As Filed With The Securities And Exchange Commission on January 28, 1999.
File Nos. 2-52552 and 811-2539
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. 34 (X)
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 (X)
Amendment No. 23 (X)
FUND FOR GOVERNMENT INVESTORS
(Exact Name of Registrant as Specified in Charter)
4922 Fairmont Avenue, Bethesda, Maryland 20814
(Address of Principal Executive Offices) (Zip Code)
(301) 657-1500
(Registrant's Telephone Number, Including Area Code)
Timothy N. Coakley
4922 Fairmont Avenue
Bethesda, Maryland 20814
(Name and Address of Agent for Service of Process)
Approximate Date of Commencement of the Proposed Public Offering of the
Securities:
It is proposed that this filing will become effective (check appropriate box):
_____ immediately upon filing pursuant to paragraph (b) of rule 485.
_____ on (date) pursuant to paragraph (b) (1) (v) of rule 485.
_____ 60 days after filing pursuant to paragraph (a) (1) of rule 485.
__X__ on May 1, 1999 pursuant to paragraph (a) (1) of rule 485.
_____ 75 days after filing pursuant to paragraph (a) (2) of rule 485.
_____ on (date) pursuant to paragraph (a) (2) of rule 485.
<PAGE>
FUND FOR GOVERNMENT INVESTORS
REGISTRATION STATEMENT ON FORM N-1A
CROSS REFERENCE SHEET
Form N-1A Location in
Item No. Registration Statement
Part A. Information Required in Prospectus
1. Front and Back Cover Pages Front Cover Page of Prospectus;
Back Cover Page of Prospectus
2. Risk/Return Summary Risk and Return Summary
3. Risk/Return Summary: Fee Risk/Return Bar Chart and Table;
Table Performance Table; Fees and
Expenses
4. Investment Objectives, Investment Objectives, Principal
Principal Investment Investment Strategies, and
Strategies, and Related Risks Related Risks
5. Management's Discussion of Management Discussion of Fund
Fund Performance Performance: Performance
Comparison
6. Management, Organization, and Management, Organization, and
Capital Structure Capital Structure: Investment
Adviser; Year 2000 Preparations
7. Shareholder Information Shareholder Information: How to
Invest in the Fund; How to
Redeem Your Investment;
Additional Information About the
Fund: Exchanging Fund Shares;
Pricing of Fund Shares;
Dividends and Distributions; Tax
Consequences of Investing in the
Fund
8. Distribution Arrangements Not Applicable
9. Financial Highlights Financial Highlights
Information
Part B: Information Required In
Statement of Additional Information
10. Cover Page and Table of Cover Page and Table of Contents
Contents
11. Fund History Not Applicable
12. Description of the Fund and Fund Description, Investments,
Its Investments and Risks and Risks; Investment
Limitations
13. Management of the Fund Management of the Fund
14. Control Persons and Principal Control Persons and Principal
Holders of Securities Holders of Securities
15. Investment Advisory and Other Investment Advisory and Other
Services Services: Investment Adviser;
Custodian and Independent Public
Accountant
16. Brokerage Allocation and Other Brokerage Allocation and Other
Practices Practices
17. Capital Stock and Other Not Applicable
Securities
<PAGE>
Form N-1A Location in
Item No. Registration Statement
18. Purchase, Redemption and Purchase and Redemption of
Pricing of Shares Shares
19. Taxation of the Fund Taxation of the Fund
20. Underwriters Not Applicable
21. Calculation of Performance Calculation of Performance Data:
Data Average Annual Total Return
Quotation; Computation of Yield
22. Financial Statements Financial Statements
Part C: Other Information
23. Exhibits Exhibits
24. Persons Controlled by or Under Persons Controlled by or Under
Common Control with the Fund Common Control with the Fund
25. Indemnification Indemnification
26. Business and Other Connections Business and Other Connections
of Investment Adviser of Investment Adviser
27. Principal Underwriters Not Applicable
28. Location of Accounts and Location of Accounts and Records
Records
29. Management Services Not Applicable
32. Undertakings Not Applicable
Signatures Signatures
<PAGE>
PART A
<PAGE>
FUND for GOVERNMENT INVESTORS
A Money Market Fund
Prospectus
May 1, 1999
Fund for Government Investors (the "Fund") is a money market fund that
invests in short-term U.S. Government securities. The Fund seeks
current income consistent with liquidity and preservation of capital.
This Prospectus contains important information about the Fund and
should be read before investing. Please keep the Prospectus on file
for future reference.
Neither the Securities and Exchange Commission nor any state
securities commission has approved or disapproved of these securities
or passed upon the accuracy or adequacy of this Prospectus. Any
representation to the contrary is a criminal offense.
<PAGE>
TABLE of CONTENTS
Page
Risk and Return Summary:
Investments, Risks, and Performance
Risk/Return Bar Chart and Table
Performance Table
Fees and Expenses
Investment Objectives, Principal Investment
Strategies, and Related Risks
Management's Discussion of Fund Performance
Performance Comparison
Shareholder Information
How to Invest in the Fund
How to Redeem Your Investment
Additional Information About the Fund
Exchanging Fund Shares
Pricing of Fund Shares
Dividends and Distributions
Tax Consequences of Investing in the Fund
Management, Organization, and Capital
Structure
Investment Adviser
Year 2000 Preparations
Financial Highlights
3
<PAGE>
RISK and RETURN SUMMARY
Investments, Risks, and Performance
Fund Investment Objective
Fund for Government Investors seeks current income consistent with
liquidity and preservation of capital.
Principal Fund Investment Strategy
In attempting to achieve this objective, the Fund invests in short-
term United States Government securities, including U.S. Treasury
bills, U.S. Treasury notes, and U.S. Treasury bonds that mature within
one year.
Principal Risks of Investing in the Fund
The Fund's income, which is paid monthly, fluctuates daily as
investments in the Fund's portfolio mature and are replaced with new
investments bearing current interest rates. The U.S. Government does
not guarantee the market value or the current yield of government
securities, and although the Fund seeks to preserve the value of your
investment at $1.00 per share, it is possible to lose money by
investing in the Fund
An investment in the Fund is not a deposit or obligation of any bank
nor is it insured or guaranteed by the Federal Deposit Insurance
Corporation or any other government agency.
Risk/Return Bar Chart and Table
The chart and table below shows the annual calendar-year returns and
the performance of the Fund. The Fund commenced operations on
February 14, 1975, and has a fiscal year-end of December 31. The
information in the chart and the table provides some indication of the
risks of investing in the Fund by showing changes in Fund performance
from year to year.
The chart and the table below assume the reinvestment of dividends and
distributions. Please keep in mind that how the Fund has performed in
the past does not necessarily indicate how the Fund will perform in
the future.
[Deleted Bar Chart]
<TABLE>
<CAPTION>
Annual Total Return Chart
<C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
8.5% 7.4% 5.4% 3.0% 2.4% 3.4% 5.0% 4.5% 4.5%
1989 1990 1991 1992 1993 1994 1995 1996 1997 1998
</TABLE>
Notes to Annual Total Return Chart:
1. The Fund's year-to-date total return for the most-recent fiscal
quarter (ended March 31, 1999) was _____%.
2. The Fund's highest quarterly return was ______% in the _____
quarter of 19__ ; the Fund's lowest quarterly return of ______%
occurred in the _____ quarter of 19__.
4
<PAGE>
Performance Table
Average Annual Total Returns
(for Periods Ended December 31, 1998)
One Year 4.34%
Five Years 4.35%
Ten Years 4.82%
Yields
(as of December 31, 1998)
7-Day 3.61%
7-Day Effective 3.68%
For current yield information please call 1-800-622-1386
FEE TABLE
This tables describes the fees and expenses that you may pay if you
buy and hold shares of the Fund.
Annual Fund Operating Expenses
(expenses that are deducted from Fund assets)
Management Fees 0.50%
Other Expenses 0.25%
------
Total Annual Fund Operating Expenses 0.75%
=======
If your monthly account balance averages less than $500 you may be
charged a $5 fee.
Example
This Example is intended to help you compare the cost of investing in
the Fund with the cost of investing in other mutual funds.
The Example assumes that you invest $10,000 in the Fund for the time
periods indicated below and then redeem all of your shares at the end
of those periods. The Example also assumes that your investment has a
5% return each year, that all dividends are reinvested, and that the
Fund's operating expenses remain the same. Although your actual costs
may be higher or lower, based on these assumptions your costs would
be:
1 year 3 years 5 years 10 years
$ 77 $ 240 $ 417 $ 930
5
<PAGE>
INVESTMENT OBJECTIVES, PRINCIPAL
INVESTMENT STRATEGIES, and RELATED RISKS
Fund Investment Objective
Fund for Government Investors seeks current income consistent with
liquidity and preservation of capital.
Principal Investment Strategies
In attempting to achieve its objective, the Fund will invest at least
95% of its total assets in United States Treasury bills, notes and
bonds and in other U.S. Government securities with maturities of one
year or less.
In managing its portfolio, the Fund considers economic conditions and
interest rate trends in determining what securities to purchase. The
Fund will invest only in short-term securities issued or guaranteed by
the U.S. Government, federal agencies and government-sponsored
enterprises. The Fund also may purchase U.S. Government securities
under repurchase agreements from member banks of the Federal Reserve
system or primary dealers of U.S. Government securities (although the
Fund did not invest in repurchase agreements during the year and has
no intentions of doing so). The Fund may also lend portfolio
securities for the purpose of earning additional income.
Risks of Investing in the Fund
The Fund's income, which is paid monthly, fluctuates daily as
investments in the Fund's portfolio mature and are replaced with new
investments bearing current interest rates. The U.S. Government does
not guarantee the market value or the current yield of government
securities.
SHAREHOLDER INFORMATION
How to Invest In The Fund
Facts To Know Before You Invest:
- The minimum initial investment is $2,500
- Retirement accounts may be opened with a $500 minimum investment
- There are no minimum amounts for subsequent investments
- There are no sales charges
- The Fund reserves the right to reject any purchase order
- All shares are electronically recorded; the Fund will not issue
certificates
- A $10 fee may be charged for items returned for insufficient or
uncollectible funds
- The Government securities market, in which the Fund buys and sells
its securities, usually requires immediate settlement in Federal funds
for all transactions. Payments received by bank wire can be converted
immediately into Federal funds and will begin earning dividends the
same day provided the order was received prior to 12 Noon, Eastern
time. Payment for the purchase of Fund shares not received in the
form of Federal funds (i.e., by check) will normally begin earning
dividends within two business days.
Purchasing Shares:
By Mail
Complete an application and make a check payable to "Fund for
Government Investors." Send your completed and signed application
and check drawn on a U.S. bank to:
Fund for Government Investors
4922 Fairmont Avenue
Bethesda, Maryland 208l4
6
<PAGE>
By Bank Wire
Speak to the branch manager of your bank. Request a transfer of
Federal funds to Rushmore Trust and Savings, FSB, instructing the
bank to wire transfer the money before 12:00 Noon, Eastern time to:
Rushmore Trust and Savings, FSB
Bethesda, Maryland
Routing # 0550-71084
Specify the Fund name, your account number (if assigned), and the
name(s) in which the account is registered.
After instructing your bank to transfer Federal funds, you must
telephone Shareholder Services at (800) 622-1386 or (301) 657-1510
between 8:30 A.M. and 12:00 Noon Eastern time and tell us the
amount you transferred and the name of the bank sending the
transfer. Your bank may charge a fee for its services. Remember
that it is important to complete the wire transfer before 12:00
Noon Eastern time.
Through Brokers
You may invest in the Fund by purchasing shares through registered
broker-dealers, banks or other financial institutions that purchase
securities for their customers. Please note that such third
parties may charge a fee for their services.
How To Redeem Your Investment
Redeeming Shares:
By Telephone
Contact Shareholder Services at
1-800-622-1386
between the hours of 8:30 A.M. and 4:30 P.M., Eastern time
For your protection, we will take measures to verify your identity
by requiring some form of personal identification prior to acting
on telephone instructions and may also record telephone transactions.
A written confirmation will be mailed to you within five business
days after your redemption. Please note that we may terminate or
modify telephone redemption privileges upon 60 days notice.
By Mail or Fax
Mail your instructions for Fax your instructions for
redemption to: redemption to:
Rushmore Trust and Savings, FSB (301) 657-1520
4922 Fairmont Avenue Attn: Shareholder Services
Bethesda, MD 20814
Attn: Shareholder Services
Include the following information in your redemption request:
- the name of the Fund and account number you are redeeming from;
- your name(s) and address as it appears on your account;
- the dollar amount or number of shares you wish to redeem;
- your signature(s) as it appears on your account; and
- a daytime telephone number.
7
<PAGE>
Additional Information You Should Know When You Redeem:
- - There are no fees charged for redemptions.
- - You may receive redemption proceeds by bank wire, check, or through
the Automated Clearing House System (ACH). When the amount to be
redeemed is at least $5,000, we will, upon instruction, wire transfer
the amount to your commercial bank or brokerage account specified in
your account application. For amounts less than $5,000, you may have
redemption proceeds deposited directly into an account specified on
the account application or request that a redemption check be
delivered by mail to your address of record.
- - If you request payment of redemptions to a third party or to a
location other than an address on record, the request must be in
writing and your signature must be guaranteed by an eligible
institution (eligible institutions generally include banking
institutions, securities exchanges, associations, agencies or
broker/dealers, and "STAMP" program participants).
- - Normally, payment for all shares redeemed will be issued within one
business day. However, withdrawal requests on investments that have
been made by check may be delayed up to ten calendar days following
the investment or until the check clears, whichever occurs first. This
delay is necessary to assure us that investments made by check are
good funds. You will receive redemption proceeds promptly upon
confirmation of receipt of good funds.
- - If your monthly account balance averages less than $500 you may be
charged a $5 fee. The fee will not be imposed on tax-sheltered
retirement plans or accounts established under the Uniform Gifts or
Transfers to Minors Acts. Additionally, we reserve the right to
involuntarily redeem accounts which fall below $500 after providing 60
days written notice.
- - The right of redemption may be suspended, or the date of payment
postponed during the following periods: (a) periods during which the
New York Stock Exchange (NYSE) is closed (other than customary weekend
or holiday closings); (b) periods when trading on the NYSE is
restricted, or an emergency exists, as determined by the Securities
and Exchange Commission, so that disposal of the Fund's investments or
determination of net asset value is not reasonably practicable; or (c)
for such other periods as the Commission, by order, may permit for
protection of the Fund's investors.
ADDITIONAL INFORMATION ABOUT THE FUND
Exchanging Fund Shares
You may exchange shares of the Fund, without cost, for shares of any
of the following Rushmore Funds: American Gas Index Fund, U.S.
Government Bond Portfolio, Maryland Tax-Free Portfolio, Virginia Tax-
Free Portfolio, or the Tax-Free Money Market Portfolio. You may also
exchange shares of the Fund for shares of the Cappiello-Rushmore
Emerging Growth, Growth and Utility Income Funds. The fund you are
exchanging into must be available for sale in your state and the
registration for both accounts must be identical. You should obtain a
current prospectus for the fund into which you are exchanging by
calling 1-800-343-3355. Exchanges will be effected at the respective
net asset values of the Funds involved as next determined after
receipt of the exchange request. The Fund may change or cancel their
exchange policies at any time, upon 60 days' notice to shareholders.
Pricing of Fund Shares
The price of a fund's shares on any given day is its net asset value
per share. This figure is computed by dividing the total amortized
value (which approximates market value) of the Fund's investments and
other assets, less any liabilities, by the number of fund shares
outstanding. The net asset value per share of the Fund is determined
as of 12:00 Noon Eastern time on days when the New York Stock Exchange
and the custodian bank are open for business.
The value of the Fund's portfolio of securities is determined on the
basis of fair value as determined in good faith by the Fund's
Trustees. In determining fair value, the Fund uses the amortized cost
method of valuing the securities in its portfolio, which method
involves valuing a security at its cost adjusted by 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. The purpose of this method of calculation is to
facilitate the maintenance of a constant Fund net asset value per
share of $1.00. Since the Fund commenced operations in 1974, it has
had a constant net asset value of $1.00; however, there is no
assurance the $1.00 net asset value will be maintained.
8
<PAGE>
Dividends and Distributions
Dividends of the Fund are declared each day the Fund is open for
business and paid monthly. Dividends of the Fund will automatically
be reinvested in additional shares (including fractional shares where
necessary) unless you elect to receive the dividends in cash.
Dividends paid in cash to those investors so electing will be mailed
on the second business day of the following month. Account statements
showing dividends paid will be mailed to shareholders monthly.
Net income of the Fund shall consist of all interest income accrued
and discount earned, plus or minus any realized gains or losses, less
estimated expenses of the Fund. The Fund does not expect to realize
any long-term capital gains.
"Undeliverable" or "Uncashed" Dividend Checks
If you elect to receive dividends and distributions in cash and the
payment (1) is returned and marked as "undeliverable" or (2)
remains uncashed for six months, your cash election will be changed
automatically and future dividends will be reinvested in the Fund
at the per share net asset value determined as of the date of
payment (normally $1.00). In addition, any undeliverable checks or
checks that remain uncashed for six months will be canceled and
then reinvested in the Fund at the per share net asset value
determined as of the date of cancellation (normally $1.00).
Tax Consequences of Investing
Taxability of Distributions
As long as the Fund meets the requirements for being tax-qualified
regulated investment company, which the Fund intends to do, the
Fund pays no federal income tax on the earnings distributed to
shareholders. As a result, dividends and any short-term capital
gains you receive, whether reinvested or taken as cash, are
generally considered taxable as ordinary income. The Form 1099 that
is mailed to you each January details your dividends and their
federal tax category, although you should verify your tax liability
with your tax professional.
Taxability of Transactions
Any time you sell or exchange shares of the Fund, it is considered
a taxable event for you. For example, if you exchange shares of
the Fund for shares of another Rushmore or Cappiello-Rushmore fund,
the transaction would be treated as a sale. Consequently, any gain
resulting from the transaction would be subject to federal income
tax.
Shareholders are required by law to certify that their tax
identification number is correct and that they are not subject to
back-up withholding. In the absence of this certification, the
Fund is required to withhold taxes at the rate of 31% on
dividends, capital gains distributions, and redemptions.
Shareholders who are non-resident aliens may be subject to a
withholding tax on dividends earned.
MANAGEMENT, ORGANIZATION and CAPITAL STRUCTURE
Investment Adviser
Money Management Associates ("Adviser"), 100 Lakeshore Drive, Suite
1555, North Palm Beach, Florida 33408, has served as the Fund's
investment adviser since the Fund's inception on February 14, 1975.
Established in 1974, the Adviser manages six no-load mutual funds
(including the Fund) with total assets under management of
approximately $900 million.
Subject to the general supervision of the Board of Trustees of the
Fund, the Adviser manages the investment and reinvestment of the
assets of the Fund and is responsible for the overall management of
the Fund's business affairs. An Adviser Group makes investment
decisions; therefore, no one person is primarily responsible for
making investment decisions. Under an agreement with the Adviser, the
Fund pays a fee at an annual rate based on the size of the Fund's net
assets as follows:
0.50% of the first $500 million;
0.45% of the next $250 million;
0.40% of the next $250 million; and
0.35% of the net assets over $1 billion.
9
<PAGE>
For the year ended December 31, 1998, the Fund paid the Adviser
investment advisory fees of ____% (__/100 of 1%) of the average daily
net assets of the Fund.
Year 2000 Preparations
The day-to-day operations of the Fund are dependent upon the Fund's
service providers, principally the Adviser, Rushmore Trust and
Savings, FSB and Rushmore Services, Inc. (collectively, the
"Servicers"), and upon the smooth functioning of the computer systems
that they utilize. Many computer systems currently cannot properly
recognize or process date-sensitive information relating to the year
2000 and beyond. Like other mutual funds and financial and business
organizations around the world, the Fund, therefore, could be
adversely affected if the computer systems used by these Servicers,
and their vendors, do not properly process and calculate date-related
information and data on and after January 1, 2000. The Servicers have
been evaluating the impact that the year 2000 issue may have on the
computer systems that they utilize and are making appropriate
modifications to these systems in order to assure that they will be
prepared for the year 2000. The Fund and the Servicers expect that
any further modifications to their computer systems necessary to
address the year 2000 issue will be made and tested in a timely
manner. The Servicers also are working with their outside vendors,
and other persons whose systems are linked to those of the Fund and
the Servicers, to obtain satisfactory assurances regarding the year
2000 issue. The costs of this systems remediation will not be paid
directly by the Fund. Inadequate remediation could have an adverse
effect on the Fund's operations, including pricing and securities
trading and settlement, and the provision of shareholder services.
Although, at this time, there can be no assurance that the remedial
action taken by the Servicers will be sufficient or timely, the
Servicers do not anticipate that the transition to the 21st century
will have a material impact on the ability of the Servicers to
continue to service the Fund at current levels.
10
<PAGE>
FINANCIAL HIGHLIGHTS
The following financial highlights table is intended to help you
understand the Fund's financial performance for the past 5 years.
Certain information reflects financial results for a single Fund
share. The total returns in the table represent the rate that you
would have earned (or lost) on an investment in the Fund (assuming
reinvestment of all dividends and distributions). This information has
been audited by Deloitte & Touche LLP, whose report, along with the
Fund's financial statements, is included in the annual report, which
is available upon request.
<TABLE>
<CAPTION>
For The Years Ended December 31,
1998 1997 1996 1995 1994
<S> <C> <C> <C> <C> <C>
Per Share Operating Performance:
Net Asset Value - Beginning of Year $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
-------- --------- --------- --------- ---------
Income from Investment Operations:
Net Investment Income 0.044 0.044 0.049 0.033
-------- --------- --------- --------- ---------
Total from Investment Operations 0.044 0.044 0.049 0.033
-------- --------- --------- --------- ---------
Distributions to Shareholders:
From Net Investment Income () (0.044) (0.044) (0.049) (0.033)
-------- --------- --------- --------- ---------
Total Distributions to Shareholders () (0.044) (0.044) (0.049) (0.033)
-------- --------- --------- --------- ---------
Net Increase in Net Asset Value 0.00 0.00 0.00 0.00 0.00
-------- --------- --------- --------- ---------
Net Asset Value - End of Year $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
======== ========= ========= ========= =========
Total Investment Return % 4.49% 4.50% 5.04% 3.38%
Ratios to Average Net Assets:
Expenses % 0.74% 0.74% 0.74% 0.75%
Net Investment Income % 4.40% 4.41% 4.93% 3.31%
Supplementary Data:
Number of Shares Outstanding at
End of Year with a Net Asset Value
of $1 (000s omitted) 572,313 535,325 577,194 524,154
</TABLE>
11
<PAGE>
In addition to this prospectus, the following information is available
to assist you in making an investment decision:
Information Available Upon Request Description
Statement of Additional A document that includes additional
Information information about the Fund.
Annual and Semiannual Reports Reports that contain information
about the Fund's investments. The
reports also discuss the market
conditions and investment strategies
that significantly affected the
Fund's performance during its last
fiscal year.
There are a variety of ways to receive the above information and make
other inquiries of the Fund. You may contact the Fund directly by
telephone at 1-800-343-3355, visit our internet site at
http://www.rushmorefunds.com, or you may send a written request to the
Fund's offices at 4922 Fairmont Avenue, Bethesda, Maryland 20814.
Additional information about the Fund can also be reviewed and copied
at the Securities and Exchange Commission's Public Reference Room in
Washington D.C. (for hours of operation please call the Commission at
1-800-SEC-0330). You may also obtain copies of the information by
visiting the Commission's internet site at http://www.sec.gov, or,
upon payment of a duplicating fee, by writing the Public Reference
Section of the Commission at 450 Fifth Street, N.W. Washington, D.C.
20549.
Fund for Government Investors Investment Company Act File No. 811-2539
12
<PAGE>
PART B
<PAGE>
FUND for GOVERNMENT INVESTORS
4922 Fairmont Avenue, Bethesda, Maryland 20814
(800) 343-3355
(301) 657-1500
Statement of Additional Information
May 1, 1999
This Statement of Additional Information is not a Prospectus. It
should be read in conjunction with the Fund's Prospectus, dated May 1,
1999. A copy of the Fund's Prospectus may be obtained without charge
by writing or telephoning the Fund at the above address or telephone
numbers.
The audited financial statements of the Fund, for the Fund's fiscal
year ended December 31, 1998, are included in the Fund's 1998 Annual
Report to Shareholders, which has been filed with the Securities and
Exchange Commission and is incorporated herein by reference. Copies
of the Fund's 1998 Annual Report are available, without charge, by
request by writing or telephoning the Fund at the above address or
telephone numbers.
<PAGE>
Table of Contents
Page in
Statement of
Additional Page in
Information Prospectus
Fund Description, Investments, and Risks
Investment Limitations
Management of the Fund
Control Persons and Principal Holders of
Securities
Investment Advisory and Other Services
Brokerage Allocation and Portfolio
Transactions
Taxation of the Fund
Calculation of Performance Data
Financial Statements
2
<PAGE>
FUND DESCRIPTION, INVESTMENTS and RISKS
Description
Fund for Government Investors (the "Fund") is an open-end, diversified
management investment company organized under the laws of the State of
Delaware as a business trust pursuant to a Declaration of Trust dated
January 25, 1996.
Investments
U.S. Government Securities
The term "government securities" is used loosely in the marketplace
and actually covers a wide array of securities. There are, in fact,
three major classifications, each of which the Fund may invest in:
U.S. Treasury Securities
U.S. Treasury securities are direct obligations of the U.S.
Government and are backed by the full faith and credit of the U.S.
Treasury. U.S. Treasury securities differ only in their interest
rates, maturities, and dates of issuance. Treasury Bills have
maturities of one year or less. Treasury Notes have maturities of
one to ten years, and Treasury Bonds generally have maturities of
greater than ten years at the date of issuance. Yields on short-,
intermediate-, and long-term U.S. Treasury securities are dependent
on a variety of factors, including the general conditions of the
money and bond markets, the size of a particular offering, and the
maturity of the obligation.
Government Agency Securities
Government agency securities, often called agencies, are indirect
obligations of the U.S. government, and are issued by federal
agencies and government-sponsored corporations under authority from
Congress. Government agency securities may be backed by the full
faith and credit of the federal government, which is the case with
Government National Mortgage Association and Small Business
Administration certificates, but are more often guaranteed by the
sponsoring agency with the implied backing of Congress. Examples
of government agency securities include, Export-Import Bank of the
United States, the Federal Home Loan Bank, and the Government
National Mortgage Association.
Government-Sponsored Enterprises
Government-sponsored enterprises are characterized as being
privately owned and publicly chartered. These entities were
created by the U.S. Government to help certain important sectors of
the economy reduce their borrowing costs. The U.S. Government does
not back government-sponsored enterprise securities. However, the
fact that the government sponsored the enterprise creates the
assumption that the federal government would not let the entity go
into default. The Student Loan Marketing Association, the Federal
National Mortgage Association, and Federal Home Loan Banks are
examples of government-sponsored enterprise securities.
Risks Associated with Investing in U.S. Government Securities
The U.S. Government is considered to be the best credit-rated
issuer in the debt markets. Since Treasury securities are direct
obligations of the U.S. Government, there is no credit risk. While
most other government-sponsored securities are not direct
obligations of the U.S. Government (some are guaranteed), they also
offer little, if any, credit risk. However, another type of risk
that may effect the Fund is market and/or interest rate risk. For
example, debt securities with longer maturities tend to produce
higher yields and are generally subject to potentially greater
capital appreciation and depreciation than obligations with shorter
maturities and lower yields. The market value of U.S. Government
securities generally varies inversely with changes in market
interest rates. An increase in interest rates, therefore, would
generally reduce the market value of portfolio investments of the
Fund, while a decline in interest rates would generally increase
the market value of portfolio investments of the Fund.
Repurchase Agreements
Although the Fund did not invest in repurchase agreements during
the year and has no intentions to do so, it is important to
describe a repurchase agreement, the reasons why a fund would use
repurchase agreements, and the risks involved.
3
<PAGE>
What is a Repurchase Agreement?
A repurchase agreement is an agreement where a Fund acquires a
money market instrument from a commercial bank or broker/dealer
with the understanding that the Fund will sell the instrument
back at an agreed-upon price and date (normally, the next
business day). Essentially, a repurchase agreement may be
considered a loan backed by securities. The resale price
reflects an agreed-upon interest rate effective for the period
the instrument is held by the Fund. In these transactions, the
value of the securities acquired by the Fund (including accrued
interest earned) must be greater than the value of the repurchase
agreement itself. The securities are held by the Fund's
custodian bank until repurchased.
Why Would The Fund Use Repurchase Agreements?
The Fund may invest in repurchase agreements with financial
institutions: (i) for defensive purposes due to market
conditions; or (ii) to generate income from the Fund's excess
cash balances. It is the current policy of the Fund to invest
in repurchase agreements that mature within seven days. If the
Fund chooses to invest in repurchase agreements, the agreements
will normally mature within 7 days. The investments of the Fund
in repurchase agreements, at times, may be substantial when, in
the view of the investment adviser, liquidity or other
considerations so warrant.
Risks of Repurchase Agreements
The use of repurchase agreements involves certain risks. For
example, if the other party to the agreement defaults on its
obligations to repurchase the underlying security at a time when
the value of the security has declined, the Fund may incur a loss
when the security is sold. If the other party to the agreement
becomes insolvent and subject to liquidation or reorganization
under the Bankruptcy Code or other laws, a court may determine
that the underlying security is collateral for a loan by the Fund
not within the control of the Fund. Consequently, the Fund may
not be able to substantiate its interest in the underlying
security and may be deemed an unsecured creditor of the other
party to the agreement. While the Fund's investment adviser
acknowledges these risks, it is expected that these risks can be
controlled through monitoring procedures. These procedures
include effecting repurchase transactions only with large, well-
capitalized and well-established financial institutions whose
condition will be continually monitored. In addition, the value
of the collateral underlying the repurchase agreement will always
be at least equal to the repurchase price, including any accrued
interest earned in the repurchase agreement.
INVESTMENT LIMITATIONS
The following paragraphs detail the Fund's investment limitations.
These limitations are fundamental and may not be changed without prior
approval of a majority of the Fund's outstanding voting shares.
As stated in the Fund's Prospectus, the Fund may invest only in
U.S. Government Securities and in repurchase agreements secured by
such securities (although the Fund did not invest in repurchase
agreements during the year and has no intentions of doing so). The
Fund may not invest in any other securities.
The Fund may not borrow money, except that as a temporary measure
the Fund may borrow money to facilitate redemptions. Such a
borrowing may be in an amount not to exceed 30% of the Fund's total
assets, taken at current value before such borrowing. The Fund may
borrow only to accommodate requests for redemption of shares of the
Fund while effecting an orderly liquidation of portfolio
securities. The Fund may not purchase a portfolio security if a
borrowing by the Fund is outstanding. Additionally, the Fund may
not issue senior securities, sell securities short, write options,
underwrite securities of other issuers, purchase or sell real
estate, commodities or commodity contracts, or loan money to others
(except securities under repurchase agreements).
MANAGEMENT OF THE FUND
A Board of Trustees governs the Fund. The Trustees are responsible
for overseeing the management of the Fund's business affairs and play
a vital role in protecting the interests of Fund shareholders. Among
other things, the Trustees approve and review the Fund's contracts and
other arrangements and monitor Fund performance and operations. The
4
<PAGE>
names, ages and addresses of the Trustees and officers of the Fund,
together with information as to their principal business occupations
during the past five years are set forth below.
<TABLE>
<CAPTION>
Name, Age, Address Position Held Principal Occupation(s)
With Fund During Past 5 Years
<S> <C> <C>
Daniel L. O'Connor*, 56 Chairman, General Partner of Money Management Associates,
100 Lakeshore Drive President, registered investment adviser of the Rushmore
Suite 1555 Treasurer, and Funds, since 1974. Director, Rushmore Trust and
North Palm Beach, FL 33408 Trustee Savings, FSB, the Trust's transfer agent and
custodian. Director of four Rushmore Fund
Boards. Director of the Cappiello-Rushmore
Trust.
Richard J. Garvey*, 65 Trustee Limited Partner of the Adviser since 1975.
4310 Southwest Warrens Way Director of four Rushmore Fund Boards.
Portland, OR 97221
Bruce C. Ellis,** 53 Trustee A private investor in start-up companies. Vice
7108 Heathwood Court President, LottoPhone, Inc., a telephone state
Bethesda, MD 20817 lottery service, September 1991-1995. Director,
The Torray Fund, since 1994; Director, the
Sheppard Fund, Since 1994. Director on three
Rushmore Fund Boards and the Cappiello-Rushmore
Trust.
Jeffrey R. Ellis,** 53 Trustee Executive Vice President, Buddy Systems, Inc., a
513 Kerry Lane manufacturing-marketing company in Virginia
Virginia Beach, VA 23451 Beach, Virginia since January 1996. Vice
President, LottoPhone, Inc., a telephone state
lottery service, September 1993-1995. Director
on three Rushmore Fund Boards and the Cappiello-
Rushmore Trust.
Michael D. Lange,* 55 Trustee Vice President, Capital Hill Management
7521 Pepperell Drive Corporation since 1967. Owner of Michael D.
Bethesda, MD 20817 Lange, Ltd., a builder and developer since 1980.
Partner of Greatful Falls, a building developer
since 1994. Director, Rushmore Trust and Savings,
FSB, the Trust's transfer agent and custodian.
Director of three Rushmore Fund Boards.
Patrick F. Noonan, 55 Trustee Chairman and Chief Executive Officer of the
11901 Glen Mill Drive Conservation Fund since 1986. Vice Chairman,
Potomac, MD 20854 American Farmland Trust and Trustee, American
Conservation Association since 1985. President,
Conservation Resources, Inc. since 1981.
Director of four Rushmore Fund Boards.
Leo Seybold, 83 Trustee Retired 1988. Director of three Rushmore Fund
5804 Rockmere Drive Boards.
Bethesda, MD 20816
Martin M. O'Connor*, 53 Vice President Employee of Rushmore Services, Inc., a subsidiary
4922 Fairmont Avenue of the Adviser, since 1995. A limited partner of
Bethesda, MD 20814 the Adviser since 1979.
John R. Cralle*, 58 Vice President Employee of Rushmore Services, Inc., a subsidiary
4922 Fairmont Avenue of the Adviser, since 1995. A limited partner
Bethesda, MD 20814 of the Adviser since 1979.
Timothy N. Coakley, CPA*, 31 Vice President Chief Financial Officer and Treasurer, Rushmore
4922 Fairmont Avenue Trust and Savings, FSB, since 1995. Vice
Bethesda, MD 20814 President of four Rushmore Funds and the
Cappiello-Rushmore Trust (collectively, the
"Funds"). Controller of the Funds, 1995-1997.
Formerly Audit Manager, Deloitte & Touche LLP
until 1994.
</TABLE>
5
<PAGE>
<TABLE>
<CAPTION>
Name, Age, Address Position Held Principal Occupation(s)
With Fund During Past 5 Years
<S> <C> <C>
Edward J. Karpowicz, CPA*, 35 Controller Vice President of Rushmore Trust and Savings,
4922 Fairmont Avenue FSB, since 1997. Controller of the Funds.
Bethesda, MD 20814 Treasurer, Bankers Finance Investment Management
Corp., August 1993 to June 1997. Senior
Accountant, Ernst & Young, September 1989 to
February 1993.
Stephenie E. Adams*, 29 Secretary Secretary of three Rushmore Funds and the
4922 Fairmont Avenue Cappiello-Rushmore Trust. Assistant Secretary of
Bethesda, MD 20814 one Rushmore Fund. Manager, Fund Administration
and Marketing, Rushmore Services, Inc., from July
1994 to Present. Regional Sales Coordinator,
Media General Cable, from June 1993 to June 1994.
* Indicates an "interested" person. An interested person has any one of
several close business or family ties to the Fund, the Fund's investment
adviser, or an affiliated company of the Fund.
Daniel L. O'Connor and Martin M. O'Connor are brothers.
** Bruce C. Ellis and Jeffrey R. Ellis are brothers.
</TABLE>
The aggregate compensation paid to the Trustees serving during the fiscal year
ended December 31, 1998, is set forth in the table below:
<TABLE>
<CAPTION>
Total
Name of Person Aggregate Pension or Estimated Annual Compensation
and Position Compensation Retirement Benefits Upon Paid to
Paid Benefits Retirement Trustees for
Accrued Services to the
Fund and Fund
Complex
<S> <C> <C> <C> <C>
Daniel L. O'Connor,*
Chairman, President, Treasurer $0 $0 $0 $0
and Trustee
Richard J. Garvey,*
Trustee $0 $0 $0 $0
Bruce C. Ellis,
Trustee $3,000 $0 $0 $9,000
Jeffrey R. Ellis,
Trustee $3,000 $0 $0 $9,000
Michael D. Lange,*
Trustee $3,000 $0 $0 $9,000
Patrick F. Noonan,
Trustee $3,000 $0 $0 $10,000
Leo Seybold,
Trustee $3,000 $0 $0 $9,000
* Indicates an "interested" person. An interested person has any one
of several close business or family ties to the Fund, the Fund's
adviser, or an affiliated company of the Fund.
</TABLE>
6
<PAGE>
CONTROL PERSONS and PRINCIPAL HOLDERS of SECURITIES
As of January 6, 1999, the following parties were the only owners of
record owning 5% or more of the shares of the Fund.
Controlling Party or Shares % Owned
Principal Holder of Securities Outstanding
Address
Rushmore Trust and Savings, FSB 29,417,846.42 5.243%
Trust Department
4922 Fairmont Avenue
Bethesda, Maryland 20814
As of the date of this Statement of Additional Information, the
Officers and Trustees of the Fund, as a group, owned, of record and
beneficially, less than 1% of the outstanding shares of the Fund.
INVESTMENT ADVISORY and OTHER SERVICES
Investment Adviser
Money Management Associates (the "Adviser"), 100 Lakeshore Drive,
Suite 1555, North Palm Beach, Florida 33408, has served as the Fund's
investment adviser since the Fund's inception on February 14, 1975.
Daniel L. O'Connor, the Fund's Chairman, President, Treasurer and
Trustee, is the sole general partner of the Adviser and, as such,
exercises control of the Adviser. The Adviser provides investment
advice to the Fund and oversees its day-to-day operations, subject to
direction and control by the Fund's Board of Trustees. For its
services, the Adviser receives a fee at an annual rate based on the
size of the Fund's net assets as follows:
0.50% of the first $500 million;
0.45% of the next $250 million;
0.40% of the next $250 million; and
0.35% of the net assets over $1 billion.
In dollars, the Fund paid advisory fees to the Adviser of
approximately $___________, $2,824,552, and $2,823,002, for the fiscal
years ended December 31, 1998, 1997, and 1996, respectively.
The Adviser also advises: the Rushmore U.S. Government Bond
Portfolio, a no-load mutual fund established in 1985 that principally
invests in U.S. Government Securities; Fund for Tax-Free Investors,
Inc., which was established in 1983 and currently consists of three
series, each of which invests primarily in securities the interest on
which is exempt either from federal income tax or from state income
tax; and American Gas Index Fund, Inc., a common stock index fund
established in 1989 that seeks to provide investment results that
correlate to those of an index comprising the common stocks of natural
gas distribution and transmission company members of the American Gas
Association. As of December 31, 1998, total assets under the
Adviser's management were approximately $900 million.
Fund expenses which are paid by the Adviser include, but are not
limited to: the expenses of shareholders and directors meetings, the
cost of office space, and the preparation, filing, printing and
distribution of the Fund's Prospectus and Statement of Additional
Information. Additionally, the Adviser may, from its own resources,
including profits from advisory fees received from the Fund provided
such fees are legitimate and not excessive, make payments to broker-
dealers and other financial institutions for their expenses in
connection with the distribution of Fund shares.
The Adviser will reimburse the Fund for expenses (including management
fee but excluding interest and extraordinary legal expenses) which
exceed one percent of the average daily net assets per annum.
7
<PAGE>
Administrator
Under an Administrative Services Agreement between the Fund and
Rushmore Trust and Savings, FSB ("RTS"), 4922 Fairmont Avenue,
Bethesda, Maryland 20814, a majority-owned subsidiary of the Adviser,
RTS provides transfer agency, dividend-disbursing, fund accounting and
administrative services to the Fund. Under the Administrative
Services Agreement with RTS, which has been approved by the Board of
Trustees, RTS receives an annual fee of 0.25% of the average daily net
assets of the Fund for the services it provides. For the fiscal years
ended August 31, 1998, 1997, and 1996, the Fund paid the following
administrative services fees to the RTS: $_______, 1,430,307, and
$1,429,445, respectively.
As the Administrator, RTS is responsible for all costs of the Fund
except for the investment advisory fee, extraordinary legal expenses,
interest and the expenses paid by the Adviser. Specifically, RTS pays
costs of registration of the Fund's shares with the Securities and
Exchanges commission and the various states, all expenses of dividend
and transfer agent services, outside auditing and legal fees,
preparation of shareholders reports, and all costs incurred in
providing custodial services.
Other Servicer
Under an agreement between the Adviser and Rushmore Services, Inc.
("RSI"), 4922 Fairmont Avenue, Bethesda, Maryland 20814, a wholly-
owned subsidiary of the Adviser, certain administrative services
provided to the Fund by the adviser, such as prospectus preparation,
are provided by RSI.
Custodian and Independent Public Accountant
RTS is the Fund's custodian and is responsible for safeguarding and
controlling the Fund's cash and securities, handling the securities,
and collecting interest on the Fund's investments.
Independent certified public accountants, Deloitte & Touche LLP,
University Square, 117 Campus Drive, Princeton, New Jersey 08540, are
responsible for auditing the annual financial statements of the Fund.
Brokerage Allocation and Other Practices
The Fund's portfolio securities are normally purchased on a net basis
which does not involve payment of brokerage commissions.
DRAFT REDEMPTIONS
Redemptions by check or wire transfer are discussed in the Fund's
Prospectus. Investors may also elect to redeem shares by draft check
(minimum check - $250) made payable to the order of any person or
institution. Upon the Fund's receipt of a completed signature card,
investors will be supplied with draft checks which are drawn on the
Fund's account and are paid through Rushmore Trust and Savings, FSB.
The Fund reserves the right to change or suspend the checking service
and to charge for the reorder of draft checks. These draft checks
cannot be certified, nor can these checks be negotiated for cash at
Rushmore Trust and Savings, FSB. There will be a $10 charge for each
stop payment request on the draft checks. Investors will be subject
to the same rules and regulations that Rushmore Trust and Savings, FSB
applies to checking accounts. Investors' accounts may not be closed
by draft check.
TAXATION OF THE FUND
The Fund currently qualifies, and will seek to continue to qualify, as
a regulated investment company (a "RIC") under Subchapter M of the
U.S. Internal Revenue Code of 1986, as amended (the "Code"). As a RIC,
the Fund will not be subject to federal income taxes on the net
investment income and capital gains that the Fund distributes to its
shareholders. The distribution of net investment income and capital
gains by the Fund to a Fund shareholder will be taxable to the
shareholder regardless of whether the shareholder elects to receive
these distributions in cash or in additional shares. Distributions
reported to a Fund shareholder as long-term capital gains shall be
taxable as such, regardless of how long the shareholder has owned the
shares. Fund shareholders will be notified annually by the Fund as to
the federal tax status of all distributions made by the Fund.
Distributions may be subject to state and local taxes.
If the Fund fails to qualify as a RIC for any taxable year, the Fund
would be taxed in the same manner as an ordinary corporation. In that
event, the Fund would not be entitled to deduct the distributions
8
<PAGE>
which the Fund had paid to shareholders and, thus, would incur a
corporate income tax liability on all of the Fund's taxable income
whether or not distributed. The imposition of corporate income taxes
on the Fund would directly reduce the return a shareholder would
receive from an investment in the Fund.
CALCULATION OF PERFORMANCE DATA
CALCULATION OF YIELD QUOTATIONS
7-Day Yield Quotation
The Fund's annualized current yield, as may be quoted in
advertisements and other communications to shareholders and
potential investors, is computed by determining, for a stated
seven-day period, the net change, exclusive of capital changes,
the value of a hypothetical pre-existing account having a balance
of one share at the beginning of the period, and dividing the
difference by the value of the account at the beginning of the
base period to obtain the base period return, and then
multiplying the base period return by (365/7).
7-Day Effective Yield Quotation
The Fund also may communicate its annualized effective yield in
advertisements and other communications to shareholders and
potential investors. An effective yield quotation is computed by
determining (for the same stated seven-day period as the current
yield), the net change, exclusive of capital changes, in the
value of a hypothetical pre-existing account having a balance of
one share at the beginning of the period, and dividing the
difference by the value of the account at the beginning of the
base period to obtain the base period return, and then
compounding the base period return by adding 1, raising the sum
to a power equal to 365 divided by 7, and subtracting 1 from the
result.
The yields quoted in any advertisement or other communication should
not be considered a representation of the yields of the Fund in the
future since the yield is not fixed. Actual yields will depend not
only on the type, quality, and maturities of the investments held by
the Fund and changes in interest rates on such investments, but also
on changes in the Fund's expenses during the period.
Yield information may be useful in reviewing the performance of the
Fund and for providing a basis for comparison with other investment
alternatives. However, unlike bank deposits or other investments
which typically pay a fixed yield for a stated period of time, the
Fund's yield fluctuates.
CALCULATION OF ANNUAL TOTAL RETURN QUOTATIONS
Fund performance may also be stated in terms of total return. Under
the rules of the Securities and Exchange Commission (the "SEC Rules"),
Fund advertising stating performance must include total return quotes
calculated according to the following formula:
n
P (1+T) = ERV
Where: P = a hypothetical initial payment of $1,000.
T = average annual total return.
n = number of years.
ERV = ending redeemable value of a hypothetical $1,000
payment made at the beginning of the 1-, 5-, or
10-year periods at the end of the 1-, 5-, or 10-year
periods (or fractional portion thereof).
Under the foregoing formula, the time periods used in advertising will
be based on rolling calendar quarters, updated to the last day of the
most recent quarter prior to submission of the advertising for
publication, and will cover 1-, 5-, and 10-year periods or a shorter
period dating from the effectiveness of the Registration Statement of
the Fund. In calculating the ending redeemable value, all dividends
and distributions by the Fund are assumed to have been reinvested at
the Fund's net asset value (normally $1.00). Total return, or "T" in
the formula above, is computed by finding the average annual
compounded rates of return over the 1-, 5-, and 10-year periods (or
fractional portion thereof) that would equate the initial amount
invested to the ending redeemable value.
9
<PAGE>
Financial Statements
Copies of the Fund's audited financial statements for the fiscal year
ended August 31, 1998, may be obtained without charge by contacting
the Fund at 4922 Fairmont Avenue, Bethesda, Maryland 20814, or by
telephoning the Fund at (800) 343-3355 or (301) 657-1500.
10
<PAGE>
Fund for Government Investors
FINANCIAL STATEMENTS
To be filed by amendment
<PAGE>
PART C
<PAGE>
PART C
OTHER INFORMATION
Fund for Government Investors
ITEM 23. Exhibits
(a)(1) Declaration of Trust. 3/
(b) Bylaws of Registrant. 3/
(c) Voting Trust Agreement. 2/
(d) Management Contract between Registrant and Money Management
Associates. 3/
(e) Underwriting Contracts. 2/
(f) Bonus or Profit Sharing Contracts. 2/
(g)(1) Custody Agreement between Registrant and Rushmore Trust and
Savings, FSB. 3/
(h)(1) Administrative Services Agreement between Registrant and
Rushmore Trust and Savings, FSB. 3/
(h)(2) Agreement between Money Management Associates and Rushmore
Services, Inc. as amended. 1/
(i) Opinion of Barham, Radigan, Suiters & Brown, P.C., regarding the
legality of securities being registered. 3/
(j) Consent of Deloitte & Touche LLP, independent public accountants
for the Registrant. 4/
(k) Omitted Financial Statements. 2/
(l) Initial Capital Agreements. 2/
(m) Rule 12b-1 Plan. 2/
(n) Financial Data Schedule for the Registrant. 4/
(o) Rule 18f-3 Plan. 2/
(p) Powers of Attorney. 3/
1/ Filed herewith.
2/ None.
3/ Incorporated by reference to the Registrant's Registration
Statement on Form N-1A, previously filed with the Securities and
Exchange Commission on June 3, 1996 (Registration Nos. 2-52552 and
811-2539).
4/ To be filed by amendment.
ITEM 24. Persons Controlled By or Under Common Control with the Fund
The following persons may be deemed to be directly or indirectly
controlled by or under common control with the Fund, a Delaware
business trust:
Percentage of
Voting Securities
Owned and/or
Controlled by the
Controlling
State of Organization Persons or
and Relationship (if Other Basis of
Company any) to the Fund Common Control
Money Management Associates a District of Columbia Daniel L.
("MMA"or the "Adviser") limited partnership, O'Connor holds
registered transfer 100% of the
agent and registered voting authority
investment adviser to in MMA in Daniel
four investment L. O'Connor's
companies, including the capacity as the
Fund sole general
partner of MMA.
Rushmore Trust and Savings, FSB a Maryland corporation, 72.2% of the
("RTS" or the "Administrator") and a registered voting securities
<PAGE>
transfer agent, which of RTS is held by
provides transfer MMA, and 27.6% of
agency, dividend the voting
disbursing, and securities of RTS
shareholder services to is held by Daniel
the Fund, and serves as L. O'Connor, the
the Fund's custodian sole general
partner of MMA.
Rushmore Services, Inc. ("RSI") a Maryland Corporation 100% of the
which provides certain voting securities
services to the Fund of RSI is owned
by MMA.
The Rushmore Fund, Inc. a Maryland corporation,
and a registered
investment company,
which is advised by MMA
Fund for Tax-Free Investors, Inc. a Maryland corporation,
and a registered
investment company,
which is advised by MMA
American Gas Index Fund, Inc. a Maryland corporation,
and a registered
investment company,
which is advised by MMA
Cappiello-Rushmore Trust a Delaware business
trust, and a registered
investment company, of
which MMA is the
administrator
ITEM 25. Indemnification
The Fund's Declaration of Trust provides that officers and Trustees
shall be indemnified by the Fund against liabilities and expenses
of defense in proceedings against them by reason of the fact that
they serve as officers or Trustees of the Fund or as an officer or
director of another entity at the request of the entity. The
indemnification is subject to the following conditions:
(a) no Trustee or officer is indemnified against all
liability to the Fund or its security holders which was the
result of any willful misfeasance, bad faith, gross negligence
or reckless disregard of his duties;
(b) officers and Trustees are only indemnified for actions
taken in good faith which they believed were in or not
opposed to the best interests of the Fund;
(c) expenses of any suit or proceeding will be paid in
advance only if the persons who will benefit by such advance
undertake to repay the expenses unless it is subsequently
determined that they are entitled to indemnification.
The Declaration provides that if indemnification is not ordered by
a court, it may be authorized upon determination by shareholders,
by a majority vote of a quorum of the Trustees who were not parties
to the proceedings or if a quorum is not obtainable, or if directed
by a quorum of disinterested Trustees, by independent legal counsel
in a written opinion that the persons to be indemnified have met
the applicable standard.
In connection with the approval of indemnification to officers and
Trustees, the Fund hereby undertakes in all cases where
indemnification is not ordered by a court not to submit any
proposed indemnification to a vote of its shareholders or Trustees
unless it has obtained a legal opinion from independent counsel
that the product of the persons seeking indemnification did not
involve willful misfeasance, bad faith, gross negligence or
reckless disregard of their duties.
Insofar as indemnification for liability arising under the
Securities Act of 1933, as amended (the "1933 Act"), may be
permitted to Trustees, officers, and controlling persons of the
Registrant pursuant to the foregoing provisions, or otherwise, the
Registrant has been advised that, in the opinion of the Securities
and Exchange Commission, such indemnification is against public
policy as expressed in the 1933 Act and, therefore, is
unenforceable. In the event that a claim for indemnification
<PAGE>
against such liabilities (other than the payment by the Registrant
of expenses incurred or paid by a Trustee, officer, or controlling
person of the Registrant in the successful defense of any action,
suit, or proceeding) is asserted by such Trustee, officer, or
controlling person in connection with the securities being
registered, the Registrant, unless in the opinion of the
Registrant's counsel the matter has been settled by controlling
precedent, will submit to a court of appropriate jurisdiction the
question whether such indemnification by the Registrant is against
public policy as expressed in the 1933 Act and will be governed by
the final adjudication of such issue.
ITEM 26. Business and Other Connections of the Investment Adviser
Money Management Associates ("MMA"), 100 Lakeshore Drive, Suite
1555North Palm Beach, FL 33408, a limited partnership organized
under the laws of the District of Columbia on August 15, 1974, has
one general partner and two limited partners. Daniel L. O'Connor
is the general partner and sole employee of MMA. Limited partners
Martin M. O'Connor and John R. Cralle, are full-time employees of
Rushmore Services, Inc. ("RSI"), a subsidiary of MMA, at 4922
Fairmont Avenue, Bethesda, Maryland 20814.
MMA also serves as the investment adviser to The Rushmore Fund,
Inc., Fund for Tax-Free Investors, Inc., and American Gas Index
Fund, Inc., all regulated investment companies since their
inception.
ITEM 27. Principal Underwriters
Not applicable
ITEM 28. Location of Accounts and Records
The physical location for all accounts, books, and records required
to be maintained and preserved by Section 31(a) of the Investment
Company Act of 1940, as amended, and Rules 31a-1 and 31a-2
thereunder, is 4922 Fairmont Avenue, Bethesda, Maryland 20814.
ITEM 29. Management Services
Not Applicable
ITEM 30. Undertakings
None.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, and
the Investment Company Act of 1940, as amended, the Registrant has duly
caused this Registration Statement to be signed on its behalf by the
undersigned, thereto duly authorized, in this City of Bethesda in the State
of Maryland, on the 28th day of January, 1999.
Fund for Government Investors
By:
/s/ Daniel L. O'Connor
Daniel L. O'Connor, Chairman of the Board
Pursuant to the requirements of the Securities Act of 1933, this Registration
Statement has been signed below by the following persons in the capacities
and on the dates indicated.
Name Title Date
/s/ Daniel L. O'Connor Chairman of the Board, President January 28, 1999
Daniel L. O'Connor Treasurer, Trustee
/s/ Richard J. Garvey Trustee January 28, 1999
Richard J. Garvey
/s/ Jeffrey R. Ellis Trustee January 28, 1999
Jeffrey R. Ellis
/s/ Bruce C. Ellis Trustee January 28, 1999
Bruce C. Ellis
/s/ Michael D. Lange Trustee January 28, 1999
Michael D. Lange
/s/ Patrick F. Noonan Trustee January 28, 1999
Patrick F. Noonan
/s/ Leo Seybold Trustee January 28, 1999
Leo Seybold
Exhibit (h)(2)
Agreement between Money Management Associates and Rushmore Services, Inc.
<PAGE>
AGREEMENT
This Agreement by and between Money Management Associates, a
District of Columbia limited partnership located at Palm Beach
Gardens, Florida ("MMA") and Rushmore Services, Inc., a Maryland
corporation located at 4922 Fairmont Avenue, Bethesda, Maryland 20814
("RSI"). This Agreement is made and entered into on the 1st day of
October 1994.
WITNESSETH
WHEREAS MMA provides investment advisory services to mutual funds;
those mutual funds currently being advised by MMA are: Fund for Tax-
Free Investors, Inc., The Rushmore Fund, Inc., Fund for Government
Investors, and American Gas Index Fund, Inc.; MMA provides
administrative services to the Cappiello-Rushmore Trust (collectively
the "Mutual Funds"); and
WHEREAS RSI provides administrative services to MMA in connection
with its management, promotion and distribution of Mutual Funds; and
IT IS the purpose of this Agreement to clearly define the
obligations of each of the parties hereto with respect to services
rendered by RSI.
NOW THEREFORE in consideration of the mutual promises herein
exchanged the parties agree as follows:
1. RSI shall provide the administrative services as set forth
above to MMA. It shall also execute trades and monitor portfolios for
the Mutual Funds. It shall maintain MMA records in Bethesda, Maryland
at its offices and assemble, prepare and file required reports with
the Securities and Exchange Commission and the Office of Thrift
Supervision.
2. MMA shall pay a monthly service fee to RSI of $82,350.00 which
is intended to compensate RSI for management of the Mutual Funds,
salary, rental expense, and profit. Additional expenses which are
reimbursable include, but are not limited to, advertising, promotion,
distribution, professional fees, telephone, postage and travel
expense. The monthly service fee shall be paid at the beginning of
each month and the reimbursement shall be paid as billed monthly.
Payments will be first allocated to the service fee and then to
reimbursement.
3. The term of this Agreement shall be one year beginning on the
1st day of January, 1995. This Agreement shall be automatically
renewed between the parties on an annual basis unless within thirty
(30) days of an annual termination date notice is given by one party
or the other of its intention not to renew.
4. The monthly fee, however, shall be renegotiable annually
between the parties. In the event that the parties cannot come to an
agreement on the amount of the monthly fee thirty (30) days in advance
of the termination of the current annual contract, such failure to
agree shall constitute a termination notice of the contract.
5. Any dispute or disagreement arising between MMA and RSI in
conjunction with any provision of this Agreement, or the compliance or
non-compliance therewith, which is not settled within thirty (30) days
(or such period as may be mutually agreed upon) from the date that
either party informs the other in writing that such dispute or
disagreement exists, shall be settled by arbitration in accordance
with rules set by a three member panel, one member each selected by
MMA and RSI and the third being an attorney selected by mutual
agreement of MMA and RSI, with all charges submitted by said attorney
to be shared equally by MMA and RSI. The decision of the panel shall
be by majority vote and final and not subject to judicial review, and
judgment may be entered thereon in accordance with applicable law in
any court having jurisdiction thereof.
6. All notices, demands and other communications required or
permitted to be given hereunder shall be made in writing and shall be
deemed to be duly given if personally delivered or if deposited in the
United States mail, registered or certified mail, with postage
prepaid, and addressed to the appropriate party at the address set
forth below, or at such other address as the parties may designate in
writing delivered in accordance with the provisions of this paragraph.
<PAGE>
If to MMA:
Money Management Associates
P.O. Box 31237
Palm Beach Gardens, Florida 33420
Attention: Daniel L. O'Connor
If to RSI:
Rushmore Services, Inc.
4922 Fairmont Avenue
Bethesda, Maryland 20814
Attention: Martin M. O'Connor
7. This Agreement is intended by the parties as a full expression
of their agreement with respect to the subject matter hereof and a
complete and exclusive statement of the terms thereof. No course of
prior dealings between the parties and no usage of trade shall be
relevant or admissible to supplement, explain, or vary any of the
terms of this Agreement. Acceptance of, or acquiescence in, a course
of performance rendered under this Agreement shall not be relevant or
admissible to vary the terms and meaning of this Agreement, even
though the accepting or acquiescing party has knowledge of the nature
of the performance and the opportunity to make objection. No
representations, undertakings, or agreements have been made or relied
upon in the making of this Agreement other than those specifically set
forth herein.
8. This Agreement shall be governed by and construed in accordance
with the laws of the State of Maryland and shall be binding upon and
shall inure to the benefit of the parties hereto.
IN WITNESS WHEREOF, the undersigned have executed this Agreement as
of the date first above written.
WITNESS: MONEY MANAGEMENT ASSOCIATES:
/s/ Stephenie E. Adams /s/ Daniel L. O'Connor
By: Stephenie E. Adams By: Daniel L. O'Connor
General Partner
WITNESS: RUSHMORE SERVICES, INC.
/s/ Stephenie E. Adams /s/ Martin M. O'Connor
By: Stephenie E. Adams By: Martin M. O'Connor
Vice President, Secretary
<PAGE>
AMENDMENT
TO
AGREEMENT BETWEEN
MONEY MANAGEMENT ASSOCIATES
AND
RUSHMORE SERVICES, INC.
The following amendment is hereby made to the Agreement dated
October 1, 1994 between Money Management Associates and Rushmore
Services, Inc. The following paragraphs shall replace in their
entirety paragraphs (2) and (3) of the original Agreement:
2. MMA shall pay a monthly service fee to RSI of $63,500.00 which
is intended to compensate RSI for management of the Mutual Funds,
salary, rental expense, and profit. Additional expenses which are
reimbursable include, but are not limited to, advertising, promotion,
distribution, professional fees, telephone, postage and travel
expense. The monthly service fee shall be paid at the beginning of
each month and the reimbursement shall be paid as billed monthly.
Payments will be first allocated to the service fee and then to
reimbursement.
3. The term of this Agreement shall be one year beginning on the
1st day of January, 1996. This Agreement shall be automatically
renewed between the parties on an annual basis unless within thirty
(30) days of an annual termination date notice is given by one party
or the other of its intention not to renew.
WITNESS: MONEY MANAGEMENT ASSOCIATES
/s/ Stephenie E. Adams /s/ Daniel L. O'Connor
By: Stephenie E. Adams By: Daniel L. O'Connor
General Partner
WITNESS: RUSHMORE SERVICES, INC.
/s/ Stephenie E. Adams /s/ Martin M. O'Connor
By: Stephenie E. Adams By: Martin M. O'Connor
Vice President, Secretary
December 24, 1995
<PAGE>
AMENDMENT
TO
AGREEMENT BETWEEN
MONEY MANAGEMENT ASSOCIATES
AND
RUSHMORE SERVICES, INC.
The following amendment is hereby made to the Agreement dated
October 1, 1994 between Money Management Associates and Rushmore
Services, Inc. The following paragraphs shall replace in their
entirety paragraphs (2) and (3) of the amended Agreement:
2. MMA shall pay a monthly service fee to RSI of $56,000.00 which
is intended to compensate RSI for management of the Mutual Funds,
salary, rental expense, and profit. Additional expenses which are
reimbursable include, but are not limited to, advertising, promotion,
distribution, professional fees, telephone, postage and travel
expense. The monthly service fee shall be paid at the beginning of
each month and the reimbursement shall be paid as billed monthly.
Payments will be first allocated to the service fee and then to
reimbursement.
3. The term of this Agreement shall be one year beginning on the
1st day of January, 1997. This Agreement shall be automatically
renewed between the parties on an annual basis unless within thirty
(30) days of an annual termination date notice is given by one party
or the other of its intention not to renew.
WITNESS: MONEY MANAGEMENT ASSOCIATES
/s/ Stephenie E. Adams /s/ Daniel L. O'Connor
By: Stephenie E. Adams By: Daniel L. O'Connor
General Partner
WITNESS: RUSHMORE SERVICES, INC.
/s/ Stephenie E. Adams /s/ Martin M. O'Connor
By: Stephenie E. Adams By: Martin M. O'Connor
Vice President, Secretary
December 23, 1996
<PAGE>
AMENDMENT
TO
AGREEMENT BETWEEN
MONEY MANAGEMENT ASSOCIATES
AND
RUSHMORE SERVICES, INC.
The following amendment is hereby made to the Agreement dated
October 1, 1994 between Money Management Associates and Rushmore
Services, Inc. The following paragraphs shall replace in their
entirety paragraphs (2) and (3) of the amended Agreement:
2. MMA shall pay a monthly service fee to RSI of $75,000.00 which
is intended to compensate RSI for management of the Mutual Funds,
salary, rental expense, and profit. Additional expenses which are
reimbursable include, but are not limited to, advertising, promotion,
distribution, professional fees, telephone, postage and travel
expense. The monthly service fee shall be paid at the beginning of
each month and the reimbursement shall be paid as billed monthly.
Payments will be first allocated to the service fee and then to
reimbursement.
3. The term of this Agreement shall be six months beginning on the
1st day of July, 1997. This Agreement shall be automatically renewed
between the parties on an annual basis unless within thirty (30) days
of an annual termination date notice is given by one party or the
other of its intention not to renew.
WITNESS: MONEY MANAGEMENT ASSOCIATES
/s/ Stephenie E. Adams /s/ Daniel L. O'Connor
By: Stephenie E. Adams By: Daniel L. O'Connor
General Partner
WITNESS: RUSHMORE SERVICES, INC.
/s/ Stephenie E. Adams /s/ Martin M. O'Connor
By: Stephenie E. Adams By: Martin M. O'Connor
Vice President, Secretary
June 30, 1997
<PAGE>
AMENDMENT
TO
AGREEMENT BETWEEN
MONEY MANAGEMENT ASSOCIATES
AND
RUSHMORE SERVICES, INC.
The following amendment is hereby made to the Agreement dated
October 1, 1994 between Money Management Associates and Rushmore
Services, Inc. The following paragraphs shall replace in their
entirety paragraphs (2) and (3) of the amended Agreement:
2. MMA shall pay a monthly service fee to RSI of $60,000.00 which
is intended to compensate RSI for management of the Mutual Funds,
salary, rental expense, and profit. Additional expenses which are
reimbursable include, but are not limited to, advertising, promotion,
distribution, professional fees, telephone, postage and travel
expense. The monthly service fee shall be paid at the beginning of
each month and the reimbursement shall be paid as billed monthly.
Payments will be first allocated to the service fee and then to
reimbursement.
3. The term of this Agreement shall be one year beginning on the
1st day of January, 1998. This Agreement shall be automatically
renewed between the parties on an annual basis unless within thirty
(30) days of an annual termination date notice is given by one party
or the other of its intention not to renew.
WITNESS: MONEY MANAGEMENT ASSOCIATES
/s/ Stephenie E. Adams /s/ Daniel L. O'Connor
By: Stephenie E. Adams By: Daniel L. O'Connor
General Partner
WITNESS: RUSHMORE SERVICES, INC.
/s/ Stephenie E. Adams /s/ Martin M. O'Connor
By: Stephenie E. Adams By: Martin M. O'Connor
Vice President, Secretary
December 31, 1997
<PAGE>
AMENDMENT
TO
AGREEMENT BETWEEN
MONEY MANAGEMENT ASSOCIATES
AND
RUSHMORE SERVICES, INC.
The following amendment is hereby made to the Agreement dated
October 1, 1994 between Money Management Associates and Rushmore
Services, Inc. The following paragraphs shall replace in their
entirety paragraphs (2) and (3) of the amended Agreement:
2. MMA shall pay a monthly service fee to RSI of $70,000.00 which
is intended to compensate RSI for management of the Mutual Funds,
salary, rental expense, and profit. Additional expenses which are
reimbursable include, but are not limited to, advertising, promotion,
distribution, professional fees, telephone, postage and travel
expense. The monthly service fee shall be paid at the beginning of
each month and the reimbursement shall be paid as billed monthly.
Payments will be first allocated to the service fee and then to
reimbursement.
3. The term of this Agreement shall be one year beginning on the
1st day of January, 1999. This Agreement shall be automatically
renewed between the parties on an annual basis unless within thirty
(30) days of an annual termination date notice is given by one party
or the other of its intention not to renew.
WITNESS: MONEY MANAGEMENT ASSOCIATES
/s/ Stephenie E. Adams /s/ Daniel L. O'Connor
By: Stephenie E. Adams By: Daniel L. O'Connor
General Partner
WITNESS: RUSHMORE SERVICES, INC.
/s/ Stephenie E. Adams /s/ Martin M. O'Connor
By: Stephenie E. Adams By: Martin M. O'Connor
Vice President, Secretary
December 31, 1998
