requirements will not be affected by the Amended Articles. If the proposal is
approved, it is anticipated that the relevant Boards will approve corresponding
amendments to each Company's bylaws.
Net Asset Value of Shares. The Charters for Cashfund and RMA Tax-Free Fund
currently set forth in detail the manner by which the net asset value of the
respective Company's Shares is determined, including provisions specifying: (1)
the time and by whom net asset value is determined; (2) the situations in which
the determination of net asset value may be suspended; (3) the manner for
computing per Share net asset value; and (4) the methods of valuing the various
assets of the Company. The Amended Articles replace these provisions with a
provision that sets forth in general terms the manner by which net asset value
per Share will be determined and that provides the Boards with the power and
duty to determine the net asset value at such times and by such methods as it
determines, subject to the restrictions or requirements or the 1940 Act. The
Boards would expect to adopt resolutions addressing the matters currently
provided for in the Charters.
Redemption of Shares. The relevant Companies' Charters currently include
detailed provisions regarding the redemption of Shares, including provisions
specifying: (1) the right to redemption of Shares; (2) the manner by which the
redemption price is determined; (3) the manner by which payment for redeemed
Shares is made; and (4) the effect of a suspension of the determination of net
asset value on redemptions. The Amended Articles replace these provisions with a
provision that sets forth generally the right of a Shareholder to redeem his or
her Shares at their net asset value. The new provision authorizes the Boards to
specify the conditions, prices, times and forms of redemptions. The Boards would
expect to adopt resolutions addressing the matters currently provided for in the
Charters.
Shareholder Liability. Each of the relevant Companies' Charters currently
includes a provision providing that neither the Shareholders personally nor
their property shall be liable to any extent for the payment of the
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Company's debts. The Amended Articles do not include this provision. Elimination
of the provision will not increase a Shareholder's risk of liability for a
Company's debts. Rather, existing principles of corporate law provide
Shareholders the same protection as contained in this provision.
Indemnification; Insurance. The Amended Articles include a provision
specifying that the relevant Company shall indemnify and advance expenses to its
present and past Board Members, officers, employees and agents as provided in
its bylaws. Under the current bylaws of each relevant Company, such
indemnification may be made to the full extent provided and allowed under
applicable law. The Amended Articles also provide that the relevant Company may
purchase and maintain insurance on behalf of its Board Members, officers,
employees and agents with respect to any liability that may be asserted against
or incurred by them in connection with their service in such capacities, whether
or not the Company would have the power to indemnify them against that
liability. Substantially identical authority is already contained in each
Company's bylaws.
Text of Proposed Amendments. The proposed text of each of the relevant
Companies' Amended Articles is set forth in Exhibits 4a-1, -2 and -3 hereto.
Required Vote. For each Company, approval of Proposal 4.a. requires the
affirmative vote of a majority of the Company's outstanding Shares entitled to
vote at the Meeting. Shares of all Funds within RMA Money Fund will be voted as
a single class for purposes of this Proposal 4. If adopted, the Amended Articles
would become effective upon being filed with the State Department of Assessments
and Taxation of Maryland.
PROPOSAL 4.B. APPROVAL OF AMENDED AND RESTATED DECLARATION OF TRUST.
Relevant Company. Municipal Money Series.
Reason for Proposed Amendments. Proposal 4.b. is to approve an Amended and
Restated Declaration of Trust (the 'Amended Declaration') for Municipal Money
Series that would enable its Board to establish separate classes of Shares of
any series of the Company. The Charters of most of the Companies within the
PaineWebber fund complex already provide their Boards with that authority.
Each class of Shares established by the Municipal Money Series Board under
the Amended Declaration would have the same rights, privileges and preferences
as any other class of Shares within the same series, except that the Amended
Declaration would authorize the Boards to allocate expenses on a class-by-class
basis, declare and pay dividends and distributions that may vary among classes,
reduce the proceeds payable with respect to a particular class of shares upon
redemption and provide for voting on a class-by-class basis with respect to
matters solely affecting a particular class. This is the same arrangement as
presently exists for the other open-end funds in the PaineWebber fund complex
that provide for separate classes of Shares.
Although the Amended Declaration would authorize the Municipal Money Series
Board to establish separate classes of Shares at any time (for RMA New Jersey
Fund, RMA Connecticut Fund and for any future series), the Board has no present
plan to do so. The Board believes, however, that it is in the interests of the
Company and its Shareholders for the Board to have the flexibility to create
separate classes of Shares when it determines that to be appropriate. Creating
separate classes of Shares will allow the Board to offer fund Shares under
different distribution systems, for which differing sales charges and fees might
be charged, and may enable the Company to allocate certain corporate expenses
over a larger base of assets. The expenses attributable to some classes might be
higher than for others, and the expenses attributable to new classes of RMA New
Jersey Fund and RMA Connecticut Fund might be lower than for outstanding Shares
of those Funds.
Text of Proposed Amended Declaration. The proposed text of the Amended
Declaration is set forth in Exhibit 4b hereto.
Required Vote. Approval of Proposal 4.b. requires the affirmative vote of
a majority of the Company's outstanding Shares entitled to vote at the Meeting.
Shares of RMA New Jersey Fund and RMA Connecticut Fund will be voted as a single
class for purposes of this Proposal 4.b. The Amended Declaration would become
effective upon adoption by the Shareholders.
THE CASHFUND, RMA TAX-FREE FUND, RMA MONEY FUND AND MUNICIPAL MONEY SERIES
BOARDS, INCLUDING THEIR INDEPENDENT BOARD MEMBERS, RECOMMEND THAT SHAREHOLDERS
VOTE 'FOR' PROPOSALS 4.A. AND 4.B.
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PROPOSAL 5--APPROVAL OF CHANGES TO BYLAWS
Relevant Company. Cashfund.
Reason for Proposed Changes. Consistent with the Cashfund Board's
determination that Cashfund's fundamental investment restrictions should be
revised to eliminate provisions that are, in substance, duplicative of
limitations imposed under applicable law or regulation, the Board concluded that
its bylaws should be revised to remove certain superfluous provisions. Cashfund
is a Maryland corporation. Under Maryland law, bylaw provisions generally may be
amended by action of the Board Members, without any Shareholder vote. As
discussed below, however, Article XI of the bylaws contains a provision
requiring Shareholder approval of any amendment to the specific provisions that
the Cashfund Board proposes to amend under Proposal 5.
Proposal 5 is to delete Articles XII and XIII of the Cashfund bylaws and to
delete the provisions in Article XI of the bylaws requiring certain bylaw
amendments to be effected by a vote of the Shareholders. Copies of Articles XI,
XII and XIII of the Cashfund bylaws, as currently in effect, are attached to
this proxy statement as Exhibit BY. The text of the proposed changes to the
bylaws is set forth below.
Amendment of Bylaws Article XII. Article XII of Cashfund's bylaws contains
provisions relating to affiliated transactions, loans to affiliates,
restrictions on the transfer of shares and conflict of interest transactions.
The restrictions on transfer provisions contained in Article XII of the bylaws
are substantively identical to the provisions on 'Transfer Regulations' in
Section 8.04 of those bylaws. The primary difference between the restriction on
transfer provisions of Section 8.04 and Article XII is that Section 8.04
contains the affirmative statement that, subject to certain stated exceptions,
'the shares of stock of the Corporation may be freely transferred,'
whereas Article XII contains the negative statement that, subject to
substantively the same exceptions,
'the Corporation shall not impose any restrictions upon the transfer
of the shares of the Corporation.'
The ability of Cashfund to restrict the transferability of its Shares also is
subject to regulation under the 1940 Act and state law. Therefore, the Board
believes that the restriction on transfer provisions in Article XII of the
Cashfund bylaws can be deleted without substantive effect.
The remaining provisions of Article XII relate to matters that are
regulated under the 1940 Act. Section 17 of the 1940 Act and the regulations
thereunder contain extensive provisions limiting transactions between affiliates
and Cashfund. Specifically, they limit the ability of any affiliated person of
Cashfund to sell or purchase any property to or from Cashfund or to receive
compensation in connection with any sale or purchase of property to or for
Cashfund, to borrow money from Cashfund, or to enter into joint transactions
with Cashfund that may involve a conflict of interest. The Cashfund Board
believes that the bylaws should neither attempt to restate, nor impose any
greater restrictions than, these regulatory provisions.
Amendment of Bylaws Article XIII. Article XIII of the Cashfund bylaws sets
forth investment policies and restrictions for it that are largely duplicative
of the fundamental investment restrictions that are the subject of Proposal 3.
The Article XIII provisions also contain certain restrictions which are derived
from state regulatory requirements, as well as a requirement that the Fund
dispose of certain non-conforming investments that might be obtained in a
merger, consolidation or acquisition and a more restrictive limitation on
borrowings. The full text of current Article XIII of the Cashfund bylaws is set
forth in Exhibit BY.
As discussed above in connection with Proposal 3, the Board is recommending
revisions to Cashfund's fundamental investment restrictions. In order for those
revisions to have substantive effect, the parallel provisions in Article XIII of
Cashfund's bylaws also need to be amended. Moreover, the Board believes that it
is undesirable for Cashfund to restate in its bylaws policies and restrictions
that are stated in its prospectus or statement of additional information or that
merely reflect limitations imposed by law. Accordingly, the Board has determined
that the statement of investment policies and restrictions contained in Article
XIII should be deleted in its entirety.
20
<PAGE>
Amendment of Bylaws Article XI. Section 11.02 of Article XI of the
Cashfund bylaws provides that:
'no amendment of this Article XI or Articles XII or XIII shall be made
except by the stockholders of the Corporation.'
The other provisions of Article XI, however, provide in substance that any other
amendment of the bylaws may be made either by the Shareholders or by the Board.
If, as contemplated by Proposal 5, Articles XII and XIII of the Cashfund
bylaws are deleted, bylaw Section 11.02 would have no effect other than to
require Shareholder approval of the amendment provision itself. Since that
provision already contemplates amendments by either the Shareholders or the
Board, acting alone, the Board believes that no purpose is served by retaining
Section 11.02. As discussed above, Maryland law contemplates that bylaw
provisions generally may be amended by action of the Board, without any
Shareholder vote.
Text of Proposed Changes to Bylaws. For Cashfund, amend the bylaws to
delete Article XII (Miscellaneous) and Article XIII (Investment Policies) in
their entirety and to revise Article XI (Amendments) by deleting Section 11.02
in its entirety and revising Section 11.01 to read as follows:
'Section 11.01. General. All By-Laws of the Corporation, whether
adopted by the board of directors or the stockholders, shall be subject to
amendment, alteration or repeal, and new By-Laws may be made, by
affirmative vote of a majority of either:
(a) the holders of record of the outstanding shares of stock of the
Corporation entitled to vote, at any annual or special meeting, the notice
or waiver of notice of which shall have specified or summarized the
proposed amendment, alteration, repeal or new By-Law; or
(b) the directors, at any regular or special meeting.'
Required Vote. Approval of Proposal 5 with respect to Cashfund requires
the affirmative vote of a 'majority of the outstanding voting securities' of
that Company, which for this purpose means the affirmative vote of the lesser of
(1) more than 50% of the outstanding Shares of the Company or (2) 67% or more of
the Shares of the Fund present at the Meeting if more than 50% of the
outstanding Shares of the Company are represented at the Meeting in person or by
proxy. If Proposal 5 is not approved with respect to Cashfund, the current
bylaws will remain in effect without change. Non-approval of Proposal 5 would
nullify the adoption of Proposal 3 by Cashfund's Shareholders. The amendments
contemplated by Proposal 5 of Cashfund's bylaws will become effective upon the
approval of Proposal 5 by its Shareholders and will not be contingent upon the
approval of the revisions to its fundamental investment restrictions pursuant to
Proposal 3.
THE CASHFUND BOARD, INCLUDING ITS INDEPENDENT BOARD MEMBERS, RECOMMENDS
THAT SHAREHOLDERS VOTE 'FOR' PROPOSAL 5.
------------------------
21
<PAGE>
PROPOSAL 6--APPROVAL OF NEW SUB-ADVISORY AGREEMENTS FOR LIR
Relevant Funds. LIR-Government Securities Fund, LIR-Money Market Fund and
LIR-Treasury Securities Fund.
Reason for Proposed Change. PaineWebber serves as investment adviser and
administrator to the Funds within LIR. Mitchell Hutchins serves as sub-adviser
and sub-administrator to those Funds pursuant to a Sub-Advisory and
Sub-Administration Contract ('Current LIR Agreement') between it and
PaineWebber. It is proposed that LIR Shareholders approve a new Sub-Advisory and
Sub-Administration Contract ('New LIR Agreement') between PaineWebber and
Mitchell Hutchins that is identical to the Current LIR Agreement except that the
percentage of PaineWebber's advisory and administration fees that are to be paid
by PaineWebber to Mitchell Hutchins would be increased from 20% to 50%. The fees
payable by the relevant Funds to PaineWebber would not be changed.
The Current LIR Agreement was approved by the Shareholders of LIR at a
special meeting held on April 13, 1995. Under that Agreement, PaineWebber
retains 80% of the advisory fees paid by the Fund and pays the remaining 20% to
Mitchell Hutchins. If approved by Shareholders, the new Sub-Advisory Agreement
would be dated and become effective as of the date of the LIR Meeting.
PaineWebber and Mitchell Hutchins have advised the LIR Board that each of
them had agreed to increase the proportion of PaineWebber's fees that
PaineWebber would pay to Mitchell Hutchins, and that the re-allocation of those
fees reflected the increased involvement of Mitchell Hutchins in the operation
of the relevant Funds. On this basis, and in light of the fact that the change
would not result in any increase in the costs borne by the relevant Funds and
their Shareholders, the LIR Board concluded that the re-allocation of fees is
justified.
Changed Language in New LIR Agreement. Section 7 of the Current LIR
Agreement would be revised in the New LIR Agreement to read as follows:
'7. Compensation. For the services provided and the expenses assumed
by Mitchell Hutchins pursuant to this Contract with respect to each Series,
PaineWebber will pay to Mitchell Hutchins a fee equal to 50% of the fee
received by PaineWebber from the Fund pursuant to the Advisory Contract
with respect to such Series, such compensation to be paid monthly.'
Required Vote. Approval of Proposal 6 requires the affirmative vote of a
'majority of the outstanding voting securities' of LIR, which for this purpose
means the affirmative vote of the lesser of (1) more than 50% of the outstanding
Shares of the Company or (2) 67% or more of the Shares of the Company present at
the Meeting if more than 50% of the outstanding Shares of the Company are
represented at the Meeting in person or by proxy. If the New LIR Agreement is
approved by LIR's Shareholders, it will become effective immediately; if it is
disapproved by Shareholders, the Current LIR Agreement will continue in effect.
Shares of all Funds within LIR vote together on Proposal 6 as a single class.
THE LIR BOARD, INCLUDING ITS INDEPENDENT BOARD MEMBERS,
RECOMMENDS THAT SHAREHOLDERS VOTE 'FOR' PROPOSAL 6.
ADDITIONAL INFORMATION WITH RESPECT TO PROPOSAL 6.
The provisions of the Current LIR Agreement and the New LIR Agreement
(together, the 'LIR Agreements') are substantially the same, except for the
commencement and termination dates and the proposed change described above.
Under the terms of the LIR Agreements, subject to the supervision and direction
of the LIR Board and subject to review by PaineWebber, Mitchell Hutchins manages
the portfolios of each of the Funds within LIR (the 'LIR Funds') in accordance
with the investment objective and stated policies of the Fund, makes investment
decisions for each LIR Fund and places purchase and sale orders for each LIR
Fund's portfolio transactions. Mitchell Hutchins pays the salaries of all
officers and employees who are employed by both it and the LIR Funds, employs a
professional staff of portfolio managers who draw upon a variety of sources for
research information for the Fund and provides the LIR Funds with investment
officers who are authorized by the LIR Board to execute purchases and sales of
securities on behalf of the Funds.
22
<PAGE>
PaineWebber and Mitchell Hutchins each bears all expenses in connection
with the performance of its services under the LIR Agreements. Other expenses to
be incurred in the operation of an LIR Fund and not specifically borne by
PaineWebber or Mitchell Hutchins will be borne by that Fund, including: the fees
for services rendered under the Fund's current advisory agreement; Shareholder
servicing fees paid under the terms of the Fund's Shareholder servicing plans;
charges and expenses of any registrar, custodian, transfer and dividend
disbursing agent providing services to the Fund; brokerage fees and commissions;
taxes; engraving and printing of the Fund's Share certificates, if any;
registration costs of the Fund and its Shares under federal and state securities
laws; the cost and expense of printing, including typesetting, and distribution
of prospectuses describing the Fund and supplements to those prospectuses to
regulatory authorities and the Fund's Shareholders; all expenses incurred in
conducting meetings of the Fund's Shareholders and meetings of the Fund's Board;
all expenses incurred in preparing, printing and mailing proxy statements and
reports to Shareholders of the Fund; fees and travel expenses of the LIR Board
Members, or members of any advisory board or committee who are not employees of
PaineWebber, Mitchell Hutchins or any of their affiliates; all expenses incident
to any dividend, withdrawal or redemption options provided to the Fund's
Shareholders; charges and expenses of any outside service used for pricing the
Fund's Shares; fees and expenses of legal counsel, including counsel to the
independent Board Members, and independent Auditors; membership dues of industry
associations; interest on the Fund's borrowings; postage; insurance premiums on
property or personnel (including officers and the LIR Board Members) of the Fund
that inure to their benefit; extraordinary expenses (including, but not limited
to, legal claims and liabilities and litigation costs and any indemnification
relating thereto); and all other costs of the Fund's operations.
The LIR Agreements provide that Mitchell Hutchins will not be liable for
any error of judgment or mistake of law or for any loss arising out of any
investment or for any act or omission in the management of an LIR Fund, except
for a loss resulting from willful misfeasance, bad faith or gross negligence on
the part of Mitchell Hutchins in the performance of its duties or from reckless
disregard by it of its obligations and duties under the LIR Agreement.
If Shareholders approve the New LIR Agreement, it will become effective on
the date of approval and will remain in effect for an initial two-year term.
Thereafter, the New LIR Agreement will continue in effect if it is approved at
least annually by a vote of the Company's Shareholders or by the LIR Board,
provided that in either event continuance is approved by the vote of a majority
of the independent Board Members, which vote must be cast in person at a meeting
called for the purpose of voting on such approval. The New LIR Agreement is
terminable without penalty on 60 days' written notice by the LIR Board, a vote
of the Shareholders of the Company, or by PaineWebber or Mitchell Hutchins. The
New LIR Agreement will terminate automatically in the event of its assignment
(as defined in the 1940 Act).
The principal executive officer and each director of Mitchell Hutchins and
PaineWebber are indicated in Exhibits I and J. Additional information about
Mitchell Hutchins is provided above.
The LIR Funds pay the same fee for investment advisory and administration
services to PaineWebber as previously paid to KPAM, the LIR Funds' predecessor
investment adviser and administrator. PaineWebber (not the LIR Funds) currently
pays Mitchell Hutchins a fee for sub-advisory and sub-administration services at
the annual rate of 20% of the fee received by PaineWebber from the LIR Funds. As
compensation for PaineWebber's services, each LIR Fund has agreed to pay
PaineWebber a fee, accrued daily and paid monthly, at the annual rate of 0.25%
of each Fund's average daily net assets. PaineWebber has undertaken to waive
0.05% of its fee and to maintain each LIR Fund's total annual operating expenses
at a level not exceeding 0.30% and 0.55% of the Fund's average daily net assets
annually for Institutional Shares and Financial Intermediary Shares,
respectively. For the fiscal year ended April 30, 1995, the total expenses of
the Institutional Shares of LIR-Government Securities Fund, LIR-Money Market
Fund and LIR-Treasury Securities Fund represented 0.35%, 0.35% and 0.22%,
respectively, of their average net assets. For the six-month period ended
October 31, 1995, the total annualized expenses of the Institutional Shares of
LIR-Government Securities Fund, LIR-Money Market Fund and LIR-Treasury
Securities Fund were 0.33%, 0.33% and 0.33%, respectively, of their average net
assets; in the absence of the fee waiver by PaineWebber, those fees would have
been 0.58%, 0.41% and 0.96%, respectively. For the fiscal year ended April 30,
1995, the total expenses of the Financial Intermediary Shares of LIR-Government
Securities Fund and LIR-Money Market Fund represented 0.60% and 0.60%,
respectively, of their average daily net assets. During the six-month period
ended October 31, 1995, the LIR Funds had no Financial Intermediary Shares
outstanding.
23
<PAGE>
During the LIR Funds' most recent fiscal year, PaineWebber (not the LIR
Funds) paid Mitchell Hutchins sub-advisory and sub-administration fees
aggregating $ (representing the period from [January 30], 1995 through
April 30, 1995). During the twelve months ended January 31, 1996, PaineWebber
(not the LIR Funds) paid Mitchell Hutchins sub-advisory and sub-administration
fees aggregating $ . If the increase in the sub-advisory and
sub-administration fees payable by PaineWebber to Mitchell Hutchins that is
proposed under Proposal 6 had been in effect during the twelve months ended
January 31, 1996, Mitchell Hutchins would have received fees in an amount equal
to [$61,863] during that period, which would have represented an increase of
% over the fees that Mitchell Hutchins actually received.
If the proposed sub-advisory fee had been in effect during the most recent
fiscal year, Mitchell Hutchins would have received [$61,863] from PaineWebber,
representing an increase of [30]% from its current sub-advisory fee.
Each officer of the LIR Funds is an officer or director of PaineWebber or
Mitchell Hutchins, as indicated in Exhibit H. None of the Funds within LIR paid
brokerage commissions to affiliated brokers during their most recently completed
fiscal years. Information concerning advisory fees paid by the LIR Funds or by
other investment companies advised by Mitchell Hutchins or PaineWebber with
investment objectives similar to the LIR Funds is attached as Exhibit K.
ADDITIONAL INFORMATION
In January and February, 1995, PW Group acquired the asset management
business of KPAM. For each of the investment companies formerly advised by KPAM,
advisory or administration services were provided on an interim basis until
April 13, 1995 by either Mitchell Hutchins or PaineWebber. On April 13, 1995,
shareholders of each of those Companies approved the selection of Mitchell
Hutchins or PaineWebber as investment adviser pursuant to an Investment Advisory
and Administration Contract. The Companies formerly advised by KPAM are LIR and
Municipal Money Market Series. A change in investment adviser is deemed a
presumed change of control under the 1940 Act.
SHAREHOLDER PROPOSALS
As a general matter, the Companies do not hold regular annual or other
meetings of Shareholders. Any Shareholder who wishes to submit proposals to be
considered at a special meeting of any Company's Shareholders should send the
proposals to that Company at 1285 Avenue of the Americas, New York, New York
10019, so as to be received a reasonable time before the proxy solicitation for
that meeting is made. Shareholder proposals that are submitted in a timely
manner will not necessarily be included in the Company's proxy materials.
Inclusion of such proposals is subject to limitations under the federal
securities laws.
OTHER BUSINESS
Management knows of no business to be presented at the Meetings other than
the matters set forth in this proxy statement, but should any other matter
requiring a vote of Shareholders arise, the proxies will vote thereon according
to their best judgment in the interest of the Companies and the Funds.
By order of the Boards,
Dianne E. O'Donnell
Secretary
February , 1996
IT IS IMPORTANT THAT YOU EXECUTE AND RETURN ALL OF YOUR PROXIES PROMPTLY.
24
<PAGE>
INDEX TO EXHIBITS TO PROXY STATEMENT
<TABLE>
<S> <C> <C>
Exhibit A -- General Information............................... A-1
Exhibit B -- Beneficial Ownership of Greater Than 5% of Fund
Shares............................................ B-1
Exhibit C -- Year in Which Each Nominee or Current Board Member
Standing for Reelection Became a Member of the
Board............................................. C-1
Exhibit D -- Compensation Table................................ D-1
Exhibit E -- Stock Ownership of Nominees and Current Board
Members........................................... E-1
Exhibit F -- Board and Committee Information................... F-1
Exhibit G -- Membership on Board Committees.................... G-1
Exhibit H -- Officer Information............................... H-1
Exhibit I -- Chief Executive Officer and Directors of Mitchell
Hutchins.......................................... I-1
Exhibit J -- Chief Executive Officer and Directors of
PaineWebber....................................... J-1
Exhibit K -- Investment Companies or Series Thereof Managed by
Mitchell Hutchins or PaineWebber with Investment
Objectives Similar to Those Funds Seeking Approval
of the Sub-Advisory Contract...................... K-1
Exhibit FR -- Existing Fundamental Restrictions................. FR-1
Exhibit 4a-1-1 -- Amended and Restated Articles of Incorporation for
PaineWebber Cashfund, Inc......................... 4a-1-1
Exhibit 4a-2-1 -- Amended and Restated Articles of Incorporation for
PaineWebber RMA Money Fund, Inc................... 4a-2-1
Exhibit 4a-3-1 -- Amended and Restated Articles of Incorporation for
PaineWebber RMA Tax-Free Fund, Inc................ 4a-3-1
Exhibit 4b -- Amended and Restated Declaration of Trust for
PaineWebber/Kidder, Peabody Municipal Money
Series............................................ 4b-1
Exhibit BY -- Articles XI, XII, and XIII of the Current Bylaws
of PaineWebber Cashfund, Inc...................... BY-1
</TABLE>
25
<PAGE>
EXHIBIT A
GENERAL INFORMATION
<TABLE>
<CAPTION>
STATE OF SHARES OUTSTANDING
COMPANY/FUND ORGANIZATION AS OF RECORD DATE
- ------------------------------------------ ------------- ------------------
<S> <C> <C>
CASHFUND.................................. Maryland
LIR....................................... Massachusetts
LIR--Government Securities Fund........... --
LIR--Money Market Fund.................... --
LIR--Treasury Securities Fund............. --
MANAGED MUNICIPAL TRUST................... Massachusetts
RMA California Fund....................... --
RMA New York Fund......................... --
MUNICIPAL MONEY SERIES.................... Massachusetts
RMA Connecticut Fund...................... --
RMA New Jersey Fund....................... --
RMA MONEY FUND............................ Maryland
Retirement Money Fund..................... --
RMA Money Market Portfolio................ --
RMA Government Portfolio.................. --
RMA TAX-FREE FUND......................... Maryland
</TABLE>
A-1
<PAGE>
EXHIBIT B
BENEFICIAL OWNERSHIP OF GREATER THAN 5% OF FUND SHARES
<TABLE>
<CAPTION>
NUMBER AND
PERCENTAGE OF
SHARES BENEFICIALLY
OWNED AS OF
NAME AND ADDRESS* NAME OF FUND JANUARY 31, 1996
- --------------------------------------------- ----------------------------------------------------- --------------------
<S> <C> <C>
</TABLE>
- ------------------
* Each of the Shareholders listed in this Exhibit may be contacted c/o Mitchell
Hutchins Asset Management Inc., 1285 Avenue of the Americas, New York, NY
10019.
B-1
<PAGE>
EXHIBIT C
YEAR IN WHICH EACH NOMINEE OR CURRENT BOARD MEMBER
STANDING FOR REELECTION BECAME A MEMBER OF THE BOARD*
<TABLE>
<CAPTION>
MARGO N. E. GARRETT MEYER GEORGE W. FREDERIC V. CARL W.
COMPANY/FUND NAME ALEXANDER BEWKES, JR.** FELDBERG GOWEN MALEK SCHAFER
- ----------------------------------------- --------- ------------- -------- --------- ----------- -------
<S> <C> <C> <C> <C> <C> <C>
Cashfund................................. -- [ ] [ ] 1978 1987 --
LIR...................................... -- -- -- -- -- 1991
Managed Municipal Trust.................. -- [ ] 1991 1987 1987 --
Municipal Money Market Series............ [ ] -- -- -- -- 1990
RMA Money Fund........................... -- [ ] 1992 [ ] 1987 --
RMA Tax-Free Fund........................ -- [ ] 1992 [ ] 1987 --
</TABLE>
- ------------------
* Mary C. Farrell and , each of whom are a nominee for Board
Member, they are not listed in a column because they are not presently a
Board Member for any PaineWebber-sponsored fund; Margo N. Alexander, though
not a Board Member of the Companies listed, presently serves as a Board
Member of other PaineWebber-sponsored funds.
** Mr. Bewkes resigned from each Board and was reappointed during 1993. He
resigned from the Board of Managed Municipal Trust in 1986 and was reelected
in 1991; he resigned from the Board of RMA Tax-Free Fund in 1990 and was
reelected in 1992.
C-1
<PAGE>
EXHIBIT D
COMPENSATION TABLE
<TABLE>
<CAPTION>
TOTAL
AMOUNTS PAID DURING THE MOST CURRENT FISCAL YEAR COMPENSATION PAID
FROM COMPANY TO BOARD MEMBERS FROM FUND AND
------------------------------------------------------------------ FUND COMPLEX FOR
MUNICIPAL THE YEAR ENDED
MANAGED MONEY RMA RMA DECEMBER 31, 1995
MUNICIPAL MARKET MONEY TAX-FREE TO BOARD
INDEPENDENT BOARD MEMBER(1) CASHFUND LIR TRUST SERIES FUND FUND MEMBERS(2)
- ----------------------------- --------- ------- --------- --------- ------- -------- -----------------
<S> <C> <C> <C> <C> <C> <C> <C>
David J. Beaubien*........... [ ] [ ] -- -- [ ]
Meyer Feldberg............... $12,000 -- $3,750 -- $4,750 $4,500 $ 106,375
George W. Gowen.............. $11,500 -- $3,750 -- $4,750 $4,500 $ 99,750
William W. Hewitt, Jr.*...... [ ] [ ] -- -- [ ]
Frederic V. Malek............ $12,000 -- $3,750 -- $4,750 $4,500 $ 99,750
Judith Davidson Moyers*...... $11,000 -- $3,500 -- $4,500 $4,250 $ 98,500
Carl W. Schafer.............. -- $6,001 -- $4,500 -- -- $ 118,175
</TABLE>
- ------------------
* Indicates Board Member not standing for reelection.
(1) Board Members who were not independent did not receive compensation from
the Companies.
(2) No Company or Fund has a bonus, pension, profit sharing or retirement plan.
D-1
<PAGE>
EXHIBIT E
STOCK OWNERSHIP OF NOMINEES AND CURRENT BOARD MEMBERS
<TABLE>
<CAPTION>
NO. OF SHARES HELD
NOMINEE FUND AS OF JANUARY 31, 1996
- ------------------------------------ ------------------------------------ ------------------------------------
<S> <C> <C>
Margo N. Alexander..................
Richard Q. Armstrong................
E. Garrett Bewkes, Jr...............
Richard Burt........................
Meyer Feldberg......................
Mary C. Farrell.....................
George W. Gowen.....................
Frederic V. Malek...................
Carl W. Schafer.....................
John R. Torell......................
<CAPTION>
BOARD MEMBERS WHO ARE NO. OF SHARES HELD
NOT STANDING FOR REELECTION FUND AS OF JANUARY 31, 1996
- ------------------------------------ ------------------------------------ ------------------------------------
<S> <C> <C>
David J. Beaubien...................
William W. Hewitt, Jr...............
Judith Davidson Moyers..............
</TABLE>
E-1
<PAGE>
EXHIBIT F
ADDITIONAL BOARD AND COMMITTEE INFORMATION
<TABLE>
<CAPTION>
MUNICIPAL
MANAGED MUNICIPAL MONEY MARKET RMA TAX-FREE
CASHFUND LIR TRUST SERIES RMA MONEY FUND FUND
-------- ----- ----------------- ------------ -------------- ------------
<S> <C> <C> <C> <C> <C> <C>
Annual Fee(1)............... $8,000 $1,000 $3,000 $1,000 $4,000 $4,000
Attendance Fee Per Board
Meeting(1)................ $ 500 $ 375 $ 250 $ 375 $ 250 $ 250
Attendance Fee Per Committee
Meeting(1)(2)............. $ 500 $ 375 $ 250 $ 375 $ 250 $ 250
Number of Board Meetings
During Last Fiscal Year... 7 15 9 12 9 9
Number of Audit Committee
Meetings During Last
Fiscal Year............... 1(3) 0 1 2 1 1
</TABLE>
- ------------------
(1) Reflects compensation rates in effect prior to changes described in proxy
statement. Members of the Board who were not Independent did not receive
compensation from the Companies.
(2) The Chairman of the Audit Committees for each LIR and Municipal Money Series
receives annual fees of $250 from each Fund.
(3) Judith Davidson Moyers attended less than 75% of the meetings of the
Cashfund audit committee.
F-1
<PAGE>
EXHIBIT G
MEMBERSHIP ON BOARD COMMITTEES*
<TABLE>
<CAPTION>
BOARD MEMBER NOT STANDING FOR REELECTION
COMMITTEE MEMBERS STANDING FOR REELECTION ----------------------------------------
--------------------------------------------
MEYER GEORGE W. FREDERIC V. CARL W. DAVID J.
COMPANY/FUND NAME FELDBERG GOWEN MALEK SCHAFER BEAUBIEN
- -------------------------- -------- --------- ----------- ------- ----------------------------------------
<S> <C> <C> <C> <C> <C>
Cashfund.................. A A A
LIR....................... A [A]
Managed Municipal Trust... A, N A, N A, N
Municipal Money Market
Series.................. A [A]
RMA Money Fund............ A, N A, N A, N
RMA Tax-Free Fund......... A, N A, N A, N
<CAPTION>
JUDITH
WILLIAM W. DAVIDSON
COMPANY/FUND NAME HEWITT, JR. MOYERS
- -------------------------- ---------------------------------------- ----------------------------------------
<S> <C> <C>
Cashfund.................. A
LIR....................... [A]
Managed Municipal Trust... A, N
Municipal Money Market
Series.................. [A]
RMA Money Fund............ A, N
RMA Tax-Free Fund......... A, N
</TABLE>
- ---------------
* Only disinterested Board Members serve on Board Audit or Nominating
Committees
A = Member of Audit Committee
N = Member of Nominating Committee
G-1
<PAGE>
EXHIBIT H
OFFICER INFORMATION
<TABLE>
<CAPTION>
NO. OF
INVESTMENT
COMPANIES OFFICER SINCE
ON WHICH ----------------------------------------------------------
NAME; PRINCIPAL BUSINESS SERVES AS MANAGED RMA RMA MUNICIPAL
OCCUPATION AN MUNICIPAL MONEY TAX-FREE MONEY
FOR THE PAST FIVE YEARS AGE OFFICE OFFICER1 LIR CASHFUND TRUST FUND FUND SERIES
- -------------------------------- ---- -------------- ---------- ---- -------- --------- ----- -------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Margo N. Alexander; Mrs.
Alexander is president, chief
executive officer and a
director of Mitchell Hutchins
(since January 1995). Mrs.
Alexander is an executive vice
president and director of
PaineWebber................... 48 President 30 * 5/95 5/95 5/95 5/95 *
Cynthia N. Bow; Ms. Bow is a
vice president of Mitchell
Hutchins. Ms. Bow has been
with Mitchell Hutchins since
1982.......................... 37 Vice President 2 9/95
Teresa M. Boyle; Ms. Boyle is a
first vice president and
manager--advisory
administration of Mitchell
Hutchins. Prior to November
1993, she was compliance
manager of Hyperion Capital
Management, Inc., an
investment advisory firm.
Prior to April 1993, Ms. Boyle
was a vice president and
manager--legal administration
of Mitchell Hutchins.......... 37 Vice President 30 * 12/93 12/93 12/93 12/93 *
Kimberly Brown; Ms. Brown is an
assistant vice president and
portfolio manager of Mitchell
Hutchins. She has been a
portfolio manager since March
1995 and has been with
Mitchell Hutchins since
December 1992. Prior to
joining Mitchell Hutchins, Ms.
Brown was with Visual Impact
Advertising................... 28 Assistant Vice 1 9/95
President
Gigi Capes; Ms. Capes is a vice
president and the tax manager
of the mutual fund finance
division of Mitchell Hutchins.
Prior to 1992, she was a tax
senior consultant with KPMG
Peat Marwick.................. 31 Vice President 30 * 11/95 11/95 11/95 11/95 *
and Assistant
Treasurer
Joan L. Cohen; Ms. Cohen is a
vice president and attorney of
Mitchell Hutchins. Prior to
December 1993, she was an
associate at the law firm of
Seward & Kissel............... 31 Vice President [25] * 2/94 2/94 2/94 2/94 *
and Assistant
Secretary
Scott H. Griff; Mr. Griff is a
vice president and attorney of
Mitchell Hutchins. Prior to
January 1995, he was an
associate at the law firm of
Cleary, Gottlieb, Steen &
Hamilton...................... [29] Vice President 5 *
and Assistant
Secretary
C. William Maher; Mr. Maher is a
first vice president and a
senior manager of the mutual
fund finance division of
Mitchell Hutchins............. 34 Vice President 30 * 6/95 6/95 6/95 6/95 *
and Assistant
Treasurer
Dennis McCauley; Mr. McCauley is
a managing director and Chief
Investment Officer--Fixed
Income of Mitchell Hutchins.
Prior to December 1994, he was
Director of Fixed Income
Investments of IBM
Corporation................... 49 Vice President 18 * 9/95 9/95 9/95 9/95
</TABLE>
- ------------------
1 Includes only investment companies for which Mitchell Hutchins or PaineWebber
serves as investment adviser; each officer serves in the same capacity for
each separate investment company.
H-1
<PAGE>
OFFICER INFORMATION--(CONTINUED)
<TABLE>
<CAPTION>
NO. OF
INVESTMENT
COMPANIES OFFICER SINCE
ON WHICH ----------------------------------------------------------
NAME; PRINCIPAL BUSINESS SERVES AS MANAGED RMA RMA MUNICIPAL
OCCUPATION AN MUNICIPAL MONEY TAX-FREE MONEY
FOR THE PAST FIVE YEARS AGE OFFICE OFFICER1 LIR CASHFUND TRUST FUND FUND SERIES
- -------------------------------- ---- -------------- ---------- ---- -------- --------- ----- -------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Susan P. Messina; Ms. Messina is
a senior vice president and
portfolio manager for Mitchell
Hutchins...................... 35 Vice President 5 * 9/95 9/95
Ann E. Moran; Ms. Moran is a
vice president of Mitchell
Hutchins...................... 38 Vice President 30 * 6/93 6/93 6/93 6/93 *
and Assistant
Treasurer
Dianne E. O'Donnell; Ms.
O'Donnell is a senior vice
president and deputy general
counsel of Mitchell
Hutchins...................... 43 Vice President 30 * 8/86 11/86 8/86 8/86 *
and Secretary
Victoria E. Schonfeld; Ms.
Schonfeld is a managing
director and general counsel
of Mitchell Hutchins. From
April 1990 to May 1994, she
was a partner in the law firm
of Arnold & Porter. Prior to
April 1990, she was a partner
in the law firm of Shereff,
Friedman, Hoffman &
Goodman....................... 45 Vice President 30 * 5/94 5/94 5/94 5/94 *
Paul H. Schubert; Mr. Schubert
is a first vice president and
a senior manager of the mutual
fund finance division of
Mitchell Hutchins. From August
1992 to August 1994, he was a
vice president at BlackRock
Financial Management, L.P.
Prior to August 1992, he was
an audit manager with Ernst &
Young LLP..................... 33 Vice President 30 * 9/94 9/94 9/94 9/94 *
and Assistant
Treasurer
Julian F. Sluyters; Mr. Sluyters
is a senior vice president and
the director of the mutual
fund finance division of
Mitchell Hutchins. Prior to
1991, he was an audit senior
manager with Ernst & Young
LLP........................... 35 Vice President 30 * 2/92 2/92 2/92 2/92 *
and Treasurer
Gregory K. Todd; Mr. Todd is a
first vice president and
associate general counsel of
Mitchell Hutchins. Prior to
1993, he was a partner in the
law firm of Shereff, Friedman,
Hoffman & Goodman............. 39 Vice President 30 * 6/93 6/93 6/93 6/93 *
and Assistant
Secretary
Debbie Vermann; Ms. Vermann is a
vice president and portfolio
manager of Mitchell
Hutchins...................... 37 Vice President 2 9/95 9/95
Keith A. Weller; Mr. Weller is a
first vice president and
associate general counsel of
Mitchell Hutchins. From
September 1987 to May 1995,
he was an attorney in private
practice...................... 34 Vice President [24] * 9/95 9/95 9/95 9/95 *
and Assistant
Secretary
</TABLE>
- ------------------
* Indicates the investment company on which the officer serves but additional
information needed on month/year officer was appointed.
* Includes only investment companies for which Mitchell Hutchins or PaineWebber
serves as investment adviser, each officer serves in the same capacity for
each separate investment company.
H-2
<PAGE>
EXHIBIT I
CHIEF EXECUTIVE OFFICER AND DIRECTORS OF MITCHELL HUTCHINS
<TABLE>
<CAPTION>
NAME PRINCIPAL OCCUPATION ADDRESS
- ---------------------------------- ---------------------------------- ---------------------------
<S> <C> <C>
Margo N. Alexander................ President, Chief Executive Officer 1285 Avenue of the Americas
and Director of Mitchell New York, NY 10019
Hutchins and Executive Vice
President and Director of
PaineWebber
Thomas Eggers..................... Managing Director and Head of 1285 Avenue of the Americas
Distribution of Mitchell New York, NY 10019
Hutchins and Executive Vice
President of PaineWebber
</TABLE>
I-1
<PAGE>
EXHIBIT J
CHIEF EXECUTIVE OFFICER AND DIRECTORS OF PAINEWEBBER
<TABLE>
<CAPTION>
NAME PRINCIPAL OCCUPATION ADDRESS
- -------------------- ---------------------------- ----------------------------
<S> <C> <C>
Donald B. Marron.... Chairman and Chief Executive 1285 Avenue of the Americas
Officer of PaineWebber and New York, NY 10019
Director and Chairman of
Paine Webber Group
Margo N.
Alexander......... Director and Executive Vice 1285 Avenue of the Americas
President of PaineWebber New York, NY 10019
and President, Chief
Executive Officer and
Director of Mitchell
Hutchins
Terry L. Atkinson... Director, Managing Director 1285 Avenue of the Americas
and Director, Municipal New York, NY 10019
Securities Group
Brian Barefoot...... Director and Executive Vice 1285 Avenue of the Americas
President--Reengineering New York, NY 10019
Steven P. Baum...... Director, Executive Vice 1285 Avenue of the Americas
President and Director-- New York, NY 10019
Global Fixed Income
Timothy E. Cronin... Director, Executive Vice 1285 Avenue of the Americas
President and Global Risk New York, NY 10019
Strategist
Regina A. Dolan..... Director, Executive Vice 1285 Avenue of the Americas
President and Chief New York, NY 10019
Financial
Officer
Joseph J. Grano,
Jr................ Director and President 1285 Avenue of the Americas
New York, NY 10019
Edward M.
Kerschner......... Director, Managing Director 1285 Avenue of the Americas
and Chairman, Investment New York, NY 10019
Policy Committee
Jerome A.
Lichtstein........ Director, Executive Vice 1200 Harbor Boulevard
President and Director, Weehawken, NJ 07087
Retail Branches
James P.
MacGilvray........ Director, Executive Vice 1285 Avenue of the Americas
President and Director, New York, NY 10019
Global Equities and
Transaction Services
Robert W. Pangia.... Director and Executive Vice 1285 Avenue of the Americas
President and Director, New York, NY 10019
Investment Banking
Ronald M.
Schwartz.......... Director, Executive Vice 1285 Avenue of the Americas
President and Chief New York, NY 10019
Administrative Officer
Robert H. Silver.... Director, Executive Vice 1200 Harbor Boulevard
President and Director, Weehawken, NJ 07087
Operations and Systems
Mark B. Sutton...... Director, Executive Vice 1200 Harbor Boulevard
President and Director, Weehawken, NJ 07087
Private Client Group
</TABLE>
J-1
<PAGE>
EXHIBIT K
INVESTMENT COMPANIES OR SERIES THEREOF
MANAGED BY MITCHELL HUTCHINS OR
PAINEWEBBER WITH INVESTMENT OBJECTIVES
SIMILAR TO THOSE FUNDS SEEKING APPROVAL
OF THE SUB-ADVISORY CONTRACT
<TABLE>
<CAPTION>
CONTRACTUAL ANNUAL
SUB-INVESTMENT
ADVISORY FEE RATE AS
CONTRACTUAL ANNUAL INVESTMENT ADVISORY A PERCENTAGE OF
NET ASSETS AS FEE RATE EXPRESSED AS A PERCENTAGE OF AVERAGE DAILY NET
OF 12/31/95 AVERAGE DAILY NET ASSETS, AS OF ASSETS, AS OF
FUND ($ MILLIONS) 12/31/95 12/31/95
- ----------------------------------- -------------- --------------------------------------- --------------------
<S> <C> <C> <C>
MONEY MARKET FUND:
Cashfund......................... $4,774.38 First $500 million of average daily net --
assets: .50%
Next $500 million: .425%
Next $500 million: .39%
Next $500 million: .38%
Next $500 million: .35%
Next $500 million: .345%
Next $500 million: .325%
Next $500 million: .315%
Next $500 million: .30%
Next $500 million: .29%
In excess of $5.5 billion: .28%
Retirement Money Fund............ 3,559.67 Up to $1.0 billion: .50% 20% of Advisory Rate
In excess of $1.0 billion up to
$1.5 billion: .44%
Over $1.5 billion: .36%
RMA California Fund.............. 472.94 Up to $300 million: .50% 20% of Advisory Rate
In excess of $300 million up to
$750 million: .44%
Over $750 million: .36%
RMA Money Market Portfolio....... 5,871.82 .50% 20% of Advisory Rate
RMA New York Fund................ 253.73 Up to $300 million: .50% 20% of Advisory Rate
In excess of $300 million up to
$750 million: .44%
Over $750 million: .36%
RMA Tax-Free Fund................ 1,932.83 Up to $1.0 billion: .50% 20% of Advisory Rate
In excess of $1.0 billion up to
$1.5 billion: .44%
Over $1.5 billion: .36%
RMA U.S. Government Portfolio.... 1,063.69 Up to $300 million: .50% --
In excess of $300 million up to
$750 million: .44%
Over $750 million: .36%
PaineWebber Money Market Fund.... 60.44 .50% --
PaineWebber Series Trust: Money 21.97 .50% --
Market Portfolio...............
RMA Connecticut Fund............. 26.72 .50% 20% of Advisory Rate
RMA New Jersey Fund.............. 39.66 .50% 20% of Advisory Rate
LIR--Government Securities 49.40 .25% --
Fund...........................
LIR--Money Market Fund........... 288.28 .25% 20% of Advisory Rate
LIR--Treasury Securities Fund.... 30.86 .25% 20% of Advisory Rate
PACE Money Market Investments.... 4.96 .15% --
Legends Fund Money Market 9.12 .65%* .50%
Portfolio......................
Infinity Mutual Funds 818.50 .10% --
Correspondent Cash Reserves
Portfolio......................
</TABLE>
- ------------------
* Includes sub-investment advisory fee rate of .50% and management fee rate of
.15%.
K-1
<PAGE>
EXHIBIT FR
EXISTING FUNDAMENTAL RESTRICTIONS
The existing fundamental restrictions of each Fund will be found on the
following pages of this exhibit.
TABLE OF CONTENTS:
<TABLE>
<S> <C>
Cashfund.................................................... FR-2
LIR
LIR--Government Securities Fund........................ FR-3
LIR--Money Market Fund................................. FR-4
LIR--Treasury Securities Fund.......................... FR-5
Managed Municipal Trust
RMA California Fund.................................... FR-6
RMA New York Fund...................................... FR-7
Municipal Money Series
RMA Connecticut Fund................................... FR-8
RMA New Jersey Fund.................................... FR-9
RMA Money Fund
Retirement Money Fund.................................. FR-10
RMA Money Market Portfolio............................. FR-11
RMA Government Portfolio............................... FR-12
RMA Tax-Free Fund........................................... FR-13
</TABLE>
FR-1
<PAGE>
CASHFUND
The Fund may not:
(1) purchase any securities other than money market instruments,
including but not limited to U.S. Treasury bills and other obligations
issued or guaranteed by the U.S. government, its agencies or
instrumentalities, certificates of deposit of U.S. banks, bankers'
acceptances, and commercial paper, including variable amount master notes
and repurchase agreements secured thereby;
(2) borrow money, except from banks for temporary purposes and except
for reverse repurchase agreements, and then in an aggregate amount not in
excess of 10% of the value of the Fund's assets at the time of such
borrowing, provided that the Fund will not purchase portfolio securities
while borrowings, including reverse repurchase agreements, exceed 5% of the
Fund's assets;
(3) make loans, except that the Fund may purchase or hold debt
instruments in accordance with its investment objective and policies and
may enter into repurchase agreements with respect to commercial paper,
certificates of deposit and obligations issued or guaranteed by the U.S.
government, its agencies or instrumentalities;
(4) purchase any securities if immediately after such purchase more
than 25% of the value of its total assets would be invested in the
securities of one or more issuers conducting their principal business
activities in the same industry, provided that there is no limitation with
respect to investments in U.S. Treasury bills, other obligations issued or
guaranteed by the U.S. government, its agencies and instrumentalities,
certificates of deposit of U.S. banks, and bankers' acceptances and
provided further that neither all finance companies as a group, nor all
utility companies as a group, are considered a single industry for purposes
of this policy;
(5) purchase securities of any one issuer, other than the U.S.
government, if immediately after such purchase more than 5% of the value of
its total assets would be invested in such issuer;
(6) purchase or sell real estate, provided that the Fund may purchase
commercial paper issued by companies, including real estate investment
trusts, which invest in real estate or interests therein;
(7) purchase securities on margin, make short sales of securities or
maintain a short position;
(8) act as an underwriter of securities;
(9) purchase or sell commodities or commodity contracts, or invest in
oil, gas or mineral exploration or development programs; and
(10) acquire voting securities of any issuer or acquire securities of
other investment companies.
The Fund will continue to interpret fundamental investment limitation (6)
to prohibit investment in real estate limited partnerships.
FR-2
<PAGE>
LIR
LIR--GOVERNMENT SECURITIES FUND
In applying the following restrictions, the Trust will not treat a
guarantee as a security issued by the guarantor if the value of all securities
issued or guaranteed by the guarantor and owned by a Fund does not exceed 10% of
the Fund's total assets.
The Trust may not, on behalf of the Fund:
(1) Purchase for the Fund the securities of any one issuer, other than
U.S. Government securities, if immediately after the purchase more than 5%
of the value of the Fund's total assets would be invested in the issuer,
except that (a) up to 25% of the value of its total assets may be invested
without regard to this 5% limitation and (b) this 5% limitation shall not
apply to repurchase agreements collateralized by U.S. Government
securities.
(2) Purchase securities if the purchase would cause more than 25% in
the aggregate of the market value of the total assets of the Fund to be
invested in the securities of one or more issuers having their principal
business activity in the same industry, provided that there is no
limitation with respect to, and each Fund reserves freedom of action, when
otherwise consistent with its investment policies, to concentrate its
investments in U.S. Government securities, obligations (other than
commercial paper) issued or guaranteed by U.S. banks and repurchase
agreements and securities loans collateralized by U.S. Government
securities or such bank obligations.
(3) Make loans, except through (a) the purchase of debt obligations in
accordance with the Fund's investment objective and policies, (b)
repurchase agreements with banks, brokers, dealers and other financial
institutions and (c) loans of securities.
(4) Borrow money, except as a temporary or emergency measure, and then
only from banks in amounts not exceeding one-third of the value of the
Fund's total assets. No purchases of securities will be made if borrowings
exceed 5% of the value of the Fund's assets.
(5) Mortgage, pledge or hypothecate any assets except to secure
permitted borrowings.
(6) Purchase real estate (excluding securities secured by real estate
or interests therein), securities issued by real estate investment trusts
or limited partnerships, commodities, commodity contracts or oil, gas or
other mineral leases or exploration or development programs.
(7) Invest in companies for the purpose of exercising control of
management.
(8) Act as an underwriter of securities (except as the Trust may be
deemed to be an underwriter under the Securities Act in connection with the
purchase and sale of portfolio instruments in accordance with the Fund's
investment objective and management policies), purchase securities on
margin (except for delayed delivery or when-issued transactions or such
short term credits as are necessary for the clearance of transactions),
make short sales of securities, maintain a short position or invest in or
write puts, calls, or combinations thereof (except that the Trust may, on
behalf of a Fund, acquire puts in connection with the acquisition of a debt
instrument).
(9) Purchase the securities of any issuer, other than U.S. Government
securities, if the purchase would cause more than 10% of the voting
securities of the issuer to be held by the Fund, except that up to 25% of
the value of the Fund's total assets may be invested without regard to this
10% limitation.
(10) Purchase warrants.
FR-3
<PAGE>
LIR
LIR--MONEY MARKET FUND
In applying the following restrictions, the Trust will not treat a
guarantee as a security issued by the guarantor if the value of all securities
issued or guaranteed by the guarantor and owned by a Fund does not exceed 10% of
the Fund's total assets.
The Trust may not, on behalf of the Fund:
(1) Purchase for the Fund the securities of any one issuer, other than
U.S. Government securities, if immediately after the purchase more than 5%
of the value of the Fund's total assets would be invested in the issuer,
except that (a) up to 25% of the value of its total assets may be invested
without regard to this 5% limitation and (b) this 5% limitation shall not
apply to repurchase agreements collateralized by U.S. Government
securities.
(2) Purchase securities if the purchase would cause more than 25% in
the aggregate of the market value of the total assets of the Fund to be
invested in the securities of one or more issuers having their principal
business activity in the same industry, provided that there is no
limitation with respect to, and each Fund reserves freedom of action, when
otherwise consistent with its investment policies, to concentrate its
investments in U.S. Government securities, obligations (other than
commercial paper) issued or guaranteed by U.S. banks and repurchase
agreements and securities loans collateralized by U.S. Government
securities or such bank obligations.
(3) Make loans, except through (a) the purchase of debt obligations in
accordance with the Fund's investment objective and policies, (b)
repurchase agreements with banks, brokers, dealers and other financial
institutions and (c) loans of securities.
(4) Borrow money, except as a temporary or emergency measure, and then
only from banks in amounts not exceeding one-third of the value of the
Fund's total assets. No purchases of securities will be made if borrowings
exceed 5% of the value of the Fund's assets.
(5) Mortgage, pledge or hypothecate any assets except to secure
permitted borrowings.
(6) Purchase real estate (excluding securities secured by real estate
or interests therein), securities issued by real estate investment trusts
or limited partnerships, commodities, commodity contracts or oil, gas or
other mineral leases or exploration or development programs.
(7) Invest in companies for the purpose of exercising control of
management.
(8) Act as an underwriter of securities (except as the Trust may be
deemed to be an underwriter under the Securities Act in connection with the
purchase and sale of portfolio instruments in accordance with the Fund's
investment objective and management policies), purchase securities on
margin (except for delayed delivery or when-issued transactions or such
short term credits as are necessary for the clearance of transactions),
make short sales of securities, maintain a short position or invest in or
write puts, calls, or combinations thereof (except that the Trust may, on
behalf of a Fund, acquire puts in connection with the acquisition of a debt
instrument).
(9) Purchase the securities of any issuer, other than U.S. Government
securities, if the purchase would cause more than 10% of the voting
securities of the issuer to be held by the Fund, except that up to 25% of
the value of the Fund's total assets may be invested without regard to this
10% limitation.
(10) Purchase warrants.
Notwithstanding restriction (1) above, to the extent required by the rules
of the SEC, the Money Market Fund will not invest more than 5% of its assets in
the obligations of any one issuer.
FR-4
<PAGE>
LIR
LIR--TREASURY SECURITIES FUND
In applying the following restrictions, the Trust will not treat a
guarantee as a security issued by the guarantor if the value of all securities
issued or guaranteed by the guarantor and owned by a Fund does not exceed 10% of
the Fund's total assets.
The Trust may not, on behalf of the Fund:
(1) Purchase for the Fund the securities of any one issuer, other than
U.S. Government securities, if immediately after the purchase more than 5%
of the value of the Fund's total assets would be invested in the issuer,
except that (a) up to 25% of the value of its total assets may be invested
without regard to this 5% limitation and (b) this 5% limitation shall not
apply to repurchase agreements collateralized by U.S. Government
securities.
(2) Purchase securities if the purchase would cause more than 25% in
the aggregate of the market value of the total assets of the Fund to be
invested in the securities of one or more issuers having their principal
business activity in the same industry, provided that there is no
limitation with respect to, and each Fund reserves freedom of action, when
otherwise consistent with its investment policies, to concentrate its
investments in U.S. Government securities, obligations (other than
commercial paper) issued or guaranteed by U.S. banks and repurchase
agreements and securities loans collateralized by U.S. Government
securities or such bank obligations.
(3) Make loans, except through (a) the purchase of debt obligations in
accordance with the Fund's investment objective and policies, (b)
repurchase agreements with banks, brokers, dealers and other financial
institutions and (c) loans of securities.
(4) Borrow money, except as a temporary or emergency measure, and then
only from banks in amounts not exceeding one-third of the value of the
Fund's total assets. No purchases of securities will be made if borrowings
exceed 5% of the value of the Fund's assets.
(5) Mortgage, pledge or hypothecate any assets except to secure
permitted borrowings.
(6) Purchase real estate (excluding securities secured by real estate
or interests therein), securities issued by real estate investment trusts
or limited partnerships, commodities, commodity contracts or oil, gas or
other mineral leases or exploration or development programs.
(7) Invest in companies for the purpose of exercising control of
management.
(8) Act as an underwriter of securities (except as the Trust may be
deemed to be an underwriter under the Securities Act in connection with the
purchase and sale of portfolio instruments in accordance with the Fund's
investment objective and management policies), purchase securities on
margin (except for delayed delivery or when-issued transactions or such
short term credits as are necessary for the clearance of transactions),
make short sales of securities, maintain a short position or invest in or
write puts, calls, or combinations thereof (except that the Trust may, on
behalf of a Fund, acquire puts in connection with the acquisition of a debt
instrument).
(9) Purchase the securities of any issuer, other than U.S. Government
securities, if the purchase would cause more than 10% of the voting
securities of the issuer to be held by the Fund, except that up to 25% of
the value of the Fund's total assets may be invested without regard to this
10% limitation.
(10) Purchase warrants.
FR-5
<PAGE>
MANAGED MUNICIPAL TRUST
RMA CALIFORNIA FUND
The Fund may not:
(1) issue senior securities or borrow money, except from banks for
temporary purposes, provided that the aggregate amount borrowed does not
exceed 10% of the total asset value of the Fund at the time of such
borrowing and further provided that the Fund will not purchase securities
while borrowings in excess of 5% of its total assets are outstanding;
(2) underwrite securities of other issuers, except to the extent that,
in connection with the purchase of municipal securities directly from an
issuer thereof in accordance with the Fund's investment objective, policies
and limitations or the disposition of portfolio securities, the Fund may be
deemed to be an underwriter;
(3) mortgage, pledge or hypothecate any assets, except in connection
with any such borrowing and not in excess of the lesser of the dollar
amount borrowed or 5% of the value of the total assets of the Fund at the
time of such borrowing;
(4) make loans, except repurchase agreements, provided that for
purposes of this restriction the acquisition of publicly distributed debt
obligations shall not be deemed to be the making of a loan;
(5) purchase or sell real estate, except that the Fund may invest in
municipal securities secured by real estate or interests therein (the Fund
reserves the freedom of action to hold and to sell any real estate acquired
as a result of ownership of securities);
(6) purchase securities on margin, make short sales of securities or
maintain a short position;
(7) purchase or sell commodities or commodity contracts, or invest in
oil, gas or mineral exploration or development programs;
(8) purchase voting securities of any issuer or acquire securities of
other investment companies, except in connection with a merger,
consolidation or acquisition; or
(9) purchase any security if, as a result, 25% or more of the value of
the Fund's total assets would be invested in the securities of issuers
having their principal business activities in the same industry, except
that this limitation does not apply to California municipal securities or
to other municipal securities or securities issued or guaranteed by the
U.S. government, its agencies and instrumentalities.
For purposes of limitation (9), when the assets and revenues of an agency,
authority, instrumentality or other political subdivision are separate from the
government creating the subdivision and the security is backed only by the
assets and revenues of the subdivision, such subdivision would be deemed to be
the sole issuer. Similarly, in the case of an industrial development bond
('IDB') or private authority bond ('PAB'), if that bond is backed only by the
assets and revenues of the nongovernmental user, then such nongovernmental user
would be deemed to be the sole issuer. However, if in either case the creating
government or some other agency guarantees a security, such a guarantee would be
considered a separate security and would be treated as an issue of such
government or other agency.
The Fund will continue to interpret fundamental investment limitation (5)
to prohibit investment in real estate limited partnerships.
* * * * *
In addition to the foregoing fundamental limitations, the Fund currently
has an affirmative policy to invest, except for temporary purposes, at least
80%, and to seek to invest 100%, of its net assets in municipal securities
issued by the State of California, its municipalities and public authorities and
other issuers if such obligations pay interest that is exempt from federal
income tax as well as California personal income tax. The revisions to the
Fund's fundamental restrictions under Proposal 3 will not change that policy.
FR-6
<PAGE>
MANAGED MUNICIPAL TRUST
RMA NEW YORK FUND
The Fund may not:
(1) issue senior securities or borrow money, except from banks for
temporary purposes, provided that the aggregate amount borrowed does not
exceed 10% of the total asset value of the Fund at the time of such
borrowing and further provided that the Fund will not purchase securities
while borrowings in excess of 5% of its total assets are outstanding;
(2) underwrite securities of other issuers, except to the extent that,
in connection with the purchase of municipal securities directly from an
issuer thereof in accordance with the Fund's investment objective, policies
and limitations or the disposition of portfolio securities, the Fund may be
deemed to be an underwriter;
(3) mortgage, pledge or hypothecate any assets, except in connection
with any such borrowing and not in excess of the lesser of the dollar
amount borrowed or 5% of the value of the total assets of the Fund at the
time of such borrowing;
(4) make loans, except repurchase agreements, provided that for
purposes of this restriction the acquisition of publicly distributed debt
obligations shall not be deemed to be the making of a loan;
(5) purchase or sell real estate, except that the Fund may invest in
municipal securities secured by real estate or interests therein (the Fund
reserves the freedom of action to hold and to sell any real estate acquired
as a result of ownership of securities);
(6) purchase securities on margin, make short sales of securities or
maintain a short position;
(7) purchase or sell commodities or commodity contracts, or invest in
oil, gas or mineral exploration or development programs;
(8) purchase voting securities of any issuer or acquire securities of
other investment companies, except in connection with a merger,
consolidation or acquisition; or
(9) purchase any security if, as a result, 25% or more of the value of
the Fund's total assets would be invested in the securities of issuers
having their principal business activities in the same industry, except
that this limitation does not apply to New York municipal securities or to
other municipal securities or securities issued or guaranteed by the U.S.
government, its agencies and instrumentalities.
For purposes of limitation (9), when the assets and revenues of an agency,
authority, instrumentality or other political subdivision are separate from the
government creating the subdivision and the security is backed only by the
assets and revenues of the subdivision, such subdivision would be deemed to be
the sole issuer. Similarly, in the case of an industrial development bond
('IDB') or private authority bond ('PAB'), if that bond is backed only by the
assets and revenues of the nongovernmental user, then such nongovernmental user
would be deemed to be the sole issuer. However, if in either case the creating
government or some other agency guarantees a security, such a guarantee would be
considered a separate security and would be treated as an issue of such
government or other agency.
The Fund will continue to interpret fundamental investment limitation (5)
to prohibit investment in real estate limited partnerships.
* * * * *
In addition to the foregoing fundamental limitations, the Fund currently
has an affirmative policy to invest, except for temporary purposes, at least
80%, and to seek to invest 100%, of its net assets in municipal securities
issued by the State of New York, its municipalities and public authorities and
other issuers if such obligations pay interest that is exempt from federal
income tax as well as New York personal income tax. The revisions to the Fund's
fundamental restrictions under Proposal 3 will not change that policy.
FR-7
<PAGE>
MUNICIPAL MONEY SERIES
RMA CONNECTICUT FUND
No Series may:
1. Purchase securities other than Municipal Obligations and Taxable
Investments as those terms are referred to above and in the Prospectus.
2. Borrow money, except from banks for temporary or emergency (not
leveraging) purposes, in an amount up to 15% of the Series' total assets
(including the amount borrowed) based upon the lesser of cost or market,
less liabilities (not including the amount borrowed) at the time the
borrowing is made. While borrowings exceed 5% of the value of the Series'
total assets, the Series will not make any additional investments.
3. Pledge, hypothecate, mortgage or otherwise encumber its assets,
except to secure borrowings for temporary or emergency purposes.
4. Make loans to others, except through the purchase of qualified debt
obligations and entry into repurchase agreements referred to above and in
the Prospectus.
5. Purchase or sell real estate investment trust securities,
commodities or commodity contracts, or oil and gas interests, but this
shall not prevent the Series from investing in Municipal Obligations
secured by real estate or interests therein.
6. Sell securities short or purchase securities on margin.
7. Enter into repurchase agreements providing for settlement in more
than seven days after notice or purchase securities which are illiquid
(which securities could include municipal lease/purchase agreements,
participation interests that are not subject to the demand feature
described in the Fund's Prospectus and floating and variable rate demand
obligations as to which the Series cannot exercise the demand feature
described in the Fund's Prospectus on less than seven days' notice and as
to which there is no secondary market), if, in the aggregate, more than 10%
of the Series' net assets would be so invested.
8. Underwrite securities of other issuers, except that the Series may
bid separately or as part of a group for the purchase of Municipal
Obligations directly from an issuer for its own portfolio to take advantage
of the lower purchase price available.
9. Purchase the securities of any other registered investment company,
except in connection with a merger, consolidation, reorganization or
acquisition of assets.
10. Purchase securities of any issuer for the purpose of exercising
control or management.
11. Invest more than 25% of such Series' assets in the securities of
issuers in any single industry; however, there is no limitation on the
purchase of Municipal Obligations and, for temporary defensive purposes,
obligations issued or guaranteed by the U.S. Government, its agencies or
instrumentalities.
For purposes of Investment Restriction No. 11, industrial development
bonds, where payment of principal and interest is the ultimate responsibility of
companies within the same industry, are grouped together as an 'industry.'
If a percentage restriction is adhered to at the time of investment, a
later increase or decrease in percentage resulting from a change in value of
portfolio securities or amount of net assets will not be considered a violation
of any of the foregoing restrictions.
The Fund may make commitments more restrictive than the restrictions listed
above so as to permit the sale of Series shares in certain states. Should the
Fund determine that a commitment is no longer in the best interests of a Series
and its shareholders, the Fund reserves the right to revoke the commitment by
terminating the sale of such Series' shares in the state involved.
* * * * *
In addition to the foregoing fundamental limitations, the Fund currently
has an affirmative policy to invest, except for temporary defensive positions,
at least 65% of the value of its net assets in the debt obligations of the State
of Connecticut, its political subdivisions, authorities and corporations, the
interest from which is, in the opinion of bond counsel to the issuer, exempt
from Federal and Connecticut income taxes. The revisions to the Fund's
fundamental restrictions under Proposal 3 will not change that policy.
FR-8
<PAGE>
MUNICIPAL MONEY SERIES
RMA NEW JERSEY FUND
No Series may:
1. Purchase securities other than Municipal Obligations and Taxable
Investments as those terms are referred to above and in the Prospectus.
2. Borrow money, except from banks for temporary or emergency (not
leveraging) purposes, in an amount up to 15% of the Series' total assets
(including the amount borrowed) based upon the lesser of cost or market,
less liabilities (not including the amount borrowed) at the time the
borrowing is made. While borrowings exceed 5% of the value of the Series'
total assets, the Series will not make any additional investments.
3. Pledge, hypothecate, mortgage or otherwise encumber its assets,
except to secure borrowings for temporary or emergency purposes.
4. Make loans to others, except through the purchase of qualified debt
obligations and entry into repurchase agreements referred to above and in
the Prospectus.
5. Purchase or sell real estate investment trust securities,
commodities or commodity contracts, or oil and gas interests, but this
shall not prevent the Series from investing in Municipal Obligations
secured by real estate or interests therein.
6. Sell securities short or purchase securities on margin.
7. Enter into repurchase agreements providing for settlement in more
than seven days after notice or purchase securities which are illiquid
(which securities could include municipal lease/purchase agreements,
participation interests that are not subject to the demand feature
described in the Fund's Prospectus and floating and variable rate demand
obligations as to which the Series cannot exercise the demand feature
described in the Fund's Prospectus on less than seven days' notice and as
to which there is no secondary market), if, in the aggregate, more than 10%
of the Series' net assets would be so invested.
8. Underwrite securities of other issuers, except that the Series may
bid separately or as part of a group for the purchase of Municipal
Obligations directly from an issuer for its own portfolio to take advantage
of the lower purchase price available.
9. Purchase the securities of any other registered investment company,
except in connection with a merger, consolidation, reorganization or
acquisition of assets.
10. Purchase securities of any issuer for the purpose of exercising
control or management.
11. Invest more than 25% of such Series' assets in the securities of
issuers in any single industry; however, there is no limitation on the
purchase of Municipal Obligations and, for temporary defensive purposes,
obligations issued or guaranteed by the U.S. Government, its agencies or
instrumentalities.
For purposes of Investment Restriction No. 11, industrial development
bonds, where payment of principal and interest is the ultimate responsibility of
companies within the same industry, are grouped together as an 'industry.'
If a percentage restriction is adhered to at the time of investment, a
later increase or decrease in percentage resulting from a change in value of
portfolio securities or amount of net assets will not be considered a violation
of any of the foregoing restrictions.
The Fund may make commitments more restrictive than the restrictions listed
above so as to permit the sale of Series shares in certain states. Should the
Fund determine that a commitment is no longer in the best interests of a Series
and its shareholders, the Fund reserves the right to revoke the commitment by
terminating the sale of such Series' shares in the state involved.
* * * * *
In addition to the foregoing fundamental limitations, the Fund currently
has an affirmative policy to invest, except for temporary defensive positions,
at least 65% of the value of its net assets in the debt obligations of the State
of New Jersey, its political subdivisions, authorities and corporations, the
interest from which is, in the opinion of bond counsel to the issuer, exempt
from Federal and New Jersey income taxes. The revisions to the Fund's
fundamental restrictions under Proposal 3 will not change that policy.
FR-9
<PAGE>
RMA MONEY FUND
RETIREMENT MONEY FUND
The Fund may not:
(1) borrow money, except from banks for temporary purposes and except
for reverse repurchase agreements and then in an aggregate amount not in
excess of 10% of the asset value of the Fund at the time of such borrowing;
(2) mortgage, pledge or hypothecate any assets except in connection
with any such borrowing, and in such case the aggregate amount may not
exceed the lesser of the dollar amount borrowed or 5% of the asset value of
the Fund at the time of such borrowing, and provided that no such borrowing
will be made except to facilitate the orderly sale of portfolio securities
to accommodate abnormally heavy redemption requests if they should occur;
(3) make loans, except that the Fund may purchase or hold debt
instruments, including repurchase agreements, in accordance with its
investment policies and restrictions;
(4) purchase or sell real estate, except that the Fund may purchase
commercial paper issued by companies, including real estate investment
trusts, which invest in real estate or interests therein;
(5) purchase securities on margin, make short sales of securities or
maintain short positions;
(6) act as an underwriter of securities except to the extent that, in
connection with the disposition of portfolio securities, it may be deemed
to be an underwriter under the federal securities laws;
(7) purchase or sell commodities or commodity contracts or invest in
oil, gas or mineral exploration or development programs, except that the
Fund may invest in securities issued by companies that engage in such
activities;
(8) acquire voting securities of any issuer or acquire securities of
other investment companies, except in connection with a merger,
consolidation or acquisition;
(9) purchase securities of any one issuer, other than the U.S.
government and its agencies and instrumentalities, if immediately after
such purchase more than 5% of the Fund's total asset value would be
invested in such issuer, except that up to 25% of the Fund's asset value
may be invested without regard to such 5% limitation; or
(10) purchase securities if immediately after such purchase more than
25% of the value of the Fund's total assets would be invested in the
securities of one or more issuers conducting their principal business
activities in the same industry, provided that there is no limitation with
respect to investments in U.S. Treasury bills, other obligations issued or
guaranteed by the U.S. government, its agencies or instrumentalities,
certificates of deposit and banker's acceptances, and provided further that
neither all finance companies as a group nor all utility companies as a
group are considered a single industry for purposes of this policy. As to
utility companies, gas, electric, water and telephone companies will be
considered separate industries. As to finance companies, the following
categories will be considered separate industries: (a) captive automotive
finance, (b) captive equipment finance, (c) retail finance, (d) consumer
loan and (e) diversified finance.
Investment limitation (9) above permits the Fund to invest up to 25% of its
total assets without regard to the 5% limitation on investment in securities of
a single issuer (other than U.S. government securities). However, Rule 2a-7
under the Investment Company Act of 1940 ('1940 Act') generally requires that
the Fund apply the 5% limitation to 100% of its total assets. Rule 2a-7 provides
certain exceptions to the 5% limitation, including provisions that the Fund may
under limited circumstances invest more than 5% of its total assets in
securities of a single issuer for up to three business days, and invest more
than 5% of its total assets in unconditional puts of a single issuer, together
with all other securities issued or guaranteed by that issuer. The following
investment restrictions may be changed by the vote of the Corporation's board of
directors without shareholder approval: (1) the Fund's investments in warrants,
valued at the lower of cost or market, may not exceed 5% of the value of its net
assets, which amount may include warrants that are not listed on the New York or
American Stock Exchanges, provided that such warrants, valued at the lower of
cost or market, do not exceed 2% of the Fund's net assets, and (2) for purposes
of limitation (10) above, the certificates of deposit and banker's acceptances
with respect to which there is no limitation on the Fund's investment are only
those issued by domestic branches of U.S. banks.
The Fund will continue to interpret fundamental investment limitation (4)
to prohibit investment in real estate limited partnerships.
FR-10
<PAGE>
RMA MONEY FUND
RMA MONEY MARKET PORTFOLIO
The Portfolio may not:
(1) borrow money, except from banks for temporary purposes and except
for reverse repurchase agreements if otherwise permitted and then in an
aggregate amount not in excess of 10% of the asset value of the Portfolio
at the time of such borrowing;
(2) mortgage, pledge or hypothecate any assets except in connection
with any such borrowing and in such case the aggregate amount may not be in
excess of the lesser of the dollar amounts borrowed or 5% of the value of
the assets of the Portfolio at the time of such borrowing, and provided
that no such borrowing will be made except to facilitate the orderly sale
of portfolio securities to accommodate abnormally heavy redemption requests
if they should occur;
(3) make loans, except that the Portfolio may purchase or hold debt
instruments, including repurchase agreements, in accordance with its
investment policies and restrictions;
(4) purchase or sell real estate (however, the Portfolio may purchase
commercial paper issued by companies, including real estate investment
trusts, which invest in real estate or interests therein);
(5) purchase securities on margin, make short sales of securities or
maintain a short position;
(6) act as underwriter of securities except to the extent that, in
connection with the disposition of portfolio securities, it may be deemed
to be an underwriter under the federal securities laws;
(7) purchase or sell commodities or commodity contracts, or invest in
oil, gas or mineral exploration or development programs;
(8) acquire voting securities of any issuer or acquire securities of
other investment companies, except in connection with a merger,
consolidation or acquisition; or
(9) purchase securities of any one issuer, other than the U.S.
government and its agencies and instrumentalities, if immediately after
such purchase more than 5% of the Portfolio's total asset value would be
invested in such issuer, except that up to 25% of the Portfolio's total
asset value may be invested without regard to such 5% limitation.
In addition, the Portfolio may not purchase securities if immediately after
such purchase more than 25% of the value of its total assets would be invested
in the securities of one or more issuers conducting their principal business
activities in the same industry, provided that there is no limitation with
respect to investments in U.S. Treasury bills, other obligations issued or
guaranteed by the U.S. government, its agencies or instrumentalities,
certificates of deposit and bankers' acceptances of domestic branches of U.S.
banks. As to utility companies, gas, electric, water and telephone companies
will be considered separate industries. As to finance companies, the following
categories will be considered separate industries: (a) captive automotive
finance, (b) captive equipment finance, (c) retail finance, (d) consumer loan
and (e) diversified finance. Investment limitation (9) above permits a Portfolio
to invest up to 25% of its total assets without regard to the 5% limitation on
investment in securities of a single issuer (other than U.S. government
securities). However, Rule 2a-7 under the Investment Company Act of 1940 ('1940
Act') generally requires that the Portfolio apply the 5% limitation to 100% of
its respective total assets. Rule 2a-7 provides certain exceptions to the 5%
limitation, including provisions that the Portfolio under limited circumstances
may invest more than 5% of its total assets in securities of a single issuer for
up to three business days, and invest more than 5% of its total assets in
unconditional puts of a single issuer, together with all other securities issued
or guaranteed by that issuer.
The Portfolio will continue to interpret fundamental investment limitation
(4) to prohibit investment in real estate limited partnerships.
FR-11
<PAGE>
RMA MONEY FUND
RMA GOVERNMENT PORTFOLIO
The Portfolio may not:
(1) borrow money, except from banks for temporary purposes and except
for reverse repurchase agreements if otherwise permitted and then in an
aggregate amount not in excess of 10% of the asset value of the Portfolio
at the time of such borrowing;
(2) mortgage, pledge or hypothecate any assets except in connection
with any such borrowing and in such case the aggregate amount may not be in
excess of the lesser of the dollar amounts borrowed or 5% of the value of
the assets of the Portfolio at the time of such borrowing, and provided
that no such borrowing will be made except to facilitate the orderly sale
of portfolio securities to accommodate abnormally heavy redemption requests
if they should occur;
(3) make loans, except that the Portfolio may purchase or hold debt
instruments, including repurchase agreements, in accordance with its
investment policies and restrictions;
(4) purchase or sell real estate (however, the Money Market Portfolio
may purchase commercial paper issued by companies, including real estate
investment trusts, which invest in real estate or interests therein);
(5) purchase securities on margin, make short sales of securities or
maintain a short position;
(6) act as underwriter of securities except to the extent that, in
connection with the disposition of portfolio securities, it may be deemed
to be an underwriter under the federal securities laws;
(7) purchase or sell commodities or commodity contracts, or invest in
oil, gas or mineral exploration or development programs;
(8) acquire voting securities of any issuer or acquire securities of
other investment companies, except in connection with a merger,
consolidation or acquisition; or
(9) purchase securities of any one issuer, other than the U.S.
government and its agencies and instrumentalities, if immediately after
such purchase more than 5% of the Portfolio's total asset value would be
invested in such issuer, except that up to 25% of the Portfolio's total
asset value may be invested without regard to such 5% limitation.
Investment limitation (9) above permits the Portfolio to invest up to 25%
of its total assets without regard to the 5% limitation on investment in
securities of a single issuer (other than U.S. government securities). However,
Rule 2a-7 under the Investment Company Act of 1940 ('1940 Act') generally
requires that the Portfolio apply the 5% limitation to 100% of their respective
total assets. Rule 2a-7 provides certain exceptions to the 5% limitation,
including provisions that a Portfolio under limited circumstances may invest
more than 5% of its total assets in securities of a single issuer for up to
three business days, and invest more than 5% of its total assets in
unconditional puts of a single issuer, together with all other securities issued
or guaranteed by that issuer.
The Portfolio will continue to interpret fundamental investment limitation
(4) to prohibit investment in real estate limited partnerships.
FR-12
<PAGE>
RMA TAX-FREE FUND
The Fund may not:
(1) borrow money, except from banks for temporary purposes and except
for reverse repurchase agreements if otherwise permitted and then in an
aggregate amount not in excess of 10% of the asset value of the Fund at the
time of such borrowing;
(2) mortgage, pledge or hypothecate any assets except in connection
with any such borrowing and in such case the aggregate amount may not be in
excess of the lesser of the dollar amounts borrowed or 5% of the value of
the assets of the Fund at the time of such borrowing, and provided that no
such borrowing will be made except to facilitate the orderly sale of
portfolio securities to accommodate abnormally heavy redemption requests if
they should occur;
(3) make loans, except that the Fund may purchase or hold debt
instruments, including repurchase agreements, in accordance with its
investment policies and restrictions;
(4) purchase or sell real estate;
(5) purchase securities on margin, make short sales of securities or
maintain a short position;
(6) act as underwriter of securities except to the extent that, in
connection with the disposition of portfolio securities, it may be deemed
to be an underwriter under the federal securities laws;
(7) purchase or sell commodities or commodity contracts, or invest in
oil, gas or mineral exploration or development programs;
(8) acquire voting securities of any issuer or acquire securities of
other investment companies, except in connection with a merger,
consolidation or acquisition; or
(9) purchase securities of any one issuer, other than the U.S.
government and its agencies and instrumentalities, if immediately after
such purchase more than 5% of the Fund's total asset value would be
invested in such issuer, except that up to 25% of the Fund's total asset
value may be invested without regard to such 5% limitation.
For purposes of limitation (9) with respect to the Fund, when the assets
and revenues of an agency, authority, instrumentality or other political
subdivision are separate from the government creating the subdivision and the
security is backed only by the assets and revenues of the subdivision, such
subdivision would be deemed to be the sole issuer. Similarly, in the case of an
industrial development bond ('IDB') or private authority bond ('PAB'), if that
bond is backed only by the assets and revenues of the nongovernmental user, then
such nongovernmental user would be deemed to be the sole issuer. However, if in
either case the creating government or some other agency guarantees a security,
such a guarantee would be considered a separate security and would be treated as
an issue of such government or other agency.
Investment limitation (9) above permits a Fund to invest up to 25% of its
total assets without regard to the 5% limitation on investment in securities of
a single issuer (other than U.S. government securities).
The Fund will continue to interpret fundamental investment limitation (4)
to prohibit investment in real estate limited partnerships.
FR-13
<PAGE>
EXHIBIT 4A-1-1
PAINEWEBBER CASHFUND, INC.
AMENDED AND RESTATED
ARTICLES OF INCORPORATION
The following Amendment and Restatement of the Articles of Incorporation of
PaineWebber Cashfund, Inc. has been advised by the Board of Directors and
approved by the stockholders of the Corporation at a meeting on April [10],
1996, and sets forth all of the provisions of the Corporation's Articles of
Incorporation as of the effective date hereof.
FIRST:
The undersigned, Clifford J. Alexander, whose post office address is 1900 M
Street N.W., Washington, D.C. 20036, being at least twenty-one years of age,
under and by virtue of the General Laws of the State of Maryland authorizing the
formation of corporations, is acting as the sole incorporator with the intention
of forming a corporation (hereinafter called the 'Corporation').
SECOND: NAME.
The name of the Corporation is PaineWebber Cashfund, Inc.
THIRD: DURATION.
The duration of the Corporation shall be perpetual.
FOURTH: CORPORATE PURPOSES.
The purposes for which the Corporation is formed are to act as an open-end
management investment company under the Investment Company Act of 1940, as
amended, and to exercise and enjoy all of the powers, rights and privileges
granted to, or conferred upon, corporations of a similar character by the Public
General Laws of the State of Maryland now or hereafter in force, including, but
not limited to, the following:
(a) To hold, invest and reinvest its funds, and in connection
therewith to hold part or all of its funds in cash, and to purchase,
subscribe for or otherwise acquire, hold for investment or otherwise, to
trade and deal in, write, sell, assign, negotiate, transfer, exchange,
lend, pledge or otherwise dispose of or turn to account or realize upon,
securities (which term 'securities' shall, for the purposes of these
Articles of Incorporation, without limiting the generality thereof, be
deemed to include any stocks, shares, bonds, debentures, bills, notes,
mortgages, contracts or other obligations or evidences of indebtedness, and
any options, certificates, receipts, warrants or other instruments
representing rights to receive, purchase or subscribe for the same, or
evidencing or representing any other rights or interests therein, or in any
property, payments or assets; and any negotiable or non-negotiable
instruments and money market instruments, including bank certificates of
deposit, finance paper, commercial paper, bankers' acceptances and all
kinds of repurchase or reverse repurchase agreements) created or issued by
any United States or foreign issuer (which term 'issuer' shall, for the
purpose of these Articles of Incorporation, without limiting the generality
thereof, be deemed to include any persons, firms, associations,
partnerships, corporations, syndicates, combinations, organizations,
governments or subdivisions, agencies or instrumentalities of any
government); and to exercise, as owner or holder of any securities, all
rights, powers, and privileges in respect thereof including the right to
vote thereon; to aid by further investment any issuer, any obligation of or
interest in which is held by the Corporation or in the affairs of which the
Corporation has any direct or indirect interest; to guarantee or become
surety on any or all of the contracts, stocks, bonds, notes, debentures and
other obligations of any corporation, company, trust, association or firm;
and to do any and all acts and things for the preservation, protection,
improvement and enhancement in value of any and all such securities.
(b) To acquire all or any part of the goodwill, rights, property and
business of any person, firm, association or corporation heretofore or
hereafter engaged in any business similar to any business which the
Corporation has the power to conduct, and to hold, utilize, enjoy and in
any manner dispose of the whole or
4a-1-1
<PAGE>
any part of the rights, property and business so acquired, and to assume in
connection therewith any liabilities of any such person, firm, association
or corporation.
(c) To apply for, obtain, purchase or otherwise acquire, any patents,
copyrights, licenses, trademarks, trade names and the like, which may be
capable of being used for any of the purposes of the Corporation; and to
use, exercise, develop, grant licenses in respect of, sell and otherwise
turn to account, the same.
(d) To issue and sell shares of its own capital stock and securities
convertible into such capital stock in such amounts and on such terms and
conditions, for such purposes and for such amount or kind of consideration
(including without limitation thereto, securities) now or hereafter
permitted by the laws of the State of Maryland, by the Investment Company
Act of 1940 and by these Articles of Incorporation, as its Board of
Directors may determine.
(e) To purchase or otherwise acquire, hold, dispose of, resell,
transfer, reissue or cancel (all without the vote or consent of the
stockholders of the Corporation) shares of its capital stock in any manner
and to the extent now or hereafter permitted by the laws of the State of
Maryland, by the Investment Company Act of 1940 and by these Articles of
Incorporation.
(f) To conduct its business in all its branches at one or more offices
in Maryland and elsewhere in any part of the world, without restriction or
limit as to extent.
(g) To exercise and enjoy, in Maryland and in any other states,
territories, districts and United States dependencies and in foreign
countries, all of the powers, rights and privileges granted to, or
conferred upon, corporations by the Public General Laws of the State of
Maryland now or hereafter in force.
(h) In general to carry on any other business in connection with or
incidental to its corporate purposes, to do everything necessary, suitable
or proper for the accomplishment of such purposes or for the attainment of
any object or the furtherance of any power hereinbefore set forth, either
alone or in association with others, to do every other act or thing
incidental or appurtenant to or growing out of or connected with its
business or purposes, objects or powers, and, subject to the foregoing, to
have and exercise all the powers, rights and privileges conferred upon
corporations by the laws of the State of Maryland as in force from time to
time.
The foregoing objects and purposes shall, except as otherwise expressly
provided, be in no way limited or restricted by reference to, or inference from,
the terms of any other clause of this or any other Article of these Articles of
Incorporation, and shall each be regarded as independent and construed as a
power as well as an object and a purpose, and the enumeration of specific
purposes, objects and powers shall not be construed to limit or restrict in any
manner the meaning of general terms or the general powers of the Corporation now
or hereafter conferred by the laws of Maryland, nor shall the expression of one
thing be deemed to exclude another though it be of like nature, not expressed;
provided, however, that the Corporation shall not have power to carry on within
the State of Maryland any business whatsoever that precludes it from being
classified as an ordinary business corporation under the laws of the State of
Maryland; nor shall it carry on any business, or exercise any powers in any
other jurisdiction except to the extent that the same may lawfully be carried on
or exercised under the laws thereof.
Incident to meeting the purposes specified above, the Corporation also
shall have the power to:
(a) Acquire (by purchase, lease or otherwise) and hold, use, maintain,
develop and dispose of (by sale or otherwise) any property, real or
personal, and any interest therein;
(b) Borrow money and, in connection with such borrowing, issue notes
or other evidence of indebtedness; and
(c) Buy, hold, sell, and otherwise deal in and with commodities,
indices of commodities or securities, and foreign exchange, including the
purchase and sale of futures contracts and options on futures and forward
contracts related thereto, subject to any applicable provisions of law.
4a-1-2
<PAGE>
FIFTH: ADDRESS AND RESIDENT AGENT.
The post office address of the principal office of the Corporation in this
State is c/o The Corporation Trust Incorporated, 32 South Street, Baltimore,
Maryland 21202. The name of the resident agent of the Corporation in this State
is The Corporation Trust, Incorporated, a corporation of this State, and the
post office address of the resident agent is 32 South Street, Baltimore,
Maryland 21202.
SIXTH: CAPITAL STOCK.
SECTION 6.1. Authority to Issue. The total number of shares of capital
stock which the Corporation shall have authority to issue is 20 billion
(20,000,000,000) shares, $.001 par value per share ('Shares'), having an
aggregate par value of $20,000,000. The shares may be issued by the Board of
Directors in such separate and distinct series ('Series') and classes of Series
('Classes') as the Board of Directors shall from time to time create and
establish. As of the effective date of these Amended and Restated Articles of
Incorporation, the authorized Shares of the Corporation are allocated to the
following Series: 20 billion (20,000,000,000) Shares to the 'PaineWebber
Cashfund' Series.
The Board of Directors shall have full power and authority, in its sole
discretion, to create and establish Series and Classes having such preferences,
rights, voting powers, terms of conversion, restrictions, limitations on
dividends, qualifications, and terms and conditions of redemption as shall be
fixed and determined from time to time by resolution or resolutions providing
for the issuance of such Shares adopted by the Board of Directors. In the event
of establishment of Classes, each Class of a Series shall represent interests in
the assets of that Series and have identical voting, dividend, liquidation and
other rights and the same terms and conditions as any other Class of that
Series, except that expenses allocated to the Class of a Series may be borne
solely by such Class as shall be determined by the Directors and a Class of a
Series may have exclusive voting rights with respect to matters affecting only
that Class. Expenses related to the distribution of, and other identified
expenses that should properly be allocated to, the shares of a particular Class
or Series of capital stock may be charged to and borne solely by such Class or
Series and the bearing of expenses solely by a Class or Series of capital stock
may be appropriately reflected (in a manner determined by the Board of
Directors) and cause differences in the net asset value attributable to, and the
dividend, redemption and liquidation rights of, the shares of each Class or
Series of capital stock. In addition, the Board of Directors is hereby expressly
granted authority to increase or decrease the number of Shares of any Series or
Class, but the number of Shares of any Series or Class shall not be decreased by
the Board of Directors below the number of Shares thereof then outstanding.
The Board of Directors of the Corporation is authorized from time to time
to classify or to reclassify, as the case may be, any unissued Shares of the
Corporation in separate Series or Classes. Except as otherwise provided in these
Articles of Incorporation, the shares of said Series or Classes of stock shall
have such preferences, rights, voting powers, restrictions, limitations as to
dividends, qualifications, and terms and conditions of redemption as shall be
fixed and determined from time to time by the Board of Directors. The
Corporation may hold as treasury shares, reissue for such consideration and on
such terms as the Board of Directors may determine, or cancel, at their
discretion from time to time, any Shares reacquired by the Corporation. No
holder of any of the Shares shall be entitled as of right to subscribe for,
purchase, or otherwise acquire any Shares of the Corporation which the
Corporation proposes to issue or reissue.
The Corporation shall have authority to issue any additional Shares
hereafter authorized and any Shares redeemed or repurchased by the Corporation.
All Shares of any Series or Class when properly issued in accordance with these
Articles of Incorporation shall be fully paid and nonassessable.
SECTION 6.2. Redemption by Stockholders. Each holder of Shares shall have
the right at such times as may be permitted by the Corporation to require the
Corporation to redeem all or any part of his or her Shares at a redemption price
per Share equal to the net asset value per Share at such time as the Board of
Directors shall have prescribed by resolution. In the absence of such
resolution, the redemption price per Share shall be the net asset value next
determined (in accordance with Section 6.4) after receipt by the Corporation of
a request for redemption in proper form less such charges as are determined by
the Board of Directors and described in the Corporation's Registration Statement
under the Securities Act of 1933. The Board of Directors may specify conditions,
prices, and places of redemption, and may specify binding requirements for the
proper form or forms of requests for redemption. Payment of the redemption price
may be wholly or partly in securities or other assets
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at the value of such securities or assets used in such determination of net
asset value, or may be in cash. Notwithstanding the foregoing, the Board of
Directors may postpone payment of the redemption price and may suspend the right
of the holders of Shares to require the Corporation to redeem Shares during any
period or at any time when and to the extent permissible under the Investment
Company Act of 1940.
SECTION 6.3. Redemption by the Corporation. The Board of Directors may
cause the Corporation to redeem at current net asset value all Shares owned or
held by any one stockholder having an aggregate current net asset value of less
than five hundred dollars ($500). No such redemption shall be effected unless
the Corporation has given the stockholder at least sixty (60) days' notice of
its intention to redeem the Shares and an opportunity to purchase a sufficient
number of additional Shares to bring the aggregate current net asset value of
his or her Shares to five hundred dollars ($500). Upon redemption of Shares
pursuant to this Section, the Corporation shall promptly cause payment of the
full redemption price to be made to the holder of Shares so redeemed.
SECTION 6.4. Net Asset Value per Share. The net asset value of each Share
of the Corporation, or each Series or Class, shall be the quotient obtained by
dividing the value of the net assets of the Corporation, or if applicable of the
Series (being the value of the assets of the Corporation or of the particular
Series less its actual and accrued liabilities exclusive of capital stock and
surplus), by the total number of outstanding Shares of the Corporation, or of
the Series or Class. Such determination may be made on a Series-by-Series basis
or made or adjusted on a Class-by-Class basis, as appropriate and shall include
any expenses allocated to a specific Series or Class thereof. The Board of
Directors shall have the power and duty to determine from time to time the net
asset value per Share at such times and by such methods as it shall include any
expenses allocated to a specific Series or Class thereof. The Board of Directors
shall have the power and duty to determine from time to time the net asset value
per Share at such times and by such methods as it shall determine, subject to
any restrictions or requirements under the Investment Company Act of 1940 and
the rules, regulations and interpretations thereof promulgated or issued by the
Securities and Exchange Commission or insofar as permitted by any order of the
Securities and Exchange Commission applicable to the Corporation. The Board of
Directors may delegate such power and duty to any one or more of the directors
and officers of the Corporation, the Corporation's administrator, investment
adviser, custodian or depository of the Corporation's assets, or another agent
of the Corporation.
SECTION 6.5. Establishment of Series or Class. The establishment of any
Series or Class shall be effective upon the adoption of a resolution by a
majority of the Directors setting forth such establishment and designation and
the relative rights and preferences of the Shares of such Series or Class. At
any time that there are no Shares outstanding of any particular Series or Class
previously established and designated, the Directors may by a majority vote
abolish that Series or Class and the establishment and designation thereof.
SECTION 6.6. Assets and Liabilities of Series or Class. All consideration
received by the Corporation for the issuance or sale of Shares of a particular
Series, together with all assets in which such consideration is invested or
reinvested, all income, earnings, profits, and proceeds thereof, including any
proceeds derived from the sale, exchange, or liquidation of such assets, and any
funds or payments derived from any reinvestment of such proceeds in whatever
form, shall be referred to as 'assets belonging to' that Series. In addition,
any assets, income, earnings, profits, and proceeds thereof, funds, or payments
which are not readily identifiable as belonging to any particular Series shall
be allocated by the Board of Directors between and among one or more of the
Series in such manner as the Board of Directors, in its sole discretion, deems
fair and equitable. Each such allocation shall be conclusive and binding upon
the stockholders of all Series for all purposes, and shall be referred to as
assets belonging to that Series. The assets belonging to a particular Series
shall be charged with the liabilities of that Series, and all expenses, costs,
charges, and reserves attributable to that Series or Class thereof shall be
borne by that Series or Class. Any general liabilities, expenses, costs, charges
or reserves of the Corporation which are not readily identifiable as belonging
to any particular Series or Class shall be allocated and charged by the Board of
Directors between or among any one or more of the Series or Classes in such a
manner as the Board of Directors in its sole discretion deems fair and
equitable. Each such allocation shall be conclusive and binding upon the
stockholders of all Series or Classes for all purposes.
SECTION 6.7 Dividends. Dividends and distributions on Shares with respect
to each Series or Class may be declared and paid with such frequency and in such
form and amount as the Board of Directors may from time
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to time determine. Dividends may be declared daily or otherwise pursuant to a
standing resolution or resolutions adopted only once or with such frequency as
the Board of Directors may determine.
All dividends and distributions of shares of a particular Series shall be
distributed pro rata to the holders of that Series in proportion to the number
of Shares of that Series held by such holders at the date and time of record
established for the payment of such dividends or distributions, except that such
dividends and distributions shall appropriately reflect expenses allocated to a
particular Class of such Series.
The Board of Directors shall have the power, in its sole discretion, to
distribute in any fiscal year as dividends (including dividends designated in
whole or in part as capital gain distributions) amounts sufficient, in the
opinion of the Board of Directors, to enable the Corporation, or when applicable
each Series of the Corporation, to qualify as a regulated investment company
under the Internal Revenue Code of 1986, as amended, or any successor or
comparable statute thereto, and regulations promulgated thereunder, and to avoid
liability of the Corporation, or each Series of the Corporation, for federal
income tax in respect of that year. The foregoing shall not limit the authority
of the Board of Directors to make distributions greater than or less than the
amount necessary to qualify as a regulated investment company and to avoid
liability of the Corporation, or any Series of the Corporation, for such tax.
Dividends and distributions may be paid in cash, property or Shares, or a
combination thereof, as determined by the Board of Directors or pursuant to any
program that the Board of Directors, may have in effect at the time. Any such
dividend or distribution paid in Shares will be paid at the current net asset
value thereof as defined in Section 6.4.
SEVENTH: ISSUANCE OF SHARES.
SECTION 7.1. Issuance of New Shares. The Board of Directors is authorized
to issue and sell or cause to be issued and sold from time to time (without the
necessity of offering the same or any part thereof to existing stockholders) all
or any portion or portions of the entire authorized but unissued Shares of the
Corporation, and all or any portion or portions of the Shares of the Corporation
from time to time in its treasury, for cash or for any other lawful
consideration or considerations and on or for any terms, conditions, or prices
consistent with the provisions of law and of the Articles of Incorporation at
the time in force; provided, however, that in no event shall Shares of the
Corporation be issued or sold for a consideration or considerations less in
amount or value than the par value of the Shares so issued or sold, and provided
further that in no event shall any Shares of the Corporation be issued or sold,
except as a stock dividend distributed to stockholders, for a consideration
(which shall be net to the Corporation after underwriting discounts or
commissions) less in amount or value than the net asset value of the Shares so
issued or sold determined as of such time as the Board of Directors shall have
by resolution prescribed. In the absence of such resolution, such net asset
value shall be that next determined after an unconditional order in proper form
to purchase such Shares is accepted, except that Shares may be sold to an
underwriter at (a) the net asset value next determined after such orders are
received by a dealer with whom such underwriter has a sales agreement or (b) the
net asset value determined at a later time.
SECTION 7.2. Issuance of Fractional Shares. The Corporation may issue and
sell fractions of Shares having pro rata all the rights of full Shares,
including, without limitation, the right to vote and to receive dividends, and
wherever the words 'Share' or 'Shares' are used in these Articles or in the
By-Laws they shall be deemed to include fractions of Shares, where the context
does not clearly indicate that only full Shares are intended.
EIGHTH: VOTING.
On each matter submitted to a vote of the stockholders, each holder of a
Share shall be entitled to one vote for each Share and fractional votes for
fractional Shares standing in his or her name on the books of the Corporation;
provided, however, that when required by the Investment Company Act of 1940 or
rules thereunder, or when the Board of Directors has determined that the matter
affects only the interests of one Series or Class, each holder of Shares thereof
shall be entitled to votes equal to the full and fractional Shares of the Series
or Class standing in his or her name on the books of the Corporation. The
presence in person or by proxy of the holders of one-third of the Shares
outstanding and entitled to vote shall constitute a quorum for the transaction
of business at a stockholders' meeting, except that where any provision of law
or of these Articles of Incorporation
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permit or require that holders of any Series or Class shall vote as a Series or
Class, one-third of the aggregate number of Shares of that Series or Class
outstanding and entitled to vote shall constitute a quorum for the transaction
of business by that Series or Class.
Notwithstanding any provision of law requiring a greater proportion than a
majority of the votes of all Shares of the Corporation or of all Series or
Classes (or of any Series or Class entitled to vote thereon as a separate Series
or Class) to take or authorize any action, in accordance with the authority
granted by Section 2-104(b)(5) of the Maryland Corporations and Associations
Code, the Corporation is hereby authorized to take such action upon the
concurrence of a majority of the aggregate number of Shares entitled to vote
thereon (or of a majority of the aggregate number of Shares of a Series or Class
entitled to vote thereon as a separate Series or Class). The right to cumulate
votes in the election of directors is expressly prohibited.
NINTH: BOARD OF DIRECTORS.
All corporate powers and authority of the Corporation (except as otherwise
provided by statute, these Articles of Incorporation, or the By-Laws of the
Corporation) shall be vested in and exercised by the Board of Directors. The
number of directors constituting the Board of Directors shall be such number as
may from time to time be fixed in or in accordance with the By-Laws of the
Corporation, provided that after stock is issued to more than one stockholder,
such number shall not be less than three. Except as provided in the By-Laws, the
election of directors may be conducted in any way approved at the meeting
(whether of stockholders or directors) at which the election is held, provided
that such election shall be by ballot whenever requested by any person entitled
to vote. As of the effective date of these Amended and Restated Articles of
Incorporation, the Board of Directors is comprised of eleven members, and the
following persons have been duly elected or appointed to serve as Directors: [to
be completed prior to filing with the Maryland State Department of Assessments
and Taxation].
TENTH: CONTRACTS.
SECTION 10.1. Contracts in General. The Board of Directors may in its
discretion from time to time enter into an exclusive or nonexclusive
distribution contract or contracts providing for the sale of Shares whereby the
Corporation may either agree to sell Shares to the other party to the contract
or appoint such other party its sales agent for such shares (such other party
being herein sometimes called the 'underwriter'), and in either case on such
terms and conditions as may be prescribed in the By-Laws, if any, and such
further terms and conditions as the Board of Directors may in its discretion
determine not inconsistent with the provisions of these Articles of
Incorporation and such contract may also provide for the repurchase of Shares of
the Corporation by such other party or parties as agent of the Corporation. The
Board of Directors may also in its discretion from time to time enter into an
investment advisory or management contract or contracts whereby the other party
to such contract shall undertake to furnish to the Board of Directors such
management, investment advisory, statistical and research facilities and
services and, if any, and all upon such terms and conditions as the Board of
Directors may in its discretion determine.
SECTION 10.2. Parties to Contracts. Any contract of the character
described in Section 10.1 or for services as administrator, custodian, transfer
agent or disbursing agent or related services may be entered into with any
corporation, firm, trust or association, although any one or more of the
directors or officers of the Corporation may be an officer, director, trustee,
stockholder or member of such other party to the contract, and no such contract
shall be invalidated or rendered voidable by reason of the existence of any such
relationship, nor shall any person holding such relationship be liable merely by
reason of such relationship for any loss or expense to the Corporation under or
by reason of said contract or accountable for any profit realized directly or
indirectly therefrom, provided that the contract when entered into was
reasonable and fair and not inconsistent with the provisions of this Article
TENTH. The same person (including a firm, corporation, trust, or association)
may be the other party to contracts entered into pursuant to Section 10.1 above,
and any individual may be financially interested or otherwise affiliated with
persons who are parties to any or all of the contracts mentioned in this Section
10.2.
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ELEVENTH: LIABILITY OF DIRECTORS AND OFFICERS.
SECTION 11.1. Liability. To the maximum extent permitted by applicable
law (including Maryland law and the Investment Company Act of 1940) as currently
in effect or as may hereafter be amended, no director or officer of the
Corporation shall be liable to the Corporation or its stockholders for money
damages.
SECTION 11.2. Indemnification. To the maximum extent permitted by
applicable law (including Maryland law and the Investment Company Act of 1940)
currently in effect or as may hereafter be amended, the Corporation shall
indemnify and advance expenses as provided in the By-Laws to its present and
past directors, officers, employees and agents, and persons who are serving or
have served at the request of the Corporation as a director, officer, employee
or agent in similar capacities for other entities.
SECTION 11.3. Insurance. The Corporation may purchase and maintain
insurance on behalf of any person who is or was a director, officer, employee or
agent of the Corporation, or is or was serving at the request of the Corporation
as a director, officer, employee or agent of another corporation, partnership,
joint venture, trust or other enterprise against any liability asserted against
him or her and incurred by him or her in any such capacity or arising out of his
or her status as such, whether or not the Corporation would have the power to
indemnify him or her against such liability.
SECTION 11.4. Modification. Any repeal or modification of this Article
ELEVENTH by the stockholders of the Corporation, or adoption or modification of
any other provision of the Articles of Incorporation or By-Laws inconsistent
with this Article ELEVENTH, shall be prospective only, to the extent that such
repeal or modification would, if applied retrospectively, adversely affect any
limitation on the liability of any director or officer of the Corporation or
indemnification available to any person covered by these provisions with respect
to any act or omission which occurred prior to such repeal, modification or
adoption.
TWELFTH: AMENDMENT.
SECTION 12.1. Articles of Incorporation. The Corporation reserves the
right from time to time to make any amendment of these Articles of
Incorporation, now or hereafter authorized by law, including any amendment which
alters contract rights, as expressly set forth in these Articles of
Incorporation, of any outstanding Shares. Any amendment to these Articles of
Incorporation may be adopted at a meeting of the stockholders upon receiving an
affirmative vote of majority of all votes entitled to be cast thereon or may be
amended by the board of directors to the extent permitted by laws of the State
of Maryland.
SECTION 12.2. By-Laws. Except as may otherwise be provided in the
By-Laws, the Board of Directors of the Corporation is expressly authorized to
make, alter, amend and repeal By-Laws or to adopt new By-Laws of the
Corporation, without any action on the part of the stockholders; but the By-Laws
made by the Board of Directors and the power so conferred may be altered or
repealed by the stockholders.
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EXHIBIT 4A-2-1
PAINEWEBBER RMA MONEY FUND, INC.
AMENDED AND RESTATED
ARTICLES OF INCORPORATION
The following Amendment and Restatement of the Articles of Incorporation of
PaineWebber RMA Money Fund, Inc. has been advised by the Board of Directors and
approved by the stockholders of the Corporation at a meeting on April [10],
1996, and sets forth all of the provisions of the Corporation's Articles of
Incorporation as of the effective date hereof.
FIRST:
The undersigned, Clifford J. Alexander, whose post office address is 1900 M
Street N.W., Washington, D.C. 20036, being at least twenty-one years of age,
under and by virtue of the General Laws of the State of Maryland authorizing the
formation of corporations, is acting as the sole incorporator with the intention
of forming a corporation (hereinafter called the 'Corporation').
SECOND: NAME.
The name of the Corporation is PaineWebber RMA Money Fund, Inc.
THIRD: DURATION.
The duration of the Corporation shall be perpetual.
FOURTH: CORPORATE PURPOSES.
The purposes for which the Corporation is formed are to act as an open-end
management investment company under the Investment Company Act of 1940, as
amended, and to exercise and enjoy all of the powers, rights and privileges
granted to, or conferred upon, corporations of a similar character by the Public
General Laws of the State of Maryland now or hereafter in force, including, but
not limited to, the following:
(a) To hold, invest and reinvest its funds, and in connection
therewith to hold part or all of its funds in cash, and to purchase,
subscribe for or otherwise acquire, hold for investment or otherwise, to
trade and deal in, write, sell, assign, negotiate, transfer, exchange,
lend, pledge or otherwise dispose of or turn to account or realize upon,
securities (which term 'securities' shall, for the purposes of these
Articles of Incorporation, without limiting the generality thereof, be
deemed to include any stocks, shares, bonds, debentures, bills, notes,
mortgages, contracts or other obligations or evidences of indebtedness, and
any options, certificates, receipts, warrants or other instruments
representing rights to receive, purchase or subscribe for the same, or
evidencing or representing any other rights or interests therein, or in any
property, payments or assets; and any negotiable or non-negotiable
instruments and money market instruments, including bank certificates of
deposit, finance paper, commercial paper, bankers' acceptances and all
kinds of repurchase or reverse repurchase agreements) created or issued by
any United States or foreign issuer (which term 'issuer' shall, for the
purpose of these Articles of Incorporation, without limiting the generality
thereof, be deemed to include any persons, firms, associations,
partnerships, corporations, syndicates, combinations, organizations,
governments or subdivisions, agencies or instrumentalities of any
government); and to exercise, as owner or holder of any securities, all
rights, powers, and privileges in respect thereof including the right to
vote thereon; to aid by further investment any issuer, any obligation of or
interest in which is held by the Corporation or in the affairs of which the
Corporation has any direct or indirect interest; to guarantee or become
surety on any or all of the contracts, stocks, bonds, notes, debentures and
other obligations of any corporation, company, trust, association or firm;
and to do any and all acts and things for the preservation, protection,
improvement and enhancement in value of any and all such securities.
(b) To acquire all or any part of the goodwill, rights, property and
business of any person, firm, association or corporation heretofore or
hereafter engaged in any business similar to any business which the
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Corporation has the power to conduct, and to hold, utilize, enjoy and in
any manner dispose of the whole or any part of the rights, property and
business so acquired, and to assume in connection therewith any liabilities
of any such person, firm, association or corporation.
(c) To apply for, obtain, purchase or otherwise acquire, any patents,
copyrights, licenses, trademarks, trade names and the like, which may be
capable of being used for any of the purposes of the Corporation; and to
use, exercise, develop, grant licenses in respect of, sell and otherwise
turn to account, the same.
(d) To issue and sell shares of its own capital stock and securities
convertible into such capital stock in such amounts and on such terms and
conditions, for such purposes and for such amount or kind of consideration
(including without limitation thereto, securities) now or hereafter
permitted by the laws of the State of Maryland, by the Investment Company
Act of 1940 and by these Articles of Incorporation, as its Board of
Directors may determine.
(e) To purchase or otherwise acquire, hold, dispose of, resell,
transfer, reissue or cancel (all without the vote or consent of the
stockholders of the Corporation) shares of its capital stock in any manner
and to the extent now or hereafter permitted by the laws of the State of
Maryland, by the Investment Company Act of 1940 and by these Articles of
Incorporation.
(f) To conduct its business in all its branches at one or more offices
in Maryland and elsewhere in any part of the world, without restriction or
limit as to extent.
(g) To exercise and enjoy, in Maryland and in any other states,
territories, districts and United States dependencies and in foreign
countries, all of the powers, rights and privileges granted to, or
conferred upon, corporations by the Public General Laws of the State of
Maryland now or hereafter in force.
(h) In general to carry on any other business in connection with or
incidental to its corporate purposes, to do everything necessary, suitable
or proper for the accomplishment of such purposes or for the attainment of
any object or the furtherance of any power hereinbefore set forth, either
alone or in association with others, to do every other act or thing
incidental or appurtenant to or growing out of or connected with its
business or purposes, objects or powers, and, subject to the foregoing, to
have and exercise all the powers, rights and privileges conferred upon
corporations by the laws of the State of Maryland as in force from time to
time.
The foregoing objects and purposes shall, except as otherwise expressly
provided, be in no way limited or restricted by reference to, or inference from,
the terms of any other clause of this or any other Article of these Articles of
Incorporation, and shall each be regarded as independent and construed as a
power as well as an object and a purpose, and the enumeration of specific
purposes, objects and powers shall not be construed to limit or restrict in any
manner the meaning of general terms or the general powers of the Corporation now
or hereafter conferred by the laws of Maryland, nor shall the expression of one
thing be deemed to exclude another though it be of like nature, not expressed;
provided, however, that the Corporation shall not have power to carry on within
the State of Maryland any business whatsoever that precludes it from being
classified as an ordinary business corporation under the laws of the State of
Maryland; nor shall it carry on any business, or exercise any powers in any
other jurisdiction except to the extent that the same may lawfully be carried on
or exercised under the laws thereof.
Incident to meeting the purposes specified above, the Corporation also
shall have the power to:
(a) Acquire (by purchase, lease or otherwise) and hold, use, maintain,
develop and dispose of (by sale or otherwise) any property, real or
personal, and any interest therein;
(b) Borrow money and, in connection with such borrowing, issue notes
or other evidence of indebtedness; and
(c) Buy, hold, sell, and otherwise deal in and with commodities,
indices of commodities or securities, and foreign exchange, including the
purchase and sale of futures contracts and options on futures and forward
contracts related thereto, subject to any applicable provisions of law.
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FIFTH: ADDRESS AND RESIDENT AGENT.
The post office address of the principal office of the Corporation in this
State is c/o The Corporation Trust Incorporated, 32 South Street, Baltimore,
Maryland 21202. The name of the resident agent of the Corporation in this State
is The Corporation Trust, Incorporated, a corporation of this State, and the
post office address of the resident agent is 32 South Street, Baltimore,
Maryland 21202.
SIXTH: CAPITAL STOCK.
SECTION 6.1. Authority to Issue. The total number of shares of capital
stock which the Corporation shall have authority to issue is 30 billion
(30,000,000,000) shares, $.001 par value per share ('Shares'), having an
aggregate par value of $30,000,000. The Shares may be issued by the Board of
Directors in such separate and distinct series ('Series') and classes of Series
('Classes') as the Board of Directors shall from time to time create and
establish. As of the effective date of these Amended and Restated Articles of
Incorporation, the authorized Shares of the Corporation are allocated to the
following Series: 15 billion (15,000,000,000) Shares to the 'PaineWebber RMA
Money Market Portfolio' Series; 5 billion (5,000,000,000) Shares to the
'PaineWebber RMA U.S. Government Portfolio' Series; and 10 billion
(10,000,000,000) Shares to the 'PaineWebber Retirement Money Fund' Series.
The Board of Directors shall have full power and authority, in its sole
discretion, to create and establish Series and Classes having such preferences,
rights, voting powers, terms of conversion, restrictions, limitations on
dividends, qualifications, and terms and conditions of redemption as shall be
fixed and determined from time to time by resolution or resolutions providing
for the issuance of such Shares adopted by the Board of Directors. In the event
of establishment of Classes, each Class of a Series shall represent interests in
the assets of that Series and have identical voting, dividend, liquidation and
other rights and the same terms and conditions as any other Class of that
Series, except that expenses allocated to the Class of a Series may be borne
solely by such Class as shall be determined by the Directors and a Class of a
Series may have exclusive voting rights with respect to matters affecting only
that Class. Expenses related to the distribution of, and other identified
expenses that should properly be allocated to, the shares of a particular Class
or Series of capital stock may be charged to and borne solely by such Class or
Series and the bearing of expenses solely by a Class or Series of capital stock
may be appropriately reflected (in a manner determined by the Board of
Directors) and cause differences in the net asset value attributable to, and the
dividend, redemption and liquidation rights of, the shares of each Class or
Series of capital stock. In addition, the Board of Directors is hereby expressly
granted authority to increase or decrease the number of Shares of any Series or
Class, but the number of Shares of any Series or Class shall not be decreased by
the Board of Directors below the number of Shares thereof then outstanding.
The Board of Directors of the Corporation is authorized from time to time
to classify or to reclassify, as the case may be, any unissued Shares of the
Corporation in separate Series or Classes. Except as otherwise provided in these
Articles of Incorporation, the shares of said Series or Classes of stock shall
have such preferences, rights, voting powers, restrictions, limitations as to
dividends, qualifications, and terms and conditions of redemption as shall be
fixed and determined from time to time by the Board of Directors. The
Corporation may hold as treasury shares, reissue for such consideration and on
such terms as the Board of Directors may determine, or cancel, at their
discretion from time to time, any Shares reacquired by the Corporation. No
holder of any of the Shares shall be entitled as of right to subscribe for,
purchase, or otherwise acquire any Shares of the Corporation which the
Corporation proposes to issue or reissue.
The Corporation shall have authority to issue any additional Shares
hereafter authorized and any Shares redeemed or repurchased by the Corporation.
All Shares of any Series or Class when properly issued in accordance with these
Articles of Incorporation shall be fully paid and nonassessable.
SECTION 6.2. Redemption by stockholders. Each holder of Shares shall have
the right at such times as may be permitted by the Corporation to require the
Corporation to redeem all or any part of his or her Shares at a redemption price
per Share equal to the net asset value per Share at such time as the Board of
Directors shall have prescribed by resolution. In the absence of such
resolution, the redemption price per Share shall be the net asset value next
determined (in accordance with Section 6.4) after receipt by the Corporation of
a request for redemption in proper form less such charges as are determined by
the Board of Directors and described in the Corporation's Registration Statement
under the Securities Act of 1933. The Board of Directors may specify
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conditions, prices, and places of redemption, and may specify binding
requirements for the proper form or forms of requests for redemption. Payment of
the redemption price may be wholly or partly in securities or other assets at
the value of such securities or assets used in such determination of net asset
value, or may be in cash. Notwithstanding the foregoing, the Board of Directors
may postpone payment of the redemption price and may suspend the right of the
holders of Shares to require the Corporation to redeem Shares during any period
or at any time when and to the extent permissible under the Investment Company
Act of 1940.
SECTION 6.3. Redemption by the Corporation. The Board of Directors may
cause the Corporation to redeem at current net asset value all Shares owned or
held by any one stockholder having an aggregate current net asset value of less
than five hundred dollars ($500). No such redemption shall be effected unless
the Corporation has given the stockholder at least sixty (60) days' notice of
its intention to redeem the Shares and an opportunity to purchase a sufficient
number of additional Shares to bring the aggregate current net asset value of
his or her Shares to five hundred dollars ($500). Upon redemption of Shares
pursuant to this Section, the Corporation shall promptly cause payment of the
full redemption price to be made to the holder of Shares so redeemed.
SECTION 6.4. Net Asset Value per Share. The net asset value of each Share
of the Corporation, or each Series or Class, shall be the quotient obtained by
dividing the value of the net assets of the Corporation, or if applicable of the
Series (being the value of the assets of the Corporation or of the particular
Series less its actual and accrued liabilities exclusive of capital stock and
surplus), by the total number of outstanding Shares of the Corporation, or of
the Series or Class. Such determination may be made on a Series-by-Series basis
or made or adjusted on a Class-by-Class basis, as appropriate and shall include
any expenses allocated to a specific Series or Class thereof. The Board of
Directors shall have the power and duty to determine from time to time the net
asset value per Share at such times and by such methods as it shall include any
expenses allocated to a specific Series or Class thereof. The Board of Directors
shall have the power and duty to determine from time to time the net asset value
per Share at such times and by such methods as it shall determine, subject to
any restrictions or requirements under the Investment Company Act of 1940 and
the rules, regulations and interpretations thereof promulgated or issued by the
Securities and Exchange Commission or insofar as permitted by any order of the
Securities and Exchange Commission applicable to the Corporation. The Board of
Directors may delegate such power and duty to any one or more of the directors
and officers of the Corporation, the Corporation's administrator, investment
adviser, custodian or depository of the Corporation's assets, or another agent
of the Corporation.
SECTION 6.5. Establishment of Series or Class. The establishment of any
Series or Class shall be effective upon the adoption of a resolution by a
majority of the Directors setting forth such establishment and designation and
the relative rights and preferences of the Shares of such Series or Class. At
any time that there are no Shares outstanding of any particular Series or Class
previously established and designated, the Directors may by a majority vote
abolish that Series or Class and the establishment and designation thereof.
SECTION 6.6. Assets and Liabilities of Series or Class. All consideration
received by the Corporation for the issuance or sale of Shares of a particular
Series, together with all assets in which such consideration is invested or
reinvested, all income, earnings, profits, and proceeds thereof, including any
proceeds derived from the sale, exchange, or liquidation of such assets, and any
funds or payments derived from any reinvestment of such proceeds in whatever
form, shall be referred to as 'assets belonging to' that Series. In addition,
any assets, income, earnings, profits, and proceeds thereof, funds, or payments
which are not readily identifiable as belonging to any particular Series shall
be allocated by the Board of Directors between and among one or more of the
Series in such manner as the Board of Directors, in its sole discretion, deems
fair and equitable. Each such allocation shall be conclusive and binding upon
the stockholders of all Series for all purposes, and shall be referred to as
assets belonging to that Series. The assets belonging to a particular Series
shall be charged with the liabilities of that Series, and all expenses, costs,
charges, and reserves attributable to that Series or Class thereof shall be
borne by that Series or Class. Any general liabilities, expenses, costs, charges
or reserves of the Corporation which are not readily identifiable as belonging
to any particular Series or Class shall be allocated and charged by the Board of
Directors between or among any one or more of the Series or Classes in such a
manner as the Board of Directors in its sole discretion deems fair and
equitable. Each such allocation shall be conclusive and binding upon the
stockholders of all Series or Classes for all purposes.
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SECTION 6.7. Dividends. Dividends and distributions on Shares with
respect to each Series or Class may be declared and paid with such frequency and
in such form and amount as the Board of Directors may from time to time
determine. Dividends may be declared daily or otherwise pursuant to a standing
resolution or resolutions adopted only once or with such frequency as the Board
of Directors may determine.
All dividends and distributions of shares of a particular Series shall be
distributed pro rata to the holders of that Series in proportion to the number
of Shares of that Series held by such holders at the date and time of record
established for the payment of such dividends or distributions, except that such
dividends and distributions shall appropriately reflect expenses allocated to a
particular Class of such Series.
The Board of Directors shall have the power, in its sole discretion, to
distribute in any fiscal year as dividends (including dividends designated in
whole or in part as capital gain distributions) amounts sufficient, in the
opinion of the Board of Directors, to enable the Corporation, or when applicable
each Series of the Corporation, to qualify as a regulated investment company
under the Internal Revenue Code of 1986, as amended, or any successor or
comparable statute thereto, and regulations promulgated thereunder, and to avoid
liability of the Corporation, or each Series of the Corporation, for federal
income tax in respect of that year. The foregoing shall not limit the authority
of the Board of Directors to make distributions greater than or less than the
amount necessary to qualify as a regulated investment company and to avoid
liability of the Corporation, or any Series of the Corporation, for such tax.
Dividends and distributions may be paid in cash, property or Shares, or a
combination thereof, as determined by the Board of Directors or pursuant to any
program that the Board of Directors, may have in effect at the time. Any such
dividend or distribution paid in Shares will be paid at the current net asset
value thereof as defined in Section 6.4.
SEVENTH: ISSUANCE OF SHARES.
SECTION 7.1. Issuance of New Shares. The Board of Directors is authorized
to issue and sell or cause to be issued and sold from time to time (without the
necessity of offering the same or any part thereof to existing stockholders) all
or any portion or portions of the entire authorized but unissued Shares of the
Corporation, and all or any portion or portions of the Shares of the Corporation
from time to time in its treasury, for cash or for any other lawful
consideration or considerations and on or for any terms, conditions, or prices
consistent with the provisions of law and of the Articles of Incorporation at
the time in force; provided, however, that in no event shall Shares of the
Corporation be issued or sold for a consideration or considerations less in
amount or value than the par value of the Shares so issued or sold, and provided
further that in no event shall any Shares of the Corporation be issued or sold,
except as a stock dividend distributed to stockholders, for a consideration
(which shall be net to the Corporation after underwriting discounts or
commissions) less in amount or value than the net asset value of the Shares so
issued or sold determined as of such time as the Board of Directors shall have
by resolution prescribed. In the absence of such resolution, such net asset
value shall be that next determined after an unconditional order in proper form
to purchase such Shares is accepted, except that Shares may be sold to an
underwriter at (a) the net asset value next determined after such orders are
received by a dealer with whom such underwriter has a sales agreement or (b) the
net asset value determined at a later time.
SECTION 7.2. Issuance of Fractional Shares. The Corporation may issue and
sell fractions of Shares having pro rata all the rights of full Shares,
including, without limitation, the right to vote and to receive dividends, and
wherever the words 'Share' or 'Shares' are used in these Articles or in the
By-Laws they shall be deemed to include fractions of Shares, where the context
does not clearly indicate that only full Shares are intended.
EIGHTH: VOTING.
On each matter submitted to a vote of the stockholders, each holder of a
Share shall be entitled to one vote for each Share and fractional votes for
fractional Shares standing in his or her name on the books of the Corporation;
provided, however, that when required by the Investment Company Act of 1940 or
rules thereunder, or when the Board of Directors has determined that the matter
affects only the interests of one Series or Class, each holder of Shares thereof
shall be entitled to votes equal to the full and fractional Shares of the Series
or Class standing in his or her name on the books of the Corporation. The
presence in person or by proxy of the
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holders of one-third of the Shares outstanding and entitled to vote shall
constitute a quorum for the transaction of business at a stockholders' meeting,
except that where any provision of law or of these Articles of Incorporation
permit or require that holders of any Series or Class shall vote as a Series or
Class, one-third of the aggregate number of Shares of that Series or Class
outstanding and entitled to vote shall constitute a quorum for the transaction
of business by that Series or Class.
Notwithstanding any provision of law requiring a greater proportion than a
majority of the votes of all Shares of the Corporation or of all Series or
Classes (or of any Series or Class entitled to vote thereon as a separate Series
or Class) to take or authorize any action, in accordance with the authority
granted by Section 2-104(b)(5) of the Maryland Corporations and Associations
Code, the Corporation is hereby authorized to take such action upon the
concurrence of a majority of the aggregate number of Shares entitled to vote
thereon (or of a majority of the aggregate number of Shares of a Series or Class
entitled to vote thereon as a separate Series or Class). The right to cumulate
votes in the election of directors is expressly prohibited.
NINTH: BOARD OF DIRECTORS.
All corporate powers and authority of the Corporation (except as otherwise
provided by statute, these Articles of Incorporation, or the By-Laws of the
Corporation) shall be vested in and exercised by the Board of Directors. The
number of directors constituting the Board of Directors shall be such number as
may from time to time be fixed in or in accordance with the By-Laws of the
Corporation, provided that after stock is issued to more than one stockholder,
such number shall not be less than three. Except as provided in the By-Laws, the
election of directors may be conducted in any way approved at the meeting
(whether of stockholders or directors) at which the election is held, provided
that such election shall be by ballot whenever requested by any person entitled
to vote. As of the effective date of these Amended and Restated Articles of
Incorporation, the Board of Directors is comprised of eleven members, and the
following persons have been duly elected or appointed to serve as Directors: [to
be completed prior to filing with the Maryland State Department of Assessments
and Taxation].
TENTH: CONTRACTS.
SECTION 10.1. Contracts in General. The Board of Directors may in its
discretion from time to time enter into an exclusive or nonexclusive
distribution contract or contracts providing for the sale of Shares whereby the
Corporation may either agree to sell Shares to the other party to the contract
or appoint such other party its sales agent for such shares (such other party
being herein sometimes called the 'underwriter'), and in either case on such
terms and conditions as may be prescribed in the By-Laws, if any, and such
further terms and conditions as the Board of Directors may in its discretion
determine not inconsistent with the provisions of these Articles of
Incorporation and such contract may also provide for the repurchase of Shares of
the Corporation by such other party or parties as agent of the Corporation. The
Board of Directors may also in its discretion from time to time enter into an
investment advisory or management contract or contracts whereby the other party
to such contract shall undertake to furnish to the Board of Directors such
management, investment advisory, statistical and research facilities and
services and, if any, and all upon such terms and conditions as the Board of
Directors may in its discretion determine.
SECTION 10.2. Parties to Contracts. Any contract of the character
described in Section 10.1 or for services as administrator, custodian, transfer
agent or disbursing agent or related services may be entered into with any
corporation, firm, trust or association, although any one or more of the
directors or officers of the Corporation may be an officer, director, trustee,
stockholder or member of such other party to the contract, and no such contract
shall be invalidated or rendered voidable by reason of the existence of any such
relationship, nor shall any person holding such relationship be liable merely by
reason of such relationship for any loss or expense to the Corporation under or
by reason of said contract or accountable for any profit realized directly or
indirectly therefrom, provided that the contract when entered into was
reasonable and fair and not inconsistent with the provisions of this Article
TENTH. The same person (including a firm, corporation, trust, or association)
may be the other party to contracts entered into pursuant to Section 10.1 above,
and any individual may be financially interested or otherwise affiliated with
persons who are parties to any or all of the contracts mentioned in this Section
10.2.
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ELEVENTH: LIABILITY OF DIRECTORS AND OFFICERS.
SECTION 11.1. Liability. To the maximum extent permitted by applicable
law (including Maryland law and the Investment Company Act of 1940) as currently
in effect or as may hereafter be amended, no director or officer of the
Corporation shall be liable to the Corporation or its stockholders for money
damages.
SECTION 11.2. Indemnification. To the maximum extent permitted by
applicable law (including Maryland law and the Investment Company Act of 1940)
currently in effect or as may hereafter be amended, the Corporation shall
indemnify and advance expenses as provided in the By-Laws to its present and
past directors, officers, employees and agents, and persons who are serving or
have served at the request of the Corporation as a director, officer, employee
or agent in similar capacities for other entities.
SECTION 11.3. Insurance. The Corporation may purchase and maintain
insurance on behalf of any person who is or was a director, officer, employee or
agent of the Corporation, or is or was serving at the request of the Corporation
as a director, officer, employee or agent of another corporation, partnership,
joint venture, trust or other enterprise against any liability asserted against
him or her and incurred by him or her in any such capacity or arising out of his
or her status as such, whether or not the Corporation would have the power to
indemnify him or her against such liability.
SECTION 11.4. Modification. Any repeal or modification of this Article
ELEVENTH by the stockholders of the Corporation, or adoption or modification of
any other provision of the Articles of Incorporation or By-Laws inconsistent
with this Article ELEVENTH, shall be prospective only, to the extent that such
repeal or modification would, if applied retrospectively, adversely affect any
limitation on the liability of any director or officer of the Corporation or
indemnification available to any person covered by these provisions with respect
to any act or omission which occurred prior to such repeal, modification or
adoption.
TWELFTH: AMENDMENT.
SECTION 12.1. Articles of Incorporation. The Corporation reserves the
right from time to time to make any amendment of these Articles of
Incorporation, now or hereafter authorized by law, including any amendment which
alters contract rights, as expressly set forth in these Articles of
Incorporation, of any outstanding Shares. Any amendment to these Articles of
Incorporation may be adopted at a meeting of the stockholders upon receiving an
affirmative vote of majority of all votes entitled to be cast thereon or may be
amended by the board of directors to the extent permitted by laws of the State
of Maryland.
SECTION 12.2. By-Laws. Except as may otherwise be provided in the
By-Laws, the Board of Directors of the Corporation is expressly authorized to
make, alter, amend and repeal By-Laws or to adopt new By-Laws of the
Corporation, without any action on the part of the stockholders; but the By-Laws
made by the Board of Directors and the power so conferred may be altered or
repealed by the stockholders.
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EXHIBIT 4A-3-1
PAINEWEBBER RMA TAX-FREE FUND, INC.
AMENDED AND RESTATED
ARTICLES OF INCORPORATION
The following Amendment and Restatement of the Articles of Incorporation of
PaineWebber RMA Tax-Free Fund, Inc. has been advised by the Board of Directors
and approved by the stockholders of the Corporation at a meeting on April [10],
1996, and sets forth all of the provisions of the Corporation's Articles of
Incorporation as of the effective date hereof.
FIRST:
The undersigned, Clifford J. Alexander, whose post office address is 1900 M
Street N.W., Washington, D.C. 20036, being at least twenty-one years of age,
under and by virtue of the General Laws of the State of Maryland authorizing the
formation of corporations, is acting as the sole incorporator with the intention
of forming a corporation (hereinafter called the 'Corporation').
SECOND: NAME.
The name of the Corporation is PaineWebber RMA Tax-Free Fund, Inc.
THIRD: DURATION.
The duration of the Corporation shall be perpetual.
FOURTH: CORPORATE PURPOSES.
The purposes for which the Corporation is formed are to act as an open-end
management investment company under the Investment Company Act of 1940, as
amended, and to exercise and enjoy all of the powers, rights and privileges
granted to, or conferred upon, corporations of a similar character by the Public
General Laws of the State of Maryland now or hereafter in force, including, but
not limited to, the following:
(a) To hold, invest and reinvest its funds, and in connection
therewith to hold part or all of its funds in cash, and to purchase,
subscribe for or otherwise acquire, hold for investment or otherwise, to
trade and deal in, write, sell, assign, negotiate, transfer, exchange,
lend, pledge or otherwise dispose of or turn to account or realize upon,
securities (which term 'securities' shall, for the purposes of these
Articles of Incorporation, without limiting the generality thereof, be
deemed to include any stocks, shares, bonds, debentures, bills, notes,
mortgages, contracts or other obligations or evidences of indebtedness, and
any options, certificates, receipts, warrants or other instruments
representing rights to receive, purchase or subscribe for the same, or
evidencing or representing any other rights or interests therein, or in any
property, payments or assets; and any negotiable or non-negotiable
instruments and money market instruments, including bank certificates of
deposit, finance paper, commercial paper, bankers' acceptances and all
kinds of repurchase or reverse repurchase agreements) created or issued by
any United States or foreign issuer (which term 'issuer' shall, for the
purpose of these Articles of Incorporation, without limiting the generality
thereof, be deemed to include any persons, firms, associations,
partnerships, corporations, syndicates, combinations, organizations,
governments or subdivisions, agencies or instrumentalities of any
government); and to exercise, as owner or holder of any securities, all
rights, powers, and privileges in respect thereof including the right to
vote thereon; to aid by further investment any issuer, any obligation of or
interest in which is held by the Corporation or in the affairs of which the
Corporation has any direct or indirect interest; to guarantee or become
surety on any or all of the contracts, stocks, bonds, notes, debentures and
other obligations of any corporation, company, trust, association or firm;
and to do any and all acts and things for the preservation, protection,
improvement and enhancement in value of any and all such securities.
(b) To acquire all or any part of the goodwill, rights, property and
business of any person, firm, association or corporation heretofore or
hereafter engaged in any business similar to any business which the
Corporation has the power to conduct, and to hold, utilize, enjoy and in
any manner dispose of the whole or
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any part of the rights, property and business so acquired, and to assume in
connection therewith any liabilities of any such person, firm, association
or corporation.
(c) To apply for, obtain, purchase or otherwise acquire, any patents,
copyrights, licenses, trademarks, trade names and the like, which may be
capable of being used for any of the purposes of the Corporation; and to
use, exercise, develop, grant licenses in respect of, sell and otherwise
turn to account, the same.
(d) To issue and sell shares of its own capital stock and securities
convertible into such capital stock in such amounts and on such terms and
conditions, for such purposes and for such amount or kind of consideration
(including without limitation thereto, securities) now or hereafter
permitted by the laws of the State of Maryland, by the Investment Company
Act of 1940 and by these Articles of Incorporation, as its Board of
Directors may determine.
(e) To purchase or otherwise acquire, hold, dispose of, resell,
transfer, reissue or cancel (all without the vote or consent of the
stockholders of the Corporation) shares of its capital stock in any manner
and to the extent now or hereafter permitted by the laws of the State of
Maryland, by the Investment Company Act of 1940 and by these Articles of
Incorporation.
(f) To conduct its business in all its branches at one or more offices
in Maryland and elsewhere in any part of the world, without restriction or
limit as to extent.
(g) To exercise and enjoy, in Maryland and in any other states,
territories, districts and United States dependencies and in foreign
countries, all of the powers, rights and privileges granted to, or
conferred upon, corporations by the Public General Laws of the State of
Maryland now or hereafter in force.
(h) In general to carry on any other business in connection with or
incidental to its corporate purposes, to do everything necessary, suitable
or proper for the accomplishment of such purposes or for the attainment of
any object or the furtherance of any power hereinbefore set forth, either
alone or in association with others, to do every other act or thing
incidental or appurtenant to or growing out of or connected with its
business or purposes, objects or powers, and, subject to the foregoing, to
have and exercise all the powers, rights and privileges conferred upon
corporations by the laws of the State of Maryland as in force from time to
time.
The foregoing objects and purposes shall, except as otherwise expressly
provided, be in no way limited or restricted by reference to, or inference from,
the terms of any other clause of this or any other Article of these Articles of
Incorporation, and shall each be regarded as independent and construed as a
power as well as an object and a purpose, and the enumeration of specific
purposes, objects and powers shall not be construed to limit or restrict in any
manner the meaning of general terms or the general powers of the Corporation now
or hereafter conferred by the laws of Maryland, nor shall the expression of one
thing be deemed to exclude another though it be of like nature, not expressed;
provided, however, that the Corporation shall not have power to carry on within
the State of Maryland any business whatsoever that precludes it from being
classified as an ordinary business corporation under the laws of the State of
Maryland; nor shall it carry on any business, or exercise any powers in any
other jurisdiction except to the extent that the same may lawfully be carried on
or exercised under the laws thereof.
Incident to meeting the purposes specified above, the Corporation also
shall have the power to:
(a) Acquire (by purchase, lease or otherwise) and hold, use, maintain,
develop and dispose of (by sale or otherwise) any property, real or
personal, and any interest therein;
(b) Borrow money and, in connection with such borrowing, issue notes
or other evidence of indebtedness; and
(c) Buy, hold, sell, and otherwise deal in and with commodities,
indices of commodities or securities, and foreign exchange, including the
purchase and sale of futures contracts and options on futures and forward
contracts related thereto, subject to any applicable provisions of law.
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FIFTH: ADDRESS AND RESIDENT AGENT.
The post office address of the principal office of the Corporation in this
State is c/o The Corporation Trust Incorporated, 32 South Street, Baltimore,
Maryland 21202. The name of the resident agent of the Corporation in this State
is The Corporation Trust, Incorporated, a corporation of this State, and the
post office address of the resident agent is 32 South Street, Baltimore,
Maryland 21202.
SIXTH: CAPITAL STOCK.
SECTION 6.1. Authority to Issue. The total number of shares of capital
stock which the Corporation shall have authority to issue is 20 billion
(20,000,000,000) shares, $.001 par value per share ('Shares'), having an
aggregate par value of $20,000,000. The Shares may be issued by the Board of
Directors in such separate and distinct series ('Series') and classes of Series
('Classes') as the Board of Directors shall from time to time create and
establish. As of the effective date of these Amended and Restated Articles of
Incorporation, the authorized Shares of the Corporation are allocated to the
following Series: 20 billion (20,000,000,000) Shares to the 'PaineWebber RMA
Tax-Free Fund' Series.
The Board of Directors shall have full power and authority, in its sole
discretion, to create and establish Series and Classes having such preferences,
rights, voting powers, terms of conversion, restrictions, limitations on
dividends, qualifications, and terms and conditions of redemption as shall be
fixed and determined from time to time by resolution or resolutions providing
for the issuance of such Shares adopted by the Board of Directors. In the event
of establishment of Classes, each Class of a Series shall represent interests in
the assets of that Series and have identical voting, dividend, liquidation and
other rights and the same terms and conditions as any other Class of that
Series, except that expenses allocated to the Class of a Series may be borne
solely by such Class as shall be determined by the Directors and a Class of a
Series may have exclusive voting rights with respect to matters affecting only
that Class. Expenses related to the distribution of, and other identified
expenses that should properly be allocated to, the shares of a particular Class
or Series of capital stock may be charged to and borne solely by such Class or
Series and the bearing of expenses solely by a Class or Series of capital stock
may be appropriately reflected (in a manner determined by the Board of
Directors) and cause differences in the net asset value attributable to, and the
dividend, redemption and liquidation rights of, the shares of each Class or
Series of capital stock. In addition, the Board of Directors is hereby expressly
granted authority to increase or decrease the number of Shares of any Series or
Class, but the number of Shares of any Series or Class shall not be decreased by
the Board of Directors below the number of Shares thereof then outstanding.
The Board of Directors of the Corporation is authorized from time to time
to classify or to reclassify, as the case may be, any unissued Shares of the
Corporation in separate Series or Classes. Except as otherwise provided in these
Articles of Incorporation, the shares of said Series or Classes of stock shall
have such preferences, rights, voting powers, restrictions, limitations as to
dividends, qualifications, and terms and conditions of redemption as shall be
fixed and determined from time to time by the Board of Directors. The
Corporation may hold as treasury shares, reissue for such consideration and on
such terms as the Board of Directors may determine, or cancel, at their
discretion from time to time, any Shares reacquired by the Corporation. No
holder of any of the Shares shall be entitled as of right to subscribe for,
purchase, or otherwise acquire any Shares of the Corporation which the
Corporation proposes to issue or reissue.
The Corporation shall have authority to issue any additional Shares
hereafter authorized and any Shares redeemed or repurchased by the Corporation.
All Shares of any Series or Class when properly issued in accordance with these
Articles of Incorporation shall be fully paid and nonassessable.
SECTION 6.2. Redemption by stockholders. Each holder of Shares shall have
the right at such times as may be permitted by the Corporation to require the
Corporation to redeem all or any part of his or her Shares at a redemption price
per Share equal to the net asset value per Share at such time as the Board of
Directors shall have prescribed by resolution. In the absence of such
resolution, the redemption price per Share shall be the net asset value next
determined (in accordance with Section 6.4) after receipt by the Corporation of
a request for redemption in proper form less such charges as are determined by
the Board of Directors and described in the Corporation's Registration Statement
under the Securities Act of 1933. The Board of Directors may specify conditions,
prices, and places of redemption, and may specify binding requirements for the
proper form or forms of requests for redemption. Payment of the redemption price
may be wholly or partly in securities or other assets
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at the value of such securities or assets used in such determination of net
asset value, or may be in cash. Notwithstanding the foregoing, the Board of
Directors may postpone payment of the redemption price and may suspend the right
of the holders of Shares to require the Corporation to redeem Shares during any
period or at any time when and to the extent permissible under the Investment
Company Act of 1940.
SECTION 6.3. Redemption by the Corporation. The Board of Directors may
cause the Corporation to redeem at current net asset value all Shares owned or
held by any one stockholder having an aggregate current net asset value of less
than five hundred dollars ($500). No such redemption shall be effected unless
the Corporation has given the stockholder at least sixty (60) days' notice of
its intention to redeem the Shares and an opportunity to purchase a sufficient
number of additional Shares to bring the aggregate current net asset value of
his or her Shares to five hundred dollars ($500). Upon redemption of Shares
pursuant to this Section, the Corporation shall promptly cause payment of the
full redemption price to be made to the holder of Shares so redeemed.
SECTION 6.4. Net Asset Value per Share. The net asset value of each Share
of the Corporation, or each Series or Class, shall be the quotient obtained by
dividing the value of the net assets of the Corporation, or if applicable of the
Series (being the value of the assets of the Corporation or of the particular
Series less its actual and accrued liabilities exclusive of capital stock and
surplus), by the total number of outstanding Shares of the Corporation, or of
the Series or Class. Such determination may be made on a Series-by-Series basis
or made or adjusted on a Class-by-Class basis, as appropriate and shall include
any expenses allocated to a specific Series or Class thereof. The Board of
Directors shall have the power and duty to determine from time to time the net
asset value per Share at such times and by such methods as it shall include any
expenses allocated to a specific Series or Class thereof. The Board of Directors
shall have the power and duty to determine from time to time the net asset value
per Share at such times and by such methods as it shall determine, subject to
any restrictions or requirements under the Investment Company Act of 1940 and
the rules, regulations and interpretations thereof promulgated or issued by the
Securities and Exchange Commission or insofar as permitted by any order of the
Securities and Exchange Commission applicable to the Corporation. The Board of
Directors may delegate such power and duty to any one or more of the directors
and officers of the Corporation, the Corporation's administrator, investment
adviser, custodian or depository of the Corporation's assets, or another agent
of the Corporation.
SECTION 6.5. Establishment of Series or Class. The establishment of any
Series or Class shall be effective upon the adoption of a resolution by a
majority of the Directors setting forth such establishment and designation and
the relative rights and preferences of the Shares of such Series or Class. At
any time that there are no Shares outstanding of any particular Series or Class
previously established and designated, the Directors may by a majority vote
abolish that Series or Class and the establishment and designation thereof.
SECTION 6.6. Assets and Liabilities of Series or Class. All consideration
received by the Corporation for the issuance or sale of Shares of a particular
Series, together with all assets in which such consideration is invested or
reinvested, all income, earnings, profits, and proceeds thereof, including any
proceeds derived from the sale, exchange, or liquidation of such assets, and any
funds or payments derived from any reinvestment of such proceeds in whatever
form, shall be referred to as 'assets belonging to' that Series. In addition,
any assets, income, earnings, profits, and proceeds thereof, funds, or payments
which are not readily identifiable as belonging to any particular Series shall
be allocated by the Board of Directors between and among one or more of the
Series in such manner as the Board of Directors, in its sole discretion, deems
fair and equitable. Each such allocation shall be conclusive and binding upon
the stockholders of all Series for all purposes, and shall be referred to as
assets belonging to that Series. The assets belonging to a particular Series
shall be charged with the liabilities of that Series, and all expenses, costs,
charges, and reserves attributable to that Series or Class thereof shall be
borne by that Series or Class. Any general liabilities, expenses, costs, charges
or reserves of the Corporation which are not readily identifiable as belonging
to any particular Series or Class shall be allocated and charged by the Board of
Directors between or among any one or more of the Series or Classes in such a
manner as the Board of Directors in its sole discretion deems fair and
equitable. Each such allocation shall be conclusive and binding upon the
stockholders of all Series or Classes for all purposes.
SECTION 6.7 Dividends. Dividends and distributions on Shares with respect
to each Series or Class may be declared and paid with such frequency and in such
form and amount as the Board of Directors may from time
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to time determine. Dividends may be declared daily or otherwise pursuant to a
standing resolution or resolutions adopted only once or with such frequency as
the Board of Directors may determine.
All dividends and distributions of shares of a particular Series shall be
distributed pro rata to the holders of that Series in proportion to the number
of Shares of that Series held by such holders at the date and time of record
established for the payment of such dividends or distributions, except that such
dividends and distributions shall appropriately reflect expenses allocated to a
particular Class of such Series.
The Board of Directors shall have the power, in its sole discretion, to
distribute in any fiscal year as dividends (including dividends designated in
whole or in part as capital gain distributions) amounts sufficient, in the
opinion of the Board of Directors, to enable the Corporation, or when applicable
each Series of the Corporation, to qualify as a regulated investment company
under the Internal Revenue Code of 1986, as amended, or any successor or
comparable statute thereto, and regulations promulgated thereunder, and to avoid
liability of the Corporation, or each Series of the Corporation, for federal
income tax in respect of that year. The foregoing shall not limit the authority
of the Board of Directors to make distributions greater than or less than the
amount necessary to qualify as a regulated investment company and to avoid
liability of the Corporation, or any Series of the Corporation, for such tax.
Dividends and distributions may be paid in cash, property or Shares, or a
combination thereof, as determined by the Board of Directors or pursuant to any
program that the Board of Directors, may have in effect at the time. Any such
dividend or distribution paid in Shares will be paid at the current net asset
value thereof as defined in Section 6.4.
SEVENTH: ISSUANCE OF COMMON SHARES.
SECTION 7.1. Issuance of New Shares. The Board of Directors is authorized
to issue and sell or cause to be issued and sold from time to time (without the
necessity of offering the same or any part thereof to existing stockholders) all
or any portion or portions of the entire authorized but unissued Shares of the
Corporation, and all or any portion or portions of the Shares of the Corporation
from time to time in its treasury, for cash or for any other lawful
consideration or considerations and on or for any terms, conditions, or prices
consistent with the provisions of law and of the Articles of Incorporation at
the time in force; provided, however, that in no event shall Shares of the
Corporation be issued or sold for a consideration or considerations less in
amount or value than the par value of the Shares so issued or sold, and provided
further that in no event shall any Shares of the Corporation be issued or sold,
except as a stock dividend distributed to stockholders, for a consideration
(which shall be net to the Corporation after underwriting discounts or
commissions) less in amount or value than the net asset value of the Shares so
issued or sold determined as of such time as the Board of Directors shall have
by resolution prescribed. In the absence of such resolution, such net asset
value shall be that next determined after an unconditional order in proper form
to purchase such Shares is accepted, except that Shares may be sold to an
underwriter at (a) the net asset value next determined after such orders are
received by a dealer with whom such underwriter has a sales agreement or (b) the
net asset value determined at a later time.
SECTION 7.2. Issuance of Fractional Shares. The Corporation may issue and
sell fractions of Shares having pro rata all the rights of full Shares,
including, without limitation, the right to vote and to receive dividends, and
wherever the words 'Share' or 'Shares' are used in these Articles or in the
By-Laws they shall be deemed to include fractions of Shares, where the context
does not clearly indicate that only full Shares are intended.
EIGHTH: VOTING.
On each matter submitted to a vote of the stockholders, each holder of a
Share shall be entitled to one vote for each Share and fractional votes for
fractional Shares standing in his or her name on the books of the Corporation;
provided, however, that when required by the Investment Company Act of 1940 or
rules thereunder, or when the Board of Directors has determined that the matter
affects only the interests of one Series or Class, each holder of Shares thereof
shall be entitled to votes equal to the full and fractional Shares of the Series
or Class standing in his or her name on the books of the Corporation. The
presence in person or by proxy of the holders of one-third of the Shares
outstanding and entitled to vote shall constitute a quorum for the transaction
of business at a stockholders' meeting, except that where any provision of law
or of these Articles of Incorporation
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permit or require that holders of any Series or Class shall vote as a Series or
Class, one-third of the aggregate number of Shares of that Series or Class
outstanding and entitled to vote shall constitute a quorum for the transaction
of business by that Series or Class.
Notwithstanding any provision of law requiring a greater proportion than a
majority of the votes of all Shares of the Corporation or of all Series or
Classes (or of any Series or Class entitled to vote thereon as a separate Series
or Class) to take or authorize any action, in accordance with the authority
granted by Section 2-104(b)(5) of the Maryland Corporations and Associations
Code, the Corporation is hereby authorized to take such action upon the
concurrence of a majority of the aggregate number of Shares entitled to vote
thereon (or of a majority of the aggregate number of Shares of a Series or Class
entitled to vote thereon as a separate Series or Class). The right to cumulate
votes in the election of directors is expressly prohibited.
NINTH: BOARD OF DIRECTORS.
All corporate powers and authority of the Corporation (except as otherwise
provided by statute, these Articles of Incorporation, or the By-Laws of the
Corporation) shall be vested in and exercised by the Board of Directors. The
number of directors constituting the Board of Directors shall be such number as
may from time to time be fixed in or in accordance with the By-Laws of the
Corporation, provided that after stock is issued to more than one stockholder,
such number shall not be less than three. Except as provided in the By-Laws, the
election of directors may be conducted in any way approved at the meeting
(whether of stockholders or directors) at which the election is held, provided
that such election shall be by ballot whenever requested by any person entitled
to vote. As of the effective date of these Amended and Restated Articles of
Incorporation, the Board of Directors is comprised of eleven members, and the
following persons have been duly elected or appointed to serve as Directors: [to
be completed prior to filing with the Maryland State Department of Assessments
and Taxation].
TENTH: CONTRACTS.
SECTION 10.1. Contracts in General. The Board of Directors may in its
discretion from time to time enter into an exclusive or nonexclusive
distribution contract or contracts providing for the sale of Shares whereby the
Corporation may either agree to sell Shares to the other party to the contract
or appoint such other party its sales agent for such shares (such other party
being herein sometimes called the 'underwriter'), and in either case on such
terms and conditions as may be prescribed in the By-Laws, if any, and such
further terms and conditions as the Board of Directors may in its discretion
determine not inconsistent with the provisions of these Articles of
Incorporation and such contract may also provide for the repurchase of Shares of
the Corporation by such other party or parties as agent of the Corporation. The
Board of Directors may also in its discretion from time to time enter into an
investment advisory or management contract or contracts whereby the other party
to such contract shall undertake to furnish to the Board of Directors such
management, investment advisory, statistical and research facilities and
services and, if any, and all upon such terms and conditions as the Board of
Directors may in its discretion determine.
SECTION 10.2. Parties to Contracts. Any contract of the character
described in Section 10.1 or for services as administrator, custodian, transfer
agent or disbursing agent or related services may be entered into with any
corporation, firm, trust or association, although any one or more of the
directors or officers of the Corporation may be an officer, director, trustee,
stockholder or member of such other party to the contract, and no such contract
shall be invalidated or rendered voidable by reason of the existence of any such
relationship, nor shall any person holding such relationship be liable merely by
reason of such relationship for any loss or expense to the Corporation under or
by reason of said contract or accountable for any profit realized directly or
indirectly therefrom, provided that the contract when entered into was
reasonable and fair and not inconsistent with the provisions of this Article
TENTH. The same person (including a firm, corporation, trust, or association)
may be the other party to contracts entered into pursuant to Section 10.1 above,
and any individual may be financially interested or otherwise affiliated with
persons who are parties to any or all of the contracts mentioned in this Section
10.2.
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ELEVENTH: LIABILITY OF DIRECTORS AND OFFICERS.
SECTION 11.1. Liability. To the maximum extent permitted by applicable
law (including Maryland law and the Investment Company Act of 1940) as currently
in effect or as may hereafter be amended, no director or officer of the
Corporation shall be liable to the Corporation or its stockholders for money
damages.
SECTION 11.2. Indemnification. To the maximum extent permitted by
applicable law (including Maryland law and the Investment Company Act of 1940)
currently in effect or as may hereafter be amended, the Corporation shall
indemnify and advance expenses as provided in the By-Laws to its present and
past directors, officers, employees and agents, and persons who are serving or
have served at the request of the Corporation as a director, officer, employee
or agent in similar capacities for other entities.
SECTION 11.3. Insurance. The Corporation may purchase and maintain
insurance on behalf of any person who is or was a director, officer, employee or
agent of the Corporation, or is or was serving at the request of the Corporation
as a director, officer, employee or agent of another corporation, partnership,
joint venture, trust or other enterprise against any liability asserted against
him or her and incurred by him or her in any such capacity or arising out of his
or her status as such, whether or not the Corporation would have the power to
indemnify him or her against such liability.
SECTION 11.4. Modification. Any repeal or modification of this Article
ELEVENTH by the stockholders of the Corporation, or adoption or modification of
any other provision of the Articles of Incorporation or By-Laws inconsistent
with this Article ELEVENTH, shall be prospective only, to the extent that such
repeal or modification would, if applied retrospectively, adversely affect any
limitation on the liability of any director or officer of the Corporation or
indemnification available to any person covered by these provisions with respect
to any act or omission which occurred prior to such repeal, modification or
adoption.
TWELFTH: AMENDMENT.
SECTION 12.1. Articles of Incorporation. The Corporation reserves the
right from time to time to make any amendment of these Articles of
Incorporation, now or hereafter authorized by law, including any amendment which
alters contract rights, as expressly set forth in these Articles of
Incorporation, of any outstanding Shares. Any amendment to these Articles of
Incorporation may be adopted at a meeting of the stockholders upon receiving an
affirmative vote of majority of all votes entitled to be cast thereon or may be
amended by the board of directors to the extent permitted by laws of the State
of Maryland.
SECTION 12.2. By-Laws. Except as may otherwise be provided in the
By-Laws, the Board of Directors of the Corporation is expressly authorized to
make, alter, amend and repeal By-Laws or to adopt new By-Laws of the
Corporation, without any action on the part of the stockholders; but the By-Laws
made by the Board of Directors and the power so conferred may be altered or
repealed by the stockholders.
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EXHIBIT 4B
PAINEWEBBER/KIDDER, PEABODY MUNICIPAL MONEY MARKET SERIES
AMENDED AND RESTATED DECLARATION OF TRUST
DATED: APRIL __, 1996
The undersigned Trustees of the Trust, which was organized pursuant to an
Agreement and Declaration of Trust made at Boston, Massachusetts on the 14th day
of September, 1990, by Gilbert R. Ott, Jr., David A. Hartman and David M. Elwood
and the holders of shares of beneficial interest to be issued thereunder, hereby
amend and restate the Agreement and Declaration of Trust as follows.
W I T N E S S E T H:
WHEREAS, the Trustees have agreed to manage all property coming into their
hands as trustees of a Massachusetts business trust in accordance with the
provisions hereinafter set forth.
NOW, THEREFORE, the Trustees hereby declare that they will hold all cash,
securities and other assets, which they may from time to time acquire in any
manner as Trustees hereunder IN TRUST to manage and dispose of the same upon the
following terms and conditions for the pro rata benefit of the holders from time
to time of Shares, whether or not certificated, in this Trust as hereinafter set
forth.
ARTICLE I
NAME AND DEFINITIONS
SECTION 1. Name. This Trust shall be known as 'PaineWebber/Kidder, Peabody
Municipal Money Market Series.'
SECTION 2. Definitions. Whenever used herein, unless otherwise required by
the context or specifically provided:
(a) The term 'Commission' shall have the meaning provided in the 1940
Act;
(b) The 'Trust' refers to the Massachusetts business trust established
by this Agreement and Declaration of Trust, as amended from time to time;
(c) 'Shareholder' means a record owner of Shares of the Trust;
(d) 'Shares' means the equal proportionate transferable units of
interest into which the beneficial interest in the Trust shall be divided
from time to time or, if more than one series or class of Shares is
authorized by the Trustees, the equal proportionate transferable units into
which each series or class of Shares shall be divided from time to time,
and includes a fraction of a Share as well as a whole Share. All references
to Shares in this Declaration of Trust shall be deemed to be Shares of any
or all series or classes as the context may require;
(e) The '1940 Act' refers to the Investment Company Act of 1940, and
the Rules and Regulations thereunder, all as amended from time to time;
(f) The term 'Manager' is defined in Article IV, Section 5;
(g) The term 'Person' shall mean an individual or any corporation,
partnership, joint venture, trust or other enterprise;
(h) 'Trust Property' or 'Trust Estate' means any and all property,
real or personal, tangible or intangible, which is owned or held by or for
the account of the Trust or the Trustees;
(i) 'Trustees' shall mean the signatories to this Declaration of
Trust, so long as they shall continue in office in accordance with the
terms hereof, and all other persons who have been duly elected or appointed
and have qualified as trustees in accordance with the provisions hereof and
are then in office, and reference
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in this Declaration of Trust to a Trustee or Trustees shall refer to such
person or persons in their capacity as trustees hereunder; and
(j) The term 'class' or 'class of Shares' refers to the division of
Shares representing any series into two or more classes as provided in
Article III, Section 1 hereof.
ARTICLE II
PURPOSES OF TRUST
SECTION 1. Purposes. This Trust is formed for the following purpose or
purposes:
(a) to conduct, operate and carry on the business of an investment
company;
(b) to subscribe for, invest in, reinvest in, purchase or otherwise
acquire, hold, pledge, sell, assign, transfer, lend, write options on,
exchange, distribute or otherwise dispose of and deal in and with
securities of every nature, kind, character, type and form, including,
without limitation of the generality of the foregoing, all types of stocks,
shares, futures contracts, bonds, debentures, notes, bills and other
negotiable or non-negotiable instruments, obligations, evidences of
interest, certificates of interest, certificates of participation,
certificates, interests, evidences of ownership, guarantees, warrants,
options or evidences of indebtedness issued or created by or guaranteed as
to principal and interest by any state or local government or any agency or
instrumentality thereof, by the United States Government or any agency,
instrumentality, territory, district or possession thereof, by any foreign
government or any agency, instrumentality, territory, district or
possession thereof, by any corporation organized under the laws of any
state, the United States or any territory or possession thereof or under
the laws of any foreign country, bank certificates of deposit, bank time
deposits, bankers' acceptances and commercial paper; to pay for the same in
cash or by the issue of stock, including treasury stock, bonds or notes of
the Trust or otherwise; and to exercise any and all rights, powers and
privileges of ownership or interest in respect of any and all such
investments of every kind and description, including, without limitation,
the right to consent and otherwise act with respect thereto, with power to
designate one or more persons, firms, associations or corporations to
exercise any of said rights, powers and privileges in respect of any said
instruments;
(c) to borrow money or otherwise obtain credit and to secure the same
by mortgaging, pledging or otherwise subjecting as security the assets of
the Trust;
(d) to issue, sell, repurchase, redeem, retire, cancel, acquire, hold,
resell, reissue, dispose of, transfer, and otherwise deal in, Shares
including Shares in fractional denominations, and to apply to any such
repurchase, redemption, retirement, cancellation or acquisition of Shares
of any funds or other assets of the appropriate series or class of Shares,
whether capital or surplus or otherwise, to the full extent now or
hereafter permitted by the laws of The Commonwealth of Massachusetts;
(e) to conduct its business, promote its purposes, and carry on its
operations in any and all of its branches and maintain offices both within
and without The Commonwealth of Massachusetts, in any and all States of the
United States of America, in the District of Columbia, and in any other
parts of the world; and
(f) to do all and everything necessary, suitable, convenient, or
proper for the conduct, promotion, and attainment of any of the businesses
and purposes herein specified or which at any time may be incidental
thereto or may appear conducive to or expedient for the accomplishment of
any of such businesses and purposes and which might be engaged in or
carried on by a Trust organized under the Massachusetts General Laws, and
to have and exercise all of the powers conferred by the laws of The
Commonwealth of Massachusetts upon a Massachusetts business trust.
The foregoing provisions of this Article II shall be construed both as
purposes and powers and each as an independent purpose and power.
SECTION 2. Pennsylvania Series. Notwithstanding the provisions of this
Article II, the Pennsylvania Series of the Trust will invest in securities for
income earnings rather than trading for profit. The Pennsylvania Series,
however, will be permitted to sell securities held in its portfolio and, as a
result, may realize capital gain or loss.
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ARTICLE III
BENEFICIAL INTEREST
SECTION 1. Shares of Beneficial Interest. The Shares of the Trust shall be
divided into transferable Shares of beneficial interest and issued in one or
more series as the Trustees may, without Shareholder approval, authorize. Each
series shall be preferred over all other series in respect of the assets
allocated to that series. The beneficial interest in each series at all times
shall be divided into Shares, with or without par value as the Trustees may from
time to time determine, each of which shall represent an equal proportionate
interest in the series with each other Share of the same series, none having
priority or preference over another. The Trustees may, without Shareholder
Approval, divide Shares of any series into two or more classes, Shares of each
class having such preferences and special or relative rights and privileges
(including conversion rights, if any) as the Trustees may determine. The number
of Shares authorized shall be unlimited, and the Shares so authorized may be
represented in part by fractional shares. All Shares issued hereunder,
including, without limitation, Shares issued in connection with a dividend in
Shares or a split of Shares, shall be fully paid and non-assessable by the
Trust. From time to time, the Trustees may divide or combine the Shares of any
series or class into a greater or lesser number without thereby changing the
proportionate beneficial interests in the series or class.
SECTION 2. Rights of Shareholders. The ownership of the Trust Property and
the property of each series of the Trust of every description and the right to
conduct any business hereinbefore described are vested exclusively in the
Trustees, and the Shareholders shall have no interest therein other than the
beneficial interest conferred by their Shares, and they shall have no right to
call for any partition or division of any property, profits, rights or interests
of the Trust nor can they be called upon to share or assume any losses of the
Trust or suffer an assessment of any kind by virtue of their ownership of
Shares. The Shares shall be personal property giving only the rights
specifically set forth in this Declaration of Trust. The Shares shall not
entitle the holder to preference, preemptive, appraisal, conversion or exchange
rights, except as the Trustees may determine with respect to any series or class
of Shares.
SECTION 3. Trust Only. It is the intention of the Trustees to create only
the relationship of Trustee and beneficiary between the Trustees and each
Shareholder from time to time. It is not the intention of the Trustees to create
a general partnership, limited partnership, joint stock association,
corporation, bailment or any form of legal relationship other than a trust with
transferable shares. Nothing in this Declaration of Trust shall be construed to
make the Shareholders, either by themselves or with the Trustees, partners or
members of a joint stock association.
SECTION 4. Issuance of Shares. The Trustees in their discretion may, from
time to time without vote of the Shareholders, issue Shares, in addition to the
then issued and outstanding Shares and Shares held in the treasury, to such
party or parties and for such amount and type of consideration, including cash
or property, at such time or times and on such terms as the Trustees may deem
best, and may in such manner acquire other assets (including the acquisition of
assets subject to, and in connection with the assumption of liabilities) and
businesses. In connection with any issuance of Shares, the Trustees may issue
fractional Shares and Shares held in the treasury. The Trustees may from time to
time divide or combine the Shares into a greater or lesser number without
thereby changing the proportionate beneficial interests in the Trust.
Contributions to the Trust may be accepted for, and Shares shall be redeemed as,
whole Shares and/or 1/1,000ths of a Share or integral multiples thereof.
SECTION 5. Register of Shares. A register shall be kept at the principal
office of the Trust or an office of the transfer agent which shall contain the
names and addresses of the Shareholders and the number of Shares held by them
respectively and a record of all transfers thereof. Such register shall be
conclusive as to who are the holders of the Shares and who shall be entitled to
receive dividends or distributions or otherwise to exercise or enjoy the rights
of Shareholders. No Shareholder shall be entitled to receive payment of any
dividend or distribution, nor to have notice given to him as herein or in the
By-Laws provided, until he has given his address to the Transfer Agent or such
other officer or agent of the Trustees as shall keep the said register for entry
thereon. It is not contemplated that certificates will be issued for the Shares;
however, the Trustees, in their discretion, may authorize the issuance of share
certificates and promulgate appropriate rules and regulations as to their use.
SECTION 6. Transfer of Shares. Except as otherwise provided by the
Trustees, Shares shall be transferable on the records of the Trust only by the
record holder thereof or by his agent thereunto duly authorized in writing,
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upon delivery to the Trustees or the Transfer Agent of a duly executed
instrument of transfer, together with such evidence of the genuineness of each
such execution and authorization and of other matters as may reasonably be
required. Upon such delivery the transfer shall be recorded on the register of
the Trust. Until such record is made, the Shareholder of record shall be deemed
to be the holder of such Shares for all purposes hereunder and neither the
Trustees nor any transfer agent or registrar nor any officer, employee or agent
of the Trust shall be affected by any notice of the proposed transfer.
Any person becoming entitled to any Shares in consequence of the death,
bankruptcy, or incompetence of any Shareholder, or otherwise by operation of
law, shall be recorded on the register of Shares as the holder of such Shares
upon production of the proper evidence thereof to the Trustees or the transfer
agent, but until such record is made, the Shareholder of record shall be deemed
to be the holder of such Shares for all purposes hereunder and neither the
Trustees nor any transfer agent or registrar nor any officer or agent of the
Trust shall be affected by any notice of such death, bankruptcy or incompetence,
or other operation of law.
SECTION 7. Treasury Shares. Shares held in the treasury shall not confer,
until reissued pursuant to Section 4 hereof, any voting rights on the Trustees,
nor shall such Shares be entitled to any dividends or other distributions
declared with respect to the Shares.
SECTION 8. Series or Class Designation. The Trustees, in their discretion,
may authorize the division of Shares into two or more series and/or two or more
classes, and the different series or classes shall be established and
designated, and the variations in the relative rights and preferences as between
the different series and classes shall be fixed and determined, by the Trustees;
provided, that all Shares shall be identical except that there may be variations
so fixed and determined between different series or classes as to investment
objective, purchase price, allocation of expenses, right of redemption, special
and relative rights as to dividends and on liquidation, conversion rights, and
conditions under which the several series or classes shall have separate voting
rights.
If the Trustees shall divide the Shares of the Trust into two or more
series or classes, the following provisions shall be applicable:
(a) All provisions herein relating to the Trust shall apply equally to
each series and class of the Trust except as the context requires
otherwise.
(b) The number of authorized Shares and the number of Shares of each
series and class that may be issued shall be unlimited. The Trustees may
classify or reclassify any unissued Shares or any Shares previously issued
and reacquired of any series or class into one or more series or classes
that may be established and designated from time to time. The Trustees may
hold as treasury Shares (of the same or some other series or class),
reissue for such consideration and on such terms as they may determine, or
cancel any Shares of any series or class reacquired by the Trust at their
discretion from time to time.
(c) All consideration received by the Trust for the issue or sale of
Shares of a particular series, together with all assets in which such
consideration is invested or reinvested, all income, earnings, profits, and
proceeds thereof, including any proceeds derived from the sale, exchange or
liquidation of such assets, and any funds or payments derived from any
reinvestment of such proceeds in whatever form the same may be, shall
irrevocably belong to that series for all purposes, subject only to the
rights of creditors of such series and except as may otherwise be required
by applicable laws, and shall be so recorded upon the books of account of
the Trust. In the event that there are any assets, income, earnings,
profits, and proceeds thereof, funds, or payments which are not readily
identifiable as belonging to any particular series, the Trustees shall
allocate them among any one or more of the series established and
designated from time to time in such manner and on such basis as they, in
their sole discretion, deem fair and equitable. Each such allocation by the
Trustees shall be conclusive and binding upon the Shareholders of all
series for all purposes.
(d) The assets belonging to each particular series shall be charged
with the liabilities of the Trust in respect of that series or the
appropriate class or classes thereof and all expenses, costs, charges and
reserves attributable to that series or class or classes thereof, and any
general liabilities, expenses, costs, charges or reserves of the Trust
which are not readily identifiable as belonging to any particular series or
class or classes thereof shall be allocated and charged by the Trustees to
and among any one or more of the series or class or classes thereof
established and designated from time to time in such manner and on such
basis as the Trustees in their sole discretion deem fair and equitable.
Each allocation of liabilities, expenses, costs,
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charges and reserves by the Trustees shall be conclusive and binding upon
the Shareholders of all series and classes for all purposes. The Trustees
shall have full discretion, to the extent not inconsistent with the 1940
Act, to determine which items are capital; and each such determination and
allocation shall be conclusive and binding upon the Shareholders. The
assets of a particular series of the Trust shall, under no circumstances,
be charged with liabilities attributable to any other series of the Trust.
All persons extending credit to, or contracting with or having any claim
against a particular series of the Trust shall look only to the assets of
that particular series for payment of such credit, contract or claim. No
Shareholder or former Shareholder of any series shall have any claim on or
right to any assets allocated or belonging to any other series.
(e) Each Share of a series of the Trust shall represent a beneficial
interest in the net assets of such series. Each holder of Shares of a
series or class shall be entitled to receive his pro rata share of
distributions of income and capital gains made with respect to such series
or class. Upon redemption of his Shares or indemnification for liabilities
incurred by reason of his being or having been a Shareholder of a series or
class, such Shareholder shall be paid solely out of the funds and property
of such series or class of the Trust. Upon liquidation or termination of a
series or class of the Trust, Shareholders of such series or class shall be
entitled to receive a pro rata share of the net assets of such series or
class. A Shareholder of a particular series or class of the Trust shall not
be entitled to participate in a derivative or class action on behalf of any
other series or class or the Shareholders of any other series or class of
the Trust.
(f) The establishment and designation of any additional series or
classes of Shares shall be effective upon the execution by a majority of
the then Trustees of an instrument setting forth such establishment and
designation and the relative rights and preferences of such series or
class, or as otherwise provided in such instrument. The Trustees may by an
instrument executed by a majority of their number abolish any series or
class and the establishment and designation thereof. Except as otherwise
provided in this Article III, the Trustees shall have the power to
determine the designations, preferences, privileges, limitations and
rights, of each class and series of Shares. Each instrument referred to in
this paragraph shall have the status of an amendment to this Declaration of
Trust.
SECTION 9. Assent to Declaration of Trust. Every Shareholder, by virtue of
having become a shareholder, shall be held to have expressly assented and agreed
to the terms hereof and to have become a party hereto.
ARTICLE IV
TRUSTEES
SECTION 1. Election. A Trustee may be elected either by the Trustees or
the Shareholders. The Trustees named herein shall serve until the first meeting
of the Shareholders or until the election and qualification of their successors.
Prior to the first meeting of Shareholders the initial Trustees hereunder may
elect additional Trustees to serve until such meeting and until their successors
are elected and qualified. The Trustees also at any time may elect Trustees to
fill vacancies in the number of Trustees. The number of Trustees shall be fixed
from time to time by the Trustees and, at or after the commencement of the
business of the Trust, shall be not less than three. Each Trustee, whether named
above or hereafter becoming a Trustee, shall serve as a Trustee during the
lifetime of this Trust, until such Trustee dies, resigns, retires, or is
removed, or, if sooner, until the next meeting of Shareholders called for the
purpose of electing Trustees and the election and qualification of his
successor. Subject to Section 16(a) of the 1940 Act, the Trustees may elect
their own successors and, pursuant to this Section, may appoint Trustees to fill
vacancies.
SECTION 2. Powers. The Trustees shall have all powers necessary or
desirable to carry out the purposes of the Trust, including, without limitation,
the powers referred to in Article II hereof. Without limiting the generality of
the foregoing, the Trustees may adopt By-Laws not inconsistent with this
Declaration of Trust providing for the conduct of the business of the Trust and
may amend and repeal them to the extent that they do not reserve that right to
the Shareholders; they may fill vacancies in their number, including vacancies
resulting from increases in their own number, and may elect and remove such
officers and employ, appoint and terminate such employees or agents as they
consider appropriate; they may appoint from their own number and terminate any
one or more committees; they may employ one or more custodians of the assets of
the Trust and may authorize such
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custodians to employ subcustodians and to deposit all or any part of such assets
in a system or systems for the central handling of securities, retain a transfer
agent and a Shareholder servicing agent, or both, provide for the distribution
of Shares through a principal underwriter or otherwise, set record dates, and in
general delegate such authority as they consider desirable (including, without
limitation, the authority to purchase and sell securities and to invest funds,
to determine the net income of the Trust for any period, the value of the total
assets of the Trust and the net asset value of each Share, and to execute such
deeds, agreements or other instruments either in the name of the Trust or the
names of the Trustees or as their attorney or attorneys or otherwise as the
Trustees from time to time may deem expedient) to any officer of the Trust,
committee of the Trustees, any such employee, agent, custodian or underwriter or
to any Manager.
Without limiting the generality of the foregoing, the Trustees shall have
full power and authority:
(a) To invest and reinvest cash and to hold cash uninvested;
(b) To vote or give assent, or exercise any rights of ownership, with
respect to stock or other securities or property, and to execute and
deliver proxies or powers of attorney to such person or persons as the
Trustees shall deem proper, granting to such person or persons such power
and discretion with relation to securities or property as the Trustees
shall deem proper;
(c) To hold any security or property in a form not indicating any
trust whether in bearer, unregistered or other negotiable form or in the
name of the Trust or a custodian, subcustodian or other depository or a
nominee or nominees or otherwise;
(d) To consent to or participate in any plan for the reorganization,
consolidation or merger of any corporation or concern, any security of
which is held in the Trust; to consent to any contract, lease, mortgage,
purchase or sale of property by such corporation or concern, and to pay
calls or subscriptions with respect to any security held in the Trust;
(e) To join with other security holders in acting through a committee,
depositary, voting trustee or otherwise, and in that connection to deposit
any security with, or transfer any security to, any such committee,
depositary or trustee, and to delegate to them such power and authority
with relation to any security (whether or not so deposited or transferred)
as the Trustees shall deem proper, and to agree to pay, and to pay, such
portion of the expenses and compensation of such committee, depositary or
trustee as the Trustees shall deem proper;
(f) To compromise, arbitrate, or otherwise adjust claims in favor of
or against the Trust or any matter in controversy, including, but not
limited to, claims for taxes;
(g) To allocate assets, liabilities and expenses of the Trust to a
particular series of Shares or to apportion the same among two or more
series, provided that any liabilities or expenses incurred by a particular
series of Shares shall be payable solely out of the assets of that series
and to the extent necessary to give effect to the preferences and special
or relative rights and privileges of any classes of Shares, to allocate
assets, liabilities, income and expenses of a series to a particular class
of Shares of that series or to apportion the same among two or more classes
of Shares of that series;
(h) To enter into joint ventures, general or limited partnerships and
any other combinations or associations;
(i) To purchase and pay for entirely out of Trust property such
insurance as they may deem necessary or appropriate for the conduct of the
business, including, without limitation, insurance policies insuring the
assets of the Trust and payment of distributions and principal on its
portfolio investments, and insurance policies insuring the Shareholders,
Trustees, officers, employees, agents, investment advisers or Managers,
principal underwriters, or independent contractors of the Trust
individually against all claims and liabilities of every nature arising by
reason of holding, being or having held any such office or position, or by
reason of any action alleged to have been taken or omitted by any such
person as Shareholder, Trustee, officer, employee, agent, investment
adviser or Manager, principal underwriter, or independent contractor,
including any action taken or omitted that may be determined to constitute
negligence, whether or not the Trust would have the power to indemnify such
person against such liability; and
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(j) To pay pensions for faithful service, as deemed appropriate by the
Trustees, and to adopt, establish and carry out pension, profit-sharing,
share bonus, share purchase, savings, thrift and other retirement,
incentive and benefit plans, trusts and provisions, including the
purchasing of life insurance and annuity contracts as a means of providing
such retirement and other benefits, for any or all of the Trustees,
officers, employees and agents of the Trust.
Further, without limiting the generality of the foregoing, the Trustees
shall have full power and authority to incur and pay out of the principal or
income of the Trust such expenses and liabilities as may be deemed by the
Trustees to be necessary or proper for the purposes of the Trust; provided,
however, that all expenses and liabilities incurred or arising in connection
with a particular series of Shares, as determined by the Trustees, shall be
payable solely out of the assets of that series.
Any determination made in good faith and, so far as accounting matters are
involved, in accordance with generally accepted accounting principles by or
pursuant to the authority granted by the Trustees, as to the amount of the
assets, debts, obligations or liabilities of the Trust; the amount of any
reserves or charges set up and the propriety thereof; the time of or purpose for
creating such reserves or charges; the use, alteration or cancellation of any
reserves or charges (whether or not any debt, obligation or liability for which
such reserves or charges shall have been created shall have been paid or
discharged or shall be then or thereafter required to be paid or discharged);
the price or closing bid or asked price of any investment owned or held by the
Trust; the market value of any investment or fair value of any other asset of
the Trust; the number of Shares outstanding; the estimated expense to the Trust
in connection with purchases of its Shares; the ability to liquidate investments
in an orderly fashion; the extent to which it is practicable to deliver a
cross-section of the portfolio of the Trust in payment for any such Shares, or
as to any other matters relating to the issue, sale, purchase and/or other
acquisition or disposition of investments or Shares of the Trust, shall be final
and conclusive, and shall be binding upon the Trust and its Shareholders, past,
present and future, and Shares are issued and sold on the condition and
understanding that any and all such determinations shall be binding as
aforesaid.
SECTION 3. Pennsylvania Series. Notwithstanding the provisions of Article
IV, Section 2, the Pennsylvania Series of the Trust may only vary its separate
portfolio investments to:
(a) eliminate unsafe investments and investments not consistent with
the preservation of capital or the tax status of the investments of the
Pennsylvania Series;
(b) honor redemption orders, meet anticipated redemption requirements
and negate gains from discount purchases;
(c) reinvest the earnings from securities in like securities; or
(d) defray normal administrative expenses.
SECTION 4. Meetings. At any meeting of the Trustees, a majority of the
Trustees then in office shall constitute a quorum. Any meeting may be adjourned
from time to time by a majority of the votes cast upon the question, whether or
not a quorum is present, and the meeting may be held as adjourned without
further notice.
When a quorum is present at any meeting, a majority of the Trustees present
may take any action, except when a larger vote is required by this Declaration
of Trust, the By-Laws or the 1940 Act.
Any action required or permitted to be taken at any meeting of the Trustees
or of any committee thereof may be taken without a meeting, if a written consent
to such action is signed by a majority of the Trustees or members of any such
committee then in office, as the case may be, and such written consent is filed
with the minutes of proceedings of the Trustees or any such committee.
The Trustees or any committee designated by the Trustees may participate in
a meeting of the Trustees or such committee by means of a conference telephone
or similar communications equipment by means of which all persons participating
in the meeting can hear each other at the same time. Participation by such means
shall constitute presence in person at a meeting.
SECTION 5. Ownership of Assets of the Trust. Title to all of the assets of
each series of Shares of the Trust at all times shall be considered as vested in
the Trustees.
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SECTION 6. Investment Advice and Management Services. The Trustees shall
not in any way be bound or limited by any present or future law or custom in
regard to investments by trustees. The Trustees from time to time may enter into
a written contract or contracts with any person or persons (herein called the
'Manager'), including any firm, corporation, trust or association in which any
Trustee or Shareholder may be interested, to act as investment advisers and/or
managers of the Trust and to provide such investment advice and/or management as
the Trustees from time to time may consider necessary for the proper management
of the assets of the Trust, including, without limitation, authority to
determine from time to time what investments shall be purchased, held, sold or
exchanged and what portion, if any, of the assets of the Trust shall be held
uninvested and to make changes in the Trust's investments. Any such contract
shall be subject to the requirements of the 1940 Act with respect to its
continuance in effect, its termination and the method of authorization and
approval of such contract, or any amendment thereto or renewal thereof.
Any Trustee or any organization with which any Trustee may be associated
also may act as broker for the Trust in making purchases and sales of securities
for or to the Trust for its investment portfolio, and may charge and receive
from the Trust the usual and customary commission for such service. Any
organization with which a Trustee may be associated in acting as broker for the
Trust shall be responsible only for the proper execution of transactions in
accordance with the instructions of the Trust and shall be subject to no further
liability of any sort whatever.
The Manager, or any affiliate thereof, also may be a distributor for the
sale of Shares by separate contract or may be a person controlled by or
affiliated with any Trustee or any distributor or a person in which any Trustee
or any distributor is interested financially, subject only to applicable
provisions of law. Nothing herein contained shall operate to prevent any
Manager, who also acts as such a distributor, from also receiving compensation
for services rendered as such distributor.
SECTION 7. Removal and Resignation of Trustees. The Trustees or the
Shareholders (by vote of 66-2/3% of the outstanding Shares entitled to vote
thereon) may remove at any time any Trustee with or without cause, and any
Trustee may resign at any time as Trustee, without penalty by written notice to
the Trust.
SECTION 8. Compensation. The Trustees shall be entitled to reasonable
compensation from the Trust and may fix the amount of their compensation.
ARTICLE V
SHAREHOLDERS' VOTING POWERS AND MEETINGS
SECTION 1. Voting Powers. The Shareholders shall have power to vote only
(i) for the election of Trustees as provided in Article IV, Section 1, of this
Declaration of Trust; provided, however, that no meeting of Shareholders is
required to be called for the purpose of electing Trustees unless and until such
time as less than a majority of the Trustees have been elected by the
Shareholders, (ii) for the removal of Trustees as provided in Article IV,
Section 6, (iii) with respect to any Manager as provided in Article IV, Section
5, (iv) with respect to any amendment of this Declaration of Trust as provided
in Article VIII, Section 3, (v) with respect to a consolidation, merger or
certain sales of assets as provided in Article VIII, Section 4, (vi) with
respect to the termination of the Trust or a series of Shares as provided in
Article VIII, Section 2, (vii) to the same extent as the stockholders of a
Massachusetts business corporation, as to whether or not a court action,
proceeding or claim should be brought or maintained derivatively or as a class
action on behalf of the Trust or the Shareholders, (viii) with respect to
incorporation of the Trust or any series to the extent and as provided in
Article VIII, Section 5, (ix) with respect to any plan adopted pursuant to Rule
12b-1 (or any successor rule) under the 1940 Act and (x) with respect to such
additional matters relating to the Trust as may be required by law, by this
Declaration of Trust, or the By-Laws of the Trust or any registration of the
Trust with the Commission or any state, or as the Trustees may consider
desirable. Each whole Share shall be entitled to one vote as to any matter on
which it is entitled to vote (except that in the election of Trustees said vote
may be cast for as many persons as there are Trustees to be elected), and each
fractional Share shall be entitled to a proportionate fractional vote.
Notwithstanding any other provision of this Declaration of Trust, on any matter
submitted to a vote of Shareholders, all Shares of the Trust then entitled to
vote shall be voted in the aggregate and not by individual series or class of
Shares, except (i) when otherwise required by the 1940 Act, and (ii) when the
Trustees have
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determined that the matter affects only the interests of one or more series or
classes, then only Shareholders of such series or classes shall be entitled to
vote thereon. There shall be no cumulative voting in the election of Trustees.
Shares may be voted in person or by proxy. A proxy with respect to Shares held
in the name of two or more persons shall be valid if executed by any one of
them, unless at or prior to exercise of the proxy the Trust receives a specific
written notice to the contrary from any one of them. A proxy purporting to be
executed by or on behalf of a Shareholder shall be deemed valid unless
challenged at or prior to its exercise and the burden of proving invalidity
shall rest on the challenger. Until Shares are issued, the Trustees may exercise
all rights of Shareholders and may take any action required by law, this
Declaration of Trust or any By-Laws of the Trust to be taken by Shareholders.
SECTION 2. Meetings of Shareholders. Meetings of Shareholders may be
called at any time by the President, and shall be called by the President and
Secretary at the request in writing or by resolution, of a majority of Trustees,
or at the written request of the holder or holders of ten percent (10%) or more
of the total number of Shares then issued and outstanding of the Trust entitled
to vote at such meeting. Any such request shall state the purpose of the
proposed meeting.
SECTION 3. Quorum and Required Vote. Thirty percent (30%) of the
outstanding Shares shall be a quorum for the transaction of business at a
Shareholders' meeting, except that where any provision of law or of this
Declaration of Trust permits or requires that holders of any series or class
shall vote as a series or class, then thirty percent (30%) of the aggregate
number of Shares of that series or class entitled to vote shall be necessary to
constitute a quorum for the transaction of business by that series or class. Any
lesser number, however, shall be sufficient for adjournment and any adjourned
session or sessions may be held within 90 days after the date set for the
original meeting without the necessity of further notice. Except when a larger
vote is required by any provision of this Declaration of Trust or the By-Laws of
the Trust and subject to any applicable requirements of law, a majority of the
Shares voted shall decide any question and a plurality shall elect a Trustee,
provided that where any provision of law or of this Declaration of Trust permits
or requires that the holders of any series or class shall vote as a series or
class, then a majority of the Shares of that series or class voted on the matter
(or a plurality with respect to the election of a Trustee) shall decide that
matter insofar as that series or class is concerned.
SECTION 4. Action by Written Consent. Any action required or permitted to
be taken at any meeting may be taken without a meeting if a consent in writing,
setting forth such action, is signed by all the Shareholders entitled to vote
on the subject matter thereof and such consent is filed with the records of the
Trust.
SECTION 5. Additional Provisions. The By-Laws may include further
provisions for Shareholders' votes and meetings and related matters.
ARTICLE VI
DISTRIBUTIONS AND REDEMPTIONS
SECTION 1. Distributions. The Trustees shall distribute periodically to
the Shareholders of each series of Shares an amount approximately equal to the
net income of that series, determined by the Trustees or as they may authorize
and as herein provided. Distributions of income may be made in one or more
payments, which shall be in Shares, cash or otherwise, and on a date or dates
and as of a record date or dates determined by the Trustees. At any time and
from time to time in their discretion, the Trustees also may cause to be
distributed to the Shareholders of any one or more series as of a record date or
dates determined by the Trustees, in Shares, cash or otherwise, all or part of
any gains realized on the sale or disposition of the assets of the series or all
or part of any other principal of the Trust attributable to the series. Each
distribution pursuant to this Section 1 shall be made ratably according to the
number of Shares of the series held by the several Shareholders on the record
date for such distribution, except to the extent otherwise required or permitted
by the preferences and special or relative rights and privileges of any classes
of Shares of that series, and any distribution to Shareholders of a particular
class of Shares shall be made to such Shareholders pro rata in proportion to the
number of Shares of such class held by each of them. No distribution need be
made on Shares purchased pursuant to orders received, or for which payment is
made, after such time or times as the Trustees may determine.
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SECTION 2. Determination of Net Income. In determining the net income of
each series or class of Shares for any period, there shall be deducted from
income for that period (a) such portion of all charges, taxes, expenses and
liabilities due or accrued as the Trustees shall consider properly chargeable
and fairly applicable to income for that period or any earlier period and (b)
whatever reasonable reserves the Trustees shall consider advisable for possible
future charges, taxes, expenses and liabilities which the Trustees shall
consider properly chargeable and fairly applicable to income for that period or
any earlier period. The net income of each series or class for any period may be
adjusted for amounts included on account of net income in the net asset value of
Shares issued or redeemed or repurchased during that period. In determining the
net income of a series or class for a period ending on a date other than the end
of its fiscal year, income may be estimated as the Trustees shall deem fair.
Gains on the sale or disposition of assets shall not be treated as income, and
losses shall not be charged against income unless appropriate under applicable
accounting principles, except in the exercise of the discretionary powers of the
Trustees. Any amount contributed to the Trust which is received as income
pursuant to a decree of any court of competent jurisdiction shall be applied as
required by the said decree.
SECTION 3. Redemptions. Any Shareholder shall be entitled to require the
Trust to redeem and the Trust shall be obligated to redeem at the option of such
Shareholder all or any part of the Shares owned by said Shareholder, at the
redemption price, pursuant to the method, upon the terms and subject to the
conditions hereinafter set forth:
(a) Certificates for Shares, if issued, shall be presented for
redemption in proper form for transfer to the Trust or the agent of the
Trust appointed for such purpose, and these shall be presented with a
written request that the Trust redeem all or any part of the Shares
represented thereby.
(b) The redemption price per Share shall be the net asset value per
Share when next determined by the Trust at such time or times as the
Trustees shall designate, following the time of presentation of
certificates for Shares, if issued, and an appropriate request for
redemption, or such other time as the Trustees may designate in accordance
with any provision of the 1940 Act, or any rule or regulation made or
adopted by any securities association registered under the Securities
Exchange Act of 1934, as determined by the Trustees.
(c) Net asset value of each series or class of Shares (for the purpose
of issuance of Shares as well as redemptions thereof) shall be determined
by dividing:
(i) the total value of the assets of such series or class
determined as provided in paragraph (d) below less, to the extent
determined by or pursuant to the direction of the Trustees in accordance
with generally accepted accounting principles, all debts, obligations
and liabilities of such series or class (which debts, obligations and
liabilities shall include, without limitation of the generality of the
foregoing, any and all debts, obligations, liabilities, or claims, of
any and every kind and nature, fixed, accrued and otherwise, including
the estimated accrued expenses of management and supervision,
administration and distribution and any reserves or charges for any or
all of the foregoing, whether for taxes, expenses, or otherwise, and the
price of Shares redeemed but not paid for) but excluding the Trust's
liability upon its Shares and its surplus, by
(ii) the total number of Shares of such series or class
outstanding.
The Trustees are empowered, in their absolute discretion, to establish
other methods for determining such net asset value whenever such other methods
are deemed by them to be necessary to enable the Trust to comply with, or are
deemed by them to be desirable, provided they are not inconsistent with any
provision of the 1940 Act.
(d) In determining for the purposes of this Declaration of Trust the
total value of the assets of each series of Shares at any time, investments
and any other assets of such series shall be valued in such manner as may
be determined from time to time by or pursuant to the order of the
Trustees.
(e) Payment of the redemption price by the Trust may be made either in
cash or in securities or other assets at the time owned by the Trust or
partly in cash and partly in securities or other assets at the time owned
by the Trust. The value of any part of such payment to be made in
securities or other assets of the Trust shall be the value employed in
determining the redemption price. Payment of the redemption price
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shall be made on or before the seventh day following the day on which the
Shares are properly presented for redemption hereunder, except that
delivery of any securities included in any such payment shall be made as
promptly as any necessary transfers on the books of the issuers whose
securities are to be delivered may be made and except as postponement of
the date of payment may be permissible under the 1940 Act.
Pursuant to resolution of the Trustees, the Trust may deduct from the
payment made for any Shares redeemed a liquidating charge not in excess of five
percent (5%) of the redemption price of the Shares so redeemed, and the Trustees
may alter or suspend any such liquidating charge from time to time.
(f) The right of any holder of Shares redeemed by the Trust as
provided in this Article VI to receive dividends or distributions thereon
and all other rights of such Shareholder with respect to such Shares shall
terminate at the time as of which the redemption price of such Shares is
determined, except the right of such Shareholder to receive (i) the
redemption price of such Shares from the Trust in accordance with the
provisions hereof, and (ii) any dividend or distribution to which such
Shareholder previously had become entitled as the record holder of such
Shares on the record date for such dividend or distribution.
(g) Redemption of Shares by the Trust is conditional upon the Trust
having funds or other assets legally available therefor.
(h) The Trust, either directly or through an agent, may repurchase its
Shares, out of funds legally available therefor, upon such terms and
conditions and for such consideration as the Trustees shall deem advisable,
by agreement with the owner at a price not exceeding the net asset value
per Share as determined by or pursuant to the order of the Trustees at such
time or times as the Trustees shall designate, less a charge not to exceed
five percent (5%) of such net asset value, if and as fixed by resolution of
the Trustees from time to time, and to take all other steps deemed
necessary or advisable in connection therewith.
(i) Shares purchased or redeemed by the Trust shall be cancelled or
held by the Trust for reissue, as the Trustees from time to time may
determine.
(j) The obligations set forth in this Article VI may be suspended or
postponed, (1) for any period (i) during which the New York Stock Exchange
is closed other than for customary weekend and holiday closings, or (ii)
during which trading on the New York Stock Exchange is restricted, (2) for
any period during which an emergency exists as a result of which (i) the
disposal by the Trust of investments owned by it is not reasonably
practicable, or (ii) it is not reasonably practicable for the Trust fairly
to determine the value of its net assets, or (3) for such other periods as
the Commission or any successor governmental authority by order may permit.
Notwithstanding any other provision of this Section 3 of Article VI, if
certificates representing such Shares have been issued, the redemption or
repurchase price need not be paid by the Trust until such certificates are
presented in proper form for transfer to the Trust or the agent of the Trust
appointed for such purpose; however, the redemption or repurchase shall be
effective, in accordance with the resolution of the Trustees, regardless of
whether or not such presentation has been made.
SECTION 4. Redemptions at the Option of the Trust. The Trust shall have
the right at its option and at any time to redeem Shares of any Shareholder at
the net asset value thereof as determined in accordance with Section 3 of
Article VI of this Declaration of Trust: (i) if at such time such Shareholder
owns fewer Shares than, or Shares having an aggregate net asset value of less
than, an amount determined from time to time by the Trustees; or (ii) to the
extent that such Shareholder owns Shares of a particular series or class of
Shares equal to or in excess of a percentage of the outstanding Shares of that
series or class determined from time to time by the Trustees; or (iii) to the
extent that such Shareholder owns Shares of the Trust representing a percentage
equal to or in excess of such percentage of the aggregate number of outstanding
Shares of the Trust or the aggregate net asset value of the Trust determined
from time to time by the Trustees.
SECTION 5. Dividends, Distributions, Redemptions and Repurchases.No
dividend or distribution (including, without limitation, any distribution paid
upon termination of the Trust or of any series or class) with respect to, nor
any redemption or repurchase of, the Shares of any series or class shall be
effected by the Trust other than from the assets of such series (or the series
of which such class is a part).
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ARTICLE VII
LIMITATION OF LIABILITY OF SHAREHOLDERS, TRUSTEES AND OTHERS
SECTION 1. No Personal Liability of Shareholders, Trustees, Etc. No
Shareholder shall be subject to any personal liability whatsoever to any Person
in connection with Trust Property or the acts, obligations or affairs of the
Trust. No Trustee, officer, employee or agent of the Trust shall be subject to
any personal liability whatsoever to any Person, other than to the Trust or its
Shareholders, in connection with Trust Property or the affairs of the Trust,
save only that arising from bad faith, willful misfeasance, gross negligence or
reckless disregard of his duties with respect to such Person; and all such
Persons shall look solely to the Trust Property for satisfaction of claims of
any nature arising in connection with the affairs of the Trust. If any
Shareholder, Trustee, officer, employee, or agent, as such, of the Trust, is
made a party to any suit or proceeding to enforce any such liability of the
Trust, he shall not, on account thereof, be held to any personal liability. The
Trust shall indemnify and hold each Shareholder harmless from and against all
claims and liabilities, to which such Shareholder may become subject by reason
of his being or having been a Shareholder, and shall reimburse such Shareholder
for all legal and other expenses reasonably incurred by him in connection with
any such claim or liability. The indemnification and reimbursement required by
the preceding sentence shall be made only out of the assets of the one or more
series of which the Shareholder who is entitled to indemnification or
reimbursement was a Shareholder at the time the act or event occurred which gave
rise to the claim against or liability of said Shareholder. The rights accruing
to a Shareholder under this Article VII, Section 1 shall not impair any other
right to which such Shareholder may be lawfully entitled, nor shall anything
herein contained restrict the right of the Trust to indemnify or reimburse a
Shareholder in any appropriate situation even though not specifically provided
herein.
Every note, bond, contract, instrument, certificate, share, or undertaking
and every other act or thing whatsoever executed or done by or on behalf of the
Trust or the Trustees or any of them in connection with the Trust shall be
deemed conclusively to have been executed or done only in their or his capacity
as Trustees or Trustee, and such Trustees or Trustee shall not be personally
liable thereon.
SECTION 2. Limitation of Liability of Trustees, Etc. No Trustee, officer,
employee or agent of the Trust shall be liable to the Trust, its Shareholders,
or to any Shareholder, Trustee, officer, employee, or agent thereof for any
action or failure to act (including without limitation the failure to compel in
any way any former or acting Trustee to redress any breach of trust) except for
his own bad faith, willful misfeasance, gross negligence or reckless disregard
of the duties involved in the conduct of his office.
SECTION 3. Indemnification.
(a) The Trustees shall provide for indemnification by the Trust of
every person who is, or has been, a Trustee or officer or employee of the
Trust against all liability and against all expenses reasonably incurred or
paid by him in connection with any claim, action, suit or proceeding in
which he becomes involved as a party or otherwise by virtue of his being or
having been a Trustee or officer and against amounts paid or incurred by
him in the settlement thereof, in such manner not otherwise prohibited or
limited by law as the Trustees may provide from time to time in the
By-Laws.
(b) the words 'claim,' 'action,' 'suit,' or 'proceeding' shall apply
to all claims, actions, suits or proceedings (civil, criminal,
administrative or other, including appeals), actual or threatened; and the
words 'liability' and 'expenses' shall include, without limitation,
attorneys' fees, costs, judgments, amounts paid in settlement, fines,
penalties and other liabilities.
SECTION 4. No Bond Required of Trustees. No Trustee shall be obligated to
give any bond or other security for the performance of any of his duties
hereunder.
SECTION 5. No Duty of Investigation; Notice in Trust Instruments, Etc. No
purchaser, lender, transfer agent or other Person dealing with the Trustees or
any officer, employee or agent of the Trust shall be bound to make any inquiry
concerning the validity of any transaction purporting to be made by the Trustees
or by said officer, employee or agent or be liable for the application of money
or property paid, loaned, or delivered to or on the order of the Trustees or of
said officer, employee or agent. Every obligation, contract, instrument,
certificate, Share, other security of the Trust or undertaking, and every other
act or thing whatsoever executed in connection
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with the Trust shall be conclusively presumed to have been executed or done by
the executors thereof only in their capacity as Trustees under this Declaration
of Trust or in their capacity as officers, employees or agents of the Trust.
Every written obligation, contract, instrument, certificate, Share, other
security of the Trust or undertaking made or issued by the Trustees may recite
that the same is executed or made by them not individually, but as Trustees
under this Declaration of Trust, and that the obligations of the Trust under any
such instrument are not binding upon any of the Trustees or Shareholders
individually, but bind only the Trust Estate, and may contain any further
recital which they or he may deem appropriate, but the omission of such recital
shall not operate to bind the Trustees individually. The Trustees may maintain
insurance for the protection of the Trust Property, its Shareholders, Trustees,
officers, employees and agents in such amount as the Trustees shall deem
adequate to cover possible tort liability, and such other insurance as the
Trustees in their sole judgment deem advisable.
SECTION 6. Reliance on Experts, Etc. Each Trustee and officer or employee
of the Trust shall, in the performance of his duties, be fully and completely
justified and protected with regard to any act or any failure to act resulting
from reliance in good faith upon the books of account or other records of the
Trust, upon an opinion of counsel, or upon reports made to the Trust by any of
its officers or employees or by the Manager, the Distributor, transfer agent,
selected dealers, accountants, appraisers or other experts or consultants
selected with reasonable care by the Trustees, officers or employees of the
Trust, regardless of whether such counsel or expert also may be a Trustee.
SECTION 7. Merged Corporations. For the purposes of this Article VII
references to 'the Trust' include any constituent corporation (including any
constituent of a constituent) absorbed in a consolidation or merger which, if
its separate existence had continued, would have had power and authority to
indemnify its directors, officers, employees or agents as well as the resulting
or surviving entity; so that any person who is or was a director, officer,
employee or agent of such a constituent corporation or is or was serving at the
request of such a constituent corporation as a trustee, director, officer,
employee or agent of another corporation, partnership, joint venture, trust or
other enterprise shall stand in the same position under the provisions of this
Article VII with respect to the resulting or surviving entity as he would have
with respect to such a constituent corporation if its separate existence had
continued.
ARTICLE VIII
SECTION 1. Duration. The Trust shall continue without limitation of time
but subject to the provisions of this Article VIII.
SECTION 2. Termination of Trust. (a) The Trust or any series or class of
the Trust may be terminated by an instrument in writing signed by a majority of
the Trustees, or by the affirmative vote of the holders of a majority of the
Shares of the Trust, series or class outstanding and entitled to vote, at any
meeting of Shareholders. Upon the termination of the Trust or any series or
class thereof,
(i) the Trust, series or class shall carry on no business except
for the purpose of winding up its affairs;
(ii) the Trustees shall proceed to wind up the affairs of the
Trust, series or class and all of the powers of the Trustees under this
Declaration of Trust shall continue until the affairs of the Trust,
series or class shall have been wound up, including the power to fulfill
or discharge the contracts of the Trust, series or class, collect its
assets, sell, convey, assign, exchange, transfer or otherwise dispose of
all or any part of the remaining Trust Property or property of the
series or class to one or more persons at public or private sale for
consideration which may consist in whole or in part of cash, securities
or other property of any kind, discharge or pay its liabilities, and do
all other acts appropriate to liquidate its business; and
(iii) after paying or adequately providing for the payment of all
liabilities, and upon receipt of such releases, indemnities and
refunding agreements as they deem necessary for their protection, the
Trustees may distribute the remaining Trust Property or property of the
series or class, in cash or in kind or partly each, among the
Shareholders of the Trust, series or class according to their respective
rights.
4b-13
<PAGE>
(b) after termination of the Trust or any series or class thereof and
distribution to the Shareholders as herein provided, a majority of the
Trustees shall execute and lodge among the records of the Trust an
instrument in writing setting forth the fact of such termination, and the
Trustees shall thereupon be discharged from all further liabilities and
duties hereunder, and the rights and interests of all Shareholders of the
Trust, series or class shall thereupon cease.
SECTION 3. Amendment Procedure. (a) This Declaration of Trust may be
amended by a vote of the holders of a majority of the Shares outstanding and
entitled to vote. Amendments shall be effective upon the taking of action as
provided in this section or at such later time as shall be specified in the
applicable vote or instrument. The Trustees may also amend this Declaration of
Trust without the vote or consent of Shareholders if they deem it necessary to
conform this Declaration of Trust to the requirements of applicable federal or
state laws or regulations or the requirements of the regulated investment
company provisions of the Internal Revenue Code of 1986, as amended (including
those provisions of such Code relating to the retention of the exemption from
federal income tax with respect to dividends paid by the Trust out of interest
income received on Municipal Obligations), but the Trustees shall not be liable
for failing so to do. The Trustees also may amend this Declaration of Trust
without the vote or consent of Shareholders if they deem it necessary or
desirable to change the name of the Trust or to make any other changes in the
Declaration of Trust which do not materially adversely affect the rights of
Shareholders hereunder.
(b) No amendment may be made under this Section 3 which would change
any rights with respect to any Shares of the Trust, series or class by
reducing the amount payable thereon upon liquidation of the Trust, series
or class or by diminishing or eliminating any voting rights pertaining
thereto, except with the vote or consent of the holders of two-thirds of
the Shares of the Trust, Series or class outstanding and entitled to vote.
Nothing contained in this Declaration of Trust shall permit the amendment
of this Declaration of Trust to impair the exemption from personal
liability of the Shareholders, Trustees, officers, employees and agents of
the Trust or to permit assessments upon Shareholders.
(c) A certificate signed by a majority of the Trustees setting forth
an amendment and reciting that it was duly adopted by the Shareholders or
by the Trustees as aforesaid or a copy of the Declaration of Trust, as
amended, and executed by a majority of the Trustees, shall be conclusive
evidence of such amendment when lodged among the records of the Trust.
SECTION 4. Merger, Consolidation and Sale of Assets. The Trust or any
series thereof may merge or consolidate with any other corporation, association,
trust or other organization or may sell, lease or exchange all or substantially
all of the Trust Property or the property of any series, including its good
will, upon such terms and conditions and for such consideration when and as
authorized at any meeting of Shareholders of the Trust or series called for the
purpose by the affirmative vote of the holders of a majority of the Shares of
the Trust or series.
SECTION 5. Incorporation. With the approval of the holders of a majority
of the Shares of the Trust or any series outstanding and entitled to vote, the
Trustees may cause to be organized or assist in organizing a corporation or
corporations under the laws of any jurisdiction or any other trust, partnership,
association or other organization to take over all of the Trust Property or the
property of any series or to carry on any business in which the Trust or the
series shall directly or indirectly have any interest, and to sell, convey and
transfer the Trust Property or the property of any series to any such
corporation, trust, association or organization in exchange for the Shares or
securities thereof or otherwise, and to lend money to, subscribe for the Shares
or securities of, and enter into any contracts with any such corporation, trust,
partnership, association or organization, or any corporation, partnership,
trust, association or organization in which the Trust or the series holds or is
about to acquire shares or any other interest. The Trustees also may cause a
merger or consolidation between the Trust or any series or any successor thereto
and any such corporation, trust, partnership, association or other organization
if and to the extent permitted by law, as provided under the law then in effect.
Nothing contained herein shall be construed as requiring approval of
Shareholders for the Trustees to organize or assist in organizing one or more
corporations, trusts, partnerships, associations or other organizations and
selling, conveying or transferring a portion of the Trust Property to such
organization or entities.
4b-14
<PAGE>
ARTICLE IX
OTHER GENERAL PROVISIONS
SECTION A. Liability of Third Persons Dealing with Trustees. No person
dealing with the Trustees shall be bound to make any inquiry concerning the
validity of any transaction made or to be made by the Trustees pursuant hereto
or to see to the application of any payments made or property transferred to the
Trust or upon its order.
SECTION B. Filing of Copies, References, Headings. The original or a copy
of this instrument and of each amendment hereto and of each Declaration of
Trust supplemental hereto shall be kept at the office of the Trust where it may
be inspected by any Shareholder. A copy of this instrument and of each such
amendment and supplemental Declaration of Trust shall be filed by the Trust with
the Secretary of The Commonwealth of Massachusetts and the Boston City Clerk, as
well as any other governmental office where such filing may from time to time be
required. Anyone dealing with the Trust may rely on a certificate by an officer
of the Trust as to whether or not any such amendments or supplemental
Declarations of Trust have been made and as to matters in connection with the
Trust hereunder; and, with the same effect as if it were the original, may rely
on a copy certified by an officer of the Trust to be a copy of this instrument
or of any such amendment or supplemental Declaration of Trust. In this
instrument or in any such amendment or supplemental Declaration of Trust,
references to this instrument, and all expressions like 'herein,' 'hereof,' and
'hereunder,' shall be deemed to refer to this instrument as amended or affected
by any such amendment or supplemental Declaration of Trust. Headings are placed
herein for convenience of reference only and in case of any conflict, the text
of this instrument, rather than the headings, shall control. This instrument may
be executed in any number of counterparts each of which shall be deemed an
original.
SECTION C. Applicable Law. The Trust set forth in this instrument is made
in The Commonwealth of Massachusetts, and it is created under and is to be
governed by and construed and administered according to the laws of said
Commonwealth. The Trust shall be of the type commonly called a Massachusetts
business trust, and without limiting the provisions hereof, the Trust may
exercise all powers which are ordinarily exercised by such a trust.
IN WITNESS WHEREOF, the undersigned Trustees have hereunto set their hand
for themselves and their assigns as of the day and year first above written.
--------------------------------------
Margo N. Alexander, as Trustee and not
individually
--------------------------------------
David J. Beaubien, as Trustee and not
individually
--------------------------------------
William W. Hewitt, Jr., as Trustee and
not individually
--------------------------------------
Carl W. Schafer, as Trustee and not
individually
4b-15
<PAGE>
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
On this day of , 1996, the individuals described in and
who executed the foregoing instrument, personally appeared before me and they
severally acknowledged the foregoing instrument to be their free act and deed.
--------------------------------------
Notary Public
My commission expires:
(Notary Seal)
4b-16
<PAGE>
EXHIBIT BY
ARTICLES XI, XII AND XIII OF THE CURRENT BYLAWS OF
PAINEWEBBER CASHFUND, INC.
(A MARYLAND CORPORATION)
ARTICLE XI
AMENDMENTS
SECTION 11.01. General: Except as provided in Section 11.02 hereof, all
By-Laws of the Corporation, whether adopted by the board of directors or the
stockholders, shall be subject to amendment, alteration or repeal, and new
By-Laws may be made, by the affirmative vote of a majority of either:
(a) the holders of record of the outstanding shares of stock of the
Corporation entitled to vote, at any annual or special meeting, the notice
or waiver of notice of which shall have specified or summarized the
proposed amendment, alteration, repeal or new By-Law; or
(b) the Directors, at any regular or special meeting the notice or
waiver of notice of which shall have specified or summarized the proposed
amendment, alteration, repeal or new By-Law.
SECTION 11.02. By Stockholders Only:
(a) No amendment of any section of these By-Laws shall be made except
by the stockholders of the Corporation if the By-Laws provide that such
section may not be amended, altered or repealed except by the stockholders.
(b) From and after the issue of any shares of the Capital Stock of the
Corporation, no amendment of this Article XI or Articles XII or XIII shall
be made except by the stockholders of the Corporation.
ARTICLE XII
MISCELLANEOUS
(A) Except as hereinafter provided, no officer or director of the
Corporation and no partner, officer, director or shareholder of the Investment
Adviser (as that term is defined in the Investment Company Act of 1940) of the
Corporation or of the distributor of the Corporation, and no Investment Adviser
or distributor of the Corporation shall take long or short positions in the
securities issued by the Corporation.
(1) The foregoing provision shall not prevent the distributor from
purchasing from the Corporation shares of the Corporation if such purchases
are limited (except for reasonable allowances for clerical errors, delays
and errors of transmission and cancellation of orders) to purchases for the
purpose of filing orders for such shares received by the distributor, and
provided that orders to purchase from the Corporation are entered with the
Corporation or the Custodian promptly upon receipt by the distributor of
purchases orders for such shares, unless the distributor is otherwise
instructed by its customer.
(2) The foregoing provision shall not prevent the distributor from
purchasing shares of the Corporation as agent for the account of the
Corporation.
(3) The foregoing provision shall not prevent the purchase from the
Corporation or from the underwriter of shares issued by the Corporation by
any officer, or director of the Corporation or by any partner, officer,
director or stockholder of the Investment Adviser of the Corporation at the
price available to the public generally at the moment of such purchase or,
to the extent that any such person is a stockholder, at the price available
to stockholders of the Corporation generally at the moment of such
purchase, or as described in the current Prospectus of the Corporation.
(B) The Corporation shall not lend assets of the Corporation to any officer
or director of the Corporation, or to any partner, officer, director or
stockholder of, or person financially interested in, the Investment Adviser of
BY-1
<PAGE>
the Corporation, or the distributor of the Corporation, or to the Investment
Adviser of the Corporation or to the distributor of the Corporation.
(C) The Corporation shall not impose any restrictions upon the transfer of
the shares of the Corporation, but this requirement shall not prevent the
charging of customary transfer agent fees.
(D) The Corporation shall not permit any officer or director, or any
officer or director of the Investment Adviser or distributor of the Corporation
to deal for or on behalf of the Corporation with himself as principal or agent,
or with any partnership, association or corporation in which he has a financial
interest; provided that the foregoing provision shall not prevent (a) officers
and directors of the Corporation from buying, holding or selling shares in the
Corporation, or from being partners, officer or directors of or otherwise
financially interested in the Investment Adviser or distributor of the
Corporation; (b) purchases or sales of securities or other property by the
Corporation from or to an affiliated person or to the Investment Advisers or
distributor of the Corporation if such transaction is exempt from the applicable
provisions of the Investment Company Act of 1940; (c) purchases of investments
for the portfolio of the Corporation or sales of investments owned by the
Corporation through a security dealer who is, or one or more of whose partners,
stockholders, officers or directors is, an officer or director of the
Corporation, if such transactions are handled in the capacity of brokers only
and commissions charged do not exceed customary brokerage charges for such
services; (d) employment of legal counsel, registrar, transfer agent, dividend
disbursing agent or custodian who is, or who has a partner, stockholder, officer
or director who is, an officer or director of the Corporation, if only customary
fees are charged for services to the Corporation; (e) sharing statistical,
research, legal and management expenses and office hire and expenses with any
other investment company in which an officer or director of the Corporation is
an officer or director or otherwise financially interested.
ARTICLE XIII
INVESTMENTS: BORROWING AND PLEDGING
The Corporation shall be subject to the following restrictions and
limitations:
(A) The Corporation shall not purchase securities of any one issuer if,
immediately after such purchase, more than 5% of the value of its assets would
be invested in the securities of such issuer. The foregoing limitation shall not
apply to investments in Government securities as defined in the Investment
Company Act of 1940. The Corporation shall not acquire voting securities of any
issuer.
(B) The Corporation shall not purchase securities issued by any other
investment company.
(C) The Corporation shall not purchase securities of any issuer if such
purchase at the time thereof would cause more than five percent (5%) of the
total assets of the Corporation (taken at market value) to be invested in
securities of companies which have a record of less than three (3) years'
continuous operation including, however, in such three (3) years the operation
of any predecessor company or companies, partnership or individual enterprise if
the issuer whose securities are proposed as an investment for funds of the
Corporation has come into existence as a result of a merger, consolidation,
reorganization, or the purchase of substantially all the assets of such
predecessor company or companies, partnership or individual enterprise.
(D) Notwithstanding the foregoing paragraphs (A), (B), and (C), any
investment company, whether organized as a trust, association or corporation, or
a personal holding company, may be merged or consolidated with or acquired by
the Corporation, provided that if such merger, consolidation or acquisition
results in an investment in the securities of any issuer prohibited by said
paragraphs, the Corporation shall within sixty (60) days after the consummation
of such merger, consolidation or acquisition dispose of all of the securities of
such issuer so acquired or such portion thereof as shall bring the total
investment therein within the limitations imposed by said paragraphs above as of
the date of consummation.
(E) The Corporation shall not purchase or retain in its portfolio any
securities issued by an issuer any of whose officers or directors, trustees or
securities holders is an officer or director of the Corporation, or is a member,
officer, director or trustee of the Investment Adviser of the Corporation, if
after the purchase of the securities of such issuer by the Corporation one or
more of such persons owns beneficially more than one-half of one percent (1/2%)
of the shares or securities, or both (all taken at market value), of such
issuer, and such persons
BY-2
<PAGE>
owning more than one-half of one percent (1/2%) of such shares or securities
together own beneficially more than five percent (5%) of such shares or
securities, or both (all taken at market value).
(F) The Corporation shall not borrow amounts in excess of ten percent (10%)
of the gross assets of the Corporation taken at cost determined in accordance
with good accounting practice, and no borrowing shall be undertaken except as a
tmeporary measure for extraordinary or emergency purposes.
(G) The Corporation shall not pledge, mortgage or hypothecate the assets of
the Corporation taken at market value to an extent greater than five percent
(5%) of the gross assets of the Corporation taken at cost.
(H) The Corporation shall not
(a) purchase any securities or evidences of interest therein on
'margin,' that is to say in a transaction in which it has borrowed all or a
portion of the purchase price and pledged the purchased securities or
evidences of interest therein as collateral for the amount so borrowed,
(b) sell or contract to sell any security which it does not own unless
by virtue of its ownership of other securities it has at the time of sale a
right to obtain securities equivalent in kind and amount to the securities
sold and provided that if such right is conditional the sale is made upon
the same conditions, and
(c) purchase or sell any put or call options or any combination
thereof, provided, however, that nothing herein shall prevent the purchase,
ownership, holding or sale of warrants when the grantor of the warrants is
the issuer of the underlying securities.
BY-3
<PAGE>
PROXY
Liquid Institutional Reserves
PaineWebber Managed Municipal Trust
PaineWebber Cashfund, Inc.
PaineWebber RMA Money Fund, Inc.
PaineWebber RMA Tax-Free Fund, Inc.
PaineWebber/Kidder, Peabody Municipal Money Market Series
Special Meetings of Shareholders - April 10, 1996
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARDS OF TRUSTEES/DIRECTORS OF EACH OF
THE ABOVE LISTED COMPANIES AND RELATES TO PROPOSALS WITH RESPECT TO ONE OR MORE
OF THEIR RESPECTIVE SERIES OR PORTFOLIOS ("FUNDS"). The undersigned hereby
appoints as proxies ________________ and ________________ and each of them (with
power of substitution) to vote for the undersigned all shares of beneficial
interest/common stock of the undersigned in the Company or Fund specified on
the mailing label on this proxy card at the above referenced meetings, and any
adjournment thereof with all the power the undersigned would have if personally
present. The shares represented by this proxy will be voted as instructed.
UNLESS INDICATED TO THE CONTRARY, THIS PROXY SHALL BE DEEMED TO GRANT
AUTHORITY TO VOTE "FOR" ALL PROPOSALS RELATING TO THE RELEVANT COMPANY OR
FUND.
YOUR VOTE IS IMPORTANT
Please date and sign this proxy on the reverse side and return it in the
enclosed envelope to Alamo Direct Mail Services, Inc., 10 Lucon Drive, Deer
Park, NY 11729.
PLEASE INDICATE YOUR VOTE BY AN "X" IN THE APPROPRIATE BOX BELOW. THE BOARD OF
TRUSTEES/DIRECTORS RECOMMENDS A VOTE "FOR"
1. FOR EACH COMPANY:
Election of eleven members of its Board of Trustees/Directors to serve
indefinite terms until their successors are duly elected and qualified;
___ FOR all nominees listed below (except as marked to the contrary below)
___ WITHHOLD AUTHORITY to vote for all nominees listed below
(INSTRUCTION: To withhold authority to vote for any individual nominee, strike
through the nominee's name in the list below.)
Margo N. Alexander, Richard Q. Armstrong, E. Garrett Bewkes, Jr., Richard Burt,
Mary C. Farrell, Meyer Feldberg, George W. Gowen, Frederic V. Malek, Carl W.
Schafer, John R. Torell III, [________________]
FOR AGAINST ABSTAIN
2. FOR EACH FUND:
Ratification of the selection of independent
auditors for its current fiscal year ___ ___ ___
3. FOR EACH FUND
Approval of certain changes to the Fund's
fundamental investment restrictions ___ ___ ___
4(a) ONLY FOR PAINEWEBBER CASHFUND, INC.,
PAINEWEBBER RMA TAX-FREE FUND, INC. AND
PAINEWEBBER RMA MONEY FUND, INC.: ___ ___ ___
Approval of amendments to, and a restatement
of, its Articles of Incorporation.
4(b) ONLY FOR PAINEWEBBER/KIDDER, PEABODY
MUNICIPAL MONEY MARKET SERIES:
Approval of an amendment to, and a re-
statement of, its Declaration of Trust. ___ ___ ___
5. ONLY FOR PAINEWEBBER CASHFUND, INC.:
Approval of certain changes to its bylaws. ___ ___ ___
6. ONLY FOR LIQUID INSTITUTIONAL RESERVES:
Approval of a new sub-advisory agreement
between Mitchell Hutchins Asset Management
Inc. and PaineWebber Incorporated. ___ ___ ___
Continued and to be signed on reverse side
<PAGE>
This proxy will not be voted unless it is dated and signed exactly as instructed
below
If Shares are held by an individual, sign your name exactly as it appears on
this proxy card. If shares are held jointly, either party may sign, but the name
of the party signing should conform exactly to the name shown on this proxy
card. If Shares are held by a corporation, partnership or similar account, the
name and the capacity of the individual signing the proxy card should be
indicated -- for example: "ABC Corp., John Doe, Treasurer."
Sign exactly as name appears hereon.
_______________________ (L.S.)
_______________________ (L.S.)
Date ________________, 1996
