As filed with Securities and Exchange Commission on August 31, 2000
Registration No. 2-66073
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 X
POST-EFFECTIVE AMENDMENT NO. 25 X
and
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 X
AMENDMENT NO. 25 X
NRM INVESTMENT COMPANY
--------------------------------------------------
(Exact Name of Registrant as Specified in Charter)
Rosemont Business Campus
Suite 112, Building 1
919 Conestoga Road
Rosemont, Pennsylvania 19010
------------------------------------------
(Address of Principal Executive Offices)
Registrant's Telephone Number: (610) 525-0904
John H. McCoy, President, NRM Investment Company
Rosemont Business Campus
Suite 112, Building 1
919 Conestoga Road
Rosemont, Pennsylvania 19010
------------------------------------------------
(Name and Address of Agent for Service)
It is proposed that this filing will become effective (check appropriate box)
___x___ immediately upon filing pursuant to paragraph (b)
_______ on [date] pursuant to paragraph (b)
_______ 60 days after filing pursuant to paragraph (a)(1)
_______ on [date] pursuant to paragraph (a)(1)
_______ 75 days after filing pursuant to paragraph (a)(2)
_______ on [date] pursuant to paragraph (a) of Rule 485
DECLARATION PURSUANT TO RULE 24f-2
The Registrant has registered an indefinite number or amount of securities under
the Securities Act of 1933 pursuant to Section (a) (1) of Rule 24f-2. The Rule
24f-2 Notice for the Registrant's fiscal year ending August 31, 1999 was filed
on October 27, 1999, and the notice for the current fiscal year ending August
31, 2000 will be filed no later than October 30, 2000.
<PAGE>
NRM INVESTMENT COMPANY
Rosemont Business Campus
Rosemont, Pennsylvania 19010
NRM Investment Company (the "Company") is a no-load, open-end, diversified
investment company that has two principal objectives: one is to obtain interest
income exempt from federal income taxes by investing one half or more of all of
its assets in tax-exempt obligations; and the other is to obtain non-exempt
income by investing up to one half of its assets in commercial debt obligations,
or common or preferred shares. To meet the foregoing objectives and at the same
time to preserve capital, the Company's investments in exempt securities will
have maturities generally not exceeding twenty-five years from date of purchase
and generally will be rated "AAA" or better by major rating services. The
non-exempt investments will be in shares of companies with large market
capitalizations, ($5 billion or more) or in high quality taxable notes and bonds
or convertible instruments, which generally, but not exclusively will be rated
"A" or better by rating services. The Company employs an experienced and capable
investment adviser in a further effort to meet its objectives. See the
discussions under "Investment Objectives" and "Management of the Company."
This Prospectus sets forth concisely the information about the Company that
a prospective investor ought to know before investing. Investors should read
this Prospectus and retain it for future reference.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION NOR HAS THE COMMISSION PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
No person has been authorized to give any information or to make any
representations not contained in this Prospectus in connection with the offering
made by this Prospectus and, if given or made, such information or
representations must not be relied upon as having been authorized by the
Company. This Prospectus does not constitute an offering by the Company in any
jurisdiction in which such offering may not lawfully be made.
December 30, 1999
(as amended, August 31, 2000)
<PAGE>
TABLE OF CONTENTS
Summary of Risk and Return; Investments, Risks, and Performance.............. 1
Investment Objectives and Strategies......................................... 1
Summary of Principal Risks of Investing in the Fund.......................... 2
Bar Chart and Table.......................................................... 3
Fees and Expenses of the Company............................................. 5
Investment Objectives, Principal Investments Strategies and Related Risks.... 7
Municipal Bonds - Currently Available Securities............................. 8
Municipal Bonds - When Issued Securities..................................... 9
Common and Preferred shares.................................................. 10
Other Investments............................................................ 10
Turnover..................................................................... 11
Risks of Investing in the Fund............................................... 12
Management's Discussion of Fund Performance.................................. 13
Graph........................................................................ 15
Total Return Calculation..................................................... 16
Management of the Company.................................................... 16
Investment Advisor........................................................... 17
Pending Legal Proceedings.................................................... 19
Capital Stock................................................................ 20
Shareholder Information...................................................... 22
Pricing of Shares............................................................ 22
Purchase of Shares........................................................... 22
Redemption of Fund Shares.................................................... 23
Dividends.................................................................... 24
Taxes........................................................................ 24
Financial Highlights......................................................... 28
Application Form............................................................. 29
Terms and Conditions......................................................... 30
<PAGE>
SUMMARY OF RISK AND RETURN
INVESTMENTS, RISKS, AND PERFORMANCE
Investment Objectives and Strategies
The Fund's objective is to invest no less than fifty-one percent of its
assets in municipal bonds. Interest income from municipals is generally exempt
from Federal Income tax to the Fund shareholders. (For an exception to the
tax-exempt nature of municipal issues, see the discussion under "Taxes" as it
relates to "private activity bonds" and the alternative minimum tax.) So long as
it invests more than half of its assets in municipals, Fund distributions of
interest to its shareholders from these tax-free sources will likewise be free
from federal tax.
The Fund's second objective is to obtain non-exempt income. Its directors plan
to invest the remaining part of the Fund's assets in stock or other instruments
of high quality (according to recognized rating services (see below) United
States companies with a market capitalization of at least $5 billion as well as
in taxable treasury bonds, and taxable corporate bonds. The directors will not
be limited in their investments, however, except as provided by law.
To accomplish the foregoing objectives, the Fund has employed an investment
adviser to be aware of and analyze the municipal bond market to recommend
advantageous purchases and sales. By so doing, the adviser tries to maintain
bonds with stated maturities from purchase in the intermediate range of five to
twelve years, with competitive rates, with little risk of principal and rated
"A" or better by Standard & Poor or Moody's rating service. The same adviser
will make recommendations regarding the stock, and corporate and Treasury bonds
which generally but not exclusively will be rated "A" or better by major rating
services. The adviser for both taxable and non-taxable investments, in part,
takes into account information contained in publications and advice from outside
sources such as brokerage firms to make its recommendations.
Summary of Principal Risks of Investing in the Fund
The risks of investing in the Company's fund include the economic condition
of the municipalities that issue the bonds the Company buys. The issuer may fail
to make principal payment or payment on time or its issue may lose its tax
status. Interest rates change constantly and most often affect the value of the
bonds. Normally if rates increase, the value of the portfolio decreases. To the
extent the Company invests in securities other than municipal bonds, there is a
risk that the businesses in which the Company invests will fail or that general
market conditions will lessen the value of its stock or other security, or in
the case of equities that the particular issuer will suffer a significant
decrease in profits causing a depreciation in market value of its shares. An
additional risk peculiar to investing in this Company is that, for the period of
1974 through 1979 the Company operated as a steel company; its waste generation
has led to environmental proceedings in the past and one is pending. See
"Pending Legal Proceedings." For any of the foregoing reasons or for other risks
including those hereafter described, loss of money is a risk of investing in the
fund. For a more complete discussion of risks of investing in the fund, see
"Risks of Investing in the Fund" later in this prospectus.
<PAGE>
Bar Chart and Table
The bar chart and table shown below provide an indication of the risks
of investing in the Fund by showing changes in the Fund's performance from year
to year and by showing how the Fund's average annual returns for 1, 5, and 10
years compared to those of a broad-based securities market index. How the Fund
has performed in the past is not necessarily an indication of how the Fund will
perform in the future.
NRM Investment Company Bar Chart
Period: December 31, 1990 through December 31, 1999*
12/31
-----
90 2.56%
91 4.02%
92 12.55%
93 9.60%
94 (0.21%)
95 13.03%
96 4.33%
97 7.09%
98 5.68%
99 -.85%
* First calendar quarter of 2000 -.53%
The highest and lowest results for quarters within the forgoing period are:
+6.33% for the period ending 9/30/91, and -6.26% for the period ending 3/31/93.
Average Annual Total Returns for period Ending
Past One Year Past 5 years Past 10 Years
------------- ------------ -------------
NRM Investment Co. -.85% 5.76% 5.68%
Lehman Bros. Municipal
5 YR GO 0.73% 5.71% 6.22%
<PAGE>
FEES AND EXPENSES OF THE COMPANY
This table describes the expenses that you may pay if you buy and hold
shares of the Fund. The Fund charges no shareholder fees, sales loads, exchange
fee or redemption fees of any kind.
Annual Fund Operating Expenses
The following are expenses that are deducted from Fund Assets:
Management Fees .06%
Other Expenses .36%
Total Annual Fund Operating Expenses .42%
Example:
This example is intended to help you compare the cost of investing in the
Fund with the cost of investing in other mutual funds.
The example assumes that you invest $10,000 in the Fund for the time
periods indicated and then redeem all of your shares at the end of those
periods. The Example also assumes that your investment has a 5% return each year
and that the Fund's operating expenses remain the same. Although your actual
costs may be higher or lower, based on these assumptions your costs would be:
One Year Three Years Five Years Ten Years
-------- ----------- ---------- ---------
$4 $13 $23 $53
<PAGE>
THIS EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR FUTURE
EXPENSES OR PERFORMANCE. ACTUAL EXPENSES MAY BE GREATER OR LESS THAN THOSE
SHOWN.
The purpose of the foregoing table is to assist the investor in
understanding the various costs and expenses that an investor in the fund will
bear directly or indirectly. A more complete description of management fees is
included in the prospectus under "MANAGEMENT OF THE COMPANY."
INVESTMENT OBJECTIVES, PRINCIPAL INVESTMENTS STRATEGIES, and RELATED RISKS
Objectives
The Company is a no-load, open-end, diversified investment company. It has
a two-part objective. For at least fifty-one percent of its assets it will
invest in high-grade municipal bonds with intermediate maturities of five to
twelve years, and other investment quality instruments whose income is free from
Federal Income Tax. The Company plans to invest the rest of the assets in common
or preferred shares or other instruments of United States companies, or in
taxable notes and bonds or convertible instruments The investment objectives may
not be changed without a vote of the holders of a majority of the outstanding
shares of the Company.
Strategy
The Company relies upon the advice of its investment adviser. Regarding
municipal bonds, the adviser attempts to maintain bonds, with stated maturities
from purchase in the intermediate range of five to twelve years, competitive
rates, with little risk of principal, and rated "A" or better by Standard & Poor
or Moody's rating service. In normal markets, bonds with short duration tend to
fluctuate in price less than bonds with long duration. Accordingly in an
atmosphere of rising rates, the adviser tends to invest in bonds with shorter
maturities and accordingly with less risk of principal deterioration.
Central to the adviser's strategy relative to equities is its belief that
company earnings drive stock prices. As a result, the adviser emphasizes the
consistency and predictability of earnings growth (and related dividend growth),
in addition to the absolute growth rate itself. The adviser uses an Investment
Selection Committee comprised of portfolio managers and analysts. The Committee
will consider an equity investment only if it meets the following criteria: (a)
it is "A" rated or better by a major rating service (b) it has had consistent
earnings and dividend growth (c) it is an industry leader (d) it has a market
capitalization of $5 billion or more and (e) it is listed on a United States
exchange.
In either category, the Company will buy with the objective of preserving
capital yet taking advantage of market undervaluations. Except as provided by
law, however, the Company's Board of Directors shall be unrestricted in
purchasing or selling securities. There can be no assurance that the Company's
objectives will be achieved.
Municipal Bonds - Currently Available Securities
As above, the Company intends to invest no less than one half of all of its
assets in debt obligations issued by or on behalf of states, territories and
possessions of the United States and the District of Columbia and their
political subdivisions, agencies, instrumentalities or authorities ("Municipal
Bonds"), the interest from which, in the opinion of counsel to the issuer, is
exempt from federal income tax. The Company presently intends to invest in
obligations with maturities generally less than twenty years from date of
purchase, but such obligations will not necessarily be held until maturity.
Generally, municipal Bonds with longer maturities tend to produce higher yields
and are subject to greater market fluctuations as a result of changes in
interest rates than are Municipal Bonds with shorter maturities and lower
yields.
The two principal classifications of Municipal Bonds are "general
obligation" and "revenue" or "special obligation" bonds. General obligation
bonds are secured by the issuer's pledge of its faith, credit and taxing power
for the payment of principal and interest. Revenue or special obligation
<PAGE>
bonds are payable only from the revenues derived from a particular facility or
class of facilities or, in some cases, from the proceeds of a special excise tax
or other specific revenue source such as from the user of the facility being
financed. Qualified private activity bonds are in most cases revenue bonds and
do not generally constitute the pledge of the credit or taxing power of the
municipal issuer of such bonds; instead they are dependent for the payment of
principal and interest on the credit standing of the private corporate user of
the facility. The portfolio may also include "moral obligations" bonds which are
normally issued by special purpose public authorities. If an issuer of moral
obligation bonds is unable to meet its obligations, the repayment of such bonds
becomes a moral commitment but not a legal obligation of the state or
municipality in question.
Municipal Bonds - When Issued Securities
The Company may purchase Municipal Bonds on a "when-issued" or delayed
delivery basis for delivery at a future specified date at a stated price and
yield. The Company would generally not pay for such securities or start earning
interest on them until they are received. The Company records when-issued
securities as an asset on the date of the purchase commitment. Thereafter the
securities are subject to changes in value based upon changes in the general
level of interest rates. To the extent that the Company remains substantially
fully invested at the same time that it has purchased "when-issued" or delayed
delivery securities, as it would generally do, there will be greater
fluctuations in its net assets than if the Company set aside cash to satisfy its
purchase commitment. The Company does not intend to purchase "when-issued" or
delayed delivery securities for speculative purposes but only in furtherance of
its investment objective.
If the Company sells a "when-issued" or delayed delivery security before
delivery, any gain or loss would not be tax-exempt. When the Company engages in
"when-issued" or delayed delivery transactions, it relies on the seller to
consummate the trade. Failure of the seller to do so may result in the Company
incurring a loss or missing the opportunity to obtain a price considered to be
advantageous.
Other Tax Free Investments Excluded
Because of tax and financial risks inherent in advance refunding bonds,
501(c)(3) bonds, Blind pools and so called gray box and black box issues, the
Company does not plan to invest in these instruments.
Common and Preferred Shares
and Other Instruments
The Company, as above, may make investments of less than one half of all of
its assets in common or preferred shares or other financial instruments. Except
as provided by law, the Company in so doing will not be barred from any sale or
purchase. Although not restricted in its investments, the Company's board of
directors, acting as a committee, normally relies upon its investment adviser
and follows the adviser's investment philosophy.
That philosophy which will be the Company's emphasis in making investment
choices, is to build and protect the purchasing power of the Company's portfolio
over time while minimizing risk. To accomplish these two goals, it recommends a
fully invested portfolio and focusing on company earnings as the driver of its
stock price. Accordingly the Adviser emphasizes consistency and predictability
of earnings growth (and related dividend growth), share growth from general or
sector economic conditions, and the selected company's position in the industry.
The Adviser's Investment Selection Committee normally considers an equity
investment only if it meets the following criteria: it is rated "A" or better by
a major rating company; it has a history of consistent earnings and dividend
growth; the issuer is an industry leader with a capitalization of $5 billion or
more and is listed on a major United States exchange.
<PAGE>
The directors will normally purchase shares or other instruments for
investment and not for short term trading purposes. Nevertheless, such shares or
instruments will be sold whenever the Company determines that it is no longer
compatible with the Company's objectives and purposes. There can be no assurance
that the purchases or sales individually or as a group, will produce either
income or gain. The shares are subject to market conditions that change
frequently and cannot be predicted with accuracy.
Other Investments
As a temporary investment or to maintain liquidity, the Company also may
hold a portion of its assets in cash or invest in any one or a combination of
the following: investment grade debt securities; money market instruments,
maturing in 12 months or less, such as domestic bank certificates of deposit (of
domestic banks which are insured by the Federal Deposit Insurance Corporation
and have total assets at the time of purchase of $1.5 billion); obligations of,
or guaranteed by, the United States Government and its agencies and
instrumentalities; tax-exempt commercial paper and municipal funds *(subject to
investment restrictions); and repurchase agreements entered into with domestic
banks where the underlying securities are any of the foregoing. These
investments normally produce lower returns than the municipal bonds and common
and preferred shares explained under the preceding heading and accordingly will
lower the income from investment operations and average annual returns for
measuring periods. To the extent the Company invests in money market instruments
or municipal funds * there will be a duplication of management fees which will
also tend to lower income from investments and annual returns.
* These are special purpose mutual funds whose earnings are generally exempt
from federal income tax.
Portfolio Turnover
The Company will not be restricted in engaging in active and frequent
trading of portfolio securities to achieve its principal investments strategies,
although in the past five fiscal years the portfolio turnover rate has not
exceed 28.98%, and in the year ending August 31, 1999 was 3.27%. To the extent
the Company engages in trades it is likely that it will recognize gain which
will increase the taxable income flowing through to the shareholders or loss
which will decrease the net asset value of the Company and its shares. Trading
in bonds will incur expenses measured by the difference between bid and asked
prices; trading in other securities will incur commission expenses reducing net
asset value.
In purchasing and selling municipal bonds, common and preferred shares, or
other investments, the Company's Board of Directors will not be restricted
except as previously set forth in this Prospectus and in the Statement of
Additional Information.
Risks of Investing in the Fund
Generally the risks associated with the Company's investments in tax-free
obligations involve the financial conditions of the state or municipal issuers.
Changes in economic conditions or the policies of the issuers could have a
significant effect upon the value of the securities that the Company owns.
Further, market rates of interest have a direct bearing upon the value of the
Company's securities regardless of the status of the issuers. The Company
depends upon Counsel for municipal issuers to opine upon the tax free status of
the investments. A risk in inherent in investing in municipal issues is that the
Internal Revenue Service may assert that the issue is not tax free, or if
initially tax free may have since lost qualified status. See also the foregoing
discussion regarding the special risk involved in investing in "when issued"
bonds.
The investments the Company makes other than in tax free bonds will be
subject to all of the market risks generally associated with conditions within
the issuer, within the issuer's industry, or within the economy as a whole.
Although the Company will purchase only such investments as the adviser believes
to be undervalued, there is no certainty that this objective will be met.
Corporate issuers do not issue "when issued" bonds; accordingly, there are no
comparable risks regarding "when issued" bonds as there are in the municipal
markets.
An additional risk is the remaining liability of the Company itself for
activities it conducted before it became an investment company. As shown under
the heading of PENDING LEGAL PROCEEDINGS, a matter involving environmental
issues is pending with respect to the Company's activities when it was an
<PAGE>
operating steel processing plant. There were like proceedings in the past,
settled or successfully resisted. The pending matter is considered material.
Presently counsel for the Company has determined that the Company's share of a
contracted obligation to clean the first phase of an environmentally damaged
site will be $100,000. The Company's remaining obligation is of such an
indefinite nature that counsel is unable to predict an amount or range of
liability; accordingly, the Company has not accrued any amount as an expense. If
and when amounts are accrued, they will decrease the net asset value of the fund
and, as a consequence, the share values of the investors' shares. Based upon the
foregoing or based upon other factors affecting the market generally or the Fund
in particular, there is a risk of losing money by investing in the Fund.
MANAGEMENT'S DISCUSSION OF FUND PERFORMANCE
In a pre-emptive strike against inflation, the Federal Reserve has recently
raised the federal Funds Rate six times to 5.25%. The economy may continue to
move forward over the next several months with GDP growth around a 4% pace.
Consumers are likely to sustain spending at a strong rate as employment remains
high and consumer confidence is at near record levels. Some hints of slower
economic growth are beginning to appear but the evidence is far from
overwhelming. The recent shift toward a more positive yield curve is a sign that
investor expectations are shifting from a deflationary to an inflationary bias.
Between August, 1998 and August, 1999 Municipal bond rates in the
intermediate range increased approximately 60 basis points. This increase in
interest rates has curtailed total returns in that sector. Throughout the year
we have continued to emphasize high current income along with high credit
quality in our bond selections. The credit quality of the portfolio remained
very strong during the fiscal year with 100% of the bonds rated investment grade
or better. Approximately 70% of the portfolio's holdings were rated "AAA", the
highest bond rating. During the period we shortened the average maturity from
17.0 to 16.0 years.
In addition, we have maintained broad diversification over a range of
different kinds of tax exempt bonds including general obligations, housing,
hospital and revenue bonds.
The following page is a line graph comparing the initial account value and
subsequent account values at the end of each of the most recently completed ten
fiscal years of the Company, assuming a $10,000 investment in the Company at the
beginning of the first fiscal year, to the same investment over the same periods
in Lehman Bros. 5 year Municipal Index. 5 Material in the table and the graph
showing past performance is not predictive of future performance.
Plot Points for NRM Investment Company Graph
Period: August 1990 through August 1999
NRM INDEX
------ ------
90 10,000 10,000
91 10,300 11,010
92 11,235 12,104
93 13,111 13,174
94 13,477 13,390
95 14,490 14,448
96 15,231 14,984
97 16,253 15,537
98 17,527 16,596
99 17,801 16,963
<PAGE>
NRM Investment Company
Total Return Calculation
Annualized Return Ending Redeemable Value
----------------- -----------------------
$1000 Invested
1 Year 1.56% $1,015.60
5 Year 5.72% 1,228.43
10 Year 6.22% 1,780.06
*Past Performance is not predictive of future performance.
MANAGEMENT OF THE COMPANY
The business and affairs of the Company are managed by the Company's Board
of Directors. The Company's by-laws provide for five directors and all positions
are filled. Two of the directors serving, including John H. McCoy, Jr. and
George W. Connell, are "interested persons" within the meaning of that term
under the Investment Company Act of 1940. The sole compensation of the directors
is $400 per meeting which normally are limited to four per year. The Statement
of Additional Information contains the names of and the general background
information concerning each director of the Company.
Investment Adviser
Rittenhouse Trust Company ("RTC"), a Pennsylvania state chartered
commercial bank and trust company, is the Company's investment adviser. Its
office is at Suite 450, No. 3 Radnor Corporate Center, Radnor, Pennsylvania
19087. RTC is qualified to act as an investment adviser for the Company under
the applicable banking laws of the Commonwealth of Pennsylvania.
RTC provides investment supervisory services to the Company on a
non-discretionary basis. Its activities are limited to making recommendations
with respect to purchases and sales of securities in accordance with the
Company's investment policies, the provisions of the Company's registration
statement, the requirements of the Investment Company Act of 1940 and the
requirements of the Internal Revenue Code of 1986. The Board of Directors acting
together or through a delegate function as a committee of the whole in approving
investment recommendations the adviser makes.
Mr. George Connell, a 1958 graduate of the University of Pennsylvania and
former first Vice President of Drexel Burnham Lambert, Incorporated, is RTC's
director and sole shareholder. Mr. Joseph McLaughlin is RTC's president. Since
the time the Company most recently employed RTC, Mr. Connell and Mr. McLaughlin
have been responsible to the Directors for day-to-day recommendations regarding
the Company's portfolio.
In addition to being a principal of RTC, Mr. Connell has been engaged in
some or all of the various enterprises described herein for a period in excess
of five years.
In addition to being president of RTC, Mr. McLaughlin is its chief
operating officer, serves on its board of directors, is a member of the
executive committee and its investment selection committee. Previously, he was
vice president and manager of the Private Client Group of Rittenhouse Financial
Services. Prior to joining Rittenhouse, he was a vice president at J.P. Morgan &
Company and a manager at Peat, Marwick, Mitchell & Co. He is a Certified Public
Accountant, serves on the Board of Directors of Philadelphia Hospitality, Inc.
and is a member of the Philadelphia Estate Planning Council. He is President of
St. Joseph's University Accounting Alumni Association and a member of the Board
of Governors in the College of Business and Administration at St. Joseph's
University, from which he graduated.
<PAGE>
From December 9, 1992 through July 15, 1997, Rittenhouse Financial Services
Inc. (RFS) served as the Company's investments adviser. Mr. Connell organized
RFS in 1979. Through September 1, 1997 he was chairman, chief executive officer,
chief investment officer and sole shareholder of RFS; he was also the chief
executive officer of Rittenhouse Financial Securities (a registered broker
dealer) which is a subsidiary of The Rittenhouse Trust Company. On September 1,
1997 RFS was acquired by The John Nuveen Company.
On October 7, 1997 the Board of NRM ratified an amendment to the advisory
agreement dated September 3, 1997 transferring the investment advisory account
and agreement from RFS to The Rittenhouse Trust Company. The assignment did not
result in a change of actual control or management of the investment manager.
Since November 27, 1992, the members of the Company's Board of Directors
acting as a committee, and taking the adviser's recommendations into account (1)
have made decisions with respect to all purchases and sales of the Company's
portfolio (2) have directed the maintenance of records and (3) have been
responsible for the day-to-day management of the portfolio; further, the Board
also arranges for (4) the services of an independent certified public
accountant; (5) custodial and transfer agency services; (6) the computation of
net asset value by RTC; (7) the providing of fidelity bond coverage; (8) the
providing of other administrative services and facilities necessary to conduct
the Company's business; and (9) the providing of certain services necessary to
comply with federal securities laws. The Company assumes all expenses therefor.
For the services provided by RTC, the Company pays RTC $10,000 annually in
quarterly installments. This is a fixed fee amount and accordingly is not based
upon assets under management. However, for the past year, the fee was equal to
.06% of the Company's average net assets.
Pending Legal Proceedings
In recent years, the Company has been identified as a Potentially
Responsible Party ("PRP") in two environmental proceedings asserted by the
United States Environmental Protection Agency. They are denominated the
Strasburg landfill in Newlin Township, Chester County, Pennsylvania, and
Boarhead Farms situate in Bridgeton Township in northern Bucks County, Pa.
During the fiscal year ended August 31, 1998, the Strasburg PRPs agreed
among themselves to a settlement offer of the EPA claims for the consideration
of $2,500,000 and of a contributing PRP claim for an additional $273,000. The
Company's share of the combined amount was $141,500. The EPA and the
contributing PRP accepted these sums. The PPRs paid and the EPA accepted the
agreed amount on January 8, 1999, and the contributing PRP accepted its agreed
amount at the same time.
The settlement agreement has "reopeners" allowing for an assertion of
liability for contamination to groundwater to the extent based upon newly
discovered information, and for natural resource damage. In counsel's view, it
is unlikely that there will be additional claims regarding the reopeners.
Accordingly this claim should no longer be regarded as material; however, it is
mentioned here since it is not possible to give absolute assurance in this
regard.
The Boarhead matter is ongoing, unresolved and material. In November 1998
EPA issued a Record of Decision ("ROD") relative to estimated future cleanup
costs. Those together with EPA's remedial costs already incurred total
$26,000,000.
To date there are six named PRPs sharing in a defense group ("the Group")
and the Fund's share, should it remain in the Group (see below), is one half of
one share. (The Company and another of the six owned an alleged waste generator
at different times and are considered one member.) The Group's investigation has
identified approximately 23 others who are arguably PRPs. The Group will attempt
to bring in as many of the 23 as possible to share expenses and liability, and
otherwise resolve or try the matter.
<PAGE>
After the ROD was distributed, EPA gave certain PRPs special notices to
remediate. The Company was not among them. The Company's interpretation of this
circumstance is that the EPA, based upon evidence available to it at the time,
determined that the Company was not sufficiently linked to the site to warrant a
cleanup direction. Nevertheless other PRPs who did receive special notices have
pointed out evidence which may lead to a link between the Company and the
Boarhead site. The Company will continue to examine whatever evidence is
presented that may create such a link. Based thereon it will make a decision
whether it will remain a member of the Group. If at any time it declines to
participate further with the Group, it will be exposed to contribution claims
from those remaining and will lose contribution protection afforded under CERCLA
(The Superfund Act).
The Company is contractually committed to pay a one half per capita share
of the first phase of the Boarhead cleanup. The total cost for this phase is
approximately $1 million, of which the Company's share is approximately
$100,000. During the first phase cleanup and pending the determination of
responsibilities for later phases of the program, the Group will engage in
allocation taking into account existing and what is expected to be later
discovered evidence. Based thereon, the $100,000 commitment may be increased,
decreased or remain static. By the same means, the Company will judge its cost
exposure for the later and larger cleanup phases.
Counsel expects the least the Company may expect to incur in regard to this
project is the approximate $100,000 presently committed and accrued. However, at
this time in light of the unknown number of participants, the uncertainty of the
ROD's estimates for future operation costs and related cleanup expense, the
issue of linkage, the absence of knowledge of evidence to be presented to the
Group's allocator, counsel is unable to predict an amount or range of liability
beyond $100,000. The Fund will resist all claims vigorously.
Capital Stock
As of October 12, 1999, the Company's president and chairman of the board,
John H. McCoy owned beneficially and of record approximately 66% of the
Company's outstanding shares and controlled the Company. As of the same date,
five shareholders owned beneficially approximately 86% of the Company's
outstanding shares. In addition to Mr. McCoy, these included directors Francis
J. Rainer (5.6%); Joseph V. Somers (5.5%); Thomas F. Kilcullen, Jr. (4.75%) and
a non-affiliated shareholder, Samuel R., Gilbert, Jr. (4.7%) A redemption of a
significant number of shares by one or more of these shareholders could require
the Company to liquidate portfolio securities to obtain all or a portion of the
redemption proceeds. The liquidation of portfolio securities under these
circumstances could be disadvantageous to the Company's remaining shareholders
and could so reduce the Company's total assets that continued operation as an
investment company would not be economically feasible. The recovery or booking
of environmental claims against the Company after a significant redemption would
likewise be disadvantageous to the remaining shareholders. If the major
shareholders redeemed and an environmental claim was recovered against the
Company at or about the same time, the reduction in net worth for the remaining
shareholders could be significant.
SHAREHOLDER INFORMATION
Pricing of Shares
The net asset value per share for purposes of both purchases and
redemptions is determined by the Adviser as of the close of trading (normally at
4:00 p.m. New York City time) on each day on which the New York Stock Exchange
is open for trading, other than a day during which no share was tendered for
redemption and no order to purchase or sell a share was received. It is computed
by dividing the value of all portfolio securities and other assets, less
liabilities, by the number of shares outstanding on such date. Portfolio
securities for which market quotations are readily available (other than debt
securities maturing in 60 days or less) are valued at market value. Securities
for which market quotations are not readily available are valued at their fair
value by the Adviser under the supervision and responsibility of the Company's
Board of Directors. Absent unusual circumstances, portfolio securities maturing
in 60 days or less are valued at amortized cost.
<PAGE>
Purchase of Shares
Those wishing to make purchases of the Company's shares may send a check and
completed application (see the form attached to this prospectus) directly to
Laurel Trust Company, 551 Main Street, Johnstown, Pa., 15907. Full and
fractional shares will be purchased for the shareholder's account at the net
asset value per share next computed after receipt of the order. Initial
investments must be for at least one share. There is no minimum investment for
additional shares. The "stub "from the confirmation of the Company's transfer
agent sent to the shareholder after each prior transaction should accompany such
investment. The Company imposes no sales charge on purchases of its shares.
Redemption of Fund Shares
The Company will redeem its shares at their net asset value next computed
after the receipt of a written redemption request submitted according to the
following procedures: if certificates have been issued for the shares to be
redeemed, the certificates must be either endorsed or accompanied by a stock
power, signed exactly as the shares are registered. If certificates have not
been issued, a signed stock power must accompany the request or the request
itself must be in similar form. In either case, unless the redemption proceeds
are less than $1,000, the signature(s) on the certificate(s), stock power(s) or
request must be guaranteed by a member firm of a national securities exchange or
a commercial bank. (Note: the required signature guarantee is not a
"notarization" as commonly understood, and accordingly is not accomplished by
using the services of a notary public.) Additional documents may be required for
shares redeemed by corporate, partnership or fiduciary accounts.
Payment of the redemption proceeds will be made after receipt of a
redemption request containing the information and providing the documentation
specified in the preceding paragraph. Payment will be made as soon as possible,
and in the absence of unusual circumstances, no later than seven days after
receipt of the request. Unusual circumstances which could delay payment are
those determined by the Securities and Exchange Commission, or during any period
when the New York Stock Exchange is closed (other than customary weekend and
holiday closings), during which trading on the New York Stock Exchange is
restricted, or for such other periods as the Securities and Exchange Commission
may permit. The proceeds paid upon redemption may be more or less than the
shareholder's cost, depending on the value of the Company's portfolio securities
at the time of redemption. Redemption requests should be tendered to Laurel
Trust Company 551 Main Street, Johnstown, Pa., 15907. For purchase and
redemption information call 814 536 2110.
Dividends
The Company normally distributes its investment company income quarterly
and its capital gain net income at least annually.
In calculating interest income, premiums on securities are amortized but
discounts (except for original issue discounts) are not accreted. Dividend
accruals are normally made as of the ex-dividend dates of companies in which the
Company owns shares. In determining amounts of capital gain to be distributed,
any capital loss carryovers from prior years will be offset against current
capital gains.
All distributions of net investment income and any capital gains paid by
the Company will be paid by checks mailed to the shareholders, or by written
request by a shareholder, will be reinvested in additional shares of the Company
without sales charge at the net asset value per share as determined at the close
of business on the payment date. Confirmation statements reflecting additional
shares purchased
<PAGE>
through reinvestment of distributions will be mailed to all shareholders who do
not receive their distributions in cash.
Taxes
The Company qualified for the fiscal year ended August 31, 1999 and intends
to continue to qualify for and elect the special tax treatment afforded
regulated investment companies under Subchapter M of the Internal Revenue Code.
It emphasizes investments in municipal bonds. From such bond income, it will pay
"exempt-interest" dividends of not less than 90% of its tax-exempt net income
which may be treated by the Company's shareholders as items of interest
excludable from their gross income. The exempt interest treatment of the
dividends to shareholders will continue for as long as the Company holds no less
than 50% of its assets in securities exempt from Federal tax. As heretofore
indicated the Company intends to invest more than 50% of its assets in
securities the ordinary income from which is exempt from federal tax. Ordinary
and capital gain income from sources other than exempt securities will be taxed
to the shareholders whether the income is received in the form of a cash
distribution or reinvested to acquire additional shares.
Interest on newly issued Municipal Bonds, the proceeds of which are used to
provide financing for persons other than states and local governmental units
(such bonds sometimes referred to as "private activity bonds") will generally be
tax exempt if certain qualification requirements are met by the issuer, but for
the most part in computing alternative minimum tax will be treated as an item of
tax preference for individual and corporate shareholders; accordingly, it is
anticipated that the Company, in purchasing new issues, will favor governmental
operations bonds over private activity bonds.
Any gain the Company recognizes on the disposition of exempt-interest
securities it purchases after April 30, 1993 and which is attributable to
accrued market discount will be taxed to the shareholders as ordinary income;
the balance of the gain, if any, will be taxed to the Company or the
shareholders as capital gain.
Exempt-interest dividends may be taxable to investors under state or local
law as dividend income even though all or a portion of such distributions may be
derived from interest on tax-exempt obligations which, if realized directly,
would be exempt from such income taxes. For Pennsylvania residents, an exclusion
from Pennsylvania State personal taxable income is allowed for dividends or
distributions received from the Company to the extent they were earned by the
Company from interest on Pennsylvania State and Local Government obligations.
If a shareholder receives an exempt-interest dividend with respect to any
share of the Company held for six months or less, any loss on the sale or
exchange of such share shall be disallowed to the extent of the amount of the
exempt-interest dividend. If a shareholder redeems any shares between dividend
record dates, the amount of any undistributed interest income will be included
in the net asset value per share and will increase the capital gain (or decrease
the capital loss) realized by the shareholder upon redemption. Capital gains
realized upon redemption are not exempt from federal income taxes.
Although exempt interest dividends are excludable from shareholders' gross
income, such dividends are taken into account in determining whether a portion
of social security benefits will be subjected to income tax under Section 86 of
the Internal Revenue Code.
Under the Code, interest on indebtedness incurred or continued to purchase
or carry tax-exempt securities (which would in whole or in part include shares
issued by the Company) will not be deductible by the borrower. Under procedures
established by the Internal Revenue Service, a purpose to use borrowed funds to
purchase or carry tax-exempt securities may be shown by either direct or
circumstantial evidence. To the extent interest expense is incurred to purchase
taxable investments, deductions therefore are generally limited to the amount of
the net taxable investment income.
Under the Code, corporate shareholders of the Company may be required to
pay an alternative minimum tax based in part upon the difference between the
shareholders' taxable income and its
<PAGE>
adjusted current earnings. In effect this may require a tax for corporate
shareholders on exempt interest dividends.
In addition to exempt interest dividends, the Company will pay dividends of
at least 98% of the ordinary income it receives from investments generating
taxable income on a calendar year basis; 98% of its capital gain net income
(amounts, if any, in excess of current or carryover losses) for every year
ending on October 31; and, 100% of any undistributed amounts of ordinary and
capital gain income from the preceding calendar year. These sums are fully
taxable to the shareholders. Moreover, since five or fewer shareholders own more
than half of the Company's stock, and since its ordinary income is from
dividends and interest, it is a personal holding company within the meaning of
section 542 of the Code. The Company's ordinary income (exclusive of tax-free
interest) is personal holding company income and to the extent not distributed
is subject to a penalty tax of 39.6% over corporate regular tax. Accordingly,
for this additional reason, it is the Company's policy to distribute all of the
Company's income currently.
The foregoing is only a brief summary of some of the important tax
considerations generally affecting the Company and its shareholders. No attempt
is made to present a detailed explanation of the federal, state and local income
tax treatment of the Company or its shareholders. This discussion is not
intended as a substitute for careful tax planning. Accordingly, potential
investors in the Company are urged to consult their tax advisers with specific
reference to their own tax situations.
In general, dividend record dates are set by the directors to occur on
approximately the 23rd day of February, May, August and November. Shareholders
will be advised annually within 60 days of the end of the Company's taxable year
as to the federal income tax consequences of distributions made during such
year, and will be similarly advised after the end of each calendar year.
FINANCIAL HIGHLIGHTS
The following financial highlights table is intended to help you understand
the Fund's financial performance for the past 5 years. Certain information
reflects financial results for a single Fund share. The total returns in the
table represent the rate that an investor would have earned on an investment in
the Fund (assuming reinvestment of all dividends and distributions). This
information for years 1996 through 1999 has been audited by Beard & Company,
Inc. independent auditors, whose report, along with the Fund's financial
statements, are included in the SAI or annual report, which is available upon
request. For the year ending August 31, 1995, Ernst & Young, LLP audited the
information.
<PAGE>
<TABLE>
<CAPTION>
Year Ended August 31
----------------------------------------------------------------------
1999 1998 1997 1996 1995
------ ------- ------- ------- -------
PER SHARE DATA
----------------------------------------------------------------------
(for a share outstanding throughout the indicated year)
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of year $ 4.041 $ 3.968 $ 3.933 $ 3.964 $ 3.909
Income from investment operations:
Net investment income .191 .222 .221 .210 .237
Net realized and unrealized gain
(loss) on investments (.125) .087 .041 (.004) .056
Total from investment operations .066 .309 .262 .206 .293
Less distributions:
Distributions from capital gains (.002) (.015)
Dividends from net investment income (.161) (.221) (.221) (.210) (.237)
Distribution in excess of net
investment income (.023) -0- (.006) (.027) (.001)
Total distributions (.186) (.236) (.227) (.237) (.238)
Net asset value end of year $ 3.921 $ 4.041 $ 3.968 $ 3.933 $ 3.964
======= ======= ======= ======= =======
TOTAL RETURN 1.56% 7.84% 6.71% 5.11% 7.52%
RATIOS\SUPPLEMENTAL DATA
Net assets, end of year (in thousands) $16,824 $17,341 $17,015 $16,847 $16,982
Ratio of expenses to average net assets .99% .42% .57% 1.02% .37%
Ratio of net investment income to
average net assets 4.72% 5.50% 5.56% 5.24% 6.08%
Portfolio turnover rate 3.27% 12.57% 28.98% 6.24% 22.73%
</TABLE>
*See note 3 on following page
<PAGE>
APPLICATION FORM: NRM INVESTMENT COMPANY
Mail to: Laurel Trust Company, 551 Main Street, Johnstown, Pa., 15907.
--------------------------------------------------------------------------------
REGISTRATION: Individual Tenants in Common Trustees
Joint Tenants Custodian Other
--------------------------------------------------------------------------------
(Name) Social Security No.
(Tax Identification No.)
--------------------------------------------------------------------------------
(Name) Social Security No.
(Tax Identification No.)
PERMANENT MAILING ADDRESS:
-----------------------------------------------------
Street Address
--------------------------------------------------------------------------------
City State Zip
GIFTS TO MINORS As Custodian for
-----------------------------------------------
--------------------------------------------------------------------------------
Minor's First Name Initial Last Name Age Minor S.S. No.
Under the Uniform Gifts to Minors Act.
------------------------
State
<PAGE>
Initial order, payment enclosed
If this Application accompanies a check for the purchase of investment
company shares, I enclose a check payable to Laurel Trust Company, and would
like you to:
Issue Certificate, or hold shares in account at Bank
Check here if dividends and distribution are to be reinvested at net asset
value without sales charge.
--------------------------------------------------------------------------------
This application is made in accordance with the provisions of the current
Prospectus of the Company, a copy of which I have received, and the applicable
terms and conditions on the reverse side. I am of legal age in the State of my
residence.
--------------------------------------------------------------------------------
Date Signature of co-owner
Terms and Conditions
Purchases of Company Shares:
Initial Purchase: Upon receipt of the application form from the subscriber, and
accompanied by any necessary funds, Laurel Trust Company, acting as agent for
the subscriber, will purchase as many shares (including fractional shares) of
the Company as may be purchased at the net asset value next computed after
receipt of the application form and payment to Laurel Trust Company, 551 Main
Street, Johnstown, Pa., 15907. Fractional shares shall be purchased to the
nearest one-thousandth (1/1000) of a share. Initial purchases must be for at
least one share.
Subsequent Purchases: Upon receipt of additional funds, Laurel Trust Company
will purchase additional shares (including fractional shares) in the same manner
as above. Additional purchases must be for at least one share.
The Company reserves the right in its discretion to reject all or any portion of
a purchase order and return the accompanying payment.
I hereby certify that the Tax Identification No. contained herein is true,
correct and complete and that I am not subject to backup withholding under
Section 3406 (a)(1)(C) of the Internal Revenue Code.
--------------------------------------------------------------------------------
Date Signature of co-owner
<PAGE>
[PROSPECTUS OUTSIDE BACK COVER]
The Company's Statement of Additional Information contains additional
information about the Fund, which in large part expands the discussion contained
in the prospectus and which may be of interest to some investors. This
additional information may also be found in the Fund's annual and semi-annual
reports to the shareholders. In the Fund's annual report, you will find a
discussion of the market conditions and investment strategies that significantly
affected the Fund's performance during its last fiscal year. The Statement of
Additional Information and the Fund's annual and semi-annual reports are
available, without charge, upon request, by calling the Fund's Custodian and
Transfer Agent, Laurel Trust Company, 551 Main Street, Johnstown, Pa., 15907;
personnel at Investor's Trust will be available to receive shareholder inquires
and to furnish other pertinent information to interested people. Alternatively,
for any of this information, you may call the Fund's assistant secretary, Edward
Fackenthal, collect at 610 279 3370 or contact him at his Internet site
[email protected].
Information about the Fund (including the SAI) can be reviewed and copied
at the Securities and Exchange Commission's Public Reference Room in Washington,
D.C. Information on the operation of the Commissions' Public Reference Room may
be obtained by calling the Commission at 1 202 942 8090 and asking for the
public reference file and referring to the Fund's Investment Company Act file
number of 811 02995. The reports and other information about the Fund are
available on the EDGAR Database on the Commission's Internet site at
http://www.sec.gov. Copies of this information may be obtained, upon payment of
a duplicating fee, by electronic request at the following E-mail address:
HYPERLINK mail to: [email protected]
[email protected], or by writing the Public Reference Section of the
Commission, Washington, D.C. 20549-0102
However you contact the Commission in regard to the Company, be sure to
have the Company's Investment Company file number at hand: 811 02995.
NRM INVESTMENT COMPANY
Statement of Additional Information
December 30, 1999
(as amended, August 31, 2000)
<PAGE>
STATEMENT OF ADDITIONAL INFORMATION
This Statement of Additional Information should be read in conjunction with
the Prospectus of the Company having the same date as this Statement of
Additional Information. Much of the information contained in this Statement of
Additional Information expands upon subjects discussed in the Prospectus. No
investment in shares of the Company should be made without first reading the
Prospectus of the Company.
NRM INVESTMENT COMPANY
Statement of Additional Information
December 30, 1999
(as amended, August 31, 2000)
<PAGE>
Table of Contents
Statement of Additional Information....................... 1
Fund History.............................................. 3
Description of the Fund; Its Investments and Risks........ 3
Investment Objective and Policies.................... 3
Investment Policies and Restrictions................. 6
Management of the Fund.................................... 9
Control Persons and Principal Holders of Securities....... 11
Advisory Services......................................... 12
Portfolio Transactions and Brokerage Commissions.......... 14
The Company's Common Stock................................ 15
Purchase, Redemption, Pricing of Shares;
Underwriting............................................ 15
Other Information of Interest to Investors................ 15
Other Services............................................ 15
Accounting................................................ 15
Custodian and Transfer Agent.............................. 16
Auditors.................................................. 16
Counsel................................................... 16
Taxation of the Fund...................................... 17
State and Local........................................... 18
Report of Independent Auditor............................. 18
Financial Statements......................................
<PAGE>
FUND HISTORY
The Company was incorporated on April 12, 1974, under the laws of the
Commonwealth of Pennsylvania, as National Rolling Mills Co. Through August 30,
1979, the Company was actively engaged in operations as a steel processing
plant. On August 31, 1979, the Company changed its name to NRM Investment
Company and registered with the Securities and Exchange Commission as an
open-end, diversified management investment company.
DESCRIPTION OF THE FUND
ITS INVESTMENTS AND RISKS
Investment Objective and Policies
The Company is an open-end, diversified, management investment company. As
stated in the Prospectus, it intends to invest fifty-one percent or more of its
assets in Municipal Bonds. Municipal Bonds include debt obligations issued to
obtain funds for various public purposes, including the construction of a wide
range of public facilities, refunding of outstanding obligations, and obtaining
funds for general operating expenses and loans to other public institutions and
facilities. In addition, certain types of private activity bonds are issued by
or on behalf of public authorities to obtain funds to provide privately operated
facilities. Such obligations are included within the term "Municipal Bonds" if
the interest paid thereon is exempt from federal income tax. (See reference to
"private activity bonds" under the discussion "TAXES" in the prospectus).
Municipal Bonds also include short-term tax-exempt municipal obligations such as
tax anticipation notes, bond anticipation notes, revenue anticipation notes, and
Public Housing Authority notes that are fully secured by a pledge of the full
faith and credit of the United States. Bond counsel to the respective issuing
authorities render opinions relating to the validity of Municipal Bonds and to
the exemption of interest thereon from federal income taxes at the time of
issuance. Neither the Company nor the adviser will review the proceedings
relating to the issuance of Municipal Bonds or the basis for such opinions.
The District of Columbia, each state, each of its political subdivisions,
agencies, instrumentalities and authorities, and each multi-state agency of
which a state is a member, is a separate "issuer" as that term is used in the
Prospectus and this Statement of Additional Information. The non-governmental
user of facilities financed by private activity bonds is also considered to be
an issuer.
The issuer's obligations under its Municipal Bonds are subject to the
provisions of bankruptcy, insolvency, and other laws affecting the rights and
remedies of creditors, such as the federal Bankruptcy Code, and laws, if any,
which may be enacted by Congress or state legislatures imposing a moratorium on
the payment of principal and interest or imposing other constraints or
conditions upon enforcement of such obligations. There is
<PAGE>
also the possibility that as a result of litigation or other conditions, the
power or ability of issuers to meet their obligations for the payment of
interest and principal on their Municipal Bonds may be materially adversely
affected. As explained in the prospectus, General Obligation bonds are those
secured by the taxing authority of the issuer; the risks inherent in such
investments are that interest rates may increase lessening the value of the
bonds, or that the municipality by reason of insolvency, bankruptcy, or court
imposed bar on collection would prohibit or postpone payment. Revenue bonds
imply additional risk. Unlike general obligation bonds, these bonds are
dependent entirely upon the income from the operation financed by the borrowing
and not upon the municipality's general taxing power. Should the project fail
the Fund would lose its investment. Private Activity Bonds bear still greater
risk. Here the borrower although an issuer of the debt is a private concern
borrowing funds from a conventional lender through a program created by an
authority; should the borrower's project fail, there is no recourse to the
municipality and the Fund would lose its investment.
The Fund will invest forty-nine percent or less of its assets in stock,
securities and instruments other than municipal bonds. For this portion of the
Fund it plans to emphasize in securities from issuers with large market
capitalizations of at least $5 billion, and of investment grade quality ranked
"A" or better by major rating services. (By emphasizing in these areas, the Fund
will not exclude the purchase or sale of any stock, security or other instrument
should the directors deem it to be for the Fund's benefit.) As discussed under
the next heading, it will not concentrate in any business or sector and, for no
less than seventy-five percent of the Fund's assets will remain diversified,
investing no more than five percent of its assets in any one issuer, nor acquire
more than ten percent of the voting stock of any issuer. General market
conditions and unforeseeable downturns in any business or sector would adversely
impact the Fund's capital and could lead to losses for the individual investor.
Risks inherent in investing even in large capitalization issuers is the
inability of the directors or their adviser to predict shifts in general or
sector economic conditions which might have an adverse effect on the value of
the shares or other instruments the Fund purchases. Also, particular issuers in
which the Fund invests may suffer reversals regardless of outside economic
conditions leading to depression in value of their stock or other instruments
and a consequent downturn in net asset value of the Fund and its shares.
In addition to the investment limitations stated in the Prospectus, the
Company is subject to the following limitations which may be changed only by a
vote of a majority of the outstanding shares of the Company (as defined under
"Miscellaneous" in the Company's Prospectus dated as of this date) as required
by Sections 8 and 13 of the Investment Company Act of 1940.
Investment Policies and Restrictions
The Company may not:
1. Borrow money except from banks for temporary purposes and then in
amounts not in excess of 10% of the value of the Company's assets at the time of
such borrowing; or mortgage, pledge or hypothecate any assets except in
connection with any such borrowing and in amounts not in excess of the lesser of
the dollar amounts borrowed or 10% of the value of the Company's assets at the
time of such borrowing. (This borrowing provision is not for investment
leverage, but to facilitate management of the portfolio where the liquidation of
portfolio securities is deemed to be disadvantageous or inconvenient.)
2. Purchase securities on margin (except that it may obtain such short-term
credits as may be necessary for clearance of purchases and sales of securities);
make short sales of securities; or maintain a short position;
<PAGE>
3. Make loans to other persons, except that the Company may purchase or
hold Municipal Bonds or other debt instruments in accordance with its investment
objective, policies, and restrictions;
4. Underwrite any issue of securities, except to the extent that the
purchase of Municipal Bonds directly from the issuer thereof in accordance with
the Company's investment objective, policies, and restrictions may be deemed to
be underwriting;
5. Purchase or sell commodities or commodity contracts or real estate
(except that the Company may invest in Municipal Bonds secured by real estate or
interests therein); invest in oil, gas, or their mineral exploration or
development programs.
6. Purchase any private activity bond where the payment of principal and
interest are the responsibility of an issuer (including its predecessors and
unconditional guarantors) which at the time of purchase had been in operation
for less than three years;
7. Issue any class of senior security or sell any senior security of which
it is an issuer, except that the Company may borrow money as set forth in
paragraph 1. above. As therein provided, such borrowing will not be for
investment leverage, but to facilitate management of he portfolio where the
liquidation of portfolio securities is deemed to be disadvantageous or
inconvenient;
8. Purchase any security of any issuer if as a result more than 5% of the
value of its assets would be invested in the securities of that issuer, except
that up to 25% of the Company's assets may be invested without regard to this
limitation;
9. Purchase the securities of any other investment company except as part
of a merger, consolidation, or reorganization or purchase of assets approved by
the Company's stockholders; provided, that the Company may purchase shares of
any registered, open-end investment company if immediately after such purchase,
the Company will not own more than 3% of the outstanding voting stock of any one
investment company;
10. Knowingly invest more than 10% of the value of the Company's assets in
securities with legal or contractual restrictions on resale; and,
11. Invest 25% or more of its total assets in securities of nongovernmental
issuers engaged in related trades or businesses.
The foregoing percentage limitations will apply at the except as provided
in the next sentence, shall not be considered violated unless an excess or
deficiency occurs immediately after and as a result of such investment or
transaction. The Company will not permit its borrowing to exceed 10% of its
assets at any time for more than three business days; should there be an excess
of borrowing as a result of a decrease in the value of the portfolio, the
Company shall repay such time of the investment or other transaction and,
portion of the debt as is necessary to maintain the 10% ratio. Also, borrowing
is not for investment leverage, but to facilitate management of the portfolio
where the liquidation of portfolio securities is deemed to be disadvantageous or
inconvenient.
<PAGE>
MANAGEMENT OF THE FUND
The Fund is managed by its board of directors with the authority and
responsibilities enumerated in the Pennsylvania Business Corporation Law of
1988. In addition, the Board acts as a committee of the whole in making
investment decisions for the Fund. The Board appoints the Company's officers.
The directors and officers of the Company and their addresses and principal
occupations during the past five years are as follows:
Position During Past
Name and Address with Registrant Five Years
---------------- --------------- -------------------
John H. McCoy* Director, **Former President of National
1010 Broadmoor Road Chairman, and Rolling Mills, Inc., a
Bryn Mawr, PA 19010 President steel rolling plant. Prior
thereto, he was President
and Director of National
Rolling Mills Co.
Joseph V. Somers Director **Former President of Somers
1518 Mt. Pleasant Rd. Construction Company and
Villanova, PA 19085 Vice President of Industrial
Lift Truck Co.
Francis J. Rainer Director C.P.A. and former President,
410 Howard Road Rainer & Company, a
Gladwyn, PA 19035 professional accounting
corporation. He is also
Vice-Chairman of the Board
of Delaware Valley Savings
Bank
Thomas F. Kilcullen, Jr. Director **Former Vice President,
4 Carriage Way Treasurer and Secretary of
Berwyn, PA 19312 National Rolling Mills Inc.
Prior thereto, he was Vice
President and Treasurer of
National\Rolling Mills Co.
George W. Connell* Director Chairman, Chief Executive
#3 Radnor Corporate Ctr. Officer, Director and sole
Suite 450 shareholder of The
100 Matsonford Road
Radnor, PA 19087 Rittenhouse Trust Company, a
commercial bank and trust
company acting as the
Company's investment
adviser, CEO and Director
of Rittenhouse Trust
Securities, a registered
brokerage dealer, Member of
the Investment Committee of
Rittenhouse Financial
Services, Inc., a John
Nuveen Company.
* Interested Director
** Retired for more than five years.
The Company and its Investment Adviser have adopted codes of ethics
under Rule 17j-1 of the Investment Company Act. Those codes, with limitations as
stated therein, permit personnel subject to the codes to invest in securities,
including securities that may be purchased or held by the Company.
<PAGE>
Since registering as an investment company under the Investment Company Act
of 1940, the Company has not paid and does not expect to pay any remuneration to
any of its officers. The company pays each director a fee of $400 for each
meeting of the Board of Directors attended and reimburses the directors for
their related out-of-pocket expenses. For the past year the payments were as
follows:
NRM INVESTMENT COMPANY
FISCAL YEAR DIRECTORS FEES
<TABLE>
<CAPTION>
MEETING DATE KILCULLEN MCCOY SOMERS RAINER CONNELL TOTAL
------------ --------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
9/24/98 250.00 250.00 250.00 250.00 250.00 1,250.00
12/17/98 400.00 400.00 400.00 400.00 400.00 2,000.00
3/18/99 -- 400.00 -- 400.00 400.00 1,200.00
6/18/99 400.00 400.00 400.00 400.00 400.00 2,000.00
F/Y TOTAL 1,050.00 1,450.00 1,050.00 1,450.00 1,450.00 6,450.00
</TABLE>
CONTROL PERSONS AND PRINCIPAL HOLDERS OF SECURITIES
As of October 12, 1999 John H. McCoy owned beneficially and of record
2,817,680 of the Company's outstanding voting securities and controlled the
Company. His control is sufficient to appoint all members of the board of
directors and carry out the business of the Company without the affirmative vote
of any other shareholder or group of shareholders. The Company's principal
shareholders are as follows:
Percentage of
Name and address Ownership
---------------- -------------
John H. McCoy 66%
1010 Broadmoor Road
Bryn Mawr, Pa 19010
Francis J. Rainer 5.6%
410 Howard Road
Gladwyn, Pa., 19035
Joseph V. Somers 5.5%
1518 Mt. Pleasant Road
Villanova, PA 19085
Samuel R. Gilbert, Jr. 4.7%
3 Turtle Lane, The Landings
Savannah, GA 31411
Thomas F. Kilcullen, Jr. 4.7%
4 Carriage Way
Berwyn, PA 19312
<PAGE>
The percent owned is based on the number of outstanding shares of common
stock at October 12, 1999. All such shares are owned of record and beneficially.
All officers and directors of the Company, as a group owned as of October 12,
1999, 3,646,248 of the Company's common stock or 85% of its outstanding voting
securities.
ADVISERY SERVICES
Rittenhouse Trust Company Services, Inc. ("RTC"), a Delaware Corporation
located at Three Radnor Corporate Center, Radnor, Pa., 19087-4514, has been
retained by the Company to act as investment adviser under an Advisery Agreement
dated November 30, 1992 with Rittenhouse Financial Services and amended by
assignment on September 3, 1997 to Rittenhouse Trust Company not resulting in a
change of actual control or management and terminable at will, without penalty,
at the discretion of the Board of Directors.
RTC's sole shareholder, George Connell, controls the adviser. His
qualifications, affiliations, and business history are contained in the
prospectus. He is a board member of the Company and accordingly an interested
person.
Under the Advisery Agreement, Rittenhouse assumes no responsibilities to
the Company except, as provided in the prospectus, to make recommendations to
the Company's board respecting the purchases and sales of securities on a
nondiscretionary basis and to adhere to the provisions of the Investment
Advisers' Act of 1940 and other pertinent securities laws. For the services
provided, the Company has agreed to pay RTC, on a quarterly basis, a fee at an
annual flat rate of $10,000. In determining net asset value, the Company accrues
RTC's fees on a daily basis.
The agreement provides that except for violations of securities laws, RTC
shall not be liable for any action it takes for services rendered or not
rendered or for any mistakes of judgment or otherwise.
For each of the fiscal years ending August 31, 1997, August 31, 1998, and
August 31, 1999, the Company paid RTC $10,000.
PORTFOLIO TRANSACTIONS AND BROKERAGE COMMISSIONS
Purchases and sales of portfolio securities will normally (but not
exclusively) be transacted with the issuer or with a primary market maker acting
as principal on a net basis with no brokerage commissions being paid by the
Company. Transactions placed through dealers serving as primary market makers
reflect the spread between the bid and the asked prices. The Company will also
purchase underwritten issues. However, when purchasing equity issues the
directors have authorized the Adviser to execute transactions that may result in
the Company paying some commissions. In years after August 31, 1999 it is
expected that the Company will pay commissions on its purchase of equity
investments. However, in the year ended August 31, 1999 and in the two preceding
fiscal years the Company paid no commissions in respect to portfolio
transactions.
The policy of the Adviser will be to seek "best execution" when placing
portfolio transactions for the Company. "Best execution" means prompt and
reliable execution at a price the Adviser has reason to believe represents the
lowest cost, including any commission in the case of a purchase, or the greatest
proceeds reasonably available. Subject to and in accordance with the provisions
of section 28(e) of the Securities Exchange Act of 1934, the Advisery Agreement
authorizes the Adviser to place orders for the purchase and sale of the
Company's securities with brokers or dealers who provide the Adviser with access
to supplemental research and security and economic analysis even though such
brokers and dealers execute such transactions at a higher net cost to the
Company than may result if other firms were used. The Adviser in connection with
its services to their advisery clients may also use these various services.
<PAGE>
The extent and continuation of this policy is subject to the review of the
Company's Board of Directors. During the past fiscal year, the Adviser did not
use this provision of the agreement; all transactions were with a single
broker/dealer but at best execution as tested periodically by seeking other
quotations.
The Company does not expect its annual portfolio turnover rate to exceed
100%, but the rate of turnover will not be a limiting factor (as in fiscal 1991)
when the Company deems it desirable to sell or purchase securities. The
Company's portfolio turnover rates during the fiscal years ended August 31, 1999
and August 31, 1998 were 3.27% and 12.57% respectively.
THE COMPANY'S COMMON STOCK
The Company was incorporated on April 12, 1974 under the laws of the
Commonwealth of Pennsylvania. Each share in the Company has a par value of $.01
and has equal voting, dividend and liquidation rights. Shareholders are entitled
to one vote for each full share held, and fractional votes for fractional shares
held. The shares are not restricted in either trading or retaining, there are no
material obligations associated with owning the Company's shares other than
investment risk and litigation risks described in the prospectus, there are no
preemptive, conversion or cumulative voting rights. Accordingly, holders of more
than 50% of the shares voting for the election of directors can elect all of the
directors.
PURCHASE, REDEMPTION, PRICING OF SHARES; UNDERWRITING
The Funds shares are offered to the public as described in the prospectus.
There are no special purchase plans or methods; and there are no sales loads of
any kind. Shares are offered to the public at net asset value determined as
described in the prospectus. The Company has no underwriter.
OTHER INFORMATION OF INTEREST TO INVESTORS
Other Services
Accounting
Raymond J. Keefe, a certified public accountant with principal offices at 6
St. Albans Ave., Newtown Square, Pennsylvania 19073, provides certain
administrative services to the Company. Mr. Keefe maintains the books and
records of the Company, compiles its monthly and semi-annually financial
statements, computes its net asset value and net income under the supervision of
the adviser, prepares its federal and state income tax returns, and provides
assistance in the preparation of its semi-annual and annual reports to the
Securities and Exchange Commission. Mr. Keefe bears all expenses in connection
with the performance of his services. For the services provided and expenses
assumed, the Company pays Mr. Keefe on a quarterly basis an annual fee of
$6,000.
Custodian and Transfer Agent
Laurel Trust Company, 551 Main Street, Johnstown, Pa., 15907 ("Laurel")
serves as the Company's Custodian and Transfer Agent. As Custodian, Laurel holds
the Company's assets subject to the instructions of the Company's officers.
Auditors
Beard & Company, Inc. independent auditors, with offices at One Park Plaza,
P.O. Box 311, Reading, Pennsylvania 19603 serves as the Company's auditors. The
financial statements of NRM Investment Company appearing in the 1996, 1997, 1998
and 1999 annual reports to shareholders for the years ended August 31, 1996,
August 31, 1997 August 31, 1998, and August 31, 1999, have been audited by Beard
& Company, Inc., independent auditors, as set forth in their report thereon
included therein, and are incorporated by reference into this Statement of
Additional Information.
<PAGE>
In the past Ernst & Young LLP independent auditors, with offices at
Harrisburg, Pennsylvania served as the Company's auditors. The financial
highlights of NRM Investment Company appearing in the 1999 annual report to
Shareholders for the years ended August 31, 1990 through August 31, 1995 have
been audited by Ernst & Young LLP, independent auditors.
Counsel
Messrs. Henderson, Wetherill, O'Hey & Horsey, Suite 902, One Montgomery
Plaza, P.O. Box 751, Norristown, PA 19404, counsel to the Company, have passed
upon the legality of the shares offered hereby.
TAXATION OF THE FUND
As stated in the prospectus, the Company is qualified under Subchapter M of
the Internal Revenue Code; those provisions normally permit a deduction for the
Company from its taxable income of distributions made to the Company's
shareholders from its earnings. A failure to qualify under Subchapter M would
result in a tax on the Company based upon its earned income, and an additional
tax on the shareholders based upon their distributions.
In general, a tax is imposed upon the Company based upon its investment
company taxable income and its net capital gains which in each case are not
distributed to its shareholders. In general, the Company's investment company
taxable income will be its taxable income (determined in the same manner as an
ordinary corporation), adjusted by excluding net long term capital gains over
short term capital losses and further adjusted by excluding any net operating
losses and by including the dividends paid deduction. The Company's capital
gains subject to tax are computed separately and are based upon the excess of
its long term capital gains over its net short term capital losses. Currently
there are no undistributed capital gains. The Company intends to distribute
"exempt-interest" dividends as described in the Company's prospectus and
distribute at least 98% of its ordinary income for each calendar year, 98% of
its capital gain net income, if any, computed on the basis of an October 31st
fiscal year, and 100% of undistributed adjusted taxable income amounts from the
previous year. Accordingly, it is unlikely that the Company will pay any income
tax. However, should the Company retain any earnings, it will be taxed on its
undistributed investment company taxable income and capital gains and may be
subject to an excise tax. To the extent income is distributed (whether in cash
or additional shares) it will be exempt, or taxable to the shareholders as
ordinary, or capital gain income, in proportion to the Company's receipt of such
income. Since the Company has earnings and profits generated in years before it
was an investment company, distributions to shareholders over and above the
Company's income for a period will be taxable to the shareholders to the extent
of the prior earnings and profits and will not be treated immediately as a
return of capital.
The Company is a personal holding company as defined by Sec. 542 of the
Code. Retained income will be taxed at the highest corporate tax rate. The
Company requested and on August 5, 1986 received a private ruling from the
Internal Revenue Service relating to investments in taxable securities. The
ruling interpreted the Tax Reform Act of 1984 in such a way as to confirm the
Company's ability to make investments in securities generating taxable income
without having to first make an accumulated earnings and profits distribution.
<PAGE>
Currently, the Company has no capital loss carryovers to offset gains in
securities.
Section 852 (b)(5) of the Code provides, in effect, that if, at the close
of each quarter of its taxable year, at least 50% of the Company's total assets
consists of tax free obligations, the income from such investments may be passed
through to the shareholders, and for federal tax purposes, excluded by them from
gross income reporting. By reason of this provision, the Company does not intend
to invest 50% or more of its assets in securities generating taxable income.
If and to the extent declared by the Board of Directors, net realized
long-term capital gains will be distributed annually. See "Dividends." The
Company will have no tax liability with respect to net realized long-term
capital gains which are distributed although the distributions will be taxable
to shareholders as gain from the sale on exchange of a capital asset held for
more than one year regardless of a shareholder's holding period of shares of the
Company. Such distributions will be designated as a capital gain dividend in a
written notice mailed by the Company to the shareholders not later than sixty
days after the close of the Company's taxable year.
State and Local. Depending upon the extent of the Company's activities in
states and localities in which it maintains offices, in which its agents or
independent contractors are located, or in which it is otherwise deemed to be
conducting business, the Company may be subject to the tax laws of such states
or localities.
The foregoing discussion, as well as that contained in the Company's
Prospectus, is only a summary of some of the important tax considerations
generally affecting the Company and its shareholders. No attempt is made to
present a detailed explanation of the federal income tax treatment of the
Company or its shareholders and this discussion is not intended as a substitute
for careful tax planning. Accordingly, potential investors in the Company are
urged to consult their tax Advisers with specific reference to their own tax
situations.
<PAGE>
NRM INVESTMENT COMPANY
FINANCIAL REPORT
AUGUST 31, 1999
<PAGE>
CONTENTS
Page
------
INDEPENDENT AUDITOR'S REPORT
ON THE FINANCIAL STATEMENTS ...................... 1
FINANCIAL STATEMENTS
Statement of assets and liabilities .............. 2
Schedule of investments .......................... 3-6
Statement of operations .......................... 7
Statements of changes in net assets .............. 8
Financial highlights ............................. 9 and 10
Notes to financial statements .................... 11-14
<PAGE>
[In the printed document there appears a bar chart
with the following plot points depicted]
NRM INVESTMENT COMPANY
10 YEAR RETURNS
1990 2.7%
1991 3.0%
1992 9.1%
1993 16.7%
1994 2.8%
1995 7.5%
1996 5.1%
1997 6.7%
1998 7.8%
1999 1.6%
During the 10-year period shown in the bar chart, the highest annual return was
16.7% (fiscal year ending 8/31/93) and the lowest annual return was 1.6% (fiscal
year ending 8/31/99)
Average Annual Total Returns
(For period ending 08/31/99) Past One Year Past 5 Years Past 10 Years
---------------------------- ------------- ------------ -------------
NRM Investment Company 1.56% 5.72% 6.22%
Lehman Bros. Municipal 5 YR GO 2.21% 4,84% 6.12%
<PAGE>
INDEPENDENT AUDITOR'S REPORT
Shareholders and Board of Directors
NRM Investment Company
Rosemont, Pennsylvania
We have audited the accompanying statement of assets and liabilities of NRM
Investment Company, including the schedule of investments, as of August 31,
1999, the related statements of operations for the year then ended, the
statement of changes in net assets for each of the two years in the period then
ended and the financial highlights for each of the four years in the period then
ended. These financial statements and financial highlights are the
responsibility of the Fund's management. Our responsibility is to express an
opinion on these financial statements and financial highlights based on our
audits. The financial highlights for each of the years ended August 31, 1990
through August 31, 1995 were audited by other auditors whose report, dated
September 29, 1995, expressed an unqualified opinion on the financial
highlights.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of
August 31, 1999, by correspondence with the custodian. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred
to above present fairly, in all material respects, the financial position of NRM
Investment Company at August 31, 1999, the results of its operations for the
year then ended, the changes in its net assets for each of the two years in the
period then ended and the financial highlights for each of the four years in the
period then ended, in conformity with generally accepted accounting principles.
/s/ BEARD & COMPANY, INC.
-------------------------
BEARD & COMPANY, INC.
Harrisburg, Pennsylvania
October 11, 1999
-1-
<PAGE>
NRM INVESTMENT COMPANY
STATEMENT OF ASSETS AND LIABILITIES
-------------------------------------------------------------------------------
August 31, 1999
-------------------------------------------------------------------------------
ASSETS
Investments at value (cost $16,451,154) $16,731,138
Interest receivable 217,861
Prepaid expense 3,477
-----------
Total assets 16,952,476
-----------
LIABILITIES
Accrued expenses and other liabilities 128,225
-----------
NET ASSETS
Net assets, applicable to 4,291,307 outstanding shares,
equivalent to $ 3.92 a share $16,824,251
===========
See Notes to Financial Statements.
-2-
<PAGE>
NRM INVESTMENT COMPANY
SCHEDULE OF INVESTMENTS
------------------------------------------------------------------------------
August 31, 1999
------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Principal
Municipal Bonds - 98.6% Amount Value
-------------------------------- ---------- ----------
<S> <C> <C>
General Obligation Bonds - 18.6%:
Leominster, Massachusetts, 6.25%, due 4/01/08 $ 300,000 $ 321,060
Upper Dublin Pennsylvania School District, 5.50%,
due 11/15/08 200,000 201,280
Lowell, Massachusetts, 5.50%, due 1/15/10 300,000 306,360
New York City, New York, 6.45%, due 8/1/10, pre-refunded 5,000 5,457
New York City, New York, 6.45%, due 8/01/10 195,000 205,959
Nevada State Colorado River Commission, Ltd Tax,
6.50%, due 10/01/12 400,000 422,880
Burgettstown, Pennsylvania, Washington County,
4.85%, due 2/01/14, callable 2/01/05 at 100 (FGIC) 125,000 116,638
Lowell, Massachusetts, 5.50%, due 12/15/15, callable 12/15/06 at 102
(AMBAC) 330,000 332,409
San Francisco, California City and County, Park
Improvement series, 5.25%, due 6/15/16, callable
6/15/05 at 102 (MBIA) 300,000 291,750
Richmond, Virginia, 6.25%, due 1/15/18, callable
1/15/01 at 102 870,000 911,325
----------
Total General Obligation Bonds 3,115,118
----------
Housing Finance Agency Bonds - 37.8%:
New Mexico Mortgage Finance Authority, Single-Family Mortgage Rev.,
7.90%, due 7/01/00 30,000 30,507
Rock Island, Illinois Residential Mortgage Revenue Refunding, 7.70%,
due 9/01/08, callable 9/01/02
at 102 85,000 91,188
Ford County, Kansas Single-Family Mortgage Revenue Refunding Bonds,
7.90%, due 8/01/10, callable
8/01/02 at 103, 8/01/05 at 100 130,000 136,331
Fort Worth, Texas Housing Finance Corporation, Home Mortgage Revenue
Refunding Series 1991, 8.50%,
due 10/01/11, callable 10/01/01 at 103 255,000 269,229
Odessa, Texas Housing Finance Corporation, Home Mortgage Revenue
Refunding, 8.45%, due 11/01/11, callable 11/01/05 at 103 210,391 219,627
Montana State Housing, Single-Family Mortgage,
7.65%, due 10/01/10, callable 10/01/00 at 102 35,000 36,242
City of Hobbs, New Mexico, Single-Family Mortgage Refunding Revenue
Bonds, 8.75%, due 7/01/11,
callable 7/01/02 at 103, 7/01/05 at 100 65,000 69,134
</TABLE>
-3-
<PAGE>
NRM INVESTMENT COMPANY
SCHEDULE OF INVESTMENTS (CONTINUED)
------------------------------------------------------------------------------
August 31, 1999
------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Principal
Municipal Bonds - 98.6% (Continued) Amount Value
----------------------------------- --------- ---------
<S> <C> <C>
Housing Finance Agency Bonds - 37.8% (Continued):
Cameron County, Texas Housing Finance Corporation, Single-Family
Mortgage Revenue Refunding, 6.20%,
due 3/01/13, callable 9/01/05 at 100 $ 225,000 $ 232,132
Alabama Housing Finance Authority, 4.60%, due 4/1/11, callable 10/1/08
at 102, callable 10/1/10 at 100 100,000 93,780
Vicksburg, Mississippi Lease Housing Corp., 5.80%,
due 8/15/13 125,000 126,350
California Housing Finance Agency, Home Mortgage, 10.25%, due 2/01/14,
callable 2/01/99 at 100 60,000 60,054
Connecticut State Housing Finance Authority, 5.60%,
due 5/15/14, callable 5/15/03 at 102 200,000 200,920
Nevada Housing Division, Single-Family Mortgage,
7.35%, due 10/01/15 115,000 119,060
Louisiana Public Facilities Authority, Multi-Family Housing, 7.75%, due
11/01/16, callable 11/01/01 at 102 500,000 525,500
Pennsylvania Housing Finance Agency, Single-Family Mortgage, 5.45%, due
10/01/17, callable 10/01/03 at 102 150,000 146,070
Utah State Housing Finance Agency, Single-Family Mortgage, 6.30%, due
1/01/18 175,000 182,018
Maryland State Community Development Administration, Department of
Housing, 5.60%, due 4/01/18 185,000 185,740
Alaska State Housing Finance Corporation, 5.90%, due 12/01/19, callable
6/01/07 at 102 (MBIA) 250,000 252,300
Troy, New York Housing Development Corp., Multi-Family Housing, 8.10%,
due 2/01/22, callable 12/01/02 at 100 1,315,000 1,524,874
Quaker Hill Housing Corporation, Multi-Family, 7.55%,
due 2/01/22 600,000 633,900
St. Alphios Housing Corporation, Multi-Family, 8.20%,
due 2/01/24 1,125,000 1,194,187
----------
Total Housing Finance Agency Bonds 6,329,143
----------
Hospital Revenue Bonds - 12.8%:
Dauphin County, Pennsylvania Hospital Authority,
HAPSCO Group, William Penn Hospital Project,
5.50%, due 7/01/07 300,000 308,310
Falls Township Pennsylvania Hospital Authority, Delaware Valley Medical
Center, 6.90%, due 8/01/11, callable 8/01/02 at 102 285,000 290,529
Rhode Island State Health and Educational Building Corp., New England
Tech, 5.90%, due 3/01/10 100,000 102,550
</TABLE>
-4-
<PAGE>
NRM INVESTMENT COMPANY
SCHEDULE OF INVESTMENTS (CONTINUED)
-------------------------------------------------------------------------------
August 31, 1999
-------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Principal
Municipal Bonds - 98.6% (Continued) Amount Value
----------------------------------- --------- ---------
<S> <C> <C>
Hospital Revenue Bonds - 12.8% (Continued):
Rochester, Minnesota, Health Care Facilities Revenue (Mayo
Foundation/Mayo Medical Center), 6.25%, due 11/15/12 $ 500,000 $ 500,000
Indiana Health Facilities Authority (Deaconess Hospital), 5.75%, due
3/01/15, callable 3/01/03 at 102 (MBIA) 100,000 101,610
Connecticut State Health and Educational Facilities Authority (Kimball
Hospital), 5.375%, due 7/01/16, callable 7/01/06 at 102 350,000 344,120
Montgomery County, Pennsylvania Higher Educational &
Health Authority (Holy Redeemer Health), 5.25%, due 10/01/17,
callable 10/01/07 at 101 (AMBAC) 200,000 190,960
Fulton DeKalb, Georgia Hospital Authority, 5.50%, due 1/01/20, callable
7/01/03 at 102 (MBIA) 200,000 195,880
University of California Hospital Revenue (UC Davis Medical Center),
5.75%, due 7/01/20, callable 7/01/06 at 101 (AMBAC) 100,000 100,760
----------
Total Hospital Revenue Bonds 2,134,719
----------
Other Revenue Bonds - 29.4%:
Washington State Public Power Supply Nuclear Project #1, 5.60%, due
7/01/05 200,000 206,640
San Francisco City & County Redevelopment Finance Authority, 4.30%, due
8/01/06, callable 8/01/03 at 100 100,000 97,370
Lee County, Florida Certificates of Participation, 4.70%,
due 10/01/06 100,000 99,870
Fitzgerald, Michigan School District, 5.00%, due 5/01/08, callable
5/01/06 at 100 200,000 200,760
Clark County, Nevada Airport Authority, 5.125%, due 6/1/06, callable
6/1/03 at 101 (MBIA) 100,000 101,650
Grand Rapids, Michigan Downtown Development Authority, 6.60%, due
6/01/08, callable 6/01/06 at 100 365,000 396,609
Alaska Industrial Development and Export Authority,
6.20%, due 4/01/10 245,000 254,947
New Jersey Economic Development Authority, Health Care Corp., 6.0%, due
7/01/11 200,000 208,480
Clark County, Washington Public Utility District, Electric System
Revenue, 5.10%, due 1/01/12, callable
1/01/08 at 100 200,000 195,180
Texas Muni Power Agency, 5.25%, due 9/01/12, callable 9/01/03 at 100
(MBIA) 100,000 99,870
</TABLE>
-5-
<PAGE>
NRM INVESTMENT COMPANY
SCHEDULE OF INVESTMENTS (CONTINUED)
------------------------------------------------------------------------------
August 31, 1999
------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Principal
Municipal Bonds - 98.6% (Continued) Amount Value
----------------------------------- --------- ---------
<S> <C> <C>
Other Revenue Bonds - 29.4% (Continued):
Suffolk County, New York Water Authority, 5.00%, due 6/01/15, callable
6/01/03 at 102 (MBIA) $ 175,000 $ 165,970
Vallejo, California Water Improvement Project (Soland County), 5.70%,
due 5/01/16, callable 5/01/06 at 102 (FSA) 100,000 102,050
Philadelphia, Pennsylvania Water and Waste Water, 5%, due 6/15/16,
callable 6/15/03 at 100 (FSA) 150,000 140,085
Allegheny County Pennsylvania Airport Revenue
(Pittsburgh International), 5.00%, due 1/01/17,
callable 1/01/08 at 101 (MBIA) 385,000 357,434
Muhlenberg, Pennsylvania School District, 5.20%,
due 4/01/17, callable 4/01/06 at 100 (MBIA) 250,000 238,675
New Jersey Economic Development Authority, (Devereux Foundation),
5.50%, due 5/01/17, callable 5/01/07 at
101 (MBIA) 270,000 268,812
Washington State Public Power Supply, Project No. 1, 5.125%, due
7/1/17, callable 7/1/08 at 102 200,000 184,420
Brazos River Authority, Texas (Houston Light and Power), 5.60%, due
12/01/17, callable 12/01/03 at 102 (MBIA) 100,000 99,410
Tacoma, Washington Solid Waste Utility, 5.50%, due 12/01/17, callable
12/01/07 at 101 (AMBAC) 350,000 345,940
New York State LOC Government Assistance Corporation, 5.50%, due
4/01/18, callable 4/01/03 at 102 290,000 285,969
Los Angeles, California Convention and Exhibition Center, 5.375%, due
8/15/18, callable 8/15/03 at 102 (MBIA) 385,000 378,417
Santa Monica-Malibu, California Unified School District, 5.50%, due
8/01/18, prerefunded 8/01/03 at 102 200,000 211,700
Chicago, Illinois Water Revenue, 5.25%, due 11/01/18,
callable 11/01/07 at 102 (FGIC) 200,000 189,540
Easton, Pennsylvania Area Joint Sewer Authority,
5.05%, due 12/01/18, callable 12/01/07 at 101 (FSA) 100,000 91,960
-----------
Total Other Revenue Bonds 4,921,758
-----------
Total Municipal Bonds (Cost $ 16,220,754) 16,500,738
-----------
Short-Term Investments - at cost approximating value - 1.4%,
Federated Pennsylvania Municipal Cash Fund #8 230,400
-----------
Total Investments - 100% (Cost $16,451,154) $16,731,138
===========
</TABLE>
See Notes to Financial Statements.
-6-
<PAGE>
NRM INVESTMENT COMPANY
STATEMENT OF OPERATIONS
------------------------------------------------------------------------------
Year Ended August 31, 1999
------------------------------------------------------------------------------
Investment income, interest $ 991,730
---------
Expenses:
Investment advisory fees 10,000
Custodian fees 10,300
Transfer and dividend disbursing agent fees 2,700
Legal and professional fees 35,402
Directors' fees 6,450
Insurance 1,785
Capital stock tax 2,934
Provision for environmental claim 100,000
Miscellaneous 3,092
---------
172,663
---------
Net investment income 819,067
---------
Realized and unrealized gain on investments:
Net realized gain from investment transactions 25
Net unrealized depreciation of investments (537,425)
---------
Net loss on investments (537,400)
---------
Net increase in net assets resulting from operations $ 281,667
=========
See Notes to Financial Statements.
-7-
<PAGE>
NRM INVESTMENT COMPANY
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------
Years Ended August 31, 1999 1998
-----------------------------------------------------------------------------------------------
<S> <C> <C>
Operations:
Net investment income $ 819,067 $ 951,392
Net realized gain from investment transactions 25 97,634
Net unrealized appreciation (depreciation) of investments (537,425) 273,544
------------ ------------
Net increase in net assets resulting
from operations 281,667 1,322,570
Distributions to shareholders, dividends from net
investment income (789,597) (948,154)
Distributions to shareholders, dividends from
capital gains (8,583) (63,443)
Capital share transactions, net increase from capital
share transactions 138 15,049
------------ ------------
Total increase (decrease) in net assets (516,375) 326,022
Net assets:
Beginning of year 17,340,626 17,014,604
------------ ------------
End of year $ 16,824,251 $ 17,340,626
============ ============
</TABLE>
See Notes to Financial Statements.
-8-
<PAGE>
NRM INVESTMENT COMPANY
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------------------------------
Years Ended August 31, 1999 1998 1997 1996 1995
---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
PER SHARE DATA (for a share outstanding
throughout the indicated year)
Net asset value, beginning of year $ 4.041 $ 3.968 $ 3.933 $ 3.964 $ 3.909
Net investment income .191 .222 .221 .210 .237
Net realized and unrealized gain (loss) on
investments (.125) .087 .041 (.004) .056
-----------------------------------------------------------------
Total from investment operations .066 .309 .262 .206 .293
Less distributions:
Dividends from capital gains (.002) (.015) -- -- --
Dividends from net investment income (.161) (.221) (.221) (.210) (.237)
Distribution in excess of net investment
income (.023) -- (.006) (.027) (.001)
-----------------------------------------------------------------
Total distributions (.186) (.236) (.227) (.237) (.238)
-----------------------------------------------------------------
Net asset value, end of year $ 3.921 $ 4.041 $ 3.968 $ 3.933 $ 3.964
=================================================================
TOTAL RETURN 1.56% 7.84% 6.71% 5.11% 7.52%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of year (in thousands) $16,824 $17,341 $17,015 $16,847 $16,982
Ratio of expenses to average net assets .99% .42% .57% 1.02% .37%
Ratio of net investment income to average net
assets 4.72% 5.50% 5.56% 5.24% 6.08%
Portfolio turnover rate 3.27% 12.57% 28.98% 6.24% 22.73%
</TABLE>
See Notes to Financial Statements.
-9-
<PAGE>
<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------------------------------
Years Ended August 31, 1994 1993 1992 1991 1990
-----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
PER SHARE DATA (for a share outstanding
throughout the indicated year) $ 4.022 $ 3.540 $ 3.488 $ 3.635 $ 3.835
Net asset value, beginning of year .229 .453 .265 .059 .157
Net investment income
(.115) .137 .055 .051 (.065)
Net realized and unrealized gain (loss) on ---------------------------------------------------------------------------
investments
.114 .590 .320 .110 .092
Total from investment operations
-- -- -- -- --
Less distributions: (.227) (.108) (.265) (.059) (.157)
Dividends from capital gains
Dividends from net investment income -- -- (.003) (.198) (.135)
Distribution in excess of net investment ---------------------------------------------------------------------------
income
(.227) (.108) (.268) (.257) (.292)
---------------------------------------------------------------------------
Total distributions
$ 3.909 $ 4.022 $ 3.540 $ 3.488 $ 3.635
===========================================================================
Net asset value, end of year
2.79% 16.69% 9.08% 3.00% 2.69%
TOTAL RETURN
RATIOS/SUPPLEMENTAL DATA
Net assets, end of year (in thousands) $ 16,745 $ 17,636 $ 15,260 $ 15,659 $ 16,268
Ratio of expenses to average net assets .49% (5.03)% .81% 6.04% 3.90%
Ratio of net investment income to average net
assets 5.77% 11.93% 7.25% 1.54% 4.07%
Portfolio turnover rate 13.56% 40.06% 64.84% 101.88% 46.10%
</TABLE>
-10-
<PAGE>
NRM INVESTMENT COMPANY
NOTES TO FINANCIAL STATEMENTS
1
------------------------------------------------------------------
NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Nature of business:
NRM Investment Company (the Fund) is registered under the
Investment Company Act of 1940, as amended, as a diversified,
open-end management investment company. The following is a summary
of significant accounting policies consistently followed by the
Fund in the preparation of its financial statements.
Valuation of investments:
Investments in securities (other than debt securities maturing in
60 days or less) traded in the over-the-counter market, and listed
securities for which no sale was reported on the last business day
of the year, are valued based on prices furnished by a pricing
service. This service determines the valuations using a matrix
pricing system based on common bond features such as coupon rate,
quality and expected maturity dates. Securities for which market
quotations are not readily available are valued by the Investment
Advisor under the supervision and responsibility of the Fund's
Board of Directors. Investments in securities that are traded on a
national securities exchange are valued at the closing prices.
Short-term investments are valued at amortized cost, which
approximates value.
Investment transactions and related investment income:
Investment transactions are accounted for on the date the
securities are purchased or sold (trade date). Realized gains and
losses from investment transactions are reported on the basis of
identified cost for both financial and federal income tax
purposes. Interest income is recorded on the accrual basis for
both financial and income tax reporting. In computing investment
income, the Fund amortizes premiums over the life of the security,
unless said premium is in excess of any call price, in which case
the excess is amortized to the earliest call date. Discounts are
accreted over the life of the security.
Transactions with shareholders:
Fund shares are sold and redeemed at the net asset value.
Transactions of these shares are recorded on the trade date.
Dividends and distributions are recorded by the Fund on the
ex-dividend date.
Federal income taxes:
It is the Fund's policy to comply with the requirements of the
Internal Revenue Code applicable to regulated investment companies
and distribute substantially all of its net investment income and
realized net gain from investment transactions to its shareholders
and, accordingly, no provision has been made for federal income
taxes.
-11-
<PAGE>
NRM INVESTMENT COMPANY
NOTES TO FINANCIAL STATEMENTS
1
-----------------------------------------------------------------
NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(CONTINUED)
Estimates:
The preparation of financial statements in conformity with
generally accepted accounting principles requires management to
make estimates and assumptions that affect the reported amounts of
assets and liabilities and disclosure of contingent assets and
liabilities at the date of the financial statements and the
reported amounts of revenues and expenses during the reporting
period. Actual results could differ from those estimates.
2
-----------------------------------------------------------------------------
INVESTMENT ADVISOR AND MANAGEMENT FEES AND OTHER TRANSACTIONS WITH AFFILIATES
The Fund has an investment advisory agreement which provides that the
Fund will pay to the investment advisor, as compensation for services
provided and expenses assumed, a fee at the annual flat rate of $
10,000. The president of the investment advisor is on the Board of
Directors of the Fund.
Advisory fees for the year ended August 31, 1999 amounted to $ 10,000.
3
--------------------------------------------------
COST, PURCHASES AND SALES OF INVESTMENT SECURITIES
Cost of purchases and proceeds from sales and maturities of investment
securities, other than short-term investments, aggregated $ 556,641 and
$ 617,464 respectively, during the year ended August 31, 1999.
At August 31, 1999, the cost of investment securities owned is the same
for financial reporting and federal income tax purposes. Net unrealized
appreciation of investment securities is $ 279,984 (aggregate gross
unrealized appreciation of $ 475,708 less aggregate unrealized
depreciation of $ 195,724).
-12-
<PAGE>
NRM INVESTMENT COMPANY
NOTES TO FINANCIAL STATEMENTS
4
-----------------------
ENVIRONMENTAL LIABILITY
The Fund has been identified as a potentially responsible party ("PRP")
by the Environmental Protection Agency ("EPA") in remedial activities
related to two environmental matters.
During 1999, the Fund paid $ 141,500, which was fully accrued as of
August 31, 1998, for remediation costs related to one matter, which
represents its share of a settlement offer made to the EPA and a
contribution claim against the Fund by another PRP involved in the same
matter. The Fund's legal counsel confirmed and advised that the
settlement agreement allows for future assertions, but that it is
likely that there will be no additional claims made with regard to this
matter.
With regard to the other matter, the Fund has been named as a PRP in a
claim asserted by the EPA. The number of other PRPs is currently
unknown as is the amount of future remedial costs, however, these costs
are considered to be material. The Fund's legal counsel has indicated
that it is not possible to predict a possible outcome for the claim,
however, the Fund is contractually committed to pay a portion of the
first phase of the cleanup. The Fund's share of this is approximately $
100,000 which was accrued at August 31, 1999. The Fund intends to
vigorously resist this claim.
5
----------------------------------------------------------
TRANSACTIONS IN CAPITAL STOCK AND COMPONENTS OF NET ASSETS
Transactions in fund shares were as follows:
<TABLE>
<CAPTION>
Years Ended August 31,
1999 1998
----------------------------------------------------
SHARES AMOUNT Shares Amount
----------------------------------------------------
<S> <C> <C> <C> <C>
Additional shares purchased -- $ -- 3,713 $ 14,997
Issued to shareholders in reinvestment of
dividends from net investment income 34 138 13 52
--------------------------------------------------
Net increase 34 $ 138 3,726 $ 15,049
==================================================
</TABLE>
-13-
<PAGE>
NRM INVESTMENT COMPANY
NOTES TO FINANCIAL STATEMENTS
5
----------------------------------------------------------
TRANSACTIONS IN CAPITAL STOCK AND COMPONENTS OF NET ASSETS
(CONTINUED)
The components of net assets at August 31, 1999 and 1998 are as
follows:
<TABLE>
<CAPTION>
1999 1998
---------------------------------
<S> <C> <C>
Capital shares - par value $ .01 per share, 4,291,307
shares and 4,291,273 shares issued and outstanding
at August 31, 1999 and 1998 (10,000,000 full and
fractional shares authorized); and capital paid-in $ 16,641,291 $ 16,641,153
Accumulated net realized loss on investment transactions - -
Undistributed net realized gain on investment transactions - 8,434
Unrealized appreciation of investments 279,984 817,410
Overdistributed net investment income (97,024) (126,371)
------------------------------------
Net assets $ 16,824,251 $ 17,340,626
====================================
</TABLE>
-14-
<PAGE>
PART C
OTHER INFORMATION
(1) Item 23 - (a)(i) Articles of Incorporation are attached as Exhibit 23(a)(1)
(ii) Amendment to Articles of Incorporation attached as Exhibit 23(a)(2)
(iii)Amendment to Articles of Incorporation attached as Exhibit 23(a)(3)
(b)(i) By-Laws are attached as Exhibit 23(b)(1)
(ii) Amendment to By-Laws attached as Exhibit 23(b)(2)
(iii) Amendment to By-Laws attached as Exhibit 23(b)(3)
(c) None
(d)(i) Investment Advisery Agreement dated November 30, 1992 attached as
Exhibit 23(d)(1)
--------
1 See infra note 5, pages 13-14
2 This percentage results from applying a fixed fee of $10,000 per year
against the Fund's 1999 average asset value. Should the assets increase the
percentage will decrease; if they decrease, the percentage will increase
proportionately.
3 "Other expenses" include fees for custodian, legal, other professionals,
and the directors; insurance; capital stock tax; and miscellaneous
expenses. Such expenses are expected to recur without significant change.
An exception applies to legal fees which are significantly higher during
periods of litigation. Also, certain accruals or payments of recoveries
against the Company are considered extraordinary expenses and accordingly
are not included in "Other Expenses." To illustrate, during fiscal years
ending August 31, 1996 and August 31, 1997, the Company accrued,
respectively, $111,000 and $34,000 relative to a single item of
environmental litigation. They represented .65% and .20% of average net
assets for those years. Had they been included in "Other Expenses" for
those years, they would have, for 1996, increased expenses from .37% to
.96% and, for 1997, from .37% to .57%. During the fiscal year ending August
31, 1998, the Federal Environmental Protection Agency advanced an
additional claim, which because of its materiality, its being non-recurring
and atypical to normal business activity, and is not being of a nature
normally considered in evaluating operating results, the Board deemed it to
be extraordinary. For the fiscal year ending August 31, 1999, the Company
accrued expenses of $100,000 in regard to this liability. Had this sum been
included in "Other Expenses" for fiscal 1999, it would have increased
expenses from .37% to .94%. See "PENDING LEGAL PROCEEDINGS" for a
description of the current claim.
4 See infra under "Investment Adviser."
5 To be included in the Lehman Brothers Municipal bond Index, bonds must have
a minimum credit rating of at least Baa. They must have an outstanding par
value of at least $3 million and be issued as part of a transaction of at
least $50 million. The bonds must have been issued after December 31, 1990
and have a remaining maturity of at least one year. Taxable municipal
bonds, bonds with floating rates, derivatives, and certificates of
participation are excluded. The five-year G.O. Index includes bonds with an
expected maturity between four and six years.
<PAGE>
(ii) Addendum to advisery agreement dated September 3, 1997, attached
as Exhibit 23(d)(2)
(e) Not applicable
(f) Not applicable
(g)(i) Custodian Agreement, dated March 9, 2000 is attached hereto as
23(g)(1)
(h)(i) Administration Agreement is attached as 23(h)(1)
(i) Opinion of Counsel, pursuant to Registrant's Rule 24f-2 Notice,
attached as 23(i)
(j)(i) Consent of Henderson, Wetherill, O'Hey & Horsey attached as
23(j)(1).
(ii) Consent of Beard & Company, Inc. attached as 23(j)(2).
(k) None
(l) None
(m) None
(n) None
(p) Ethics Code - attached hereto as 23(p)
Item 24. Not applicable
Item 25. Under the Company's bylaws (see Exhibit 23 b hereto) the Company with
certain exceptions indemnifies its directors and officers against expenses
incurred defending claims relative to Company business and the Company has the
power to purchase and maintain liability insurance on behalf of the same
individuals.
Item 26. The business of Rittenhouse Trust Company, Inc., Suite 450, No. 3
Radnor Corporate Center, Radnor, Pennsylvania 19087 is summarized under
"Advisery Agreement" in the Prospectus constituting Part I of this Registration
Statement,which summary is incorporated herein by reference.
Item 27. Not applicable
Item 28. Books and other documents required to be maintained by section 31(a)
of the 1940 Act and the Rules (17 CFR 270.31a-1 to 31a-3) promulgated
thereunder, are maintained by Raymond J. Keefe, 6 St. Albans Avenue, Newtown
Square, Pennsylvania 19073 except records relating to the custody of the
Company's assets and the shareholder records which are maintained by Laurel
Trust Company, 551 Main Street, Johnstown, Pa., 15907 and Registrant's articles
of incorporation, By-Laws and Minute Books which are maintained by its
Secretary, at the Company's principal executive offices, Conestoga Road,
Rosemont, Pennsylvania, 19010.
Item 29. Not applicable
Item 30. Not applicable
<PAGE>
NRM INVESTMENT COMPANY
Power-of-Attorney
I hereby appoint John H. McCoy and Thomas F. Kilcullen, Jr., and each of
them, attorney for me and in my name and on my behalf to sign the registration
Statement on Form N-1A of NRM Investment Company and any amendments thereto to
be filed with the Securities and Exchange Commission under the Securities Act of
1933 or the Investment Company Act of 1940, and generally to do and perform all
things necessary to be done in that connection.
I have signed this Power of Attorney on October 7, 1999.
/s/Francis J. Rainer
-----------------------
Francis J. Rainer
<PAGE>
NRM INVESTMENT COMPANY
Power-of-Attorney
I hereby appoint John H. McCoy and Thomas F. Kilcullen, Jr., and each of
them, attorney for me and in my name and on my behalf to sign the registration
Statement on Form N-1A of NRM Investment Company and any amendments thereto to
be filed with the Securities and Exchange Commission under the Securities Act of
1933 or the Investment Company Act of 1940, and generally to do and perform all
things necessary to be done in that connection.
I have signed this Power of Attorney on October , 1999.
/s/ Joseph V. Somers
----------------------
Joseph V. Somers
<PAGE>
NRM INVESTMENT COMPANY
Power-of-Attorney
I hereby appoint John H. McCoy and Thomas F. Kilcullen, Jr., and each of
them, attorney for me and in my name and on my behalf to sign the registration
Statement on Form N-1A of NRM Investment Company and any amendments thereto to
be filed with the Securities and Exchange Commission under the Securities Act of
1933 or the Investment Company Act of 1940, and generally to do and perform all
things necessary to be done in that connection.
I have signed this Power of Attorney on October , 1999.
/s/ George W. Connell
--------------------------
George W. Connell
<PAGE>
Signatures
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940 the Registrant has duly caused this
Post-Effective Amendment to the Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in Rosemont, Pennsylvania
on October 26, 1999.
NRM INVESTMENT COMPANY
By: /s/ John H. McCoy
-----------------------
John H. McCoy
President
Pursuant to the requirement of the Securities Act of 1933, this
Post-Effective Amendment to the Registration Statement has been signed by the
following persons in the capacities and on the dates indicated:
Signature Title Date
--------- ----- ----
/s/ John H.McCoy President (Chief 10/26/99
------------------------ Executive Officer)
John H. McCoy
/s/ Thomas F. Kilcullen Treasurer(Chief 10/26/99
----------------------- Financial and
Thomas F. Kilcullen Accounting Officer)
and Secretary
The Post-Effective Amendment No. 25 has also been signed by John H. McCoy,
Attorney-In-Fact, on behalf of the following directors on the Date indicated:
JOSEPH V. SOMERS
FRANCIS J. RAINER
GEORGE W. CONNELL
Date 10/26/99
<PAGE>
Part C
EXHIBIT INDEX
Exhibit/Item
(1) Item 23 - (a)(i) Articles of Incorporation are attached as
Exhibit 23(a)(1)
(ii) Amendment to Articles of Incorporation attached as
Exhibit 23(a)(2)
(iii) Amendment to Articles of Incorporation attached as
Exhibit 23(a)(3)
(b)(i) By-Laws are attached as Exhibit 23(b)(1)
(ii) Amendment to By-Laws attached as Exhibit 23(b)(2)
(iii) Amendment to By-Laws attached as Exhibit 23(b)(3)
(c) None
(d)(i) Investment Advisery Agreement dated November 30, 1992
attached as Exhibit 23(d)(1)
(ii) Addendum to advisery agreement dated September 3, 1997,
attached as Exhibit 23(d)(2)
(e) Not applicable
(f) Not applicable
(g)(i) Custodian Agreement, dated March 9, 2000 is attached
hereto as 23(g)(1)
(h)(i) Administration Agreement is attached as 23(h)(1)
(i) Opinion of Counsel, pursuant to Registrant's Rule 24f-2
Notice, attached as 23(i)
(j)(i) Consent of Henderson, Wetherill, O'Hey & Horsey attached
as 23(j)(1).
(ii) Consent of Beard & Company, Inc. attached as 23(j)(2).
(k) None
(l) None
(m) None
(n) None
(2) Item 24 None
(3) Item 25. The indemnity provisions are set forth in section 5 of Ex. 23 (b)1.
(4) Item 26. The business of Rittenhouse Trust Company, Inc., Suite 450, No. 3
Radnor Corporate Center, Radnor, Pennsylvania 19087. is summarized under
"Advisery Agreement" in the Prospectus constituting Part I of this Registration
Statement, which summary is incorporated herein by reference.
(5) Item 27. Not applicable
(6) Item 28. Books and other documents required to be maintained by
section 31(a) of the 1940 Act and the Rules (17 CFR 270.31a-1 to 31a-3)
promulgated thereunder, are maintained by Raymond J. Keefe, 6 St. Albans Avenue,
Newtown Square, Pennsylvania 19073 except records relating to the custody of the
Company's assets and the shareholder records which are maintained by Laurel
Trust Company, 551 Main Street, Johnstown, Pa., 15907. Registrant's articles of
incorporation, By-Laws and Minute Books which are maintained by its Secretary,
at the Company's principal executive offices, Conestoga Road, Rosemont,
Pennsylvania, 19010.
(7) Item 29. Not applicable
(8) Item 30. Not applicable
