<PAGE>
As filed with Securities and Exchange Commission on January 16, 2001
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. 26 X
and
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 X
AMENDMENT NO. 26 X
NRM INVESTMENT COMPANY
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(Exact Name of Registrant as Specified in Charter)
Rosemont Business Campus
Suite 112, Building 1
919 Conestoga Road
Rosemont, Pennsylvania 19010
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(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
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(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, 2000 was filed
on October 31, 2000, and the notice for the current fiscal year ending August
31, 2001 will be filed no later than October 31, 2001.
<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 "A" 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.
The Securities and Exchange Commission has not approved or disapproved
these securities or passed upon the 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, 2000
<PAGE>
TABLE OF CONTENTS
PAGE
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 Investment Strategies and Related Risks 7
Municipal Bonds - Currently Available Securities 8
Municipal Bonds - When Issued Securities 9
Common and Preferred shares 10
Other Investments 11
Turnover 11
Risks of Investing in the Fund 12
Management's Discussion of Fund Performance 13
Graph 15
Total Return Calculation 15
Management of the Company 16
Investment Advisor 16
Pending Legal Proceedings 18
Capital Stock 20
Shareholder Information 21
Pricing of Shares 21
Purchase of Shares 22
Redemption of Fund Shares 22
Dividends 23
Taxes 23
Financial Highlights 27
Application Form 28
Terms and Conditions 29
<PAGE>
SUMMARY OF RISK AND RETURN
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INVESTMENTS, RISKS, AND PERFORMANCE
-----------------------------------
Investment Objectives and Strategies
The Fund's principal 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. At present substantially all of the Fund's
assets are invested in municipals and the directors have no present intention of
changing this investment policy. However should investment conditions change in
the view of the directors they may alter the present policy to implement the
Fund's secondary objective, described below.
The Fund's secondary objective is to obtain non-exempt income. Its
directors plan to invest any 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. If and 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
12/31 through December 31,1999*
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 nine months of 2000 2.18%
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
(Calendar year basis)
Ending Past One Year Past 5 years Past 10
Years
NRM Investment Co. -.85% 5.76% 5.68%
Lehman Bros. Municipal
5 YR GO(1) 0.73% 5.71% 6.22%
Performance for the fund for the first nine months of 2000 is 2.18%. Performance
for the Lehman Bros. Municipal 5 YR Index for the same time period is 4.82%.
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(1) See infra note 5, pages 13-14
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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%(2)
Other Expenses .71%(3)
Total Annual Fund Operating Expenses .77%
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(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%. For the fiscal year ending August 31, 2000 the
Company accrued additional legal fees of $22,500 for the same project. See
"PENDING LEGAL PROCEEDINGS" for a description of the current claim.
<PAGE>
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 $1,000 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
$7.44 $23.18 $32.79 $82.82
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."
<PAGE>
INVESTMENT OBJECTIVES, PRINCIPAL INVESTMENTS STRATEGIES,
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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. At present substantially all of the Fund's assets are
invested in municipals and the directors have no present intention of changing
this investment policy. However should investment conditions change in the view
of the directors they may alter the present policy to implement the Fund's
secondary objective. The Company's secondary objective is to invest not more
than forty-nine percent 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 directors may make changes in the mix of municipal
and non-municipal investments without the vote of the shareholders. Other than
the foregoing, 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 any equities the Company
may purchase, it 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.
<PAGE>
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 and most often from five to twelve years, 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 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.
<PAGE>
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.(4) 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.
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.
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(4) See infra under "Investment Adviser."
<PAGE>
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 investment strategies.
In the current fiscal year ending August 31, 2000 its turnover rate was 77.12%.
However, in the preceding four years the turnover rate has not exceeded 28.98%.
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.
The increase for fiscal 2000 is entirely attributable to the Board of
Directors' decision in December 1999 to increase the fraction of the Company's
portfolio invested in equities and correspondingly to reduce the fraction in
municipal bonds. The investment advisor implemented this decision by selling
bonds and purchasing equities in December 1999 and January 2000. In March 2000,
the Board reversed its decision and determined to sell its equities and reinvest
in municipals. Accordingly, the investment advisor sold the equities in March
and April 2000 and repurchased municipals.
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.
<PAGE>
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 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
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 plus the cost of liaison counsel and a special allocator
which have been accrued or expensed in the financial statements. 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 related to this remaining obligation. 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.
<PAGE>
MANAGEMENT'S DISCUSSION OF FUND PERFORMANCE
-------------------------------------------
The Federal Reserve has raised the Federal Funds rate six times since
June 1999 in an effort to contain inflation. The Federal Funds rate is now 6.50%
with the last tightening in May 2000, an increase of 50 basis points. It appears
the Federal Reserve has been able to slow growth and steer the economy toward a
soft landing. The economy grew at a robust pace of 5.6% in the second quarter,
but with the Federal Reserve increases starting to take hold the economy should
slow in the third quarter. Consumers continue to remain upbeat and continue to
spend at a strong pace, with very low unemployment.
Federal Funds rate hikes, along with the Treasury buying back issues on
the long end, have created an inverted Treasury yield curve. The actions of the
Federal Reserve this year have increased municipal yields on the short end,
while municipal yields in the intermediate to long term have decreased slightly.
In general, intermediate term municipal bonds are now yielding 14 basis points
less than one year ago. Within the Company portfolio, the overall yield has
decreased over the last year from 5.63% to 5.53% as of August, 2000. The
portfolio continues to consist of high quality, intermediate-term issues
producing high current income. The Company intends to adhere to its strategy and
bonds in the portfolio continue to be investment grade, with most of the bonds
rated AAA.
The portfolio is well diversified with bonds from across the United
States, consisting primarily of general obligation, housing 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.
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(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>
Plot Points for NRM Investment Company Graph
(August 31, 1990 through August 31, 2000)
Period NRM INDEX*
90 10,000 10,000
91 10,300 11,010
92 11,235 12,104
93 13,110 13,174
94 13,476 13,390
95 14,490 14,448
96 15,230 14,984
97 16,252 15,537
98 17,526 16,597
99 17,800 16,964
00 18,008 17,878
*Lehman Brothers 5 Year Municipal Bond Index
NRM Investment Company
Total Return Calculation
Annualized Return Ending Redeemable Value
$1000 Invested
1 Year 1.17% $1,011.70
5 Year 4.44% 1,242.81
10 Year 6.06% 1,800.89
*Past Performance is not predictive of future performance.
MANAGEMENT OF THE COMPANY
-------------------------
The Company's Board of Directors manages the business and affairs of
the Company. 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 passing
upon investment recommendations the adviser makes.
<PAGE>
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, and 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.
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.
<PAGE>
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 PRPs 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 (Potentially Responsible Parties)
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 in Malvern Pennsylvania 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.
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).
<PAGE>
Recently the EPA issued a second set of special notice letters to ten
additional PRP's. Again, the Company was not among them, reinforcing the
interpretation that the evidence EPA has available as of October 2000 is
insufficient in its judgment to link the Company to the site. One of the
recipients was an immediate prior owner of the Malvern plant indicating an
historic link with Boarhead, but relative to events occurring before the Company
owned it. (Thus there are now three successive owners of the plant who could be
liable, but only the first of the three has received a special notice.) Other
PRP's and special notice recipients, as before, believe that they have or will
be able to develop evidence linking the Company to Boarhead. Much of the linking
evidence depends upon the recollection by waste haul drivers of events taking
place more than twenty-five years ago. At least one such driver has given
contradictory accounts of events in testimony over the past several years. He
and other drivers will be examined in the future and records will likewise be
reviewed all or any of which may supply evidence linking the Company to the
site.
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. In addition to the foregoing
the Company committed to reimburse liaison counsel one tenth (one-half of a
one-fifth share) and provide funding for the allocator on the same basis. Should
any of the new recipients of special notice or later recipients elect to join
the Boarhead Group to effect the cleanup, it would dilute any responsibility the
Company had for cleanup, counsel fees and allocator costs.
Subject to the foregoing regarding the possibility of additional group
members, the least the Company may expect to incur in regard to this project is
the approximate $100,000 presently committed and accrued plus counsel fees and
allocator expenses. 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.
In summary, the Strasburg matter is no longer material; however
Boarhead is material and not capable of reasonable estimate of liability or, if
liable, an amount or range of damages.
Capital Stock
As of October 20, 2000, 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.
<PAGE>
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.
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.
<PAGE>
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 carryforwards 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 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, 2000 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
that 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.
<PAGE>
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 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 carryforward 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.
<PAGE>
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 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.
Year Ended August 31
<TABLE>
<CAPTION>
2000 1999 1998 1997 1996
---------------------------------------------------------------------------
PER SHARE DATA
--------------
(for a share outstanding
throughout the indicated year)
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of year $3.921 $4.041 $3.968 $3.933 $3.964
Income from investment operations:
Net investment income .184 .191 .222 .221 .210
Net realized and unrealized gain
(loss) on investments (.135) (.125) .087 .041 (.004)
-------------------------------------------------------------------------------
Total from investment operations .049 .066 .309 .262 .206
Less distributions:
Distributions from capital gains (.002) (.015)
Dividends from net tax-exempt income (.174) (.161) (.221) (.221) (.210)
Dividends from net taxable income (.002)
Distribution in excess of net
investment income (.023) (.006) (.027)
-------------------------------------------------------------------------------
Total distributions (.176) (.186) (.236) (.227) (.237)
-------------------------------------------------------------------------------
Net asset value end of year $3.794 $3.921 $4.041 $3.968 $3.933
===============================================================================
TOTAL RETURN 1.17% 1.56% 7.84% 6.71% 5.11%
RATIOS\SUPPLEMENTAL DATA
Net assets, end of year (in thousands) $16,268 $16,824 $17,341 $17,015 $16,847
Ratio of expenses to average net assets .77% .99% .42% .57% 1.02%
Ratio of net investment income to
average net assets 4.83% 4.72% 5.50% 5.56% 5.24%
Portfolio turnover rate 77.12% 3.27% 12.57% 28.98% 6.24%
</TABLE>
<PAGE>
APPLICATION FORM: NRM INVESTMENT COMPANY
Mail to: Promistar 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
Initial order, payment enclosed
If this Application accompanies a check for the purchase of
investment company shares, I enclose a check payable to Promistar 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
<PAGE>
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 Laurel 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:
[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.
<PAGE>
NRM INVESTMENT COMPANY
Statement of Additional Information
December 30, 2000
STATEMENT OF ADDITIONAL INFORMATION
-----------------------------------
This Statement of Additional Information is not a prospectus and 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 he Prospectus of the Company.
<PAGE>
NRM INVESTMENT COMPANY
Statement of Additional Information
December 30, 2000
TABLE OF CONTENTS
PAGE
Statement of Additional Information
Fund History 1
Description of the Fund; Its Investments and Risks 1
Investment Objectives and Policies 1
Investment Policies and Restrictions 3
Management of the Fund 5
Control Persons and Principal Holders of Securities 8
Advisory Services 9
Portfolio Transactions and Brokerage Commissions 10
The Company's Common Stock 11
Purchase, Redemption, Pricing of Shares; Underwriting 12
Other Information of Interest to Investors 12
Other Services 12
Accounting 12
Custodian and Transfer Agent 12
Auditors 13
Counsel 13
Taxation of the Fund 13
State and Local 15
Report of Independent Auditor
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.
<PAGE>
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 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 (taking Municipal Bonds into
account) it 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.
<PAGE>
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;
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;
<PAGE>
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 time of the
investment or other transaction and, 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 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
1010 Broadmoor Road Chairman, and of National Rolling
Bryn Mawr, PA 19010 President Mills, Inc., a
steel rolling
plant. Prior
thereto, he was
President and
Director of
National Rolling
Mills Co.
Joseph V. Somers Director **Former President of
1518 Mt. Pleasant Rd. Somers Construction
Villanova, PA 19085 Company and Vice
President of
Industrial Lift
Truck Co.
Francis J. Rainer Director C.P.A. and former
410 Howard Road President, Rainer &
Gladwyn, PA 19035 Company, a profess-
ional accounting
corporation. He is
also a former Vice-
Chairman of the
Board of Delaware
Valley Savings Bank
James Fisher Director **Former Officer of
1210 Rockcreek Road National Rolling
Gladwyn, PA 19035 Mills Inc.
<PAGE>
George W. Connell* Director Chairman, Chief
#3 Radnor Corporate Ctr. Executive Officer,
Suite 450 Director and sole
100 Matsonford Road shareholder of The
Radnor, PA 19087 Rittenhouse Trust
Company, a commer-
cial bank and trust
company acting as
the Company's in-
vestment 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.
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:
<PAGE>
NRM INVESTMENT COMPANY
FISCAL YEAR DIRECTORS FEES
<TABLE>
<CAPTION>
MEETING KILCULLEN MCCOY SOMERS RAINER CONNELL TOTAL
DATE
<S> <C> <C> <C> <C> <C>
9/23/99 400.00 400.00 400.00 400.00 1,600.00
11/18/99 400.00 400.00 400.00 400.00 1,600.00
12/23/99 400.00 400.00 400.00 400.00 1,600.00
3/13/00 400.00 400.00 400.00 1,200.00
6/13/00 400.00 400.00 400.00 400.00 1,600.00
F/Y TOTAL 2,000.00 2,000.00 1,200.00 800.00 1,600.00 7,600.00
</TABLE>
CONTROL PERSONS AND PRINCIPAL HOLDERS OF SECURITIES
As of October 20, 2000 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:
<PAGE>
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
The percent owned is based on the number of outstanding shares
of common stock at October 20, 2000. All such shares are owned of record and
beneficially. All officers and directors of the Company, as a group owned as of
October 20, 2000, 3,646,245 of the Company's common stock or 85% of its
outstanding voting securities,.
ADVISORY 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 Advisory
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.
<PAGE>
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 Advisory 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, 1998, August
31, 1999, and August 31, 2000, 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 year ending August 31, 2000 the Company
paid 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, and it is expected that it
will not pay such commissions for the current fiscal year. Although the Company
may purchase equity investments, it is not its present purpose to do so.
<PAGE>
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
Advisory 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 advisory clients may also use these
various services. 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,
2000 and August 31, 1999 were 77.12% and 3.27% 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, and 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.
<PAGE>
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 288 Lancaster Ave. Malvern, Pa 19355, 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 plus
additional hourly compensation of additional or unanticipated work.
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.
<PAGE>
Auditors
Beard & Company, Inc. independent auditors, with offices at
320 East Market Street, P.O. Box 625, Harrisburg, Pennsylvania 17108-0625 serves
as the Company's auditors. The financial statements of NRM Investment Company
appearing in the 1996, 1997, 1998, 1999 and 2000 annual reports to shareholders
for the years ended August 31, 1996, August 31, 1997 August 31, 1998, August 31,
1999 and August 31, 2000, 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.
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; it has capital losses
subject to carryforward. The Company intends to distribute "exempt-interest"
dividends as described in the Company's prospectus and distribute at least
<PAGE>
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.
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 or 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.
<PAGE>
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, 2000
<PAGE>
C O N T E N T S
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>
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, 2000, 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 five 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, 1991
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, 2000, 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.
-1-
<PAGE>
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, 2000, 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 five years in the period then ended, in conformity with generally accepted
accounting principles.
Harrisburg, Pennsylvania
October 3, 2000
-2-
<PAGE>
NRM INVESTMENT COMPANY
STATEMENT OF ASSETS AND LIABILITIES
--------------------------------------------------------------------------------
August 31, 2000
--------------------------------------------------------------------------------
ASSETS
Investments at value (cost $ 15,850,170) $16,120,636
Interest receivable 234,714
Prepaid expense 641
-----------
Total assets 16,355,991
-----------
LIABILITIES
Accrued expenses and other liabilities 88,029
-----------
NET ASSETS
Net assets, applicable to 4,287,448 outstanding shares,
equivalent to $3.79 a share $16,267,962
===========
See Notes to Financial Statements.
-3-
<PAGE>
NRM INVESTMENT COMPANY
SCHEDULE OF INVESTMENTS
--------------------------------------------------------------------------------
August 31, 2000
--------------------------------------------------------------------------------
Principal
Municipal Bonds - 99.8% Amount Value
--------------------------------------------------------------------------------
General Obligation Bonds - 17.4%:
Texas State Water Development, 6.00%, due
8/1/10 $ 300,000 $ 306,504
New York City, New York, 6.45%, due 8/1/10,
pre-refunded 5,000 5,385
New York City, New York, 6.45%, due 8/01/10 195,000 206,402
Illinois State, 5.70%, due 4/1/11, callable 4/1/03
at 102.00,
callable 4/1/05 at 100 300,000 309,111
Nevada State Colorado River Commission, Ltd
Tax,
6.50%, due 10/01/12 400,000 415,240
Breitung Township Michigan School District,
6.30%, due
5/1/15, callable 5/1/02 at 102 (MBIA) 100,000 104,133
Montgomery County Texas Municipal Utility
District 67, 6.00%, due 9/1/16, callable 9/1/05
at 100 (AMBAC) 250,000 257,268
Richmond, Virginia, 6.25%, due 1/15/18,
callable
1/15/01 at 102 870,000 893,264
New York State LOC Government Assistance
Corp., 5.50%,
Due 4/1/18, callable 4/1/03 at 102, callable
6/15/05 at
102 (MBIA) 100,000 99,950
Montachusett Massachusetts Vocational
Technical School
District, 5.95%, due 1/15/20, callable 1/15/10
at 101 MBIA) 200,000 208,948
----------
Total General Obligation Bonds 2,806,205
----------
-4-
<PAGE>
Housing Finance Agency Bonds - 40.4%:
Rock Island, Illinois Residential Mortgage
Revenue Refunding, 7.70%, due 9/01/08,
callable 9/01/02
at 102 75,000 78,818
Ford County, Kansas Single-Family Mortgage
Revenue Refunding Bonds, 7.90%, due
8/01/10, callable
8/01/02 at 103, callable 8/01/05 at 100 100,000 104,540
Fort Worth, Texas Housing Finance
Corporation, Home Mortgage Revenue
Refunding Series 1991, 8.50%,
due 10/01/11, callable 10/01/01 at 103 205,000 213,833
Odessa, Texas Housing Finance Corporation,
Home Mortgage Revenue Refunding, 8.45%,
due 11/01/11, callable 11/01/05 at 103 176,512 190,734
Montana State Housing, Single-Family
Mortgage,
7.65%, due 10/01/10, callable 10/01/00 at
102 35,000 36,762
City of Hobbs, New Mexico, Single-Family
Mortgage Refunding Revenue Bonds, 8.75%,
due 7/01/11,
callable 7/01/02 at 103, callable 7/01/05 at
100 55,000 58,349
-5-
<PAGE>
NRM INVESTMENT COMPANY
SCHEDULE OF INVESTMENTS (CONTINUED)
--------------------------------------------------------------------------------
August 31, 2000
--------------------------------------------------------------------------------
Principal
Municipal Bonds - 99.8% (Continued) Amount Value
--------------------------------------------------------------------------------
Housing Finance Agency Bonds - 40.4%
(Continued):
Cameron County, Texas Housing Finance
Corporation, Single-Family Mortgage
Revenue Refunding, 6.20%,
due 3/01/13, callable 9/01/05 at 100 $190,000 $194,248
California Housing Finance Agency, Home
Mortgage, 10.25%, due 2/01/14, callable
2/01/99 at 100 60,000 60,092
Nevada Housing Division, Single-Family
Mortgage,
7.35%, due 10/01/15 80,000 81,549
Alabama Housing Finance Authority, Single-
Family Mortgage,
6.00%, due 10/1/16, callable 4/1/06 at 102 385,000 394,386
Louisiana Public Facilities Authority, Multi-Family
Housing, 7.75%, due 11/01/16, callable
11/01/01 at 102 500,000 525,680
Connecticut State Housing Finance Authority,
5.85%, due
11/15/16, callable 11/15/02 at 102 100,000 100,618
Minnesota State Housing Finance Agency, Single-
Family Mortgage, 5.95%, due 1/1/17, callable
1/01/07 at 101.50 300,000 309,711
Maryland State Community Development
Administration, Single-
Family Program, 5.80%, due 4/1/17, callable
10/1/09 at 100 200,000 203,234
Rhode Island Housing and Mortgage Finance
Corporation,
Homeownership Opportunity, 6.125%, due
4/1/17, callable
6/27/06 at 102 100,000 103,088
-6-
<PAGE>
Hawaii State Housing Finance and Development
Corporation,
Single-Family Mortgage, 5.45%, due 7/1/17
callable 7/1/07
At 102, callable 7/1/09 at 100 100,000 100,694
Utah State Housing Finance Agency, Single-
Family Mortgage, 6.30%, due 1/01/18 140,000 145,247
New Jersey State Housing and Mortgage Finance
Agency, Multi-Family Housing, 6.05%, due
11/1/20, callable 5/1/05 at 102
(AMBAC) 500,000 513,705
Troy, New York Housing Development Corp.,
Multi-Family Housing, 8.10%, due 2/01/22,
callable 12/01/02 at 100 1,295,000 1,302,938
Quaker Hill Housing Corporation, Multi-Family,
7.55%,
due 2/01/22 600,000 624,624
St. Alphios Housing Corporation, Multi-Family,
8.20%,
due 2/01/24 1,115,000 1,174,184
---------
Total Housing Finance Agency Bonds 6,517,034
---------
Hospital Revenue Bonds - 11.2%:
Falls Township Pennsylvania Hospital Authority,
Delaware Valley Medical Center, 6.90%, due
8/01/11, callable 8/01/02 at 102 85,000 87,989
-7-
<PAGE>
NRM INVESTMENT COMPANY
SCHEDULE OF INVESTMENTS (CONTINUED)
--------------------------------------------------------------------------------
August 31, 2000
--------------------------------------------------------------------------------
Principal
Municipal Bonds - 99.8% (Continued) Amount Value
--------------------------------------------------------------------------------
Hospital Revenue Bonds - 11.2% (Continued):
Rochester, Minnesota, Health Care Facilities
Revenue (Mayo Foundation/Mayo Medical
Center), 6.25%, due 11/15/12 $ 500,000 $ 500,000
Pennsylvania State Higher Educational Facilities
Authority, UPMC Health System, 5.25%, due
8/1/13, callable 8/1/09 at 101 (FSA) 300,000 299,151
New Hampshire Higher Educational and Health
Facilities Authority, Hichcock Clinic, 6.00%, due
7/1/15, callable 7/1/04 at 102 (MBIA) 400,000 411,840
Massachusetts State Health and Educational
Facilities Authority,
Newton Wellesley Hospital, 5.875%, callable
7/1/05 at 102, callable 7/1/07 at 100 (MBIA) 200,000 211,718
Kalamozoo Michigan Hospital Finance Authority,
Bronson Methodist, 5.75%, due 5/15/16 callable
5/15/06 at 102 (MBIA) 125,000 127,244
Louisiana Public Facilities Authority, Alton Ohsner
Medical Foundation, 6.00%, due 5/15/17,
callable 5/15/02 at 100 (MBIA) 160,000 163,600
---------
Total Hospital Revenue Bonds 1,801,542
---------
-8-
<PAGE>
Other Revenue Bonds - 30.8%:
Mississippi Development Bank, Desoto County
Convention Center, 6.25%, due 7/1/07
(AMBAC) 255,000 278,320
Grand Rapids, Michigan Downtown Development
Authority, 6.60%, due 6/01/08, callable 6/01/06
at 100 365,000 394,821
Alaska Industrial Development and Export
Authority, 6.20%,
due 4/01/10 220,000 230,050
Spokane Washington Solid Waste Utility,
6.25%, due 12/01/11 callable 12/01/02 at 102
(AMBAC) 225,000 234,823
Central and Western Chester County IDA,
Heatherwood Project, 5.75%, due 2/1/12,
callable 2/1/02 at 100 200,000 201,746
Jackson Mississippi Redevelopment Authority,
Jackson Street Area Project, 5.70&, due 4/1/13,
callable 10/1/05 at 100 (MBIA) 100,000 102,832
Maricopa Arizona Unified School District No. 80,
5.85%, due 7/1/13, callable 7/1/04 at 101
(FGIC) 100,000 103,151
-9-
<PAGE>
NRM INVESTMENT COMPANY
SCHEDULE OF INVESTMENTS (CONTINUED)
--------------------------------------------------------------------------------
August 31, 2000
--------------------------------------------------------------------------------
Principal
Municipal Bonds - 99.8% (Continued) Amount Value
--------------------------------------------------------------------------------
Other Revenue Bonds - 30.8% (Continued):
Little Rock Arkansas Municipal Airport, 6.00%,
due 11/1/14, callable 11/1/02 at 100 (MBIA) $150,000 $152,708
Oklahoma State Turnpike Authority, 6.10%, due
1/1/15, callable 7/1/02 at 102 (AMBAC) 650,000 670,949
Okmulgee County Oklahoma Governmental
Building, Sales Tax Revenue, 6.00%, due
3/1/15 callable 2/1/08 at 102, callable 2/1/10
at 100 (MBIA) 300,000 316,326
Matagorda County Texas, Houston Light and
Power Company, 5.80%, due 10/15/15,
callable 10/15/00 at 102, callable 10/15/02 at
100 (MBIA) 250,000 251,713
Rochester Minnesota Independent School
District No. 535, 5.75%, due 2/1/16, callable
2/1/10 at 100 100,000 103,748
Colorado Postsecondary Educational Authority,
University of Denver Project, 3/1/16, callable
3/1/03 at 101 (CNLE) 300,000 306,783
Menasha Wisconsin Utility, 5.60%, due 3/1/17,
callable 3/1/06 at 100 (MBIA) 300,000 300,000
Arizona State Municipal Finance Program
Certificates of Participation, 6.00%, due
8/1/17, callable 8/1/02 at 101, callable 8/1/03
at 100 (AMBAC) 400,000 406,268
Red River Texas Education Finance
Corporation, St. Marks School, 6.00%, due
8/15/17, callable 2/15/10 at 100 300,000 312,957
-10-
<PAGE>
Las Vegas Nevada Convention and Visitors
Authority, 5.75%,
due 7/1/18, callable 7/1/09 at 101 (AMBAC) 100,000 102,737
Massachusetts Municipal Wholesale Electric
Company Power Supply System, 6.00%, due
7/1/18, callable 7/1/02 at 100 (MBIA) 230,000 232,199
Red River Texas Education Finance
Corporation, St. Marks School, 6.00%, due
8/15/18, callable 2/15/10 at 100 150,000 156,027
Michigan Municipal Bond Authority, LOC
Government Loans, 6.125%, due 12/1/18,
callable 12/1/04 at 102, callable 12/1/06 at
100 (FGIC) 100,000 104,090
-------
Total Other Revenue Bonds 4,962,248
---------
Total Municipal Bonds (Cost $ 15,816,563) 16,087,029
----------
Short-Term Investments - at cost approximating
value - 0.2%,
Federated Pennsylvania Municipal Cash Fund
#8 33,607
----------
Total Investments - 100% (Cost
$ 15,850,170) $ 16,120,636
============
See Notes to Financial Statements.
-11-
<PAGE>
NRM INVESTMENT COMPANY
STATEMENT OF OPERATIONS
--------------------------------------------------------------------------------
Year Ended August 31, 2000
--------------------------------------------------------------------------------
Investment income $ 917,312
---------
Expenses:
Investment advisory fees 10,000
Custodian fees 11,736
Transfer and dividend disbursing agent fees 3,897
Legal and professional fees 80,600
Directors' fees 7,600
Insurance 1,619
Capital stock tax 6,937
Miscellaneous 3,720
---------
126,109
---------
Net investment income 791,203
---------
Realized and unrealized gain on investments:
Net realized loss from investment transactions (568,168)
Net unrealized depreciation of investments (9,518)
---------
Net loss on investments (577,686)
---------
Net increase in net assets resulting from operations $ 213,517
=========
See Notes to Financial Statements.
-12-
<PAGE>
NRM INVESTMENT COMPANY
STATEMENTS OF CHANGES IN NET ASSETS
--------------------------------------------------------------------------------
Years Ended August 31, 2000 1999
--------------------------------------------------------------------------------
Operations:
Net investment income $ 791,203 $ 819,067
Net realized gain (loss) from investment
transactions (568,168) 25
Net unrealized (depreciation) of investments (9,518) (537,425)
-------------------------
Net increase in net assets resulting
from operations 213,517 281,667
Distributions to shareholders, dividends from net
investment income (754,594) (789,597)
Distributions to shareholders, dividends from
capital gains - (8,583)
Capital share transactions, net (decrease) increase
from capital
share transactions (15,212) 138
-------------------------
Total (decrease) in net assets (556,289) (516,375)
Net assets:
Beginning of year 16,824,251 17,340,626
-------------------------
End of year $16,267,962 $16,824,251
=========================
See Notes to Financial Statements.
-13-
<PAGE>
NRM INVESTMENT COMPANY
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------------------------------------
Years Ended August 31, 2000 1999 1998 1997 1996
--------------------------------------------------------------------------------------------------------------------------
PER SHARE DATA (for a share outstanding
throughout the indicated year)
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of year $ 3.921 $ 4.041 $ 3.968 $ 3.933 $ 3.964
Net investment income .184 .191 .222 .221 .210
Net realized and unrealized gain (loss) on
investments (.135) (.125) .087 .041 (.004)
---------------------------------------------------------------------------
Total from investment operations .049 .066 .309 .262 .206
Less distributions:
Dividends from capital gains - (.002) (.015) - -
Dividends from net tax-exempt income (.174) (.161) (.221) (.221) (.210)
Dividends from net taxable income (.002) - - - -
Distribution in excess of net investment
income - (.023) - (.006) (.027)
--------------------------------------------------------------------------
Total distributions (.176) (.186) (.236) (.227) (.237)
---------------------------------------------------------------------------
Net asset value, end of year $ 3.794 $ 3.921 $ 4.041 $ 3.968 $ 3.933
===========================================================================
TOTAL RETURN 1.17% 1.56% 7.84% 6.71% 5.11%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of year (in thousands) $ 16,268 $ 16,824 $ 17,341 $ 17,015 $ 16,847
Ratio of expenses to average net assets .77% .99% .42% .57% 1.02%
Ratio of net investment income to average net
assets 4.83% 4.72% 5.50% 5.56% 5.24%
Portfolio turnover rate 77.12% 3.27% 12.57% 28.98% 6.24%
</TABLE>
See Notes to Financial Statements.
-14-
<PAGE>
--------------------------------------------------------------------------------
1995 1994 1993 1992 1991
--------------------------------------------------------------------------------
$ 3.909 $ 4.022 $ 3.540 $ 3.488 $ 3.635
.237 .229 .453 .265 .059
.056 (.115) .137 .055 .051
---------------------------------------------------------------------------
.293 .114 .590 .320 .110
- - - - -
(.237) (.227) (.108) (.265) (.059)
- - - - -
(.001) - - (.003) (.198)
---------------------------------------------------------------------------
(.238) (.227) (.108) (.268) (.257)
---------------------------------------------------------------------------
$ 3.964 $ 3.909 $ 4.022 $ 3.540 $ 3.488
===========================================================================
7.52% 2.79% 16.69% 9.08% 3.00%
$ 16,982 $ 16,745 $ 17,636 $ 15,260 $ 15,659
.37% .49% (5.03)% .81% 6.04%
6.08% 5.77% 11.93% 7.25% 1.54%
22.73% 13.56% 40.06% 64.84% 101.88%
-15-
<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.
-16-
<PAGE>
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.
-17-
<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, 2000 amounted to $ 10,000.
-18-
<PAGE>
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 $ 11,654,939
and $ 12,021,573 respectively, during the year ended August 31, 2000.
At August 31, 2000, the cost of investment securities owned is the same
for financial reporting and federal income tax purposes. Net unrealized
appreciation of investment securities is $ 270,466 (aggregate gross
unrealized appreciation of $ 292,757 less aggregate unrealized
depreciation of $ 22,291).
-19-
<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.
-20-
<PAGE>
5
--------------------------------------------------------------------------------
TRANSACTIONS IN CAPITAL STOCK AND COMPONENTS OF NET ASSETS
Transactions in fund shares were as follows:
<TABLE>
<CAPTION>
Years Ended August 31,
2000 1999
---------------------------------------------
Shares Amount Shares Amount
---------------------------------------------
<S> <C> <C> <C> <C> <C>
Issued to shareholders in reinvestment of
dividends from net investment income 36 $ 128 34 $ 138
Shares redeemed (3,895) (15,340)
---------------------------------------------
Net (decrease) increase (3,859) $ (15,212) 34 $ 138
=============================================
</TABLE>
-21-
<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, 2000 and 1999 are
as follows:
2000 1999
---------------------------
Capital shares - par value $ .01 per share,
4,287,448
shares and 4,291,307 shares issued and
outstanding at August 31, 2000 and 1999
(10,000,000 full and fractional shares
authorized);
and capital paid-in $ 16,626,079 $ 16,641,291
Accumulated net realized loss on investment
transactions (568,168) -
Unrealized appreciation of investments 270,466 279,984
Overdistributed net investment income (60,415) (97,024)
-----------------------------
Net assets $ 16,267,962 $ 16,824,251
=============================
<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 Advisory Agreement dated
November 30, 1992 attached as Exhibit
23(d)(1)
(ii) Addendum to advisory 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
<PAGE>
(l) None
(m) None
(n) None
(o) Ethics Code - attached hereto as 23(o)
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
"Advisory 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, 288 Lancaster Ave.
Malvern, Pa., 19355 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
3
<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 , 2000.
/s/Francis J. Rainer
----------------------------
Francis J. Rainer
4
<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 12, 2000.
/s/Joseph V. Somers
----------------------------
Joseph V. Somers
5
<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 12, 2000.
/s/George W. Connell
-----------------------------
George W. Connell
6
<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
President (Chief
/s/John H.McCoy Executive Officer) 10/30/00
-------------------
John H. McCoy
/s/Thomas F. Kilcullen Treasurer(Chief
----------------------
Thomas F. Kilcullen Financial and
Accounting Officer)
and Secretary 10/30/00
The Post-Effective Amendment No.26 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 10/30/00
7
<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 Advisory Agreement dated November
30, 1992 attached as Exhibit 23(d)(1)
(ii) Addendum to advisory 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).
8
<PAGE>
(k) None
(l) None
(m) None
(n) None
(o) Ethics code attached hereto as 23(o)
(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 "Advisory 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, 288 Lancaster Ave.
Malvern, Pa. 19355, 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
9
<PAGE>
With the exception of Exhibits 23 (i), 23 (j) (i) and (ii) and 23 (o), the
exhibits named in the Exhibit Index are incorporated by reference to the N1a
filing for the Company on August 31, 2000 being Amendment 25, as amended.
