SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 [X]
Pre-Effective Amendment No. ______ [ ]
Post-Effective Amendment No. 22 File No. 2-65761 [X]
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 [X]
Amendment No. 24 File No. 811-2963 [X]
D.L. BABSON MONEY MARKET FUND, INC.
(Exact Name of Registrant as Specified in Charter)
2440 Pershing Road, G-15 Kansas City, Missouri 64108
(Address of Principal Executive Office)
Registrant's Telephone Number,including Area Code (816)_471-5200
Larry D. Armel, President, D.L. BABSON MONEY MARKET FUND, INC.
2440 Pershing Road, G-15, Kansas City, Missouri 64108
(Name and Address of Agent for Service)
Approximate Date of Proposed Public Offering: October 31, 1995
It is proposed that this filing become effective:
X On October 31, 1995, pursuant to paragraph (b) of Rule 485
Registrant has registered an indefinite number or amount of securities
under the Securities Act of 1933 pursuant to Rule 24f-2 of the Invest-
ment Company Act of 1940, and will file its required Rule 24f-2 Notice
for the Registrant's fiscal year ended June 30, 1996, by August 30,
1996.
Please address inquiries and a carbon copy of all
and communications to: communications to:
John G. Dyer, Esq. Mark H. Plafker, Esq.
D.L. BABSON MONEY MARKET Stradley, Ronon, Stevens & Young
FUND, INC. 2600 One Commerce Square
2440 Pershing Road, G-15 Philadelphia, PA 19103-7098
Kansas City, MO 64108 Telephone: (215) 564-8024
Telephone: (816) 471-5200
D.L. BABSON MONEY MARKET FUND, INC.
CROSS REFERENCE SHEET
Form N-1A Item Number Location in Prospectus
Item 1. Cover Page . . . . . . . . . . . . . Cover Page
Item 2. Synopsis . . . . . . . . . . . . . . Not Applicable
Item 3. Condensed Financial Information . . Per Share Capital and
Income Changes
Item 4. General Description of Registrant. . Investment Objective
and Portfolio
Management Policy
Item 5. Management of the Fund . . . . . . . Officers and Directors;
Management and
Investment Counsel
Item 6. Capital Stock and Other Securities . How to Purchase Shares;
How to Redeem Shares;
How Share Price is
Determined; General
Information and
History; How Share
Price is Determined
Dividends Distributions
and their Taxation
Item 7. Purchase of Securities . . . . . . . Cover Page; How to
being Offered Purchase Shares;
Shareholder Services
Item 8. Redemption or Repurchase . . . . . . How to Redeem Shares
Item 9. Pending Legal Proceedings . . . . . Not Applicable
D.L. BABSON MONEY MARKET FUND, INC.
CROSS REFERENCE SHEET (CONTINUED)
Location in Statement
of Additional
Form N-1A Item Number Information
Item 10. Cover Page . . . . . . . . . . . . . Cover Page
Item 11. Table of Contents . . . . . . . . . Cover Page
Item 12. General Information and History . . Investment Objectives
and Policies;
Management and
Investment Counsel
Item 13. Investment Objectives and Policies . Investment Objectives
and Policies;
Investment Restrictions
Item 14. Management of the Fund . . . . . . . Management and
Investment Counsel
Item 15. Control Persons and Principal . . . Management and
Holders of Securities Investment Counsel;
Officers and Directors
Item 16. Investment Advisory and other . . . Management and
Services Investment Counsel;
Shareholder Services
(Prospectus)
Item 17. Brokerage Allocation . . . . . . . . Portfolio Transactions
Item 18. Capital Stock and Other Securities . General Information;
Financial Statements
Item 19. Purchase, Redemption and Pricing . . How Share Purchases
of Securities Being Offered are Handled; Redemption
of Shares
Financial Statements
Item 20. Tax Status . . . . . . . . . . . . . Dividends,
Distributions and their
Taxation (in prospectus
Item 21. Underwriters . . . . . . . . . . . . How the Fund's Shares
are Distributed
Item 22. Calculation of Yield Quotations . . Performance Measures
of Money Market Fund
Item 23. Financial Statements . . . . . . . . Incorporated by
Reference
<PAGE>
PROSPECTUS
October 31, 1995
D. L. BABSON MONEY MARKET FUND, INC.
Managed and Distributed By:
JONES & BABSON, INC.
Three Crown Center 2440 Pershing Road, Suite G-15
Kansas City, Missouri 64108
Toll-Free 1-800-4-BABSON (1-800-422-2766)
In the Kansas City area 471-5200
Investment Counsel:
DAVID L. BABSON & CO. INC.
Cambridge, Massachusetts
INVESTMENT OBJECTIVE
The Babson Money Market Fund offers two
Portfolios to investors who share the Fund's investment goal of
maximizing income consistent with safety of principal and liquidity, and
who desire to have their investment receive continuous portfolio
supervision by the staff of David L. Babson & Co. Inc. Each Portfolio
seeks to maintain, but does not guarantee, a constant net asset value of
$1.00 per share. Although each Portfolio invests in high quality
instruments, the shares of the Portfolios are not insured or guaranteed by
the U.S. Government and there can be no assurance that each Portfolio
will be able to maintain a constant net asset value per share.
PURCHASE INFORMATION
Minimum Investment (each Portfolio selected)
Initial Purchase $ 1,000
Initial IRA and Uniform Transfers (Gifts) to Minors Purchases$ 250
Subsequent Purchase:
By Mail $ 100 By Telephone or Wire $1,000
All Automatic Purchases $ 100
Shares are purchased and redeemed at net asset value. There are no sales,
redemption or Rule 12b-1 distribution charges. If you need further information,
please call the Fund at the telephone numbers indicated.
ADDITIONAL INFORMATION
This prospectus should be read and retained for future reference. It
contains the information that you should know before you invest. A
"Statement of Additional Information" of the same date as this prospectus
has been filed with the Securities and Exchange Commission and is
incorporated by reference. Investors desiring additional information about
the Fund may obtain a copy without charge by writing or calling the Fund.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED
UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
<PAGE>
TABLE OF CONTENTS
Page Fund Expenses 3
Financial Highlights 4
Investment Objective and Portfolio Management Policy 5
Repurchase Agreements 6
Risk Factors Peculiar to Money Market Instruments 6
Investment Restrictions 6
Performance Measures 7
How to Purchase Shares 7
Initial Investments 8
Investments Subsequent to Initial Investments 9
Telephone Investment Service 9
Automatic Monthly Investment Plan 9
How to Redeem Shares 9
Systematic Redemption Plan 12
How to Exchange Shares Between Portfolios and Babson Funds 13
How Share Price is Determined 14
Officers and Directors 15
Management and Investment Counsel 15
General Information and History 16
Dividends, Distributions and Their Taxation 17
Shareholder Services 18
Shareholder Inquiries 19
FUND EXPENSES FEDERAL PORTFOLIO
Shareholder Transaction Expenses
Maximum sales load imposed on purchases None
Maximum sales load imposed on reinvested dividends None
Deferred sales load None
Redemption fee None
Exchange fee None
Annual Fund Operation Expenses (as a percentage of average net assets)
Management fees .85%
12b-1 fees None
Other expenses .07%
Total Fund operating expenses .92%
You would pay the following expenses on a $1,000 investment, assuming
(1) 5% annual return and (2) redemption at the end of each time period:
1 Year 3 Year 5 Year 10 Year
$9 $29 $51 $113
PRIME PORTFOLIO Shareholder Transaction Expenses
Maximum sales load imposed on purchases None
Maximum sales load imposed on reinvested dividends None
Deferred sales load None
Redemption fee None
Exchange fee None
Annual Fund Operation Expenses (as a percentage of average net assets)
Management fees .85%
12b-1 fees None
Other expenses .07%
Total Fund operating expenses .92%
You would pay the following expenses on a $1,000 investment, assuming
(1) 5% annual return and (2) redemption at the end of each time period:
1 Year 3 Year 5 Year 10 Year
$9 $29 $51 $113
The above information is provided in order to assist you in understanding
the various costs and expenses that a shareholder of the Fund will bear
directly or indirectly. The expenses set forth above are for the fiscal year
ended June 30, 1995. The example should not be considered a
representation of past or future expenses. Actual expenses may be greater
or less than those shown.
D. L. BABSON MONEY MARKET FUND, INC. FINANCIAL
HIGHLIGHTS
The following financial highlights for each of the ten years
in the period ended June 30, 1995, have been derived from audited
financial statements of D.L. Babson Money Market Fund, Inc. Such
information for each of the five years in the period ended June 30, 1995
should be read in conjunction with the financial statements of the Fund
and the report of Arthur Andersen LLP, independent public accountants,
appearing in the June 30, 1995 annual report to share- holders which is
incorporated by reference in this prospectus. The information for each of
the five years in the period ended June 30, 1990, is not covered by the
report of Arthur Andersen LLP.
<TABLE>
<CAPTION>
FEDERAL PORTFOLIO 1995 1994 1993 1992 1991 1990 1989 1988 1987 1986
</CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value,
beginning of year $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
Income from investment
operations:
Net investment income 0.04 0.02 0.02 0.04 0.06 0.08 0.08 0.06 0.05 0.06
Less distributions:
Dividends from net
investment income (0.04) (0.02) (0.02) (0.04) (0.06) (0.08) (0.08) (0.06) (0.05) (0.06)
Net asset value,
end of year $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
Total Return 5% 3% 3% 4% 7% 8% 8% 6% 5% 7%
Ratios/Supplemental
Data Net assets, end
of year (in millions) $ 10 $ 10 $ 9 $ 11 $ 14 $ 11 $ 10 $ 8 $ 4 $ 3
Ratio of expenses to
average net assets 0.92% 0.92% 0.90% 0.89% 0.88% 0.89% 0.88% 0.89% 0.89% 0.87%
Ratio of net
investment income to
average net assets 4.48% 2.47% 2.51% 4.14% 6.28% 7.63% 7.89% 5.93% 5.22% 6.58%
</TABLE>
<TABLE>
<CAPTION>
PRIME PORTFOLIO 1995 1994 1993 1992 1991 1990 1989 1988 1987 1986
</CAPTIPN>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value,
beginning of year $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
Income from investment
operations:
Net investment income 0.05 0.03 0.02 0.04 0.07 0.08 0.08 0.06 0.05 0.07
Less distributions:
Dividends from net
investment income (0.05) (0.03) (0.02) (0.04) (0.07) (0.08) (0.08) (0.06) (0.05) (0.07)
Net asset value,
end of year $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
Total Return 5% 3% 3% 4% 7% 8% 8% 6% 6% 7%
Ratios/Supplemental Data
Net assets, end of
year (in millions) $ 40 $ 43 $ 45 $ 60 $ 79 $ 77 $ 81 $ 73 $ 58 $ 57
Ratio of expenses to
average net assets 0.92% 0.91% 0.90% 0.89% 0.88% 0.88% 0.89% 0.90% 0.89% 0.88%
Ratio of net
investment income to
average net assets 4.58% 2.51% 2.53% 4.21% 6.53% 7.73% 8.03% 6.16% 5.43% 6.84%
</TABLE>
INVESTMENT OBJECTIVE and PORTFOLIO MANAGEMENT POLICY
Babson Money Market Fund offers two separate Portfolios, each
of which invests in high quality short-term debt instruments for the
purpose of maximizing income consistent with safety of principal and
liquidity. Each Portfolio also seeks to maintain a constant price of $1.00
per share. Neither Portfolio's objective can be changed without the
approval of a majority of its outstanding shares. Each Portfolio will limit
its holdings to the types of securities hereinafter described.
FEDERAL PORTFOLIO
The Federal Portfolio will invest only in the following "U.S.
Government Securities":
1. Direct obligations of the U.S. government such as bills,
notes, bonds and other debt securities issued by the U.S. treasury.
2. Obligations of U.S. government agencies and
instrumentalities which are secured by the full faith and credit of
the U.S. treasury such as securities of the Government National
Mortgage Association, the Export-Import Bank, or the Student
Loan Marketing Association; or which are secured by the right of
the issuer to borrow from the Treasury, such as securities issued by
the Federal Financing Bank or the U.S. Postal Service; or are
supported by the credit of the government agency or
instrumentality itself, such as securities of the Federal Home Loan
Banks, or the Federal National Mortgage Association.
The Federal Portfolio also may invest in issues of the United States
treasury or United States government agencies subject to repurchase
agreements entered into with the seller of the issues. The use of
repurchase agreements by the Fund involves certain risks. For a
discussion of repurchase agreements and their risks see page 6. PRIME
PORTFOLIO The Prime Portfolio may invest in any of the following in
addition to securities eligible for the Federal Portfolio:
1. Certificates of deposit, bankers' acceptances, and other
short-term obligations issued domestically by United States
commercial banks having assets of at least $1 billion and which
are members of the Federal Deposit Insurance Corporation, or
holding companies of such banks.
2. Commercial paper, including variable rate master demand
notes of companies whose commercial paper is rated P-2 or higher
by Moody's Investors Service, Inc. (Moody's) or A-2 or higher by
Standard and Poor's Corporation (S&P). If not rated by either
Moody's or S&P, a company's commercial paper, including
variable rate master demand notes, may be purchased by the
Portfolio if the company has an outstanding bond issue rated Aa or
higher by Moody's or AA or higher by S&P. Variable rate master
demand notes represent a borrowing arrangement under a letter of
agreement between a commercial paper issuer and an institutional
lender. Applicable interest rates are determined on a formula basis
and are adjusted on a monthly, quarterly, or other term as set out
in the agreement. They vary as to the right of the lender to demand
payment. (For a description of money market securities and their
ratings, see "Money Market Securities Described and Ratings" in
the "Statement of Additional Information.")
3. Short-term debt securities which are non-convertible and
which have one year or less remaining to maturity at the date of
purchase and which are rated Aa or higher by Moody's or AA or
higher by S&P.
4. Negotiable certificates of deposit and other short-term debt
obligations of savings and loan associations having assets of at
least $1 billion and which are members of the Federal Home Loan
Banks Association and insured by the Federal Deposit Insurance
Corporation.
To achieve its objectives the Fund may engage in trading activity in order
to take advantage of opportunities to enhance yield, protect principal or
improve liquidity. This trading activity should not increase the Fund's
expenses, since there are normally no broker's commissions paid by the
Fund for the purchase or sale of money market instruments. However, a
markup or spread may be paid to a dealer from which the Fund purchases
a security. To assure compliance with adopted procedures pursuant to
Rule 2a-7 under the Investment Company Act of 1940 (the "1940 Act"),
the Fund will only invest in U.S. dollar denominated securities with
remaining maturities of 397 days or less, maintain the dollar weighted
average maturity of the securities in the Fund's portfolio at 90 days or less
and limit its investments to those instruments which the Directors of the
Fund determines present minimal credit risks and which are eligible
investments under the rule.
REPURCHASE AGREEMENTS
A repurchase agreement involves the sale of securities to the Portfolio with
the concurrent agreement by the seller to repurchase the securities at the
Portfolio's cost plus interest at an agreed rate upon demand or within a
specified time, thereby determining the yield during the purchaser's
period of ownership. This results in a fixed rate of return insulated from
market fluctuations during such period. Under the Investment Company
Act of 1940, repurchase agreements are considered loans by the Fund.
The Fund will enter into such repurchase agreements only with United
States banks having assets in excess of $1 billion which are members of
the Federal Deposit Insurance Corporation, and with certain securities
dealers who meet the qualifications set from time to time by the Board of
Directors of the Fund. Securities subject to a repurchase agreement may
bear maturities exceeding one year but the term of the repurchase
agreement normally will be no longer than a few days. Repurchase
agreements maturing in more than seven days and other illiquid securities
will not exceed 10% of the total assets of the Portfolio. Risk Factors
Applicable to Repurchase Agreements Repurchase agreements involve
investments in debt securities where the seller (broker-dealer or bank)
agrees to repurchase the securities from the Fund at cost plus an agreed-to
interest rate within a specified time. A risk of repurchase agreements is
that if the seller seeks the protection of the bankruptcy laws, the Fund's
ability to liquidate the security involved could be temporarily impaired,
and it subsequently might incur a loss if the value of the security declines
or if the other party to a repurchase agreement defaults on its obligation.
There is also the risk that the Fund may be delayed or prevented from
exercising its rights to dispose of the collateral.
RISK FACTORS PECULIAR TO MONEY MARKET INSTRUMENTS
The yield and the principal value of money market instruments are sensitive
to short-term lending conditions, and it is possible that an issuer
may default. The Fund will seek to minimize these risks through portfolio
diversification, careful portfolio selection among securities considered
to be high quality and by maintaining short average maturities.
Concentration of assets in the banking industry may increase the element
of risk because banks are highly leveraged. The manager believes this
risk is reduced because purchases will be limited to banks which are members
of the Federal Deposit Insurance Corporation, although securities purchased
by the Fund may not be FDIC insured deposits. Furthermore, the manager will
carefully evaluate the financial ratios and asset characteristics of banks in
which the Fund might invest, and reject those banks whose financial
ratios and asset characteristics are not, in the manager's opinion,
sufficiently strong.
INVESTMENT RESTRICTIONS
In addition to the policies set forth under the caption
"Investment Objective and Portfolio Management Policy"
the Fund is subject to certain other restrictions
which may not be changed without approval of the "holders of a majority
of the outstanding shares" of the Fund or the affected Portfolio. Among
these restrictions, the more important ones are that the Fund (Portfolio)
will not invest in equity securities; purchase the securities of any issuer if
more than 5% of the Fund's total assets would be invested in the
securities of such issuer, or the Fund would hold more than 10% of any
class of securities of such issuer; borrow money in excess of 15% of total
assets taken at market value, and then only from banks as a temporary
measure for extraordinary or emergency purposes; will not borrow to
increase income (leveraging) but only to facilitate redemption requests
which might otherwise require untimely dispositions of portfolio
securities; will repay all borrowings before making additional investments
(interest paid on such borrowings will reduce net income). The full text of
these restrictions is set forth in the "Statement of Additional Information."
There is no limitation with respect to investments in U.S. Treasury Bills,
or other obligations issued or guaranteed by the federal government, its
agencies and instrumentalities.
PERFORMANCE MEASURES
From time to time, the Fund may advertise its performance in various ways, as
summarized below. Further discussion of these matters also appears in the
"Statement of Additional Information." Yield From time to time, each
Portfolio may advertise "yield" and "effective yield." The "yield" of a
Fund refers to the income generated by an investment in a Fund over a
seven-day period (which period will be stated in the advertisement). This
income is then "annualized." That is, the amount of income generated by
the investment during that week is assumed to be generated each week
over a 52-week period and is shown as a percentage of the investment.
The "effective yield" is calculated similarly, but, when annualized, the
income earned by an investment in a Portfolio is assumed to be
reinvested. The "effective yield" will be slightly higher than the "yield"
because of the compounding effect of this assumed reinvestment. Each
Portfolio of the Fund may quote its yield in advertisements or in reports to
shareholders. Yield information may be useful in reviewing the
performance of the Fund Portfolios and in providing a basis for
comparison with other investment alternatives. However, since the net
investment income of these Funds changes in response to fluctuations in
interest rates and Fund expenses, any given yield quotations should not be
considered representative of the Fund's yields for any future period.
Current yield and price quotations for the Fund may be obtained by
telephoning 1-800-4-BABSON (1-800-422-2766), or in the Kansas City
area 471-5200. Performance Comparisons In advertisements or in reports
to shareholders, the Fund may compare its performance to that of other
mutual funds with similar investment objectives and to stock or other
relevant indices. For example, each Portfolio may compare its yields to
the Donoghue's Money Fund Average and the Donoghue's Government
Money Fund Average which are averages compiled by Donoghue's
Money Fund Report, a widely recognized independent publication that
monitors the performance of money market mutual funds, or to the
average yield reported by the Bank Rate Monitor for money market
deposit accounts offered by the 50 leading banks and thrift institutions in
the top five standard metropolitan statistical areas. Performance
comparisons should not be considered as representative of the future
performance of any Fund. Further information regarding the performance
of the Fund is contained in the "Statement of Additional Information."
Performance rankings, recommendations, published editorial comments
and listings reported in Money, Barron's, Kiplinger's Personal Finance
Magazine, Financial World, Forbes, U.S. News & World Report, Business
Week, The Wall Street Journal, Investors Business Daily, USA Today,
Fortune and Stangers's may also be cited (if the Fund is listed in any such
publication) or used for comparison, as well as performance listings and
rankings from Morningstar Mutual Funds, Personal Finance, Income and
Safety, The Mutual Fund Letter, No-Load Fund Investor, United Mutual
Fund Selector, No-Load Fund Analyst, No- Load Fund X, Louis
Rukeyser's Wall Street newsletter, Donoghue's Money Letter, CDA
Investment Technologies, Inc., Wiesenberger Investment Companies
Service, and Donoghue's Mutual Fund Almanac.
HOW TO PURCHASE SHARES
Shares are purchased at net asset value (no sales charge) from
the Fund through its agent, Jones & Babson, Inc., Three Crown Center,
2440 Pershing Road, Suite G-15, Kansas City, MO 64108. For
information call toll free 1-800-4-BABSON (1-800-422-2766), or in the
Kansas City area 471-5200. If an investor wishes to engage the services of
any other broker to purchase (or redeem) shares of the Fund, a fee may be
charged by such broker. The Fund will not be responsible for the
consequences of delays including delays in the banking or Federal
Reserve wire systems. You do not pay a sales commission when you buy
shares of the Fund. Shares are purchased at the Fund's net asset value
(price) per share next computed after a purchase order becomes effective
and payment has been received by the Fund. Normally, but not
necessarily, this price will be $1.00. (See "How Share Price is
Determined.") In the case of certain institutions which have made
satisfactory payment arrangements with the Fund, orders may be
processed at the net asset value per share next effective after a purchase
order has been received by the Fund. A purchase order becomes effective
when it has been determined that the Fund has received unconditional
payment in the form of federal funds or such payment has been converted
to federal funds and accepted by the Fund. Payments transmitted by
federal funds wire can be accepted and effective upon receipt. Payments
transmitted by other bank wire may take longer to be converted to federal
funds. Money transmitted by check is normally converted into federal
funds on the second business day following receipt. (Federal funds are
deposits made by member banks of the Federal Reserve System with the
Federal Reserve Bank which can be electronically transferred from one
member bank to another.) The Fund reserves the right in its sole discretion
to withdraw all or any part of the offerings made by the prospectus or to
reject purchase orders when, in the judgment of management, such
withdrawal or rejection is in the best interest of the Fund and its
shareholders. The Fund also reserves the right at any time to waive or
increase the minimum requirements applicable to initial or subsequent
investments with respect to any person or class of persons, which includes
shareholders of the Fund's special investment programs. The Fund
reserves the right to refuse to accept orders for fund shares unless
accompanied by payment, except when a responsible person has
indemnified the Fund against losses resulting from the failure of investors
to make payment. In the event that the Fund sustains a loss as the result
of failure by a purchaser to make payment, the Fund's underwriter, Jones
& Babson, Inc. will cover the loss.
INITIAL INVESTMENTS
Initial investments - By mail. You may open an account and make an
investment by completing and signing the application which accompanies
this prospectus. Make your check ($1,000 minimum for each Portfolio
selected unless your purchase is pursuant to an IRA or the Uniform
Transfers (Gifts) to Minors Act in which case the minimum initial
purchase is $250 for each Portfolio selected) payable to UMB Bank, n.a.
Mail your application and check to: D.L. Babson Money Market Fund,
Inc. Three Crown Center 2440 Pershing Road, Suite G-15 Kansas City,
Missouri 64108 Initial investments -- By wire. You may purchase shares
of the Fund by wiring the purchase price ($1,000 minimum for each
Portfolio selected) through the Federal Reserve Bank to the custodian,
UMB Bank, n.a. Prior to sending your money, you must call the Fund toll
free 1-800-4-BABSON (1-800-422-2766), or in the Kansas City area 471-
5200 and provide it with the identity of the registered account owner, the
registered address, the Social Security or Taxpayer Identification Number
of the registered owner, the amount being wired, the name and telephone
number of the wiring bank and the person to be contacted in connection
with the order. You will then be provided a Fund account number, after
which you should instruct your bank to wire the specified amount, along
with the account number and the account registration to:
UMB Bank, n.a.
Kansas City, Missouri, ABA #101000695
For Babson Money Market Fund, Inc.
Federal Portfolio/AC = 980103-3883
Prime Portfolio/AC = 980103-3581
For Account No.
(insert assigned Fund account number and name in which account
is registered.)
A completed application must be sent to the Fund as soon as
possible so the necessary remaining information can be
recorded in your account. Payment of redemption proceeds will be
delayed until the completed application is received by the Fund.
INVESTMENTS SUBSEQUENTTO INITIAL INVESTMENT
You may add to your Fund account at any
time in amounts of $100 or more if purchases are made by mail, or $1,000
or more if purchases are made by wire or telephone. Automatic monthly
investments must be in amounts of $100 or more. Checks should be
mailed to the Fund at its address, but make them payable to UMB Bank,
n.a. Always identify your account number or include the detachable
reminder stub which accompanies each confirmation. Wire share
purchases should include your account registration, your account number
and the Babson Fund (Portfolio) in which you are purchasing shares. It
also is advisable to notify the Fund by telephone that you have sent a wire
purchase order to the bank.
TELEPHONE INVESTMENT SERVICE
To use the Telephone Investment Service, you must first establish your Fund
account and authorize telephone orders in the application form, or,
subsequently, on a special authorization form provided upon request. If
you elect the Telephone Investment Service, you may purchase Fund
shares by telephone and authorize the Fund to draft your checking account
for the cost of the shares so purchased. You will receive the next available
price after the Fund has received your telephone call. Availability and
continuance of this privilege is subject to acceptance and approval by the
Fund and all participating banks. During periods of increased market
activity, you may have difficulty reaching the Fund by telephone, in
which case you should contact the Fund by mail or telegraph. The Fund
will not be responsible for the consequences of delays including delays in
the banking or Federal Reserve wire systems. The Fund will employ
reasonable procedures to confirm that instructions communicated by
telephone are genuine, and if such procedures are not followed, the Fund
may be liable for losses due to unauthorized or fraudulent instructions.
Such procedures may include, but are not limited to requiring personal
identification prior to acting upon instructions received by telephone,
providing written confirmations of such transactions, and/or tape
recording of telephone instructions. The Fund reserves the right to initiate
a charge for this service and to terminate or modify any or all of the
privileges in connection with this service at any time upon 15 days written
notice to shareholders, and to terminate or modify the privileges without
prior notice in any circumstances where such termination or modification
is in the best interest of the Fund and its investors.
AUTOMATIC MONTHLY INVESTMENT PLAN
You may elect to make monthly investments in a constant dollar amount
from your checking account ($100 minimum). The Fund will draft your
checking account on the same day each month in the amount you authorize in
your application, or, subsequently, on a special authorization form provided
upon request. Availability and continuance of this privilege is subject to
acceptance and approval by the Fund and all participating banks. If the
date selected falls on a day upon which the Fund shares are not priced,
investment will be made on the first date thereafter upon which Fund
shares are priced. The Fund will not be responsible for the consequences of
delays including delays in the banking or Federal Reserve wire systems.
The Fund reserves the right to initiate a charge for this service and to
terminate or modify any or all of the privileges in connection with this
service at any time upon 15 days written notice to shareholders, and to
terminate or modify the privileges without prior notice in any
circumstances where such termination or modification is in the best interest
of the Fund and its investors.
HOW TO REDEEM SHARES
Shareholders registered in the stock records of the Fund may withdraw
all or part of their investment by redeeming shares for which the Fund
has received unconditional payment in the form of federal funds or such
payment has been converted to federal funds and accepted by the Fund.
For your convenience, and to enable your account to continue earning
daily dividends as long as possible, the Fund offers expedited redemption
procedures by telephone/telegraph and draft ("check"), in addition to normal
mail procedures. In each instance you must comply with the general
requirements relating to all redemptions as well as with specific
requirements set out for the particular redemption method you select.
If you wish to expedite redemptions by using the telephone/telegraph or
draft writing (check) privileges, you should carefully note the special
requirements and limitations relating to these methods. If an investor
wishes to engage the services of any other broker to redeem (or purchase)
shares of the Fund, a fee may be charged by such broker. Where additional
documentation is normally required to support redemptions as in the case
of corporations, fiduciaries, and others who hold shares in a representative
or nominee capacity such as certified copies of corporate resolutions, or
certificates of incumbency, or such
other documentation as may be required under the Uniform Commercial Code or
other applicable laws or regulations, it is the responsibility of the
shareholder to maintain such documentation on file and in a current
status. A failure to do so will delay the redemption. If you have questions
concerning redemption requirements, please write or telephone the Fund
well ahead of an anticipated redemption in order to avoid any possible
delay. Requests which are subject to special conditions or which specify
an effective date other than as provided herein cannot be accepted. All
redemption requests must be transmitted to the Fund at Three Crown
Center, 2440 Pershing Road, Suite G-15, Kansas City, Missouri 64108.
Shareholders who have authorized telephone redemption may call toll free
1-800-4-BABSON (1-800-422-2766), or in the Kansas City area 471-
5200. The Fund will redeem shares at the price (net asset value per share)
next computed after receipt of a redemption request in "good order."
Normally this price will be $1.00. (For more information on how the Fund
intends to maintain a constant price see "How Share Price is
Determined.") The Fund will endeavor to transmit redemption proceeds to
the proper party, as instructed, as soon as practicable after a redemption
request has been received in "good order" and accepted, but in no event
later than the fifth day thereafter. Transmissions are made by mail unless
an expedited method has been authorized and specified in the redemption
request. The Fund will not be responsible for the consequences of delays
including delays in the banking or Federal Reserve wire systems.
Redemptions will not become effective until all documents in the form
required have been received. In the case of redemption requests made
within 15 days of the date of purchase, the Fund will delay transmission
of proceeds until such time as it is certain that unconditional payment in
federal funds has been collected for the purchase of shares being
redeemed or 15 days from the date of purchase. You can avoid the
possibility of delay by paying for all of your purchases with a transfer of
federal funds. Shares redeemed will be entitled to receive all dividends
declared through the date of redemption. If you redeem all of the shares in
your account, in addition to the share redemption check, a separate check
representing all dividends declared but unpaid on the shares redeemed
will be distributed on the next dividend payment date, according to your
dividend instructions on file with the Fund. Any amount due you in your
declared but unpaid dividend account cannot be redeemed by draft.
Signature Guarantees are required in connection with all redemptions by
mail, or changes in share registration, except as hereinafter provided.
These requirements may be waived by the Fund in certain instances where
it appears reasonable to do so and will not unduly affect the interests of
other shareholders. Signature(s) must be guaranteed by an "eligible
Guarantor institution" as defined under Rule 17Ad-15 under the
Securities Exchange Act of 1934. Eligible guarantor institutions include:
(1) national or state banks, savings associations, savings and loan
associations, trust companies, savings banks, industrial loan companies
and credit unions; (2) national securities exchanges, registered securities
associations and clearing agencies; or (3) securities broker/dealers which
are members of a national securities exchange or clearing agency or which
have a minimum net capital of $100,000. A notarized signature will not
be sufficient of the request to be in proper form. Signature guarantees
will be waived for mail redemptions of $10,000 or less, but they will be
required if the checks are to be payable to someone other than the
registered owner(s), or are to be mailed to an address different from the
registered address of the shareholder(s), or where there appears to be a
pattern of redemptions designed to circumvent the signature guarantee
requirement, or where the Fund has other reason to believe that this
requirement would be in the best interests of the Fund and its
shareholders. The right of redemption may be suspended or the date of
payment postponed beyond the normal five-day period when the New
York Stock Exchange is closed or under emergency circumstances as
determined by the Securities and Exchange Commission. Further, the
Fund reserves the right to redeem its shares in kind under certain
circumstances. If the shares are redeemed in kind, the shareholder may
incur brokerage costs when converting into cash. Additional details are set
forth in the "Statement of Additional Information." Due to the high cost
of maintaining smaller accounts, the Board of Directors has authorized the
Fund to close shareholder accounts where their value falls below the
current minimum initial investment requirement at the time of initial
purchase as a result of redemptions and not as the result of market action,
and remains below this level for 60 days after each such shareholder
account is mailed a notice of: (1) the Fund's intention to close the
account, (2) the minimum account size requirement, and (3) the date on
which the account will be closed if the minimum size requirement is not
met. Withdrawal By Mail -- Shares may be redeemed by mailing your
request to the Fund. To be in "good order" the request must include the
following:
(1) A written redemption request or stock assignment (stock power)
containing the genuine signature of each registered owner exactly as the
shares are registered with clear identification of the account by registered
name(s) and account number and the number of shares or the dollar
amount to be redeemed;
(2) any outstanding stock certificates representing shares to be
redeemed;
(3) signature guarantees as required; and
(See Signature Guarantees.)
(4) any additional documentation
which the Fund may deem necessary to insure a genuine redemption.
Withdrawal By Telephone or Telegraph - You may withdraw any
amount of $1,000 or more by telephone toll free 1-800-4-BABSON (1-
800-422-2766), or in the Kansas City area 471-5200, or by telegram to the
Fund's address. Telephone/telegraph redemption authorization signed by
all registered owners with signatures guaranteed must be on file with the
Fund before you may redeem by telephone or telegraph. The signature
guarantee requirement may be waived by the Fund if the request for this
redemption method is made at the same time the initial application to
purchase shares is submitted. All communications must include the
Fund's name, Portfolio name, your account number, the exact registration
of your shares, the number of shares or dollar amount to be redeemed, and
the identity of the bank and bank account (name and number) to which
the proceeds are to be wired. This procedure may only be used for non-
certificated shares held in open account. For the protection of
shareholders, your redemption instructions can only be changed by filing
with the Fund new instructions on a form obtainable from the Fund which
must be properly signed with signature(s) guaranteed. Telephone or
telegraph redemption proceeds may be transmitted to your pre-identified
bank account either by wire or mail to a domestic commercial bank which
is a member of the Federal Reserve System as designated by you on your
pre-authorization form. If you elect to have proceeds wired to your bank,
and your request is received prior to 1:00 P.M. (Eastern Time), proceeds
normally will be wired the following business day. If your request is
received during the day thereafter, proceeds normally will be wired on the
second business day following the day of receipt of your request. It is the
Fund's present policy not to assess wire charges on amounts of $5,000 or
more. A charge of $5.00 normally will be made on lesser amounts, but
this charge may be reduced or waived in connection with master accounts.
The Fund reserves the right to change this policy or to refuse a telephone
or telegraph redemption request or require additional documentation to
assure a genuine redemption, and, at its option, may pay such redemption
by wire or check and may limit the frequency or the amount of such
request. The Fund reserves the right to terminate or modify any or all of
the services in connection with this privilege at any time without prior
notice. Neither the Fund nor Jones & Babson, Inc. assumes responsibility
for the authenticity of withdrawal instructions, and there are provisions on
the authorization form limiting their liability in this respect. Withdrawal
by Draft ("Check") - This method of redemption is limited to open
account shares. You may elect this method of redemption on your initial
application, or on a form which will be sent to you upon request. All
signatures must be guaranteed unless this method of redemption is elected
on your initial application. The authorization form, which all registered
owners must sign, also contains a provision relieving the Fund and Jones
& Babson, Inc. from liability for loss, if any, which you may sustain
arising out of a non-genuine redemption pursuant to this redemption
feature. Any additional documentation required to assure a genuine
redemption must be maintained on file with the Fund in such current
status as the Fund may deem necessary. A new form properly signed, with
signature(s) guaranteed must be received and accepted by the Fund before
authorized redemption instructions already on file with the Fund can be
changed. When the draft authorization form is received by the Fund in
"good order" and accepted, you will be provided a supply of drafts
("checks") which may be drawn on the Fund. Drafts must be deposited in
a bank account of the payee to be cleared through the banking system in
order to be presented to the Fund for payment through UMB Bank, n.a.
An additional supply of drafts will be furnished upon request. There
presently is no charge for these drafts or their clearance. However, the
Fund and UMB Bank, n.a. reserve the right to make reasonable charges
and to terminate or modify any or all of the services in connection with
this privilege at any time and without prior notice. These drafts must be
signed by all registered owners exactly as the shares are registered, except
that if shares are owned in joint tenancy, drafts may be signed by any one
joint owner unless otherwise indicated on the application. They may be
made payable to the order of any person in any amount ranging from $500
to $100,000. The bank of the draft payee must present it for collection
through UMB Bank, n.a. which delivers it to the Fund for redemption of a
sufficient number of shares to cover the amount of the draft. Dividends
will be earned by the shareholder on the draft proceeds until it clears at
UMB Bank, n.a. Drafts will not be honored by the Fund and will be
returned unpaid if there are insufficient open account shares to meet the
withdrawal amount. The Fund reserves the right to withhold the bank's
redemption request until it determines that it has received unconditional
payment in federal funds for at least the number of shares required to be
redeemed to make payment on the draft. If such a delay is necessary, the
bank may return the draft not accepted (by the Fund) because there are not
sufficient shares for which good payment has been received in the
shareholder account. Dividends declared but not yet paid to you cannot be
withdrawn by drafts. Drafts (checks) written on the Babson Money
Market Fund should not be used as a redemption form or for the transfer
of shares to another Babson Fund unless the registration of the accounts
involved is identical.
SYSTEMATIC REDEMPTION PLAN
If you own shares in an open account valued at $10,000 or more, and desire
to make regular monthly or quarterly withdrawals without the necessity and
inconvenience of executing a separate redemption request to initiate each
withdrawal, you may enter into a Systematic Withdrawal Plan by
completing forms obtainable from the Fund. For this service, the manager
may charge you a fee not to exceed $1.50 for each withdrawal. Currently
the manager assumes the additional expenses arising out of this type of
plan, but it reserves the right to initiate such a charge at any time in the
future when it deems it necessary. If such a charge is imposed,
participants will be provided 30 days notice. Subject to a $50 minimum,
you may withdraw each period a specified dollar amount. Shares also may
be redeemed at a rate calculated to exhaust the account at the end of a
specified period of time. Dividends and capital gains distributions must
be reinvested in additional shares. Under all withdrawal programs,
liquidation of shares in excess of dividends and distributions reinvested
will diminish and may exhaust your account, particularly during a period
of declining share values. You may revoke or change your plan or redeem
all of your remaining shares at any time. Withdrawal payments will be
continued until the shares are exhausted or until the Fund or you terminate
the plan by written notice to the other.
HOW TO EXCHANGE SHARES
BETWEEN PORTFOLIOS AND BABSON FUNDS
Shareholders may exchange without a waiting period their Fund shares
which are held in open account, and for which good payment has been received,
for identically registered shares of any other Babson Fund, or any other
Portfolio in the Babson Fund Group which is legally registered for sale in
the state of residence of the investor, except Babson Enterprise Fund, Inc.,
provided that the minimum amount exchanged has a value of $1,000 or
more and meets the minimum investment requirement of the Fund or
Portfolio into which it is exchanged.
Effective at the close of business on January 31, 1992, the Directors of the
Babson Enterprise Fund, Inc. took action to limit the offering of that Fund's
shares. Babson Enterprise Fund, Inc. will not accept any new accounts,
including IRAs and other retirement plans, until further notice, nor will
Babson Enterprise Fund accept transfers from shareholders of other Babson
Funds, who were not shareholders of record of Babson Enterprise Fund at the
close of business on January 31, 1992. Investors may want to consider
purchasing shares in Babson Enterprise Fund II, Inc. as an alternative.
To authorize the Telephone/Telegraph Exchange Privilege, all registered
owners must sign the appropriate section on the original application, or the
Fund must receive a special authorization form, provided upon request. During
periods of increased market activity, you may have difficulty reaching the
Fund by telephone, in which case you should contact the Fund by mail or
telegraph. The Fund reserves the right to initiate a charge for this service
and to terminate or modify any or all of the privileges in connection with
this service at any time and without prior notice under any circumstances
where continuance of these privileges would be detrimental to the Fund or
its shareholders such as an emergency, or where the volume of such
activity threatens the ability of the Fund to conduct business, or under any
other circumstances, upon 60 days written notice to shareholders. The
Fund will not be responsible for the consequences of delays including
delays in the banking or Federal Reserve wire systems. The Fund will
employ reasonable procedures to confirm that instructions communicated
by telephone are genuine, and if such procedures are not followed, the
Fund may be liable for losses due to unauthorized or fraudulent
instructions. Such procedures may include, but are not limited to
requiring personal identification prior to acting upon instructions received
by telephone, providing written confirmations of such transactions, and/or
tape recording of telephone instructions. Exchanges by mail may be
accomplished by a written request properly signed by all registered
owners identifying the account, the number of shares or dollar amount to
be redeemed for exchange, and the Babson Fund into which the account is
being transferred. If you wish to exchange part or all of your shares in the
Fund for shares of another Fund or Portfolio in the Babson Fund Group,
you should review the prospectus of the Fund to be purchased which can
be obtained from Jones & Babson, Inc. Any such exchange will be based
on the respective net asset values of the shares involved. An exchange
between Funds or Portfolios involves the sale of an asset. Unless the
shareholder account is tax-deferred, this is a taxable event.
HOW SHARE PRICE IS DETERMINED
In order to determine the price at which new shares will be sold and at
which issued shares presented for redemption will be liquidated, the net
asset value per share of each Portfolio is computed once daily, Monday
through Friday, at the specific time during the day that the Board of
Directors sets at least annually, except on days on which changes in the
value of portfolio securities will not materially affect the net asset
value, or days during which no security is tendered for redemption and no
order to purchase or sell such security is received by the Fund, or
customary holidays. For a list of the holidays during which the Fund
is not open for business, see "How Share Price is Determined" in
the "Statement of Additional Information."
The price at which new shares of the Fund will be sold and at which
issued shares presented for redemption will be liquidated is computed
once daily at 1:00 P.M. (Eastern Time), except on those days when the
Fund is not open for business. The per share calculation is made by
subtracting from each Portfolio's total assets any liabilities and
then dividing into this amount the total outstanding shares as of the date
of the calculation.
Normally each Portfolio's price will be $1.00 because the Fund will
adhere to a number of procedures designed, but not guaranteed, to maintain a
constant price of $1.00 per share. Although unlikely, it still is possible
that the value of the shares you redeem may be more or less than your cost
depending on the market value of the Portfolio's securities at the time a
redemption becomes effective. For the purpose of calculating each
Portfolio's net asset value per share, securities are valued by the
"amortized cost" method of valuation, which does not take into
consideration unrealized gains or losses. This involves valuing an
instrument at its cost and thereafter assuming a constant amortization to
maturity of any discount or premium regardless of the impact of
fluctuating interest rates on the market value of the instrument. While this
method provides certainty in valuation, it may result in periods during
which value, as determined by amortized cost, is higher or lower than the
price the Portfolio would receive if it sold the instrument. During periods
of declining interest rates, the daily yield on shares of the Portfolio
computed as described above may tend to be higher than a like
computation made by a fund with identical investments utilizing a method
of valuation based upon market prices and estimates of market prices for
its portfolio instruments. Thus, if the use of amortized cost by the
Portfolio resulted in a lower aggregate value on a particular day, a
prospective investor in the Portfolio would be able to obtain a somewhat
higher yield than would result from investment in a fund utilizing market
values, and existing investors in the Portfolio would receive less
investment income. The converse would apply in a period of rising
interest rates. The use of amortized cost and the maintenance of each
Portfolio's per share net asset value at $1.00 is based on its election to
operate under the provisions of Rule 2a-7 under the Investment Company
Act of 1940. To assure compliance with adopted procedures pursuant to
Rule 2a-7 under the Investment Company Act of 1940 (the "1940 Act"),
the Fund will only invest in U.S. dollar denominated securities with
remaining maturities of 397 days or less, maintain the dollar weighted
average maturity of the securities in the Fund's portfolio at 90 days or less
and limit its investments to those instruments which the Directors of the
Fund determines present minimal credit risks and which are eligible
investments under the rule. The Directors have established procedures
designed to maintain the Portfolios' price per share, as computed for the
purpose of sales and redemptions, at $1.00. These procedures include a
review of the Portfolios' holdings by the Directors at such intervals as
they deem appropriate to determine whether the Portfolios' net asset value
calculated by using available market quotations deviates from $1.00 per
share based on amortized cost. If any deviation exceeds one-half of one
percent, the Directors will promptly consider what action, if any, will be
initiated. In the event the Directors determine that a deviation exists
which may result in material dilution or other unfair results to investors or
existing shareholders, they have agreed to take such corrective action as
they regard as necessary and appropriate, including the sale of Portfolio
instruments prior to maturity to realize capital gains or losses or to shorten
average Portfolio maturity; withhold dividends; make a special capital
distribution; redeem shares in kind; or establish net asset value per share
using available market quotations. There are various methods of valuing
the assets and of paying dividends and distributions from a money market
fund. Each Portfolio values its assets at amortized cost while also
monitoring the available market bid prices, or yield equivalents. Since
dividends from net investment income will be accrued daily and paid
monthly, the net asset value per share of each Portfolio's daily dividends
will vary in amount.
OFFICERS AND DIRECTORS
The officers of the Fund manage its day-to-day operations. The Fund's
manager and its officers are subject to the supervision and control of the
Board of Directors. A list of the officers and directors of the Fund and a
brief statement of their present positions and principal occupations during
the past five years is set forth in the "Statement of Additional Information."
MANAGEMENT AND INVESTMENT COUNSEL
Jones & Babson, Inc. was founded in 1960. It organized the Fund in 1979, and
acts as its manager and principal underwriter. Pursuant to the current
Management Agreement, Jones & Babson, Inc. provides or pays the cost of all
management, supervisory and administrative services required in the
normal operation of the Fund. This includes investment management and
supervision; fees of the custodian, independent public accountants and
legal counsel; remuneration of officers, directors and other personnel;
rent; shareholder services, including maintenance of the shareholder
accounting system and transfer agency; and such other items as are
incidental to corporate administration. Not considered normal operating
expenses, and therefore payable by the Fund, are taxes, interest,
governmental charges and fees, including registration of the Fund and its
shares with the Securities and Exchange Commission and the Securities
Departments of the various States, brokerage costs, dues, and all
extraordinary costs and expenses including but not limited to legal and
accounting fees incurred in anticipation of or arising out of litigation or
administrative proceedings to which the Fund, its officers or directors
may be subject or a party thereto.
As a part of the Management Agreement, Jones & Babson, Inc. employs at its
own expense David L. Babson & Co. Inc. as its investment counsel to assist
in the investment advisory function. David L. Babson & Co. Inc. is an
investment counseling firm founded in 1940. It serves a broad variety of
individual, corporate and other institutional clients by maintaining an
extensive research and analytical staff. It has an experienced investment
analysis and research staff which eliminates the need for Jones & Babson,
Inc. and the Fund to maintain an extensive duplicate staff, with the
consequent increase in the cost of investment advisory service. The cost
of the services of David L. Babson & Co. Inc. is included in the fee of
Jones & Babson, Inc. The Management Agreement limits the liability of the
manager and its investment counsel, as well as their officers, directors and
personnel, to acts or omissions involving willful malfeasance, bad faith,
gross negligence, or reckless disregard of their duties. Brian F. Reynolds
has been the portfolio manager of both the Federal and Prime Portfolios of
D.L. Babson Money Market Fund since 1986. He is a Chartered Financial
Analyst. He joined David L. Babson & Co. in 1984 and has twelve years
investment management experience. As compensation for the services
provided by Jones & Babson, Inc., the Fund pays Jones & Babson, Inc. a
fee at the annual rate of 85/100 of one percent (.85%) of its average daily
net assets, which is computed daily and paid semimonthly, from which
Jones & Babson, Inc. pays David L. Babson & Co. Inc. a fee of 20/100 of
one percent (.20%). The annual fee charged by Jones & Babson, Inc. is
higher than the fees of most other investment advisers whose charges
cover only investment advisory services with all remaining operational
expenses absorbed directly by the Fund. Yet, it compares favorably with
these other advisers when all expenses to Fund shareholders are taken into
account.
The total expenses of the Fund for the fiscal year ended June 30,
1995, amounted to .92%, of the average net assets for both the Prime and
Federal Portfolios. Per share expenses of both series may differ due to
differences in registration fees. Certain officers and directors of the Fund
are also officers or directors or both of other Babson Funds, Jones &
Babson, Inc. or David L. Babson & Co. Inc.
Jones & Babson, Inc. is a wholly-owned subsidiary of Business Men's
Assurance Company of America, which is considered to be a controlling
person under the Investment Company Act of 1940. Assicurazioni Generali
S.p.A., an insurance organization founded in 1831 based in Trieste, Italy,
is considered to be a controlling person and is the ultimate parent of
Business Men's Assurance Company of America. Mediobanca is a 5%
owner of Generali.
David L. Babson & Co. Inc. is a wholly-owned subsidiary of Massachusetts
Mutual Life Insurance Company headquartered in Springfield, Massachusetts.
Massachusetts Mutual Life Insurance Company is an insurance organiza- tion
founded in 1851 and is
considered to be a controlling person of David L. Babson & Co. Inc.,
under the Investment Company Act of 1940.
The current Management Agreement between the Fund and Jones & Babson, Inc.,
which includes the Investment Counsel Agreement between Jones & Babson, Inc.
and David L. Babson & Co. Inc., will continue in effect until October 31,
1996, and will continue automatically for successive annual periods
ending each October 31 so long as such continuance is specifically
approved at least annually by the Board of Directors of the Fund or by the
vote of a majority of the outstanding voting securities of the Fund, and,
provided also that such continuance is approved by the vote of a majority
of the directors who are not parties to the Agreements or interested
persons of any such party at a meeting held in person and called
specifically for the purpose of evaluating and voting on such approval.
Both Agreements provide that either party may terminate by giving the
other 60 days written notice. The Agreements terminate automatically if
assigned by either party.
GENERAL INFORMATION AND HISTORY
The Fund, incorporated in Maryland on October 19, 1979, has a present
authorized capitalization of 2,000,000,000 shares of $.01 par value
common stock. Half of the shares are presently reserved for issuance to
shareholders invested in the Federal Portfolio and half are reserved for the
Prime Portfolio shareholders. Each full and fractional share, when issued
and outstanding, has: (1) equal voting rights with respect to matters which
affect the Fund in general and with respect to matters relating solely to the
interests of the Portfolio for which issued, and (2) equal dividend,
distribution and redemption rights to the assets of the Portfolio for which
issued and to general assets, if any, of the Fund which are not specifically
allocated to a particular Portfolio. Shares when issued are fully paid and
non-assessable. Except for the priority of each share in the assets of its
Portfolio, the Fund will not issue any class of securities senior to any other
class. Shareholders do not have pre-emptive or conversion rights. The
Fund may issue additional series of stock with the approval of the Fund's
Board of Directors.
Non-cumulative voting - These shares have non-cumulative voting rights,
which means that the holders of more than 50% of the shares voting for the
election of directors can elect 100% of the directors, if they choose to do
so, and in such event, the holders of the remaining less than 50% of the
shares voting will not be able to elect any directors. Each series will vote
separately on investment advisory agreements, changes in fundamental policies,
and other matters affecting each series separately.
The Maryland Statutes permit registered investment companies, such as the
Fund, to operate without an annual meeting of shareholders under specified
circumstances if an annual meeting is not required by the Investment Company
Act of 1940. There are procedures whereby the shareholders may remove
directors. These procedures are described in the "Statement of Additional
Information" under the caption "Officers and Directors."
The Fund has adopted the appropriate provisions in its By-Laws and may not,
at its discretion, hold annual meetings of shareholders for the following
purposes unless required to do so: (1) election of directors; (2) approval of
any investment advisory agreement; (3) ratification of the selection of
independent public accountants; and (4) approval of a distribution plan. As
a result, the Fund does not intend to hold annual meetings. The Fund may
use the name "Babson" in its name so long as Jones & Babson, Inc. is continued
as manager and David L. Babson & Co. Inc. as its investment counsel.
Complete details with respect to the use of the name are set out in the
Management Agreement between the Fund and Jones & Babson, Inc.
This prospectus omits certain of the information contained in the
registration statement filed with the Securities and Exchange
Commission, Washington, D.C. These items may be inspected at the
offices of the Commission or obtained from the Commission upon
payment of the fee prescribed.
DIVIDENDS, DISTRIBUTIONS AND THEIR TAXATION
At the close of each business day, dividends consisting of substantially all
of each Portfolio's net investment income are declared payable to shareholders
of record at the close of the previous business day, and credited to their
accounts. All daily dividends declared during a given month will be
distributed on the last day of the month. Dividend and capital gains
distributions, if any, are automatically reinvested in additional shares at
net asset value, unless the shareholder has elected in writing to receive
cash. The method of payment elected remains in effect until the Fund is
notified in writing to the contrary. If at the time of a complete redemption
and closing of a shareholder account, there is net undistributed income to
the credit of the shareholder, it will be paid by separate check on the
next dividend distribution date. In the case of a partial redemption, any net
undistributed credit will be distributed on the next dividend date according
to the shareholder's instructions on file with the Fund.
Shares begin earning income on the day following the effective date of
purchase. Income earned by the Fund on weekends, holidays and other days
on which the Fund is closed for business is declared as a dividend on the
next day on which the Fund is open for business, except for month-ends when
such dividend is declared as of the last day of the month.
Each Portfolio within the Fund has qualified, and intends to continue to
qualify for taxation as a "regulated investment company" under the Internal
Revenue Code so that each Portfolio will not be subject to federal income
tax to the extent it distributes its income to shareholders. Dividends,
either in cash or reinvested in shares, paid by a Portfolio from net
investment income will be taxable to shareholders as ordinary income and will
not qualify for the 70% dividends-received deduction for corporations.
Each Portfolio intends to declare and pay dividends so as to avoid imposition
of the federal excise tax. To do so, the Fund expects to distribute during
the calendar year an amount equal to: (1) 98% of its calendar year ordinary
income; and (2) 100% of any undistributed income from the prior calendar year.
Dividends declared in December by a Portfolio will be deemed to have been paid
by such Portfolio and received by its shareholders on the record date so long
as the dividends are actually paid before February 1 of the following year.
Promptly after the end of each calendar year, each shareholder will receive
a statement of the federal income tax status of all dividends and
distributions paid during the year.
To comply with IRS regulations, the Fund is required by federal law to
withhold 31% of reportable payments (which may include dividends, capital
gains distributions, and redemptions) paid to shareholders who have not
complied with IRS regulations. In order to avoid this withholding
requirement, shareholders must certify on their Application, or on a
separate form supplied by the Fund, that their Social Security or Taxpayer
Identification Number provided is correct and that they are not currently
subject to backup withholding, or that they are exempt from backup withholding.
Shareholders also may be subject to state and local taxes on distributions
from the Fund. You should consult your tax adviser with respect to the tax
status of distributions from the Fund in your state and locality.
THE TAX DISCUSSION SET FORTH ABOVE IS INCLUDED HEREIN FOR GENERAL INFORMATION
ONLY. PROSPECTIVE INVESTORS SHOULD CONSULT THEIR OWN TAX ADVISERS WITH
RESPECT TO THE TAX CONSEQUENCES TO THEM OF AN INVESTMENT IN THE FUND.
SHAREHOLDER SERVICES
The Fund and its manager offer shareholders a broad variety of services
described throughout this
prospectus. In addition, the following services are available:
Automatic Monthly Investment - You may elect to make monthly investments
in a constant dollar amount from your checking account ($100 minimum). The
Fund will draft your checking account on the same day each month in the
amount you authorize in your application, or, subsequently, on a special
authorization form provided upon request.
Automatic Reinvestment - Dividends and capital gains distributions may be
reinvested automatically, or shareholders may elect to have dividends paid
in cash and capital gains reinvested, or to have both paid in cash.
Telephone Investments - You may make investments of $1,000 or more by
telephone if you have authorized such investments in your application, or,
subsequently, on a special authorization form provided upon request. See
"Telephone Investment Service."
Automatic Exchange - You may exchange shares from your account ($100 minimum)
in any of the Babson Funds to an identically registered account in any other
fund in the Babson Group except Babson Enterprise Fund, Inc. according to
your instructions. Monthly exchanges will be continued until all shares
have been exchanged or until you terminate the Automatic Exchange
authorization. A special authorization form will be provided upon request.
Transfer of Ownership - A shareholder may transfer shares to another
shareholder account. The requirements which apply to redemptions apply
to transfers. A transfer to a new account must meet initial investment
requirements.
Systematic Redemption Plan - Shareholders who own shares
in open account valued at $10,000 or more may arrange to make regular
withdrawals without the necessity of executing a separate redemption
request to initiate each withdrawal.
Sub-Accounting - Keogh and corporate tax qualified retirement plans,
as well as certain other investors who must maintain separate participant
accounting records, may meet these needs through services provided by the
Fund's manager, Jones & Babson, Inc. Investment minimums may be met by
accumulating the separate accounts of the group. Although there is currently
no charge for sub-accounting, the Fund and its manager reserve the right to
make reasonable charges for this service.
Prototype Retirement Plans - Jones & Babson, Inc. offers a defined
contribution prototype plan - The Universal Retirement Plan - which is
suitable for all who are self-employed, including sole proprietors,
partnerships, and corporations. The Universal Prototype includes both money
purchase pension and profit-sharing plan options.
Individual Retirement Accounts - Also available is an Individual
Retirement Account (IRA). The IRA uses the IRS model form of plan
and provides an excellent way to accumulate a retirement fund which
will earn tax-deferred dollars until withdrawn. An IRA may also be
used to defer taxes on certain distributions from
employer-sponsored retirement plans. You may contribute up to $2,000
of compensation each year ($2,250 if a spousal IRA is established),
some or all of which may be deductible. Consult your tax adviser
concerning the amount of the tax deduction, if any.
Simplified Employee Pensions (SEPs) - The Jones & Babson IRA may
be used with IRS Form 5305-SEP to establish a SEP-IRA, to which the
self-employed individual may contribute up to 15% of net earned
income or $30,000, whichever is less. A SEP-IRA offers the employer
the ability to make the same level of deductible contributions as a
Profit-Sharing Plan with greater ease of administration, but less
flexibility in plan coverage of employees.
SHAREHOLDER INQUIRIES
Telephone inquiries may be made toll free
to the Fund, 1-800-4-BABSON (1-800-422-2766),
or in the Kansas City area 471-5200.
Shareholders may address written inquiries to the Fund at:
D.L. Babson Money Market Fund, Inc.
Three Crown Center 2440
Pershing Road, Suite G-15
Kansas City, MO 64108
AUDITORS
ARTHUR ANDERSEN LLP Kansas City, Missouri
LEGAL COUNSEL
STRADLEY, RONON, STEVENS & YOUNG
Philadelphia, Pennsylvania
JOHN G. DYER
Kansas City, Missouri
CUSTODIAN
UMB BANK, n.a. Kansas City, Missouri
TRANSFER AGENT
JONES & BABSON, INC. Kansas City, Missouri
<PAGE>
PART B
D.L. BABSON MONEY MARKET FUND, INC.
STATEMENT OF ADDITIONAL INFORMATION
October 31, 1995
This Statement is not a prospectus but should be read in conjunction with
the Fund's current Prospectus dated October 31, 1995. To obtain the
Prospectus please call the Fund toll-free 1-800-4-BABSON (1-800-422-2766)
or in the Kansas City area 471-5200.
TABLE OF CONTENTS
PAGE
Investment Objective and Policies
Portfolio Transactions
Investment Restrictions
Performance Measures
How the Fund's Shares are Distributed
How Share Purchases are Handled
Redemption of Shares
Signature Guarantees
Management and Investment Counsel
How Share Price is Determined
Officers and Directors
Custodian
Independent Public Accountants
Other Jones & Babson Funds
Money Market Securities Described and Ratings
Financial Statements
INVESTMENT OBJECTIVE AND
POLICIES
The following policies supplement the
Fund's investment objective and policies
set forth in the Prospectus.
PORTFOLIO TRANSACTIONS
Decisions to buy and sell securities for
the Fund are made by Jones & Babson,
Inc. pursuant to recommendations by
David L. Babson & Co. Inc. Officers of
the Fund and Jones & Babson, Inc. are
generally responsible for implementing or
supervising these decisions, including
allocation of portfolio brokerage and
principal business as well as the
negotiation of commissions and/or the
price of the securities. In instances where
securities are purchased on a commission
basis, the Fund will seek competitive and
reasonable commission rates based on the
circumstances of the trade involved and
to the extent that they do not detract
from the quality of the execution.
In all transactions, it is the Fund's policy
to obtain the best combination of price
and execution commensurate with the
circumstances as viewed at the time.
The Fund expects that purchases and
sales of portfolio securities usually will be
principal transactions. Portfolio securities
normally will be purchased directly from
the issuer or in the over-the-counter
market from a principal market maker for
the securities, unless it appears that a
better combination of price and execution
may be obtained elsewhere. Usually there
will be no brokerage commission paid by
the Fund for such purchases. Purchases
from underwriters of portfolio securities
will include a commission or concession
paid by the issuer to the underwriter, and
purchases from dealers serving as market
makers will include the spread between
the bid and asked price.
The Fund believes it is in its best
interest and that of its shareholders to
have a stable and continuous relationship
with a diverse group of financially strong
and technically qualified broker-dealers
who will provide quality executions at
competitive rates. Broker-dealers
meeting these qualifications also will be
selected for their demonstrated loyalty to
the Fund, when acting on its behalf, as
well as for any research or other services
provided to the Fund. The Fund normally
will not pay a higher commission rate to
broker-dealers providing benefits or
services to it than it would pay to broker-
dealers who do not provide it such
benefits or services. However, the Fund
reserves the right to do so within the
principles set out in Section 28(e) of the
Securities Act of 1934 when it appears
that this would be in the best interests of
the shareholders.
No commitment is made to any broker
or dealer with regard to placing of orders
for the purchase or sale of Fund
securities, and no specific formula is used
in placing such business. Allocation is
reviewed regularly by both the Board of
Directors of the Fund and Jones &
Babson, Inc.
Since the Fund does not market its
shares through intermediary brokers or
dealers, it is not the Fund's practice to
allocate brokerage or principal business
on the basis of sales of its shares which
may be made through such firms.
However, it may place portfolio orders
with qualified broker-dealers who
recommend the Fund to other clients, or
who act as agent in the purchase of the
Fund's shares for their clients.
Research services furnished by broker-
dealers may be useful to the Fund
manager and its investment counsel in
serving other clients, as well as the Fund.
Conversely, the Fund may benefit from
research services obtained by the manager
or its investment counsel from the
placement of portfolio brokerage of other
clients.
When it appears to be in the best
interest of its shareholders, the Fund may
join with other clients of the manager and
its investment counsel in acquiring or
disposing of a portfolio holding.
Securities acquired or proceeds obtained
will be equitably distributed between the
Fund and other clients participating in the
transaction. In some instances, this
investment procedure may affect the price
paid or received by the Fund or the size
of the position obtained by the Fund.
The Fund does not intend to purchase
securities solely for short-term trading;
nor will securities be sold for the sole
purpose of realizing gains. A security
may be sold and another of comparable
quality purchased at approximately the
same time, however, to take advantage of
what the Fund's manager believes to be a
disparity in the normal yield relationship
between the two securities. In addition, a
security may be sold and another
purchased when, in the opinion of the
Fund's management, a favorable yield
spread exists between specific issues or
different market sectors.
Since short-term debt instruments with
maturities of less than one year are
excluded from the calculation of portfolio
turnover, the Fund does not anticipate
having a portfolio turnover ratio.
INVESTMENT RESTRICTIONS
In addition to the investment objective
and portfolio management policies set
forth in the Prospectus under the caption
"Investment Objective and Portfolio
Management Policy," the following
restrictions also may not be changed
without approval of the "holders of a
majority of the outstanding shares" of the
Fund or the affected Portfolio series.
The Fund will not: (1) invest in equity
securities or securities convertible into
equities; (2) purchase the securities of any
issuer (other than obligations issued or
guaranteed as to principal and interest by
the government of the United States, its
agencies or instrumentalities) if, as a
result, (a) more than 5% of the Fund's
total assets (taken at current value) would
be invested in the securities of such
issuer, or (b) the Fund would hold more
than 10% of any class of securities of
such issuer (for this purpose, all debts and
obligations of an issuer maturing in less
than one year are treated as a single class
of securities); (3) borrow money in excess
of 15% of its total assets taken at market
value, and then only from banks as a
temporary measure for extraordinary or
emergency purposes; the Fund will not
borrow to increase income (leveraging)
but only to facilitate redemption requests
which might otherwise require untimely
dispositions of Portfolio securities; the
Fund will repay all borrowings before
making additional invest-ments, and
interest paid on such borrowings will
reduce net income; (4) mortgage, pledge
or hypothecate its assets except in an
amount up to 15% (10% as long as the
Fund's shares are registered for sale in
certain states) of the value of its total
assets but only to secure borrowings for
temporary or emergency purposes; (5)
issue senior securities, as defined in the
Investment Company Act of 1940, as
amended; (6) underwrite securities issued
by other persons; (7) purchase or sell real
estate, but this shall not prevent
investment in obligations secured by real
estate; (8) make loans to other persons,
except by the purchase of debt obligations
which are permitted under its investment
policy; (9) purchase securities on margin
or sell short; (10) purchase or retain
securities of an issuer if to the knowledge
of the Fund's management those directors
of the Fund, each of whom owns more
than one-half of one percent (.5%) of
such securities, together own more than
five percent (5%) of the securities of such
issuer; (11) purchase or sell commodities
or commodity contracts; (12) write or
invest in put, call, straddle or spread
options or invest in interests in oil, gas or
other mineral exploration or development
programs; (13) invest in companies for
the purpose of exercising control; (14)
invest in securities of other investment
companies, except as they may be
acquired as part of a merger,
consolidation or acquisition of assets;
(15) invest more than 5% of the value of
its total assets at the time of investment in
the securities of any issuer or issuers
which have records of less than three
years continuous operation, including the
operation of any predecessor, but this
limitation does not apply to securities
issued or guaranteed as to interest and
principal by the United States government
or its agencies or instrumentalities; or
(16) purchase any securities which would
cause more than 25% of the value of a
Portfolio's total net assets at the time of
such purchase to be invested in any one
industry; provided, however, the Prime
Portfolio reserves freedom of action to
invest up to 100% of its assets in
certificates of deposit or bankers'
acceptances of domestic branches of U.S.
banks.
There is no limitation with respect to
investments in U. S. Treasury Bills, or
other obligations issued or guaranteed by
the federal government, its agencies and
instrumentalities.
In addition to the fundamental
investment restrictions set out above, in
order to comply with the law or
regulations of various States, the Fund
will not engage in the following practices:
(1) invest in securities which are not
readily marketable or in securities of
foreign issuers which are not listed on a
recognized domestic or foreign securities
exchange; (2) write put or call options;
(3) invest in oil, gas and other mineral
leases or arbitrage transactions; or (4)
purchase or sell real estate (including
limited partnership interests, but
excluding readily marketable interests in
real estate investment trusts or readily
marketable securities of companies which
invest in real estate).
Certain States also require that the
Fund's investments in warrants, valued at
the lower of cost or market, may not
exceed 5% of the value of the Fund's net
assets. Included within that amount, but
not to exceed 2% of the value of the
Fund's net assets may be warrants which
are not listed on the New York or
American Stock Exchange. Warrants
acquired by the Fund in units or attached
to securities may be deemed to be
without value for purposes of this
limitation.
PERFORMANCE MEASURES
Yield
From time to time, each Portfolio of the
Fund may quote its yield in
advertisements, shareholder reports or
other communications to shareholders.
Yield information is generally available by
calling the Fund toll free 1-800-4-
BABSON (1-800-422-2766), or in the
Kansas City area 471-5200.
The current annualized yield for each
Portfolio of the Fund is computed by: (a)
determining the net change in the value of
a hypothetical pre-existing account in a
Fund having a balance of one share at the
beginning of a seven calendar-day period
for which yield is to be quoted, (b)
dividing the net change by the value of
the account at the beginning of the period
to obtain the base period return, and (c)
annualizing the results (i.e., multiplying
the base period return by 365/7). The net
change in value of the account reflects the
value of additional shares purchased with
dividends declared on the original share
and any such additional shares, but does
not include realized gains and losses or
unrealized appreciation and depreciation.
In addition, each Fund may calculate a
compound effective yield by adding 1 to
the base period return (calculated as
described above, raising the sum to a
power equal to 365/7 and subtracting 1).
For the seven-day period ended June
30, 1995 the current annualized yield of
the Federal Portfolio was 5.20% and the
compound effective yield was 5.33%. At
June 30, 1995, that Portfolio's average
maturity was 37 days. For the seven-day
period ended June 30, 1995, the current
annualized yield of the Prime Portfolio
was 5.24% and the compound effective
yield was 5.37%. At June 30, 1995, that
Portfolio's average maturity was 47 days.
Yield information is useful in reviewing
the Funds' performance, but because
yields fluctuate, such information cannot
necessarily be used to compare an
investment in a Fund's shares with bank
deposits, savings accounts and similar
investment alternatives which often
provided an agreed or guaranteed fixed
yield for a stated period of time.
Shareholders should remember that yield
is a function of the kind and quality of the
instruments in the Funds' portfolios,
portfolio maturity, operating expenses
and market conditions. Shares of the
Fund are not insured.
HOW THE FUND'S SHARES ARE
DISTRIBUTED
Jones & Babson, Inc., as agent of the
Fund, agrees to supply its best efforts as
sole distributor of the Fund's shares and,
at its own expense, pay all sales and
distribution expenses in connection with
their offering other than registration fees
and other government charges.
Jones & Babson, Inc. does not receive
any fee or other compensation under the
distribution agreement which continues in
effect until October 31, 1996, and which
will continue automatically for successive
annual periods ending each October 31, if
continued at least annually by the Fund's
Board of Directors, including a majority
of those Directors who are not parties to
such agreements or interested persons of
any such party. It terminates
automatically if assigned by either party
or upon 60 days written notice by either
party to the other.
Jones & Babson, Inc. also acts as sole
distributor of the shares for David L.
Babson Growth Fund, Inc., Babson
Enterprise Fund, Inc., Babson Enterprise
Fund II, Inc., D. L. Babson Tax-Free
Income Fund, Inc., Babson Value Fund,
Inc., D. L. Babson Bond Trust, Shadow
Stock Fund, Inc., Babson-Stewart Ivory
International Fund, Inc., Scout Stock
Fund, Inc., Scout Bond Fund, Inc., Scout
Money Market Fund, Inc., Scout Tax-
Free Money Market Fund, Inc., Scout
Regional Fund, Inc., Scout WorldWide
Fund, Inc., Buffalo Balanced Fund, Inc.,
Buffalo Equity Fund, Inc., Buffalo High
Yield Fund, Inc. and Buffalo USA Global
Fund, Inc.
HOW SHARE PURCHASES ARE
HANDLED
Each order accepted will be fully
invested in whole and fractional shares,
unless the purchase of a certain number of
whole shares is specified, at the net asset
value per share next effective after the
order is accepted by the Fund.
Each investment is confirmed by a year-
to-date statement which provides the
details of the immediate transaction, plus
all prior transactions in your account
during the current year. This includes the
dollar amount invested, number of shares
purchased or redeemed, price per share,
and aggregate shares owned. A transcript
of all activity in your account during the
previous year will be furnished each
January. By retaining each annual
summary and the last year-to-date
statement, you have a complete detailed
history of your account. A duplicate
copy of a past annual statement is
available from Jones & Babson, Inc. at its
cost, subject to a minimum charge of $5
per account, per year requested.
Normally, the shares which you
purchase are held by the Fund in open
account, thereby relieving you of the
responsibility of providing for the
safekeeping of a negotiable share
certificate. Should you have a special
need for a certificate, one will be issued
on request for all or a portion of the
whole shares in your account. There is no
charge for the first certificate issued. A
charge of $3.50 will be made for any
replacement certificates issued. In order
to protect the interests of the other
shareholders, share certificates will be
sent to those shareholders who request
them only after the Fund has determined
that unconditional payment for the shares
represented by the certificate has been
received by its custodian, UMB Bank,
n.a.
If an order to purchase shares must be
canceled due to non-payment, the
purchaser will be responsible for any loss
incurred by the Fund arising out of such
cancellation. To recover any such loss,
the Fund reserves the right to redeem
shares owned by any purchaser whose
order is canceled, and such purchaser may
be prohibited or restricted in the manner
of placing further orders.
The Fund reserves the right in its sole
discretion to withdraw all or any part of
the offering made by the prospectus or to
reject purchase orders when, in the
judgment of management, such
withdrawal or rejection is in the best
interest of the Fund and its shareholders.
The Fund also reserves the right at any
time to waive or increase the minimum
requirements applicable to initial or
subsequent investments with respect to
any person or class of persons, which
includes shareholders of the Fund's
special investment programs.
REDEMPTION OF SHARES
The right of redemption may be
suspended, or the date of payment
postponed beyond the normal five-day
period by the Fund's Board of Directors
under the following conditions authorized
by the Investment Company Act of 1940:
(1) for any period (a) during which the
New York Stock Exchange is closed,
other than customary weekend and
holiday closing, or (b) during which
trading on the New York Stock
Exchange is restricted; (2) for any period
during which an emergency exists as a
result of which (a) disposal by the Fund
of securities owned by it is not reasonably
practicable, or (b) it is not reasonably
practicable for the Fund to determine the
fair value of its net assets; or (3) for such
other periods as the Securities and
Exchange Commission may by order
permit for the protection of the Fund's
shareholders.
SIGNATURE GUARANTEES
Signature guarantees normally reduce
the possibility of forgery and are required
in connection with each redemption
method to protect shareholders from loss.
Signature guarantees are required in
connection with all redemptions by mail
or changes in share registration, except as
provided in the Prospectus.
Signature guarantees must appear
together with the signature(s) of the
registered owner(s), on:
(1) a written request for redemption,
(2) a separate instrument of assignment,
which should specify the total
number of shares to be redeemed
(this "stock power" may be obtained
from the Fund or from most banks
or stock brokers), or
(3) all stock certificates tendered for
redemption.
MANAGEMENT AND
INVESTMENT COUNSEL
As a part of the Management
Agreement, Jones & Babson, Inc.
employs at its own expense David L.
Babson & Co. Inc., as its investment
counsel. David L. Babson & Co. Inc.
was founded in 1940 as a private
investment research and counseling
organization On June 30, 1995, David L.
Babson & Co. Inc. became a wholly-
owned subsidiary of Massachusetts
Mutual Life Insurance Company. David
L. Babson & Co. Inc. serves individual,
corporate and other institutional clients
and participates with Jones & Babson in
the management of nine Babson no-load
mutual funds.
The aggregate management fee paid to
Jones & Babson, Inc. during the most
recent fiscal year ended June 30, 1995,
from which Jones & Babson, Inc. paid all
the Fund's expenses except those payable
directly by the Fund, was $436,670. The
.85% annual fee charged by Jones &
Babson, Inc. covers all normal operating
costs of the Fund. As a result, it is higher
than the fees of some other advisers
whose charges cover only investment
advisory services with all remaining
operational expenses absorbed directly by
the Fund. Yet, Jones & Babson's charges
compare favorably with those other
advisors when all expenses to Fund
shareholders (i.e., operating expenses as a
percent of average net assets) are taken
into account.
David L. Babson & Co. Inc. has an
experienced investment analysis and
research staff which eliminates the need
for Jones & Babson, Inc. and the Fund to
maintain an extensive duplicate staff, with
the consequent increase in the cost of
investment advisory service. The cost of
the services of David L. Babson & Co.
Inc. is included in the services of Jones &
Babson, Inc. For its investment
supervisory services and counsel, Jones &
Babson, Inc. pays David L. Babson &
Co. Inc. a fee computed on an annual
basis at the rate of 20/100 (.20%) of the
average daily total net assets of the Fund.
During the most recent fiscal year ended
June 30, 1995, Jones & Babson, Inc.
paid David L. Babson & Co. Inc. fees
amounting to $102,724.
HOW SHARE PRICE IS
DETERMINED
The net asset value per share of each
Fund Portfolio is computed once daily,
Monday through Friday, at the specific
time during the day that the Board of
Directors of each Fund sets at least
annually, except on days on which
changes in the value of a Fund's portfolio
securities will not materially affect the net
asset value, or days during which no
security is tendered for redemption and
no order to purchase or sell such security
is received by the Fund, or the following
holidays:
New Year's Day January 1
Martin Luther Third Monday
King Day in January
Presidents' Holiday Third Monday
in February
Good Friday Friday before
Easter
Memorial Day Last Monday in
May
Independence Day July 4
Labor Day First Monday
in September
Columbus Day Second Monday
in October
Veterans' Day November 11
Thanksgiving Day Fourth Thursday
in November
Christmas Day December 25
OFFICERS AND DIRECTORS
The Fund is managed by Jones &
Babson, Inc. subject to the supervision
and control of the Board of Directors.
the following table lists the Officers and
Directors of the Fund. Unless noted
otherwise, the address of each Officer and
Director is Three Crown Center, 2440
Pershing Road, Suite G-15, Kansas City,
Missouri 64108. Except as indicated,
each has been an employee of Jones &
Babson, Inc. for more than five years.
* Larry D. Armel, President and
Director.
President and Director, Jones & Babson,
Inc., David L. Babson Growth Fund, Inc.,
D. L. Babson Tax-Free Income Fund,
Inc., Babson Enterprise Fund, Inc.,
Babson Enterprise Fund II, Inc., Babson
Value Fund, Inc., Shadow Stock Fund,
Inc., Babson-Stewart Ivory International
Fund, Inc., Scout Stock Fund, Inc., Scout
Bond Fund, Inc., Scout Money Market
Fund, Inc., Scout Tax-Free Money
Market Fund, Inc., Scout Regional Fund,
Inc., Scout WorldWide Fund, Inc.,
Buffalo Balanced Fund, Inc., Buffalo
Equity Fund, Inc., Buffalo High Yield
Fund, Inc., Buffalo USA Global Fund,
Inc.; President and Trustee, D. L. Babson
Bond Trust.
Francis C. Rood, Director.
Retired, 6429 West 92nd Street,
Overland Park, Kansas 66212. Formerly,
Group Vice President-Administration of
Hallmark Cards, Inc.; Director, David L.
Babson Growth Fund, Inc., D.L. Babson
Tax-Free Income Fund, Inc., Babson
Enterprise Fund, Inc., Babson Enterprise
Fund II, Inc., Babson Value Fund, Inc.,
Shadow Stock Fund, Inc., Buffalo
Balanced Fund, Inc., Buffalo Equity
Fund, Inc., Buffalo High Yield Fund, Inc.,
Buffalo USA Global Fund, Inc.; Trustee,
D.L. Babson Bond Trust.
William H. Russell, Director.
Financial Consultant, 645 West 67th
Street, Kansas City, Missouri 64113,
previously Vice President, United
Telecommunications, Inc.; Director,
David L. Babson Growth Fund, Inc.,
D.L. Babson Tax-Free Income Fund,
Inc., Babson Enterprise Fund, Inc.,
Babson Enterprise Fund II, Inc., Babson
Value Fund, Inc., Shadow Stock Fund,
Inc., Babson-Stewart Ivory International
Fund, Inc., Buffalo Balanced Fund, Inc.,
Buffalo Equity Fund, Inc., Buffalo High
Yield Fund, Inc., Buffalo USA Global
Fund, Inc.; Trustee, D. L. Babson Bond
Trust.
_________________________________
* Directors who are interested persons as
that term is defined in the Investment
Company Act of 1940, as amended.
H. David Rybolt, Director.
Consultant, HDR Associates, P.O. Box
2468, Shawnee Mission, Kansas 66202;
Director, David L. Babson Growth Fund,
Inc., D.L. Babson Tax-Free Income
Fund, Inc., Babson Enterprise Fund, Inc.,
Babson Enterprise Fund II, Inc., Babson
Value Fund, Inc., Shadow Stock Fund,
Inc., Buffalo Balanced Fund, Inc., Buffalo
Equity Fund, Inc., Buffalo High Yield
Fund, Inc., Buffalo USA Global Fund,
Inc.; Trustee, D.L. Babson Bond Trust.
P. Bradley Adams, Vice President and
Treasurer.
Vice President and Treasurer, Jones &
Babson, Inc., David L. Babson Growth
Fund, Inc., D.L. Babson Tax-Free
Income Fund, Inc., Babson Enterprise
Fund, Inc., Babson Enterprise Fund II,
Inc., Babson Value Fund, Inc., Shadow
Stock Fund, Inc., Babson-Stewart Ivory
International Fund, Inc., D.L. Babson
Bond Trust, Scout Stock Fund, Inc.,
Scout Bond Fund, Inc., Scout Money
Market Fund, Inc., Scout Tax-Free
Money Market Fund, Inc., Scout
Regional Fund, Inc., Scout WorldWide
Fund, Inc., Buffalo Balanced Fund, Inc.,
Buffalo Equity Fund, Inc., Buffalo High
Yield Fund, Inc., Buffalo USA Global
Fund, Inc.
Michael A. Brummel, Vice President,
Assistant Secretary and Assistant
Treasurer.
Vice President, Jones & Babson, Inc.,
David L. Babson Growth Fund, Inc.,
D.L. Babson Tax-Free Income Fund,
Inc., Babson Enterprise Fund, Inc.,
Babson Enterprise Fund II, Inc., Babson
Value Fund, Inc., Shadow Stock Fund,
Inc., Babson-Stewart Ivory International
Fund, Inc., D.L. Babson Bond Trust,
Scout Stock Fund, Inc., Scout Bond
Fund, Inc., Scout Money Market Fund,
Inc., Scout Tax-Free Money Market
Fund, Inc., Scout Regional Fund, Inc.,
Scout WorldWide Fund, Inc., Buffalo
Balanced Fund, Inc., Buffalo Equity
Fund, Inc., Buffalo High Yield Fund, Inc.,
Buffalo USA Global Fund, Inc.
Martin A. Cramer, Vice President and
Secretary.
Vice President and Secretary, Jones &
Babson, Inc., David L. Babson Growth
Fund, Inc., D.L. Babson Tax-Free
Income Fund, Inc., Babson Enterprise
Fund, Inc., Babson Enterprise Fund II,
Inc., Babson Value Fund, Inc., Shadow
Stock Fund, Inc., Babson-Stewart Ivory
International Fund, Inc., D.L. Babson
Bond Trust, Scout Stock Fund, Inc.,
Scout Bond Fund, Inc., Scout Money
Market Fund, Inc., Scout Tax-Free
Money Market Fund, Inc., Scout
Regional Fund, Inc., Scout WorldWide
Fund, Inc., Buffalo Balanced Fund, Inc.,
Buffalo Equity Fund, Inc., Buffalo High
Yield Fund, Inc., Buffalo USA Global
Fund, Inc.
Edward L. Martin, Vice President.
Executive Vice President and Director,
David L. Babson & Co. Inc., One
Memorial Drive, Cambridge,
Massachusetts 02142; Vice President, D.
L. Babson Tax-Free Income Fund, Inc.,
D. L. Babson Bond Trust.
None of the officers or directors will be
remunerated by the Fund for their normal
duties and services. Their compensation
and expenses arising out of normal
operations will be paid by Jones &
Babson, Inc. under the provisions of the
Management Agreement.
Messrs. Rood, Russell and Rybolt have
no financial interest in, nor are they
affiliated with, either Jones & Babson,
Inc. or David L. Babson & Co. Inc.
The Audit Committee of the Board of
Directors is composed of Messrs. Rood,
Russell and Rybolt.
The Officers and Directors of the Fund
as a group own less than 1% of the Fund.
The Fund will not hold annual meetings
except as required by the Investment
Company Act of 1940 and other
applicable laws. The Fund is a Maryland
corporation. Under Maryland law, a
special meeting of stockholders of the
Fund must be held if the Fund receives
the written request for a meeting from the
stockholders entitled to cast at least 25
percent of all the votes entitled to be cast
at the meeting. The Fund has undertaken
that its Directors will call a meeting of
stockholders if such a meeting is
requested in writing by the holders of not
less than 10% of the outstanding shares
of the Fund. To the extent required by
the undertaking, the Fund will assist
shareholder communications in such
matters.
CUSTODIAN
The Fund's assets are held for
safekeeping by an independent custodian,
UMB Bank, n.a. This means the bank,
rather than the Fund, has possession of
the Fund's cash and securities. The
custodian bank is not responsible for the
Fund's investment management or
administration. But, as directed by the
Fund's officers, it delivers cash to those
who have sold securities to the Fund in
return for such securities, and to those
who have purchased securities from the
Fund, it delivers such securities in return
for their cash purchase price. It also
collects income directly from issuers of
securities owned by the Fund and holds
this for payment to shareholders after
deduction of the Fund's expenses. The
custodian is compensated for its services
by the manager. There is no charge to
the Fund.
INDEPENDENT PUBLIC
ACCOUNTANTS
The Fund's financial statements are
examined annually by independent public
accountants approved by the directors
each year, and in years in which an annual
meeting is held the directors may submit
their selection of independent public
accountants to the shareholders for
ratification. Arthur Andersen LLP, P.O.
Box 13406, Kansas City, Missouri 64199,
is the Fund's present independent public
accountant.
Reports to shareholders will be
published at least semiannually.
OTHER JONES & BABSON FUNDS
The Fund is one of nine no-load funds
comprising the Babson Mutual Fund
Group managed by Jones & Babson, Inc.
in association with its investment counsel,
David L. Babson & Co. Inc. The other
funds are:
EQUITY FUNDS
DAVID L. BABSON GROWTH
FUND, INC. was organized in 1960
with the objective of long-term growth
of both capital and dividend income
through investment in the common
stocks of well-managed companies
which have a record of long-term
above-average growth of both earnings
and dividends.
BABSON ENTERPRISE FUND,
INC. was organized in 1983 with the
objective of long-term growth of capital
by investing in a diversified portfolio of
common stocks of smaller, faster-
growing companies with market capital
of $15 million to $300 million at the
time of purchase. This Fund is intended
to be an investment vehicle for that part
of an investor's capital which can
appropriately be exposed to above-
average risk in anticipation of greater
rewards. This Fund is currently closed
to new shareholders.
BABSON ENTERPRISE FUND II,
INC. was organized in 1991 with the
objective of long-term growth of capital
by investing in a diversified portfolio of
common stocks of smaller, faster-
growing companies which at the time of
purchase are considered by the
Investment Adviser to be realistically
valued in the smaller company sector of
the market. This Fund is intended to be
an investment vehicle for that part of an
investor's capital which can
appropriately be exposed to above-
average risk in anticipation of greater
rewards.
BABSON VALUE FUND, INC. was
organized in 1984 with the objective of
long-term growth of capital and income
by investing in a diversified portfolio of
common stocks which are considered to
be undervalued in relation to earnings,
dividends and/or assets.
SHADOW STOCK FUND, INC. was
organized in 1987 with the objective of
long-term growth of capital that can be
exposed to above-average risk in
anticipation of greater-than-average
rewards. The Fund expects to reach its
objective by investing in small company
stocks called "Shadow Stocks", i.e.,
stocks that combine the characteristics
of "small stocks" (as ranked by market
capitalization) and "neglected stocks"
(least held by institutions and least
covered by analysts).
BABSON-STEWART IVORY
INTERNA-TIONAL FUND, INC.
was organized in 1987 with the
objective of seeking a favorable total
return (from market appreciation and
income) by investing primarily in a
diversified portfolio of equity securities
(common stocks and securities
convertible into common stocks) of
established companies whose primary
business is carried on outside the
United States.
FIXED INCOME FUNDS
D.L. BABSON BOND TRUST was
organized in 1944, and has been
managed by Jones & Babson, Inc. since
1972, with the objective of a high level
of current income and reasonable
stability of principal. It offers two
portfolios - Portfolio L and Portfolio S.
D. L. BABSON TAX-FREE
INCOME FUND, INC. was organized
in 1979 to provide shareholders the
highest level of regular income exempt
from federal income taxes consistent
with investing in quality municipal
securities. It offers three separate high-
quality portfolios (including a money
market portfolio) which vary as to
average length of maturity. Income
from the Tax-Free Money Market
portfolio may be subject to state and
local taxes, as well as the Alternative
Minimum Tax.
A prospectus for any of the Funds may
be obtained from Jones & Babson, Inc.,
Three Crown Center, 2440 Pershing
Road, Suite G-15, Kansas City, Missouri
64108.
Jones & Babson, Inc. also sponsors and
manages six mutual funds which
especially seek to provide services to
customers of affiliate banks of UMB
Financial Corporation. They are Scout
Stock Fund, Inc., Scout Bond Fund, Inc.,
Scout Money Market Fund, Inc., Scout
Tax-Free Money Market Fund, Inc.,
Scout Regional Fund, Inc. and Scout
WorldWide Fund, Inc.
Jones & Babson, Inc. also sponsors and
manages the Buffalo Group of Mutual
Funds. They are: Buffalo Balanced Fund,
Inc., Buffalo Equity Fund, Inc., Buffalo
High Yield Fund, Inc. and Buffalo USA
Global Fund, Inc.
MONEY MARKET SECURITIES
DESCRIBED AND RATINGS
In evaluating investment suitability,
each investor must relate the
characteristics of a particular investment
under consideration to personal financial
circumstances and goals.
Money market instruments are generally
described as short-term debt obligations
issued by governments, corporations and
financial institutions. Usually maturities
are one year or less.
The yield from this type of instrument is
very sensitive to short-term lending
conditions. Thus, the income of the Fund
will follow closely the trend of short-term
interest rates, rising when those rates
increase and declining when they fall.
Because of the short maturities,
fluctuation in the principal value of
money market-type securities resulting
from changes in short-term interest rates
normally will not be sufficient to change
the net asset value (price) per share.
Although the Fund's shareholders can
anticipate that this principal value stability
will be reflected in the price of the Fund's
shares, it cannot be guaranteed.
A money market security does not have
the characteristics usually associated with
a long-term investment. Long-term
investors who commit their assets to a
money market security must understand
that short-term interest rates have a
history of sharp and frequent peaks and
valleys. Thus, there may be occasions
when the rates are sufficiently low as to
be unattractive when compared to the
return on other types of investments. The
investor who commits long-term funds to
a short-term investment is exposed to the
risks associated with buying and selling
securities in anticipation of unpredictable
future market events.
Description of Bond Ratings:
Standard & Poor's Corporation
(S&P) . . . AAA - Highest Grade.
These securities possess the ultimate
degree of protection as to principal and
interest. Marketwise, they move with
interest rates, and hence provide the
maximum safety on all counts.
AA - High Grade. Generally, these
bonds differ from AAA issues only in a
small degree. Here too, prices move with
the long-term money market.
A - Upper-medium Grade. They have
considerable investment strength, but are
not entirely free from adverse effects of
changes in economic and trade
conditions. Interest and principal are
regarded as safe. They predominately
reflect money rates in their market
behavior but, to some extent, also
economic conditions.
Moody's Investors Service, Inc.
(Moody's) . Aaa - Best Quality. These
securities carry the smallest degree of
investment risk and are generally referred
to as "gilt-edge." Interest payments are
protected by a large, or by an
exceptionally stable margin, and principal
is secure. While the various protective
elements are likely to change, such
changes as can be visualized are most
unlikely to impair the fundamentally
strong position of such issues.
Aa - High Quality by All Standards.
They are rated lower than the best bonds
because margins of protection may not be
as large as in Aaa securities, fluctuation
of protective elements may be of greater
amplitude, or there may be other elements
present which make the long-term risks
appear somewhat greater.
A - Upper-medium Grade. Factors
giving security to principal and interest
are considered adequate, but elements
may be present which suggest a
susceptibility to impairment sometime in
the future.
Description of Commercial Paper
Ratings:
Moody's . . . Moody's commercial
paper rating is an opinion of the ability of
an issuer to repay punctually promissory
obligations not having an original
maturity in excess of nine months.
Moody's has one rating - prime. Every
such prime rating means Moody's believes
that the commercial paper note will be
redeemed as agreed. Within this single
rating category are the following
classifications:
Prime - 1 Highest Quality
Prime - 2 Higher Quality
Prime - 3 High Quality
The criteria used by Moody's for rating
a commercial paper issuer under this
graded system include, but are not limited
to the following factors:
(1) evaluation of the management of the
issuer;
(2) economic evaluation of the issuer's
industry or industries and an appraisal
of speculative type risks which may
be inherent in certain areas;
(3) evaluation of the issuer's products in
relation to competition and customer
acceptance;
(4) liquidity;
(5) amount and quality of long-term debt;
(6) trend of earnings over a period of ten
years;
(7) financial strength of a parent company
and relationships which exist with the
issuer; and
(8) recognition by the management of
obligations which may be present or
may arise as a result of public interest
questions and preparations to meet
such obligations.
S&P . . . Standard & Poor's
commercial paper rating is a current
assessment of the likelihood of timely
repayment of debt having an original
maturity of no more than 270 days.
Ratings are graded into four categories,
ranging from "A" for the highest quality
obligations to "D" for the lowest. The
four categories are as follows:
"A" Issues assigned this highest rating
are regarded as having the greatest
capacity for timely payment. Issues
in this category are further refined
with the designations 1, 2, and 3 to
indicate the relative degree of
safety.
"A-1" This designation indicates
that the degree of safety
regarding timely payment is
very strong.
"A-2" Capacity for timely payment
on issues with this
designation is strong.
However, the relative
degree of safety is not as
overwhelming.
"A-3" Issues carrying this
designation have a
satisfactory capacity for
timely payment. They are,
however, somewhat more
vulnerable to the adverse
effects of changes in
circumstances than
obligations carrying the
higher designations.
"B" Issues rated "B" are regarded as
having only an adequate capacity
for timely payment. Furthermore,
such capacity may be damaged by
changing conditions or short-term
adversities.
"C" This rating is assigned to short-term
debt obligations with a doubtful
capacity for payment.
"D" This rating indicates that the issuer
is either in default or is expected to
be in default upon maturity.
FINANCIAL STATEMENTS
The audited financial statements of the
Fund which are contained in the June 30,
1995 Annual Report to Shareholders, are
incorporated herein by reference.
<PAGE>
PART C
OTHER INFORMATION
Item 24. FINANCIAL STATEMENTS AND EXHIBITS.
Herewith are all financial statements and exhibits filed as
a part of this registration statement:
(a) Financial Statements:
Included in Part A - Prospectus:
Per Share Capital and Income Changes
Included in Part B - Statement of Additional Information:
The audited financial statements contained in the
most recent Annual Report to Shareholders of D. L.
Babson Money Market Fund, Inc., are incorporated by
reference into Part B. of this Registration
Statement.
Included in Part C - Other Information:
Consents of Independent Public Accountants
Arthur Andersen & Co.
(b) *(1) Registrant s Articles of Incorporation.
*(2) Registrant s Bylaws.
(3) Not applicable, because there is no voting
trust agreement.
*(4) Specimen copy of each security to be issued by
the registrant.
*(5) (a) Form of Management Agreement between
Jones & Babson, Inc. and the Registrant.
(b) Form of Investment Counsel Agreement
between Jones & Babson, Inc. and Babson-
Stewart Ivory International.
*(6) Form of principal Underwriting Agreement
between Jones & Babson, Inc. and the
Registrant.
(7) Not applicable, because there are no pension,
bonus or other agreements for the benefit of
directors and officers.
*(8) Form of Custodian Agreement between Registrant
and United Missouri Bank of Kansas City, N. A.
(9) There are no other material contracts not made
in the ordinary course of business between the
Registrant and others.
(10) Opinion and consent of counsel as to the
legality of the registrant s securities being
registered. (To be supplied annually pursuant
to Rule 24f-2 of the Investment Company Act of
1940.)
(11) The consent of Arthur Andersen & Co.,
Independent Public Accountants.
(To be supplied by further amendment)
(12) Not applicable.
*(13) Letter from contributors of initial capital to
the Registrant that purchase was made for
investment purposes without any present
intention of redeeming or selling.
*(14) Copies of the model plan used in the establishment
of any retirement plan in conjunction with which
Registrant offers its securities.
(15) Not applicable.
*(16) Schedule for computation of performance
quotations.
*(17) Copies of Powers of Attorney pursuant to Rule
402(c).
*Previously filed and incorporated herein by reference.
Item 25. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL OF THE
REGISTRANT.
NONE
Item 26. NUMBER OF HOLDERS OF SECURITIES.
The number of record holders of each class of securities of
the Registrant as of October 20, 1995, is as follows:
(1) (2)
Title of class Number of Record Holders
Common Stock $0.01 par value 604
Federal Portfolio
Common Stock $0.01 par value 2,562
Prime Portfolio
Item 27. INDEMNIFICATION.
Under the terms of the Maryland General Corporation Law and
the company s By-laws, the company shall indemnify any
person who was or is a director, officer, or employee of the
company to the maximum extent permitted by the Maryland
General Corporation Law; provided however, that any such
indemnification (unless ordered by a court) shall be made by
the company only as authorized in the specific case upon a
determination that indemnification of such persons is proper
in the circumstances. Such determination shall be made
(i) by the Board of Directors by a majority vote of a
quorum which consists of the directors who are neither
interested persons of the company as defined in
Section 2(a)(19) of the 1940 Act, nor parties to the
proceedings, or
(ii) if the required quorum is not obtainable or if a quorum
of such directors so directs, by independent legal
counsel in a written opinion.
No indemnification will be provided by the company to any
director or officer of the company for any liability to the
company or shareholders to which he would otherwise be
subject by reason of willful misfeasance, bad faith, gross
negligence, or reckless disregard of duty.
Item 28. BUSINESS AND OTHER CONNECTIONS OF INVESTMENT ADVISOR.
The principal business of Jones & Babson, Inc. is the
management of the Babson family of mutual funds. It also
has expertise in the tax and pension plan field. It
supervises a number of prototype and profit-sharing plan
programs sponsored by various organizations eligible to be
prototype plan sponsors.
The principal business of David L. Babson & Co., Inc. is to
provide investment counsel and advice to a wide variety of
clients. It supervises assets in excess of $3,000,000,000.
Item 29. PRINCIPAL UNDERWRITERS.
(a) Jones & Babson, Inc., the only principal underwriter of
the Registrant, also acts as principal underwriter for
the David L. Babson Growth Fund, Inc., Babson
Enterprise Fund, Inc., Babson Value Fund, Inc., D.L.
Babson Tax-Free Income Fund, Inc., D.L. Babson Bond
Trust, Shadow Stock Fund, Inc., Babson-Stewart Ivory
International Fund, Inc., UMB Stock Fund, Inc., UMB
Bond Fund, Inc., UMB Money Market Fund, Inc., UMB
Tax-Free Money Market Fund, Inc. and UMB Qualified
Dividend Fund, Inc.
(b) Herewith is the information required by the following
table with respect to each director, officer or partner
of the only underwriter named in answer to Item 21 of
Part B:
Name and Principal Position and Offices Positions and Offices
_Business Address_ __with Underwriter__ ___with Registrant___
Stephen S. Soden Chairman and Director None
BMA Tower
One Penn Valley Park
Kansas City, MO 64141
Larry D. Armel President and Director President and
Three Crown Center Director
2440 Pershing Road
Kansas City, MO 64108
Giorgio Balzer Director None
BMA Tower
One Penn Valley Park
Kansas City, MO 64141
J. William Sayler Director None
BMA Tower
One Penn Valley Park
Kansas City, MO 64141
Edward S. Ritter Director None
BMA Tower
One Penn Valley Park
Kansas City, MO 64141
Robert N. Sawyer Director None
BMA Tower
One Penn Valley Park
Kansas City, MO 64141
Vernon W. Voorhees Director None
BMA Tower
One Penn Valley Park
Kansas City, MO 64141
P. Bradley Adams Vice President Vice President
Three Crown Center and Treasurer and Treasurer
2440 Pershing Road, G-15
Kanasas City, Missouri 64108
Michael A Brummel Vice President Vice President
Three Crown Center
2440 Pershing Road, G-15
Kanasas City, Missouri 64108
Martin A. Cramer Vice President Vice President
Three Crown Center and Secretary and Secretary
2440 Pershing Road, G-15
Kanasas City, Missouri 64108
(c) The principal underwriter does not receive any
remuneration or compansation for the duties or services
rendered to the Registrant pursuant to the principal
underwriting Agreement.
Item 30. LOCATION OF ACCOUNTS AND RECORDS.
Each account, book or other document 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 is in the
physical possession of Jones & Babson, Inc., at Three Crown
Center, 2440 Pershing Road, G-15, Kansas City, Missouri
64108.
Item 31. MANAGEMENT SERVICES.
All management services are covered in the management
agreement between the Registrant and Jones & Babson, Inc.,
which are discussed in Parts A and B.
Item 32. DISTRIBUTION EXPENSES.
Not applicable.
Item 33. UNDERTAKINGS.
<PAGE>
Pursuant to the requirements of the Securities Act of 1933 and the Investment
Company Act of 1940, the Registrant certifies that it meets all of the
requirements for effectiveness of this Registration Statement pursuant to Rule
485(b) under the Securities Act of 1933 and has duly caused this amendment to
its registration statement to be signed on its behalf by the undersigned,
thereunto authorized, in the City of Kansas City, and State of Missouri on the
26th day of October, 1995.
D. L. BABSON MONEY MARKET FUND, INC.
(Registrant)
By Larry D. Armel
(Larry D. Armel, President)
Pursuant to the requirements of the Securities Act of 1933, this
Post-effective Amendment #22 to the Registration Statement has been signed
below by the following persons in the capacities and on the date indicated.
Larry D. Armel President, Principal October 26, 1995
Larry D. Armel Executive Officer, and Director
H. David Rybolt Director October 26, 1995
H. David Rybolt*
William H. Russell Director October 26, 1995
William H. Russell*
Francis C. Rood Director October 26, 1995
Francis C. Rood*
P. Bradley Adams Treasurer and Principal October 26, 1995
P. Bradley Adams Financial and Accounting Officer
*Signed pursuant to Power of Attorney
By Larry D. Armel
Attorney-in Fact
REPRESENTATIONS OF COUNSEL
I assisted in the preparation of this Post Effective Amendment to the Fund's
Registration Statement filed under the Securities Act of 1933 and the
Amendment to the Fund's Registration Statement filed under the Investment
Company Act of 1940. Based on my review it is my opinion that this amendment
does not contain disclosures which would render it ineligible to become
effective pursuant to paragraph (b) of Rule 485 under the Securities Act of
1933.
John G. Dyer Attorney October 26, 1995
John G. Dyer
ARTHUR ANDERSEN LLP
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation
by reference of our report dated August 4, 1995, included in the D. L.
Babson Money Market Fund, Inc.'s Annual Report for the year ended
June 30, 1995 (and all references to our Firm) included in or made a
part of this Post-effective Amendment No. 22 to the Registration Statement
File No. 2-79132 under the Securities Act of 1933 and Amendment No. 24 to
the Registration Statement File No. 811-3558 under the Investment Company
Act of 1940 on Form N-1A.
Arthur Andersen LLP
Kansas City, Missouri,
October 25, 1995
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</TABLE>
