<PAGE> 1
SUPPLEMENT DATED JUNE 21, 1995
(REPLACING THE SUPPLEMENT DATED JUNE 12, 1995)
TO THE PROSPECTUS OF QUALITY CASH RESERVE PRIME SHARES
(A CLASS OF ALEX. BROWN CASH RESERVE FUND, INC.)
DATED AUGUST 1, 1994
The disclosure contained within the Prospectus of Quality Cash Reserve
Prime Shares dated August 1, 1994, is amended and supplemented by the
following:
VOLUNTARY WAIVER OF 12B-1 FEES
Effective August 1, 1995, the "Table of Fees and Expenses" and "Management
of the Fund -- Distributor" will be amended by the following:
Alex. Brown currently intends to reduce its annual 12b-1 Fee, on a
voluntary basis, to .53% of the Quality Cash Reserve Prime Shares' average
net assets. Accordingly, effective August 1, 1995, the "Annual Fund Operating
Expenses" and "Example" appearing on page 2 of the Prospectus will be
restated as follows to reflect this reduction:
ANNUAL FUND OPERATING EXPENSES (AS A PERCENTAGE OF AVERAGE NET ASSETS) (AFTER
FEE WAIVERS)
<TABLE>
<CAPTION>
<S> <C>
Management Fees ...................................... .21%
12b-1 Fees (after fee waivers) ....................... .53%*
Other Expenses ....................................... .15%
---------
Total Fund Operating Expenses (after fee waivers) .... .89%*
=========
</TABLE>
- ------
* Absent fee waivers, 12b-1 Fees would be .60% and Total Fund Operating
Expenses would be .96% of the average net assets of the Quality Cash
Reserve Prime Shares.
EXAMPLE OF QUALITY CASH RESERVE PRIME SHARES EXPENSES
The following is an illustration of the total transaction and operating
expenses that an investor in Quality Cash Reserve Prime Shares would bear
over different periods of time, assuming a hypothetical investment of $1,000,
a 5% annual return and redemption at the end of each time period*:
<TABLE>
<CAPTION>
<S> <C>
1 year. .............................................. $ 9
3 years .............................................. $ 29
5 years .............................................. $ 50
10 years .............................................. $115
</TABLE>
- ------
* Absent fee waivers for the one, three, five and ten year periods, expenses
would be $10, $31, $54 and $124, respectively.
PROPOSED INCREASE IN INVESTMENT ADVISORY FEE
On June 1, 1995, the Fund's Board of Directors approved, subject to
shareholder approval, a proposal to increase the investment advisory fee
payable by the Fund, on behalf of each Series, to Investment Company Capital
Corp. ("ICC").
The matter will be submitted to shareholders of each of the Fund's Series at
a meeting scheduled for July 25, 1995. Shareholders of record of the Fund as of
the close of business on June 9, 1995 will be entitled to vote on the proposal
relating to their Series. If such proposals are approved, Management Fees and
Total Operating Expenses of each Series will increase, effective August 1, 1995,
and the "Annual Fund Operating Expenses" and "Example" appearing on page 2 of
the Prospectus will be restated as shown below (and replaces the amounts set
forth above under "WAIVER OF 12b-1 FEES").
<PAGE> 2
ANNUAL FUND OPERATING EXPENSES (AS A PERCENTAGE OF AVERAGE NET ASSETS) (AFTER
FEE WAIVERS)
<TABLE>
<CAPTION>
<S> <C>
Management Fees ...................................... .28%
12b-1 Fees (after fee waivers) ....................... .53%*
Other Expenses ....................................... .15%
---------
Total Fund Operating Expenses (after fee waivers) .... .96%*
=========
</TABLE>
- ------
* Absent fee waivers, 12b-1 Fees would be .60% and Total Fund Operating
Expenses would be 1.03% of the Quality Cash Reserve Prime Shares' average
net assets.
EXAMPLE OF QUALITY CASH RESERVE PRIME SHARES EXPENSES
The following is an illustration of the total transaction and operating
expenses that an investor in Quality Cash Reserve Prime Shares would bear
over different periods of time, assuming a hypothetical investment of $1,000,
a 5% annual return and redemption at the end of each time period*:
<TABLE>
<CAPTION>
<S> <C>
1 year .............................................. $ 10
3 years .............................................. $ 31
5 years .............................................. $ 54
10 years .............................................. $124
</TABLE>
- ------
* Absent fee waivers for the one, three, five and ten year periods, expenses
would be $11, $33, $58 and $133, respectively.
THIS EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR FUTURE
EXPENSES. ACTUAL EXPENSES MAY BE GREATER OR LESS THAN THOSE SHOWN.
In addition, the section entitled "Management of the Fund -- Investment
Advisor" will be amended as follows:
"As compensation for providing investment advisory services to the Fund,
ICC is entitled to receive a fee from the Fund, calculated daily and paid
monthly, at the annual rate of .30% of the first $500 million of the Fund's
aggregate average daily net assets, .26% of the next $500 million of the
Fund's aggregate average daily net assets, .25% of the next $500 million of
the Fund's aggregate average daily net assets, .24% of the next $1 billion of
the Fund's aggregate average daily net assets, .23% of the next $1 billion of
the Fund's aggregate average daily net assets and .22% of the Fund's
aggregate average daily net assets in excess of $3.5 billion. Each Series
pays its share of the foregoing fee in proportion to its relative net assets.
In addition, ICC is entitled to receive an additional fee with respect to the
Prime Series, calculated daily and paid monthly, at the annual rate of .02%
of the Prime Series' average daily net assets. ICC may, from time to time,
voluntarily waive a portion of its fee with respect to any Series to preserve
or enhance the performance of the Series."
