PAINEWEBBER RMA MONEY FUND INC, N14AE24, 1995-09-12

PAINEWEBBER RMA MONEY FUND INC
N14AE24, 1995-09-12

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As filed with the Securities and Exchange Commission on September 12, 1995

Registration No. 33-

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM N-14

REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933

Pre-Effective Amendment No. [ ]
---
Post-Effective Amendment No. [ ]
---

PAINEWEBBER RMA MONEY FUND, INC.
(Exact Name of Registrant as Specified in Charter)

1285 Avenue of the Americas
New York, New York 10019
(Address of Principal Executive Offices)

(212) 713-2000
(Registrant's Area Code and Telephone Number)

DIANNE E. O'DONNELL, ESQ.
Mitchell Hutchins Asset Management Inc.
1285 Avenue of the Americas
New York, New York 10019
(Name and Address of Agent for Service)

Copies to:
REBECCA H. LAIRD, ESQ.
BRIAN F. MCNALLY, ESQ.
Kirkpatrick & Lockhart LLP
South Lobby - 9th Floor
1800 M Street, N.W.
Washington, D.C. 20036-5891
Telephone: (202) 778-9000

Approximate Date of Proposed Public Offering: as soon as practicable after
this Registration Statement becomes effective.

The Registrant has filed a declaration registering an indefinite number of
securities pursuant to Rule 24f-2 under the Investment Company Act of 1940, as
amended. Accordingly, no filing fee is payable herewith. The Registrant filed
on August 25, 1995, the notice required by Rule 24f-2 for its fiscal year ended
June 30, 1995.

It is proposed that this filing will become effective on October 12, 1995
pursuant to Rule 488.

<PAGE>

PAINEWEBBER RMA MONEY FUND, INC.

CONTENTS OF REGISTRATION STATEMENT

This Registration Statement contains the following papers and documents:

Cover Sheet

Contents of Registration Statement

Cross Reference Sheet

Letter to Shareholders

Notice of Special Meeting

Part A - Prospectus/Proxy Statement

Part B - Statement of Additional Information

Part C - Other Information

Signature Pages

Exhibits

<PAGE>

PAINEWEBBER RMA MONEY FUND, INC.
Form N-14 Cross Reference Sheet

Part A Item No. Prospectus/Proxy
and Caption Statement Caption
--------------- -----------------
<S> <C>
1. Beginning of Registration Statement and Cover Page
Outside Front Cover Page of Prospectus
2. Beginning and Outside Back Cover Page of Table of Contents
Prospectus

3. Synopsis Information and Risk Factors Synopsis; Comparison of Principal Risk Factors
4. Information About the Transaction Synopsis; The Proposed Transaction

5. Information About the Registrant Synopsis; Comparison of Principal Risk
Factors; See also, the Prospectus of
--- ----
PaineWebber RMA Money Fund, Inc., dated August
29, 1995, previously filed on EDGAR, Accession
Number: 0000950112-95-002296

6. Information About the Company Being Acquired Synopsis; Comparison of Principal Risk
Factors; See also, the Prospectus of
--- ----
PaineWebber/Kidder, Peabody Government Money
Fund, Inc., dated August 1, 1995, previously
filed on EDGAR, Accession Number: 0000950117-
95-000194
7. Voting Information Voting Information

8. Interest of Certain Persons and Experts Not Applicable
9. Additional Information Required for Not Applicable
Reoffering by Persons Deemed to be
Underwriters

Part B Item No. Statement of Additional
and Caption Information Caption
--------------- -----------------------

10. Cover Page Cover Page
11. Table of Contents Table of Contents

12. Additional Information About the Registrant Statement of Additional Information of
PaineWebber RMA Money Fund, Inc., dated August
29, 1995, previously filed on EDGAR, Accession
Number: 0000950112-95-002296
13. Additional Information About the Company Statement of Additional Information of
Being Acquired PaineWebber/Kidder, Peabody Government Money
Fund, Inc., dated August 1, 1995, previously
filed on EDGAR, Accession Number: 0000950117-
95-000194

</TABLE>

<PAGE>

<S> <C>
14. Financial Statements Annual Report of PaineWebber RMA Money Fund,
Inc. for Fiscal Year Ended June 30, 1995,
previously filed on EDGAR, Accession Number:
0000950112-95-002312

Annual Report of PaineWebber/Kidder, Peabody
Government Money Fund, Inc. for Fiscal Year
Ended March 31, 1995, previously filed on
EDGAR, Accession Number: 0000950146-95-000313

Pro Forma Financial Statements for the Twelve
Months Ended June 30, 1995
</TABLE>

Part C
------

Information required to be included in Part C is set forth under the
appropriate item, so numbered, in Part C of this Registration Statement.

<PAGE>

PAINEWEBBER RMA MONEY FUND, INC.
PART A

<PAGE>

PAINEWEBBER/KIDDER, PEABODY GOVERNMENT MONEY FUND, INC.

October , 1995
----

Dear Shareholder:

The attached proxy materials describe a proposal that PaineWebber/Kidder,
Peabody Government Money Fund, Inc. ("PW/KP Fund") reorganize and become part of
PaineWebber RMA U.S. Government Portfolio ("PW Fund"). If the proposal is
approved and implemented, each shareholder of PW/KP Fund automatically would
become a shareholder of PW Fund.

Your board of directors recommends a vote FOR the Reorganization Proposal.
The board believes that combining the Funds will benefit PW/KP Fund's
shareholders by providing them with a portfolio that has an investment objective
similar to the investment objective of PW/KP Fund and that will have lower
operating expenses as a percentage of net assets. The attached materials
provide more information about the proposed reorganization and the two Funds
involved.

Your vote is important no matter how many shares you own. Voting your
---------------------------------------------------------
shares early will permit PW/KP Fund to avoid costly follow-up mail and telephone
solicitation. After reviewing the attached materials, please complete, date and
sign your proxy card and mail it in the enclosed return envelope today.

Very truly yours,

MARGO N. ALEXANDER, President
PaineWebber/Kidder, Peabody Government
Money Fund, Inc.

<PAGE>
PAINEWEBBER/KIDDER, PEABODY GOVERNMENT MONEY FUND, INC.

------------------------

NOTICE OF
SPECIAL MEETING OF SHAREHOLDERS

November 10, 1995

------------------------

To The Shareholders:

A special meeting of shareholders ("Meeting") of PaineWebber/Kidder,
Peabody Government Money Fund, Inc. ("PW/KP Fund") will be held on November 10,
1995, at 10:00 a.m. Eastern time, at 1285 Avenue of the Americas, 38th Floor,
New York, New York 10019, for the following purposes:

(1) To consider an Agreement and Plan of Reorganization and Dissolution
under which PaineWebber RMA U.S. Government Portfolio ("PW Fund"), a series of
PaineWebber RMA Money Fund, Inc., would acquire the assets of PW/KP Fund in
exchange solely for shares of common stock in PW Fund and the assumption by PW
Fund of PW/KP Fund's liabilities, followed by the distribution of those shares
to the shareholders of PW/KP Fund as described in the accompanying
Prospectus/Proxy Statement; and

(2) To transact such other business as may properly come before the
Meeting or any adjournment thereof.

You are entitled to vote at the Meeting and any adjournment thereof if you
owned shares of PW/KP Fund at the close of business on October 4, 1995. If you
attend the Meeting, you may vote your shares in person. If you do not expect to
attend the Meeting, please complete, date, sign and return the enclosed proxy
card in the enclosed postage paid envelope.

By order of the board of directors,

DIANNE E. O'DONNELL
Secretary
October , 1995
---
1285 Avenue of the Americas
New York, New York 10019

YOUR VOTE IS IMPORTANT
NO MATTER HOW MANY SHARES YOU OWN

Please indicate your voting instructions
on the enclosed proxy card, date and sign the
card, and return it in the envelope provided.
IF YOU SIGN, DATE AND RETURN THE PROXY CARD BUT
GIVE NO VOTING INSTRUCTIONS, YOUR SHARES WILL
BE VOTED "FOR" THE PROPOSAL NOTICED ABOVE. In
order to avoid the additional expense of
further solicitation, we ask your cooperation
in mailing in your proxy card promptly. Unless
proxy cards submitted by corporations and part-
nerships are signed by the appropriate persons
as indicated in the voting instructions on the
proxy card, they will not be voted.

<PAGE>
PAINEWEBBER RMA U.S. GOVERNMENT PORTFOLIO
(a series of PaineWebber RMA Money Fund, Inc.)

PAINEWEBBER/KIDDER, PEABODY GOVERNMENT MONEY FUND, INC.

1285 Avenue of the Americas
New York, New York 10019
(Toll Free) [1-800-647-1568]

PROSPECTUS/PROXY STATEMENT
OCTOBER __, 1995

This Prospectus/Proxy Statement ("Proxy Statement") is being furnished to
shareholders of PaineWebber/Kidder, Peabody Government Money Fund, Inc. ("PW/KP
Fund") in connection with the solicitation of proxies by the board of directors
of PW/KP Fund for use at a special meeting of the shareholders to be held on
November 10, 1995, at 10:00 a.m., Eastern time, and at any adjournment thereof
(the "Meeting").

As more fully described in this Proxy Statement, the purpose of the Meeting
is to vote on a proposed reorganization ("Reorganization"). Under the
Reorganization, PaineWebber RMA U.S. Government Portfolio ("PW Fund"), a series
of PaineWebber RMA Money Fund, Inc. ("PW Corporation"), would acquire the assets
of PW/KP Fund in exchange solely for shares of common stock in PW Fund and the
assumption by PW Fund of PW/KP Fund's liabilities. Those PW Fund shares then
would be distributed to PW/KP Fund's shareholders so that each such shareholder
would receive a number of full and fractional shares of PW Fund having an
aggregate value that, on the effective date of the Reorganization, is equal to
the aggregate net asset value of the shareholder's shares in PW/KP Fund. As
soon as practicable following these distributions, PW/KP Fund will be
dissolved.

PW Fund is a diversified series of PW Corporation, which is an open-end
management investment company. PW Fund's investment objective is to achieve
maximum current income consistent with liquidity and conservation of capital.
It seeks to achieve its investment objective by investing in short-term U.S.
government securities.

This Proxy Statement, which should be retained for future reference, sets
forth concisely the information about the Reorganization and PW Fund that a
shareholder should know before voting. This Proxy Statement is accompanied by
the Prospectus of PW Fund dated August 29, 1995, [and by its Annual Report to
Shareholders for the fiscal year ended June 30, 1995], which are incorporated by
reference into this Proxy Statement. A Statement of Additional Information
dated October , 1995 relating to the Reorganization and including historical
---
financial statements, and a Statement of Additional Information with respect to
PW Fund, dated August 29, 1995 have been filed with the Securities and Exchange
Commission ("SEC") and are incorporated herein by this reference. The
prospectus of PW/KP Fund, dated August 1, 1995, and Statement of Additional
Information also dated August 1, 1995, have been filed with the SEC and are
incorporated herein by this reference. Copies of these documents as well as
PW/KP Fund's Annual Report may be obtained free of charge by contacting your
PaineWebber Incorporated ("PaineWebber") investment executive or PaineWebber's
correspondent firms or by calling toll-free 1-800-647-1568.

An investment in either PW Fund or PW/KP Fund is neither insured nor
guaranteed by the U.S. Government. While each fund seeks to maintain a stable
net asset value of $1.00 per share, there can be no assurance that it will be
able to do so.

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 ON
THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS/PROXY STATEMENT. ANY REPRESENTATION
TO THE CONTRARY IS A CRIMINAL OFFENSE.

<PAGE>
TABLE OF CONTENTS

VOTING INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

SYNOPSIS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2

COMPARISON OF PRINCIPAL RISK FACTORS . . . . . . . . . . . . . . . . . . . . 7

THE PROPOSED TRANSACTIONS . . . . . . . . . . . . . . . . . . . . . . . . . . 8

MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12

APPENDIX A - AGREEMENT AND PLAN OF REORGANIZATION AND DISSOLUTION . . . . . A-1

[APPENDIX B - BENEFICIAL OWNERSHIP OF SHARES OF PW FUND AND PW/KP FUND . . B-1]

<PAGE>

PAINEWEBBER/KIDDER, PEABODY GOVERNMENT MONEY FUND, INC.

------------------------------

PROSPECTUS/PROXY STATEMENT

Special Meeting of Shareholders
To Be Held on
November 10, 1995

-----------------------------

VOTING INFORMATION

This Prospectus/Proxy Statement ("Proxy Statement") is being furnished to
shareholders of PaineWebber/Kidder, Peabody Government Money Fund, Inc. ("PW/KP
Fund") in connection with the solicitation of proxies by the board of directors
of PW/KP Fund for use at a special meeting of shareholders of PW/KP Fund to be
held on November 10, 1995, at 10:00 a.m. Eastern time, and at any adjournment
thereof (the "Meeting"). This Proxy Statement will first be mailed to
shareholders on or about October , 1995.
---

At least one-third of the shares of PW/KP Fund outstanding on October 4,
1995, represented in person or by proxy, must be present for the transaction of
business by PW/KP Fund at the Meeting. If a quorum is not present at the
Meeting or a quorum is present but sufficient votes to approve the proposal are
not received, the persons named as proxies may propose one or more adjournments
of the Meeting to permit further solicitation of proxies. Any such adjournment
will require the affirmative vote of a majority of those shares represented at
the Meeting in person or by proxy. The persons named as proxies will vote those
proxies that they are entitled to vote FOR any such proposal in favor of such an
adjournment and will vote those proxies required to be voted AGAINST any such
proposal against such adjournment. A shareholder vote may be taken on the
proposals in this Prospectus/Proxy Statement prior to any such adjournment if
sufficient votes have been received and it is otherwise appropriate.

Broker non-votes are shares held in street name for which the broker
indicates that instructions have not been received from the beneficial owners or
other persons entitled to vote and for which the broker does not have
discretionary voting authority. Abstentions and broker non-votes will be
counted as shares present for purposes of determining whether a quorum is
present but will not be voted for or against any adjournment or proposal.
Accordingly, abstentions and broker non-votes effectively will be a vote against
adjournment or against any proposal where the required vote is a percentage of
the shares present or outstanding. Abstentions and broker non-votes will not be
counted, however, as votes cast for purposes of determining whether sufficient
votes have been received to approve a proposal.

The individuals named as proxies on the enclosed proxy card will vote in
accordance with your direction as indicated thereon if your proxy card is
received properly executed by you or your duly appointed agent or attorney-in-
fact. If you sign, date and return the proxy card, but give no voting
instructions, your shares will be voted in favor of approval of the Agreement
and Plan of Reorganization and Dissolution dated as of September 7, 1995 (the
"Reorganization Plan") which is attached to this Proxy Statement as Appendix A.
Under the Reorganization Plan, PaineWebber RMA U.S. Government Portfolio ("PW
Fund"), a series of PaineWebber RMA Money Fund, Inc. ("PW Corporation"), would
acquire the assets of PW/KP Fund in exchange solely for shares of common stock
in PW Fund and the assumption by PW Fund of PW/KP Fund's liabilities; those
shares then would be distributed to PW/KP Fund's shareholders. After completion
of the Reorganization, PW/KP Fund will be dissolved.

<PAGE>

In addition, if you sign, date and return the enclosed proxy card, but give
no voting instructions, the duly appointed proxies may, in their discretion,
vote upon such other matters as may come before the Meeting. The proxy card may
be revoked by giving another proxy or by letter or telegram revoking such proxy.
To be effective, such revocation must be received by PW/KP Fund prior to the
Meeting and must indicate your name and account number. In addition, if you
attend the Meeting in person you may, if you wish, vote by ballot at the
Meeting, thereby canceling any proxy previously given.

As of October 4, 1995 (the "Record Date"), PW/KP Fund had ____________
shares of common stock outstanding. The solicitation of proxies, the cost of
which will be borne by PW Fund and PW/KP Fund (each, a "Fund" and, collectively
the "Funds") in proportion to their respective net assets, will be made
primarily by mail but also may include telephone or oral communications by
representatives of Mitchell Hutchins Asset Management Inc. ("Mitchell Hutchins")
who will not receive any compensation therefor from the Funds, or by Shareholder
Communications Corporation, professional proxy solicitors retained by PW/KP
Fund, who will be paid fees and expenses of up to approximately $5,000 for
soliciting services. [Except as set forth in Appendix B, management does not
know of any single shareholder or "group" (as that term is used in Section 13(d)
of the Securities Exchange Act of 1934) who beneficially owns 5% or more of the
shares of either PW/KP Fund or PW Fund as of the Record Date. Directors and
officers of PW Corporation own in the aggregate less than 1% of the shares of PW
Fund.]

Under Maryland law, the affirmative vote of a majority of the outstanding
shares of PW/KP Fund entitled to vote at the Meeting is required to approve the
Reorganization. Each outstanding full share of PW/KP Fund is entitled to one
vote, and each outstanding fractional share of PW/KP Fund is entitled to a
proportionate share of one vote. If the Reorganization Plan is not approved by
the requisite vote of the shareholders of PW/KP Fund, the persons named as
proxies may propose one or more adjournments of the Meeting to permit further
solicitation of proxies. Although the shareholders of PW/KP Fund may exchange
or redeem out of the Fund, they do not have appraisal rights which may be
accorded to shareholders of corporations that propose similar types of
reorganizations under the laws of some states.

SYNOPSIS

The following is a summary of certain information contained elsewhere in
this Proxy Statement, the Prospectuses of the Funds (which are incorporated
herein by reference), and the Reorganization Plan. Shareholders should read
this Prospectus/Proxy Statement and the Prospectus of PW Fund carefully. As
discussed more fully below, PW/KP Fund's board of directors believes that the
Reorganization will benefit PW/KP Fund's shareholders. PW Fund has an
investment objective similar to the investment objective of PW/KP Fund, although
its investment strategy may differ from that of PW/KP Fund in some respects.
Both PW Fund and PW/KP Fund are money market funds that seek to maintain a
stable $1.00 price per share. It is anticipated that, following the
Reorganization, PW/KP Fund's shareholders will, as shareholders of PW Fund, be
subject to lower total operating expenses as a percentage of net assets than has
been experienced by PW/KP Fund.

The Reorganization

The board of directors of PW/KP Fund voted to approve the Reorganization
Plan with respect to PW/KP Fund at a meeting held on July 20, 1995. The
Reorganization Plan provides for the acquisition by PW Fund of the assets of
PW/KP Fund in exchange solely for shares of PW Fund and the assumption by PW
Fund of the liabilities of PW/KP Fund. PW/KP Fund then will distribute the PW
Fund shares to its shareholders, so that each shareholder will receive the
number of full and fractional shares of PW Fund that is equal in value to such
shareholder's holdings in PW/KP Fund as of the Closing Date (defined below).
PW/KP Fund then will be disclosed as soon as practicable thereafter.

<PAGE>

The exchange of PW/KP Fund's assets for PW Fund shares and PW Fund's
assumption of PW/KP Fund's liabilities will occur at or as of 12:00 noon,
Eastern time, on November 17, 1995, or such later date as the conditions to any
such closing are satisfied ("Closing Date").

Each Fund currently offers a single class of shares. PW Fund shares are
offered primarily to clients of PaineWebber Incorporated ("PaineWebber") and its
correspondent firms who are participants in the Resource Management Account
("RMA") and Business Service Account ("BSA") programs. Shareholders of PW/KP
Fund who receive shares of PW Fund in the Reorganization may be eligible to
become participants in the RMA or BSA programs but will not become participants
in such programs automatically. Among the features of the RMA and BSA programs
is a daily sweep of uninvested cash in amounts of $1.00 or more into a
designated money market fund. PW/KP shareholders who receive shares of PW Fund
in the Reorganization but who do not choose to participate in the RMA or BSA
programs will have uninvested cash of $5,000 or more swept into PW Fund on a
daily basis, with amounts below $5,000 swept weekly. The RMA and BSA programs
include a full array of premier account services, such as checkwriting, a Gold
or Business Card MasterCard and toll-free telephone access to a customer service
center. The features of the RMA and BSA programs are summarized in the PW Fund

Statement of Additional Information.

For the reasons set forth below under "The Proposed Transaction -- Reasons
for the Reorganization," the board of directors of PW/KP Fund, including the
directors who are not "interested persons," as that term is defined in the
Investment Company Act of 1940 (the "1940 Act") (the "Independent Directors"),
have determined that the Reorganization is in the best interests of PW/KP Fund,
that the terms of the Reorganization are fair and reasonable and that the
interests of PW/KP Fund's shareholders will not be diluted as a result of the
Reorganization. Accordingly, the board of directors of PW/KP Fund recommends
approval of the Reorganization. In addition, the board of directors of PW
Corporation, including its Independent Directors, on behalf of PW Fund has
concluded that the Reorganization is in the best interests of PW Fund, that the
terms of the Reorganization are fair and reasonable and that the interests of PW
Fund's shareholders will not be diluted as a result of the Reorganization.

COMPARATIVE FEE TABLE

Reorganization of PW/KP Fund into PW Fund

Certain fees and expenses that PW/KP Fund's shareholders pay, directly or
indirectly, are different from those incurred by PW Fund shareholders.
PaineWebber is paid a advisory and administrative fee for its services as PW/KP
Fund's investment adviser and administrator at the annual rate of .50% of PW/KP
Fund's average daily net assets. With respect to PW Fund, PaineWebber is paid
for its services as PW Fund's investment adviser and administrator at an annual
rate based on a sliding scale related to average daily net assets which is
presently of 0.46% of PW Fund's average daily net assets. As distributor of
PW/KP Fund's shares, PaineWebber is paid a 12b-1 service fee at the annual rate
of .12% of PW/KP Fund's average daily net assets. As distributor of PW Fund's
shares, PaineWebber is paid a 12b-1 service fee at the annual rate of .08% of PW
Fund's average daily net assets.

The following tables show (1) transaction expenses currently incurred by
shareholders of PW Fund and PW/KP Fund and transaction expenses that each
shareholder will incur after giving effect to the Reorganization; (2) the
current fees and expenses incurred by the shares of PW/KP Fund and PW Fund for
the twelve months ended June 30, 1995 (unaudited) and for the fiscal year ended
June 30, 1995, respectively; and (3) pro forma fees for PW Fund shares after
giving effect to the Reorganization.

<PAGE>

Shareholder Transaction Expenses
PW/KP Fund PW Fund Combined Fund
---------- ------- -------------

Sales charge on purchases of shares NONE NONE NONE

Sales charge on reinvested dividends NONE NONE NONE

Redemption fee or deferred sales charge NONE NONE NONE

Annual Fund Operating Expenses
(as a percentage of average net assets)

PW/KP Fund PW Fund Combined Fund
---------- ------- -------------
(Pro Forma)
-----------

Management
Fees 0.50% 0.46%(1) 0.43%

12b-1
Expenses 0.12% 0.08% 0.08%

Other
Expenses 0.09% 0.09% 0.08%

------- ------- -------
Total Fund
======= ======= =======
Operating
Expenses 0.71%(2) 0.63% 0.59%
======= ======= =======

-----------------------------------

(1) PaineWebber acts as PW Fund's investment adviser and administrator pursuant
to contract. Under the PaineWebber contract, the Fund pays PaineWebber an
annual fee, computed daily and paid monthly, according to the following
schedule:

Average Daily Net Assets Annual Rate
------------------------ -----------

Up to $300 million................... 0.50%
In excess of $300 million up
to $750 million................... 0.44%
Over $750 million.................... 0.36%

As indicated, for the fiscal year ended June 30, 1995, PW Fund paid investment
advisory and administrative fees to PaineWebber at an effective annual rate of
0.46%.

(2) The ratios of total operating expenses as a percentage of average net
assets for PW/KP Fund were 0.72% and
% for the fiscal year ended March 31, 1995 and [for the six month period
----
ended September 30, 1995 (unaudited), respectively.]

<PAGE>

Example of Effect of Fund Expenses

The following illustrates the expenses on a $1,000 investment under the
existing and estimated fees and expenses stated above, assuming a 5% annual
return.

1 year 3 years 5 years 10 years
------ ------- ------- --------

PW/KP Fund $7 $23 $40 $88

PW Fund $6 $20 $35 $79

Combined Fund $6 $19 $33 $74

This Example assumes that all dividends and other distributions are
reinvested, that the percentage amounts listed under Annual Fund Operating
Expenses remain the same in the years shown and that the shares are redeemed at
the end of the time period shown. The above tables and the assumption in the
Example of a 5% annual return are required by regulations of the Securities and
Exchange Commission ("SEC"); the assumed 5% annual return is not a prediction
of, and does not represent, the projected or actual performance of any Fund's
shares.

The Example should not be considered a representation of past or future
expenses, and each Fund's actual expenses may be more or less than those shown.
The actual expenses attributable to each Fund's shares will depend upon, among
other things, the level of average net assets and the extent to which a Fund
incurs variable expenses, such as transfer agency costs.

Forms of Organization

PW Corporation and PW/KP Fund are each open-end management investment
companies organized as Maryland corporations. PW Corporation was organized
under the laws of Maryland on July 2, 1982. PW/KP Fund was organized under the
laws of Maryland on February 2, 1983 and commenced operations on May 17, 1983.
PW Corporation has an authorized capitalization of 30 billion shares of $0.001
par value common stock, 5 billion of which are designated as shares of its
series PW Fund. PW/KP Fund has authorized capitalization of 5 billion shares of
$0.01 par value common stock. The shares have no preemptive, subscription or
conversion rights and are freely transferable.

Neither PW/KP Fund nor PW Corporation is required to (and they do not) hold
shareholder meetings annually. Neither Fund currently issues share certificates.

Investment Objectives and Policies

The Funds have similar investment objectives, although their investment
policies may differ in some respects. The investment objective and policies of
each Fund are set forth below. There can be no assurance that either Fund will
achieve its investment objective, and while each Fund seeks to maintain a stable
net asset value of $1.00 per share, there can be no assurance that it will do
so.

PW Fund. The investment objective of PW Fund is to provide maximum current
income consistent with liquidity and conservation of capital. The Fund invests
in U.S. government securities with remaining maturities of 13 months or less and
repurchase agreements secured by U.S. government securities. The Fund maintains
a dollar-weighted average

<PAGE>

portfolio maturity of 90 days or less. The Fund currently invests only in
securities such as U.S. Treasury bills, Treasury notes and Government National
Mortgage Association ("GNMA") securities that are backed by the full faith and
credit of the United States and repurchase agreements secured by such
securities. In addition, the Fund may invest in securities issued or guaranteed
as to principal and interest by the U.S. Government in the form of custodial
receipts that evidence ownership of future interest payments, principal payments
or both, on certain U.S. Treasury notes or bonds. Such notes and bonds are held
in custody by a bank on behalf of the owners of such notes or bonds. These
custodial receipts are known by various names, including "Treasury Investment
Growth Receipts" ("TIGRs") and Certificates of Accrual on Treasury Securities
("CATs"). The Fund may also invest in the principal and interest components of
selected securities that are traded under the Separate Trading of Registered
Interest and Principal of Securities ("STRIPS") program.

PW/KP Fund. The investment objective of PW/KP Fund is the maximization of
current income to the extent consistent with the preservation of capital and the
maintenance of liquidity. The Fund invests only in short-term money market
instruments issued or guaranteed by the U.S. Government, its agencies or
instrumentalities ("Eligible Investments"). The Fund maintains a dollar-
weighted average portfolio maturity of 90 days or less. All securities in which
the Fund invests have remaining maturities of 397 days or less on the date of
purchase, are denominated in U.S. dollars and have been determined by Mitchell
Hutchins, each Fund's sub-adviser, to be of high quality if unrated. The Fund
may enter into repurchase agreements with government securities dealers
recognized by the Federal Reserve Board or member banks of the Federal Reserve
System. While the maturities of underlying securities in such repurchase
transactions may be more than one year, the term of each repurchase agreement is
less than one year. The Fund may purchase securities on a when-issued or
delayed delivery basis. The Fund attempts to increase yields by trading to take
advantage of short-term market variations.

Operations of PW Fund Following the Reorganization

Following the Reorganization, the directors and officers of PW Corporation
and PW Fund's investment adviser, sub-adviser, distributor and other outside
agents will continue to serve PW Fund in their current capacities. While there
are differences in the Funds' investment policies, it is not expected that PW
Fund will revise its investment policies following the Reorganization to reflect
those of the PW/KP Fund. Because the PW/KP Fund is permitted to invest in
securities having characteristics different from those permitted for PW Fund,
certain of the securities currently held in PW/KP Fund's portfolio may need to
be sold, rather than transferred to PW Fund. If the Reorganization is approved,
the PW/KP Fund may sell any assets if necessary that are inconsistent with the
investment policies of PW Fund prior to the effective date of the
Reorganization, and the proceeds thereof will be held in temporary investments
or reinvested in assets that qualify to be held by PW Fund. The necessity for
PW/KP Fund to dispose of assets prior to the effective date of the
Reorganization may result in selling securities at a disadvantageous time and
could result in the PW/KP Fund's realizing losses that would not otherwise have
been realized.

Purchases and Redemptions

Shares of each Fund are available through PaineWebber and its correspondent
firms. There is no minimum initial investment in either Fund. Shares of PW
Fund are offered primarily to clients of PaineWebber and its correspondent firms
who are participants in the RMA or BSA programs. Shares of PW/KP Fund may be
purchased only by existing shareholders of PW/KP Fund through their PaineWebber
brokerage accounts.

Shares of each Fund may be redeemed at their particular net asset value per
share (next determined after a redemption request is properly received). Within
three Business Days after receipt of the request, redemption proceeds will be
credited to the shareholder's account or sent to the shareholder. A "Business
Day" is any day on which the offices of a Fund's custodian, and the New York
offices of PaineWebber and PaineWebber's bank, are all open for business.
Clients of PaineWebber or its correspondent firms may redeem shares from their
Fund account by wire, telephone or mail.

<PAGE>

If the Reorganization is approved, PW/KP shares will no longer be available
for purchase or exchange on November __, 1995 (the next Business Day). If the
Meeting is adjourned and the Reorganization is approved on a later date PW/KP
Fund shares will no longer be available for purchase or exchange on the Business
Day following the date on which the Reorganization is approved and all
contingencies have been met. Redemptions of PW/KP Fund's shares and exchanges
of such shares for shares of other PaineWebber/Kidder, Peabody money market
funds may be effected through the Closing Date.

Exchanges

The exchange policies of the Funds differ. While shares of PW/KP Fund may
be exchanged with shares of other PaineWebber/Kidder, Peabody money market
funds, shares of PW Fund are not exchangeable. After the Reorganization, shares
of PW Fund will continue not to be exchangeable.
---

Dividends

Each Business Day, each Fund declares as dividends all of its net
investment income. Shares begin earning dividends on the day of purchase; they
do not earn dividends on the day of redemption. Dividends are accrued to
shareholder accounts daily and are automatically paid in additional shares
monthly; with respect to PW/KP Fund, however, at the shareholder's option
dividends are paid in cash. Each Fund distributes its net short-term capital
gain, if any, annually but may make more frequent distributions of such gains,
if necessary, to maintain its net asset value per share at $1.00 or to avoid
income or excise taxes.

On or before the Closing Date, PW/KP Fund will declare as a dividend
substantially all of its net investment income and short-term capital gain, if
any, and distribute that amount plus any previously declared but unpaid
dividends, in order to continue to maintain its tax status as a regulated
investment company. Such distributions by PW/KP Fund will be paid only in cash.

Federal Income Tax Consequences of the Reorganization

PW Corporation has received an opinion of Kirkpatrick & Lockhart LLP, its
counsel, with respect to the Reorganization, and PW/KP Fund has received an
opinion of Sullivan & Cromwell, its counsel, with respect to the Reorganization,
each to the effect that the Reorganization will constitute a tax-free
reorganization within the meaning of section 368(a)(1)(C) of the Internal
Revenue Code of 1986, as amended ("Code"). Accordingly, no gain or loss will be
recognized by either of the Funds or their shareholders as a result of the
Reorganization. See "The Proposed Transaction--Federal Income Tax
Considerations."

COMPARISON OF PRINCIPAL RISK FACTORS

Since the investment policies of each Fund are similar, the investment
risks presented by the two Funds are also similar. Such risks are those
typically associated with a money market fund that invests in U.S. government
securities. Certain differences between the two Funds are identified below.
See the PW Fund Prospectus for a more detailed discussion of the investment
risks of PW Fund, and see the PW/KP Fund Prospectus for a more detailed
discussion of the risks of PW/KP Fund.

Full Faith and Credit Obligations. Under investment guidelines adopted by
its board of directors, PW Fund currently invests only in securities, such as
U.S. Treasury bills, Treasury Notes and GNMA securities, that are backed

<PAGE>

by the full faith and credit of the United States and in repurchase agreements
secured by such securities. PW/KP Fund may invest in non-full faith and credit
obligations of U.S. Government agencies and instrumentalities. Because full
faith and credit obligations of the U.S. Government are backed by the strongest
assurance of repayment offered by the U.S. Government, these obligations are
considered to be more creditworthy than non-full faith and credit obligations.

Lending Portfolio Securities. PW/KP Fund may lend its portfolio securities
to brokers, dealers and financial institutions to the extent permitted under the
1940 Act. PW/KP Fund's loans of portfolio securities are terminable at any time
and no loans may be made to PaineWebber or Mitchell Hutchins. PW/KP Fund has
the right to regain record ownership of loaned securities in order to exercise
beneficial rights. Any gain or loss in the market price of the loaned
securities occurring during the term of the loan inures to the Fund. Risks are
involved in the lending of portfolio securities, associated with the loss or
substitution of the securities, that do not exist when a Fund's investment
policies do not permit the lending of portfolio securities. PW Fund is not
permitted to engage in portfolio securities lending and thus does not incur the
risks of such lending.

Purchasing Securities on a When-Issued or Delayed-Delivery Basis. PW/KP
Fund, but not PW Fund, may purchase securities on a when-issued or delayed-
delivery basis -- i.e., delivery and payment may take place a month or more
----
after the date of the transaction. The purchase price and the interest rate
payable on such securities are fixed on the transaction date. The securities so
purchased are subject to market fluctuations; therefore, at the time of delivery
and payment the market price may be higher or lower than the purchase price. No
interest accrues to PW/KP Fund until delivery and payment take place. If the
Fund chooses to dispose of the right to acquire a when-issued security prior to
its acquisition, it could, as with the disposition of any other portfolio
obligation, incur a gain or loss due to market fluctuation. As PW Fund does not
engage in the purchase of securities on a when-issued or delayed-delivery basis,
it does not incur these risks.

Repurchase Transactions. Both Funds engage in repurchase agreements.
Repurchase agreements carry certain risks not associated with direct investments
in securities. Repurchase agreements are transactions in which a Fund purchases
securities from a bank or recognized securities dealer and simultaneously
commits to resell the securities to that bank or dealer at an agreed-upon date
and price reflecting a market rate of interest unrelated to the coupon rate or
maturity of the purchased securities. In the event the other party to a
repurchase agreement defaults, a Fund may experience difficulties and incur
certain costs in exercising its rights to the collateral and may lose the
interest it expected to receive in respect of the repurchase agreement.
Although repurchase agreements carry the risk of possible decline in the market
value of the underlying securities and delays and costs to a Fund if the other
party to the repurchase agreement becomes insolvent, PW Fund intends to enter
into repurchase agreements only with banks and dealers in transactions believed
by Mitchell Hutchins to present minimal credit risks in accordance with
guidelines established by PW Corporation's board of directors.

THE PROPOSED TRANSACTION

Reorganization Plan

The terms and conditions under which the proposed transaction may be
consummated are set forth in the Reorganization Plan. Significant provisions of
the Reorganization Plan are summarized below; however, this summary is qualified
in its entirety by reference to the Reorganization Plan, which is attached as
Appendix A to this Prospectus/Proxy Statement.

The Reorganization Plan contemplates (1) PW Fund's acquiring on the Closing
Date the assets of PW/KP Fund in exchange solely for shares of PW Fund and the
assumption by PW Fund of PW/KP Fund's liabilities and (2) the constructive
distribution of such shares of PW Fund to the shareholders of the PW/KP Fund.

<PAGE>

The assets of PW/KP Fund to be acquired by PW Fund include all cash, cash
equivalents, securities, receivables and other property owned by PW/KP Fund. PW
Fund will assume from PW/KP Fund all debts, liabilities, obligations and duties
of PW/KP Fund of whatever kind or nature; provided, however, that PW/KP Fund
will use its best efforts, to the extent practicable, to discharge all of its
known debts, liabilities, obligations and duties prior to the Closing Date. PW
Fund also will deliver to PW/KP Fund shares of PW Fund, which then will be
constructively distributed to PW/KP Fund's shareholders.

The value of PW/KP Fund's assets to be acquired, and the amount of its
liabilities to be assumed, by PW Fund and the net asset value of a share of PW
Fund will be determined as of the close of regular trading on the NYSE on the
Closing Date. The amortized cost method will be used in valuing each Fund's
securities. All other assets and liabilities will be valued at fair value as
determined in good faith by or under the direction of PW/KP Fund's and PW
Corporation's respective board of directors.

On, or as soon as practicable after the Closing Date, PW/KP Fund will
distribute pro rata to its shareholders of record the shares of PW Fund it
received so that each PW/KP Fund shareholder will receive a number of full and
fractional shares of PW Fund equal in value to the shareholder's holdings in
PW/KP Fund. PW/KP Fund will be dissolved as soon as practicable thereafter.
Such distribution will be accomplished by opening accounts on the books of PW
Fund in the names of PW/KP Fund's shareholders and by transferring thereto the
shares of PW Fund previously credited to the account of PW/KP Fund on those
books. Fractional shares of PW Fund will be rounded to the third decimal place.

Accordingly, immediately after the Reorganization, each former shareholder
of PW/KP Fund will own shares of PW Fund that will be equal in value to that
shareholder's shares of PW/KP Fund immediately prior to the Reorganization.
Moreover, because shares of PW Fund will be issued at net asset value in
exchange for the net assets of PW/KP Fund, the aggregate value of PW Fund shares
so issued will equal the aggregate value of PW/KP Fund shares. The net asset
value per share of PW Fund will be unchanged by the transaction. Thus, the
Reorganization will not result in a dilution of any shareholder's interest.

Any transfer taxes payable upon issuance of shares of PW Fund in a name
other than that of the registered holder of the shares on the books of PW/KP
Fund shall be paid by the person to whom such shares are to be issued as a
condition of such transfer. Any reporting responsibility of PW/KP Fund will
continue to be its responsibility up to and including the Closing Date and such
later date on which it is dissolved.

The cost of the Reorganization, including professional fees and the cost of
soliciting proxies for the Meeting, consisting principally of printing and
mailing expenses, together with the cost of any supplementary solicitation, will
be borne by both Funds in proportion to their respective net assets. Mitchell
Hutchins recommended this method of expense allocation to the boards of
directors of PW Corporation and PW/KP Fund. Mitchell Hutchins based its
recommendations on its belief that this method is fair because, for the reasons
discussed under "Reasons for the Reorganization," the Reorganization has the
potential to benefit both Funds. Each board of directors considered this
expense allocation method in approving the Reorganization and in finding that
the Reorganization is in the best interests of its Fund.

The consummation of the Reorganization is subject to a number of conditions
set forth in the Reorganization Plan, some of which may be waived by PW/KP Fund
or PW Corporation. In addition, the Reorganization Plan may be amended in any
mutually agreeable manner, except that no amendment may be made subsequent to
the Meeting that would have a material adverse effect on the shareholders'
interests.

Reasons for the Reorganization

The board of directors of PW/KP Fund, including a majority of its
Independent Directors, has determined that the Reorganization is in the best
interests of PW/KP Fund, that the terms of the Reorganization are fair and
reasonable and that the interests of PW/KP Fund's shareholders will not be
diluted as a result of the Reorganization. The board of directors of PW
Corporation, including a majority of its Independent Directors, has determined
on behalf of PW Fund that

<PAGE>

the Reorganization is in the best interests of PW Fund, that the terms of the
Reorganization are fair and reasonable and that the interests of PW Fund's
shareholders will not be diluted as a result of the Reorganization.

In considering the Reorganization, the boards of directors made an
extensive inquiry into a number of factors, including the following:

(1) the similarity of the investment objectives, policies and restrictions
of the Funds;
(2) the effect of the Reorganization on expected investment performance;
(3) the effect of the Reorganization on the expense ratio of PW Fund
(after the Reorganization) relative to each Fund's current expense
ratio;
(4) the costs to be incurred by each Fund as a result of the
Reorganization;
(5) the tax consequences of the Reorganization;
(6) possible alternatives to the Reorganization, including continuing to
operate on a stand-alone basis or liquidation; and
(7) the potential benefits of the Reorganization to other persons,
especially Mitchell Hutchins and PaineWebber.

The Reorganization was recommended to the boards of directors of PW
Corporation and PW/KP Fund by Mitchell Hutchins at meetings of the boards of
directors held on July 20, 1995. In approving the Reorganization, the boards of
directors took into account the fact that the Funds have substantially identical
investment objectives and similar investment policies, with the differences
noted, and that Mitchell Hutchins did not believe there was a need to offer both
Funds to investors.

In recommending the Reorganization, Mitchell Hutchins [and PaineWebber]
indicated to the boards that the investment advisory and administration fee
schedule applicable to PW Fund would be lower than that currently in effect for
PW/KP Fund, and that the 12b-1 service fee schedule currently in effect for PW
Fund is lower than that currently in effect for PW/KP Fund. The boards also
were advised that the expense ratio for PW Fund shares would likely decrease
over time because the Investment Advisory and Administration Agreement
applicable to that Fund provides for lower fees as the size of the Fund
increases. In approving the Reorganization, the boards noted that the overall
investment objective of maximum current income consistent with liquidity and
conservation of capital remains an appropriate one to offer investors as part of
an overall investment strategy.

Mitchell Hutchins and PaineWebber also advised the boards of directors that
they did not expect to receive any immediate direct benefits from the
Reorganization, because the compensation they would be receive as investment
advisers to the combined Fund would be the same or less than the aggregate
compensation they received from the Funds prior to the Reorganization, assuming
no change in aggregate net assets. However, Mitchell Hutchins and PaineWebber
noted that they could benefit in the future if the combined Fund's assets grow
faster than would be the case for the separate Funds in the absence of the
Reorganization.

THE BOARD OF DIRECTORS RECOMMENDS THAT THE SHAREHOLDERS
OF PW/KP FUND VOTE "FOR" THE PROPOSED REORGANIZATION.

Description of Securities to be Issued

PW Corporation is registered with the SEC as an open-end management
investment company. Its directors are authorized to issue 30 billion shares of
common stock of separate series (par value $.001 per share). The directors have
established PW Fund as one of PW Corporation's series. Each share in PW Fund
represents an equal proportionate interest in PW Fund with each other share in
the Fund. Shares of PW Fund entitle their holders to one vote per full share
and fractional votes for fractional shares held. On the Closing Date, PW Fund
will have outstanding one class of shares. Each share of PW Fund will be
entitled to participate equally in dividends and the proceeds of any
liquidation.

<PAGE>

PW Corporation does not hold meetings of shareholders annually. There will
normally be no meetings of shareholders for the purpose of electing directors
unless fewer than a majority of the directors holding office has been elected by
shareholders, at which time the directors then in office will call a
shareholders' meeting for the election of directors. Under the 1940 Act,
shareholders of record of at least two-thirds of the outstanding shares of an
investment company may remove a director by votes cast in person or by proxy at
a meeting called for that purpose. The directors are required to call a meeting
of shareholders for the purpose of voting upon the question of removal of any
director when requested in writing to do so by the shareholders of record
holding at least 10% of PW Corporation's outstanding shares.

Federal Income Tax Considerations

The exchange of PW/KP Fund's assets for shares of PW Fund and PW Fund's
assumption of PW/KP Fund's liabilities is intended to qualify for federal income
tax purposes as a tax-free reorganization under section 368(a)(1)(C) of the
Code. PW Corporation has received an opinion of Kirkpatrick & Lockhart LLP, its
counsel, and PW/KP Fund has received an opinion of Sullivan & Cromwell, its
counsel, each substantially to the effect that --

(1) PW Fund's acquisition of PW/KP Fund's assets in exchange solely for PW
Fund shares and PW Fund's assumption of PW/KP Fund's liabilities, followed
by PW/KP Fund's distribution of those shares to its shareholders
constructively in exchange for their PW/KP Fund shares, will constitute a
"reorganization" within the meaning of section 368(a)(1)(C) of the Code,
and each Fund will be "a party to a reorganization" within the meaning of
section 368(b) of the Code;

(2) No gain or loss will be recognized to PW/KP Fund on the transfer to PW
Fund of its assets in exchange solely for PW Fund shares and PW Fund's
assumption of PW/KP Fund's liabilities or on the subsequent distribution of
those shares to PW/KP Fund's shareholders in constructive exchange for
their PW/KP Fund shares;

(3) No gain or loss will be recognized to PW Fund on its receipt of the
transferred assets in exchange solely for PW Fund shares and its assumption
of PW/KP Fund's liabilities;

(4) PW Fund's basis for the transferred assets will be the same as the
basis thereof in PW/KP Fund's hands immediately prior to the
Reorganization, and PW Fund's holding period for those assets will include
PW/KP Fund's holding period therefor;

(5) A PW/KP Fund shareholder will recognize no gain or loss on the
constructive exchange of all its PW/KP Fund shares solely for PW Fund
shares pursuant to the Reorganization; and

(6) A PW/KP Fund shareholder's basis for the PW Fund shares to be received
by it in the Reorganization will be the same as the basis for its PW/KP
Fund shares to be constructively surrendered in exchange for those PW Fund
shares, and its holding period for those PW Fund shares will include its
holding period for those PW/KP Fund shares, provided they are held as
capital assets by the shareholder on the Closing Date.

Each such opinion may state that no opinion is expressed as to the effect of the
Reorganization on the Funds or any shareholder with respect to any asset as to
which any unrealized gain or loss is required to be recognized for federal
income tax purposes at the end of a taxable year (or on the termination or
transfer thereof) under a mark-to-market system of accounting.

[Utilization by PW Fund after the Reorganization of pre-Reorganization
capital losses realized by PW/KP Fund could be subject to limitation in future
years under the Code.]

Shareholders of PW/KP Fund should consult their tax advisers regarding the
effect, if any, of the Reorganization in light of their individual
circumstances. Because the foregoing discussion only relates to the federal
income tax

<PAGE>

consequences of the Reorganization, those shareholders also should consult their
tax advisers as to state and local tax consequences, if any, of the
Reorganization.

Capitalization

The following table shows the capitalization of each Fund as of June 30,
1995 and on a pro forma combined basis (unaudited) as of that date, giving
effect to the Reorganization.

PW/KP
Fund PW Fund Combined
---- ------- --------

Net Assets $255,875,849 $815,780,861 $1,071,656,710

Net Asset Value Per Share $1.00 $1.00 $1.00

Shares Outstanding 255,876,801 815,864,869 1,071,741,670

MISCELLANEOUS

Available Information

PW/KP Fund and PW Corporation are each subject to the informational
requirements of the Securities Exchange Act of 1934 and the 1940 Act and in
accordance therewith file reports, proxy material and other information with the
SEC. Such reports, proxy material and other information can be inspected and
copied at the Public Reference Room maintained by the SEC at 450 Fifth Street,
N.W., Washington, D.C. 20549. Copies of such material can also be obtained from
the Public Reference Branch, Office of Consumer Affairs and Information
Services, Securities and Exchange Commission, Washington, D.C. 20549 at
prescribed rates.

Legal Matters

Certain legal matters in connection with the issuance of PW Fund shares
will be passed upon by Kirkpatrick & Lockhart LLP, counsel to PW Corporation.

Experts

The audited financial statements of PW Fund and PW/KP Fund, incorporated by
reference herein and in each Fund's respective Statement of Additional
Information, have been audited by Ernst & Young LLP, independent auditors, and
Deloitte & Touche LLP, independent auditors, respectively, whose reports thereon
are included in the Funds' Annual Reports to Shareholders for the fiscal years
ended June 30, 1995 and March 31, 1995, respectively. The financial statements
audited by Ernst & Young LLP and Deloitte & Touche LLP have been incorporated by
reference herein and in the Statement of Additional Information in reliance on
their reports given on their authority as experts in auditing and accounting.

<PAGE>

APPENDIX A

AGREEMENT AND PLAN OF REORGANIZATION AND DISSOLUTION
----------------------------------------------------

THIS AGREEMENT AND PLAN OF REORGANIZATION AND DISSOLUTION ("Agreement") is
made as of September 7, 1995, between PaineWebber RMA Money Fund, Inc., a
Maryland corporation ("PW Corporation"), on behalf of PaineWebber RMA U.S.
Government Portfolio, a segregated portfolio of assets ("series") thereof ("Ac-
quiring Fund"), and PaineWebber/Kidder, Peabody Government Money Fund, Inc., a
Maryland corporation ("Target"). (Acquiring Fund and Target are sometimes re-
ferred to herein individually as a "Fund" and collectively as the "Funds," and
PW Corporation and Target are sometimes referred to herein individually as an
"Investment Company" and collectively as the "Investment Companies.")

This Agreement is intended to be, and is adopted as, a plan of a
reorganization described in section 368(a)(1)(C) of the Internal Revenue Code of
1986, as amended ("Code"). The reorganization will involve the transfer to
Acquiring Fund of Target's assets solely in exchange for voting shares of common
stock in Acquiring Fund ("Acquiring Fund Shares") and the assumption by
Acquiring Fund of Target's liabilities, followed by the constructive
distribution of the Acquiring Fund Shares to the holders of shares of common
stock in Target ("Target Shares") in exchange therefor, all upon the terms and
conditions set forth herein. The foregoing transactions are referred to herein
as the "Reorganization." All agreements, representations, actions, and
obligations described herein made or to be taken or undertaken by Acquiring Fund
are made and shall be taken or undertaken by PW Corporation on its behalf.

In consideration of the mutual promises herein, the parties covenant and
agree as follows:

1. PLAN OF REORGANIZATION AND DISSOLUTION OF TARGET
------------------------------------------------

1.1. Target agrees to assign, sell, convey, transfer, and deliver all of
its assets described in paragraph 1.2 ("Assets") to Acquiring Fund. Acquiring
Fund agrees in exchange therefor --

(a) to issue and deliver to Target the number of full and fractional
Acquiring Fund Shares determined by dividing the net value of Target
(computed as set forth in paragraph 2.1) by the net asset value (computed
as set forth in paragraph 2.2) ("NAV") of an Acquiring Fund Share; and

(b) to assume all of Target's liabilities described in paragraph 1.3
("Liabilities").

<PAGE>

Such transactions shall take place at the Closing (as defined in paragraph 3.1).

1.2. The Assets shall include, without limitation, all cash, cash
equivalents, securities, receivables (including interest and dividends
receivable), claims and rights of action, rights to register shares under
applicable securities laws, books and records, deferred and prepaid expenses
shown as assets on Target's books, and other property owned by Target at the
Effective Time (as defined in paragraph 3.1).

1.3. The Liabilities shall include (except as otherwise provided herein)
all of Target's liabilities, debts, obligations, and duties of whatever kind or
nature, whether absolute, accrued, contingent, or otherwise, whether or not
arising in the ordinary course of business, whether or not determinable at the
Effective Time, and whether or not specifically referred to in this Agreement,
including without limitation Target's share of the expenses described in
paragraph 7.2. Notwithstanding the foregoing, Target agrees to use its best
efforts to discharge all of its known Liabilities prior to the Effective Time.

1.4. At or immediately before the Effective Time, Target shall declare and
pay to its shareholders a dividend in an amount large enough so that it will
have distributed substantially all (and in any event not less than 90%) of its
investment company taxable income (computed without regard to any deduction for
dividends paid) for the current taxable year through the Effective Time.

1.5. At the Effective Time (or as soon thereafter as is reasonably
practicable), Target shall constructively distribute the Acquiring Fund Shares
received by it pursuant to paragraph 1.1 to Target's shareholders of record,
determined as of the Effective Time (collectively "Shareholders" and
individually a "Shareholder"), in exchange for their Target Shares. Such
distribution shall be accomplished by the Funds' transfer agent ("Transfer
Agent") opening accounts on Acquiring Fund's share transfer books in the Share-
holders' names and transferring such Acquiring Fund Shares thereto. Each
Shareholder's account shall be credited with the respective pro rata number of
full and fractional (rounded to the third decimal place) Acquiring Fund Shares
due that Shareholder. All outstanding Target Shares, including any represented
by certificates, shall simultaneously be canceled on Target's share transfer
records. Acquiring Fund shall not issue certificates representing the Acquiring
Fund Shares in connection with the Reorganization.

1.6. As soon as reasonably practicable after distribution of the Acquiring
Fund Shares pursuant to paragraph 1.5, Target shall be dissolved and any further
actions shall be taken in connection therewith as required by applicable law.

A-2

<PAGE>

1.7. Any reporting responsibility of Target to a public authority is and
shall remain its responsibility up to and including the date on which it is
dissolved.

1.8. Any transfer taxes payable upon issuance of Acquiring Fund Shares in
a name other than that of the registered holder on Target's books of the Target
Shares constructively exchanged therefor shall be paid by the person to whom
such Acquiring Fund Shares are to be issued, as a condition of such transfer.

2. VALUATION
---------

2.1. For purposes of paragraph 1.1(a), Target's net value shall be (a) the
value of the Assets computed as of the close of regular trading on the New York
Stock Exchange, Inc. ("NYSE") on the date of the Closing ("Valuation Time"),
using the valuation procedures set forth in Target's then-current prospectus and
statement of additional information less (b) the amount of the Liabilities as of
the Valuation Time.

2.2. For purposes of paragraph 1.1(a), the NAV of an Acquiring Fund Share
shall be computed as of the Valuation Time, using the valuation procedures set
forth in Acquiring Fund's then-current prospectus and statement of additional
information.

2.3. All computations pursuant to paragraphs 2.1 and 2.2 shall be made by
or under the direction of Mitchell Hutchins Asset Management Inc.

2.4 If the difference between the NAVs per share of the Funds equals or
exceeds $.0025 at 5:00 p.m., Eastern time, at the Valuation Time, or such
earlier or later day and time as the parties may agree and set forth in writing
signed by their duly authorized officers, as computed by using the market values
of the Funds' assets in accordance with the policies and procedures established
by the Funds (or as otherwise mutually determined by the Investment Companies'
boards of directors), either Fund may postpone the Valuation Time until such
time as such per share NAV difference is less than $.0025.

3. CLOSING AND EFFECTIVE TIME
--------------------------

3.1. The Reorganization, together with related acts necessary to consummate
the same ("Closing"), shall occur at the Funds' principal office on November 17,
1995, or at such other place and/or on such other date as the parties may agree.
All acts taking place at the Closing shall be deemed to take place
simultaneously as of 12:00 noon on the date thereof or at such other
time as the parties may agree ("Effective Time"). If, immediately before the
Valuation Time, (a) the NYSE is closed to trading or trading thereon is
restricted or (b) trading or the reporting of trading on

A-3

<PAGE>

the NYSE or elsewhere is disrupted, so that accurate appraisal of the net value
of Target and the NAV per Acquiring Fund Share is impracticable, the Effective
Time shall be postponed until the first business day after the day when such
trading shall have been fully resumed and such reporting shall have been
restored.

3.2. Target shall deliver to PW Corporation at the Closing a schedule of
the Assets as of the Effective Time, which shall set forth for all portfolio
securities included therein their adjusted tax basis and holding period by lot.
Target's custodian shall deliver at the Closing a certificate of an authorized
officer stating that (a) the Assets held by the custodian will be transferred to
Acquiring Fund at the Effective Time and (b) all necessary taxes in conjunction
with the delivery of the Assets, including all applicable federal and state
stock transfer stamps, if any, have been paid or provision for payment has been
made.

3.3. Target shall deliver to PW Corporation at the Closing a list of the
names and addresses of the Shareholders and the number of outstanding Target
Shares owned by each Shareholder, all as of the Effective Time, certified by the
Secretary or Assistant Secretary of Target. The Transfer Agent shall deliver at
the Closing a certificate as to the opening on Acquiring Fund's share transfer
books of accounts in the Shareholders' names. PW Corporation shall issue and
deliver a confirmation to Target evidencing the Acquiring Fund Shares to be cre-
dited to Target at the Effective Time or provide evidence satisfactory to Target
that such Acquiring Fund Shares have been credited to Target's account on
Acquiring Fund's books. At the Closing, each party shall deliver to the other
such bills of sale, checks, assignments, stock certificates, receipts, or other
documents as the other party or its counsel may reasonably request.

3.4. Each Investment Company shall deliver to the other at the Closing a
certificate executed in its name by its President or a Vice President in form
and substance satisfactory to the recipient and dated the Effective Time, to the
effect that the representations and warranties it made in this Agreement are
true and correct at the Effective Time except as they may be affected by the
transactions contemplated by this Agreement.

4. REPRESENTATIONS AND WARRANTIES
------------------------------

4.1. Target represents and warrants as follows:

4.1.1. Target is a corporation duly organized, validly existing, and
in good standing under the laws of the State of Maryland, and a copy of its
Articles of Incorporation is on file with the Department of Assessments and
Taxation of Maryland;

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<PAGE>

4.1.2. Target is duly registered as an open-end management investment
company under the Investment Company Act of 1940 ("1940 Act"), and such
registration will be in full force and effect at the Effective Time;

4.1.3. At the Closing, Target will have good and marketable title to
the Assets and full right, power, and authority to sell, assign, transfer,
and deliver the Assets free of any liens or other encumbrances; and upon
delivery and payment for the Assets, Acquiring Fund will acquire good and
marketable title thereto;

4.1.4. Target's current prospectus and statement of additional
information conform in all material respects to the applicable requirements
of the Securities Act of 1933 ("1933 Act") and the 1940 Act and the rules
and regulations thereunder and do not include any untrue statement of a
material fact or omit to state any material fact required to be stated
therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading;

4.1.5. Target is not in violation of, and the execution and delivery
of this Agreement and consummation of the transactions contemplated hereby
will not conflict with or violate, Maryland law or any provision of
Target's Articles of Incorporation or By-Laws or of any agreement, instru-
ment, lease, or other undertaking to which Target is a party or by which it
is bound or result in the acceleration of any obligation, or the imposition
of any penalty, under any agreement, judgment, or decree to which Target is
a party or by which it is bound, except as previously disclosed in writing
to and accepted by PW Corporation;

4.1.6. Except as disclosed in writing to and accepted by PW
Corporation, all material contracts and other commitments of or applicable
to Target (other than this Agreement and investment contracts) will be
terminated, or provision for discharge of any liabilities of Target
thereunder will be made, at or prior to the Effective Time, without either
Fund's incurring any liability or penalty with respect thereto and without
diminishing or releasing any rights Target may have had with respect to
actions taken or omitted to be taken by any other party thereto prior to
the Closing;

4.1.7. Except as otherwise disclosed in writing to and accepted by PW
Corporation, no litigation, administrative proceeding, or investigation of
or before any court or governmental body is presently pending or (to
Target's knowledge) threatened against Target or any of its properties or
assets that, if adversely determined, would materially and adversely affect
Target's financial condition or the conduct of its

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<PAGE>

business; Target knows of no facts that might form the basis for the
institution of any such litigation, proceeding, or investigation and is not
a party to or subject to the provisions of any order, decree, or judgment
of any court or governmental body that materially or adversely affects its
business or its ability to consummate the transactions contemplated hereby;

4.1.8. The execution, delivery, and performance of this Agreement
have been duly authorized as of the date hereof by all necessary action on
the part of Target's board of directors, which has made the determinations
required by Rule 17a-8(a) under the 1940 Act; and, subject to approval by
Target's shareholders and receipt of any necessary exemptive relief or no-
action assurances requested from the Securities and Exchange Commission
("SEC") or its staff with respect to sections 17(a) and 17(d) of the 1940
Act, this Agreement will constitute a valid and legally binding obligation
of Target, enforceable in accordance with its terms, except as the same may
be limited by bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium, and similar laws relating to or affecting creditors' rights and
by general principles of equity;

4.1.9. At the Effective Time, the performance of this Agreement shall
have been duly authorized by all necessary action by Target's shareholders;

4.1.10. No governmental consents, approvals, authorizations, or
filings are required under the 1933 Act, the Securities Exchange Act of
1934 ("1934 Act"), or the 1940 Act for the execution or performance of this
Agreement by Target, except for (a) the filing with the SEC of a registra-
tion statement by PW Corporation on Form N-14 relating to the Acquiring
Fund Shares issuable hereunder, and any supplement or amendment thereto
("Registration Statement"), including therein a prospectus/proxy statement
("Proxy Statement"), (b) receipt of the exemptive relief referenced in
subparagraph 4.1.8, and (c) such consents, approvals, authorizations, and
filings as have been made or received or as may be required subsequent to
the Effective Time;

4.1.11. On the effective date of the Registration Statement, at the
time of the shareholders' meeting referred to in paragraph 5.2, and at the
Effective Time, the Proxy Statement will (a) comply in all material
respects with the applicable provisions of the 1933 Act, the 1934 Act, and
the 1940 Act and the regulations thereunder and (b) not contain any untrue
statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein, in light of
the circumstances under which such statements were made, not misleading;
provided that the fore-

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<PAGE>

going shall not apply to statements in or omissions from the Proxy
Statement made in reliance on and in conformity with information furnished
by PW Corporation for use therein;

4.1.12. The Liabilities were incurred by Target in the ordinary
course of its business;

4.1.13. Target qualified for treatment as a regulated investment
company under Subchapter M of the Code ("RIC") for each past taxable year
since it commenced operations and will continue to meet all the
requirements for such qualification for its current taxable year; and it
has no earnings and profits accumulated in any taxable year in which the
provisions of Subchapter M did not apply to it. The Assets shall be
invested at all times through the Effective Time in a manner that ensures
compliance with the foregoing;

4.1.14. Target is not under the jurisdiction of a court in a
proceeding under Title 11 of the United States Code or similar case within
the meaning of section 368(a)(3)(A) of the Code;

4.1.15. Not more than 25% of the value of Target's total assets
(excluding cash, cash items, and U.S. government securities) is invested in
the stock and securities of any one issuer, and not more than 50% of the
value of such assets is invested in the stock and securities of five or
fewer issuers; and

4.1.16. Target will be dissolved as soon as reasonably practicable
after the Reorganization, but in all events within six months after the
Effective Time.

4.2. Acquiring Fund represents and warrants as follows:

4.2.1. PW Corporation is a corporation duly organized, validly
existing, and in good standing under the laws of the State of Maryland, and
a copy of its Articles of Incorporation is on file with the Department of
Assessments and Taxation of Maryland;

4.2.2. PW Corporation is duly registered as an open-end management
investment company under the 1940 Act, and such registration will be in
full force and effect at the Effective Time;

4.2.3. Acquiring Fund is a duly established and designated series of
PW Corporation;

4.2.4. No consideration other than Acquiring Fund Shares (and
Acquiring Fund's assumption of the Liabilities) will be issued in exchange
for the Assets in the Reorganization;

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<PAGE>

4.2.5. The Acquiring Fund Shares to be issued and delivered to Target
hereunder will, at the Effective Time, have been duly authorized and, when
issued and delivered as provided herein, will be duly and validly issued
and outstanding shares of Acquiring Fund, fully paid and non-assessable.
Except as contemplated by this Agreement, Acquiring Fund does not have out-
standing any options, warrants, or other rights to subscribe for or pur-
chase any of its shares, nor is there outstanding any security convertible
into any of its shares;

4.2.6. Acquiring Fund's current prospectus and statement of addi-
tional information conform in all material respects to the applicable
requirements of the 1933 Act and the 1940 Act and the rules and regulations
thereunder and do not include any untrue statement of a material fact or
omit to state any material fact required to be stated therein or necessary
to make the statements therein, in light of the circumstances under which
they were made, not misleading;

4.2.7. Acquiring Fund is not in violation of, and the execution and
delivery of this Agreement and consummation of the transactions
contemplated hereby will not conflict with or violate, Maryland law or any
provision of PW Corporation's Articles of Incorporation or By-Laws or of
any provision of any agreement, instrument, lease, or other undertaking to
which Acquiring Fund is a party or by which it is bound or result in the
acceleration of any obligation, or the imposition of any penalty, under any
agreement, judgment, or decree to which Acquiring Fund is a party or by
which it is bound, except as previously disclosed in writing to and
accepted by Target;

4.2.8. Except as otherwise disclosed in writing to and accepted by
Target, no litigation, administrative proceeding, or investigation of or
before any court or governmental body is presently pending or (to Acquiring
Fund's knowledge) threatened against PW Corporation with respect to Acquir-
ing Fund or any of its properties or assets that, if adversely determined,
would materially and adversely affect Acquiring Fund's financial condition
or the conduct of its business; Acquiring Fund knows of no facts that might
form the basis for the institution of any such litigation, proceeding, or
investigation and is not a party to or subject to the provisions of any
order, decree, or judgment of any court or governmental body that
materially or adversely affects its business or its ability to consummate
the transactions contemplated hereby;

4.2.9. The execution, delivery, and performance of this Agreement
have been duly authorized as of the date hereof by all necessary action on
the part of PW Corporation's board of directors, which has made the
determinations required by Rule 17a-8(a) under the 1940 Act; and, subject
to receipt of any

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<PAGE>

necessary exemptive relief or no-action assurances requested from the SEC
or its staff with respect to sections 17(a) and 17(d) of the 1940 Act, this
Agreement will constitute a valid and legally binding obligation of
Acquiring Fund, enforceable in accordance with its terms, except as the
same may be limited by bankruptcy, insolvency, fraudulent transfer, reor-
ganization, moratorium, and similar laws relating to or affecting
creditors' rights and by general principles of equity;

4.2.10. No governmental consents, approvals, authorizations, or
filings are required under the 1933 Act, the 1934 Act, or the 1940 Act for
the execution or performance of this Agreement by PW Corporation, except
for (a) the filing with the SEC of the Registration Statement, (b) receipt
of the exemptive relief referenced in subparagraph 4.2.9, and (c) such con-
sents, approvals, authorizations, and filings as have been made or received
or as may be required subsequent to the Effective Time;

4.2.11. On the effective date of the Registration Statement, at the
time of the shareholders' meeting referred to in paragraph 5.2, and at the
Effective Time, the Proxy Statement will (a) comply in all material
respects with the applicable provisions of the 1933 Act, the 1934 Act, and
the 1940 Act and the regulations thereunder and (b) not contain any untrue
statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein, in light of
the circumstances under which such statements were made, not misleading;
provided that the foregoing shall not apply to statements in or omissions
from the Proxy Statement made in reliance on and in conformity with
information furnished by Target for use therein;

4.2.12. Acquiring Fund is a "fund" as defined in section 851(h)(2) of
the Code; it qualified for treatment as a RIC for each past taxable year
since it commenced operations and will continue to meet all the
requirements for such qualification for its current taxable year; Acquiring
Fund intends to continue to meet all such requirements for the next taxable
year; and it has no earnings and profits accumulated in any taxable year in
which the provisions of Subchapter M of the Code did not apply to it;

4.2.13. Acquiring Fund has no plan or intention to issue additional
Acquiring Fund Shares following the Reorganization except for shares issued
in the ordinary course of its business as a series of an open-end
investment company; nor does Acquiring Fund have any plan or intention to
redeem or otherwise reacquire any Acquiring Fund Shares issued to the
Shareholders pursuant to the Reorganization, other than through redemptions
arising in the ordinary course of that business;

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<PAGE>

4.2.14. Acquiring Fund (a) will actively continue Target's business
in substantially the same manner that Target conducted that business
immediately before the Reorganization, (b) has no plan or intention to sell
or otherwise dispose of any of the Assets, except for dispositions made in
the ordinary course of that business and dispositions necessary to maintain
its status as a RIC, and (c) expects to retain substantially all the Assets
in the same form as it receives them in the Reorganization, unless and
until subsequent investment circumstances suggest the desirability of
change or it becomes necessary to make dispositions thereof to maintain
such status;

4.2.15. There is no plan or intention for Acquiring Fund to be
dissolved or merged into another corporation or business trust or any
"fund" thereof (within the meaning of section 851(h)(2) of the Code)
following the Reorganization;

4.2.16. Immediately after the Reorganization, (a) not more than 25%
of the value of Acquiring Fund's total assets (excluding cash, cash items,
and U.S. government securities) will be invested in the stock and
securities of any one issuer and (b) not more than 50% of the value of such
assets will be invested in the stock and securities of five or fewer
issuers; and

4.2.17. Acquiring Fund does not own, directly or indirectly, nor at
the Effective Time will it own, directly or indirectly, nor has it owned,
directly or indirectly, at any time during the past five years, any shares
of Target.

4.3. Each Fund represents and warrants as follows:

4.3.1. The fair market value of the Acquiring Fund Shares, when re-
ceived by the Shareholders, will be approximately equal to the fair market
value of their Target Shares constructively surrendered in exchange
therefor;

4.3.2. Its management (a) is unaware of any plan or intention of
Shareholders to redeem or otherwise dispose of any portion of the Acquiring
Fund Shares to be received by them in the Reorganization and (b) does not
anticipate dispositions of those Acquiring Fund Shares at the time of or
soon after the Reorganization to exceed the usual rate and frequency of
dispositions of shares of Target as an open-end investment company. Conse-
quently, its management expects that the percentage of Shareholder inter-
ests, if any, that will be disposed of as a result of or at the time of the
Reorganization will be de minimis. Nor does its management anticipate that
there will be extraordinary redemptions of Acquiring Fund Shares
immediately following the Reorganization;

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<PAGE>

4.3.3. The Shareholders will pay their own expenses, if any, incurred
in connection with the Reorganization;

4.3.4. Immediately following consummation of the Reorganization,
Acquiring Fund will hold substantially the same assets and be subject to
substantially the same liabilities that Target held or was subject to im-
mediately prior thereto, plus any liabilities and expenses of the parties
incurred in connection with the Reorganization;

4.3.5. The fair market value on a going concern basis of the Assets
will equal or exceed the Liabilities to be assumed by Acquiring Fund and
those to which the Assets are subject;

4.3.6. There is no intercompany indebtedness between the Funds that
was issued or acquired, or will be settled, at a discount;

4.3.7. Pursuant to the Reorganization, Target will transfer to
Acquiring Fund, and Acquiring Fund will acquire, at least 90% of the fair
market value of the net assets, and at least 70% of the fair market value
of the gross assets, held by Target immediately before the Reorganization.
For the purposes of this representation, any amounts used by Target to pay
its Reorganization expenses and redemptions and distributions made by it
immediately before the Reorganization (except for (a) distributions made to
conform to its policy of distributing all or substantially all of its
income and gains to avoid the obligation to pay federal income tax and/or
the excise tax under section 4982 of the Code and (b) redemptions not made
as part of the Reorganization) will be included as assets thereof held
immediately before the Reorganization;

4.3.8. None of the compensation received by any Shareholder who is an
employee of Target will be separate consideration for, or allocable to, any
of the Target Shares held by such Shareholder-employee; none of the
Acquiring Fund Shares received by any such Shareholder-employee will be
separate consideration for, or allocable to, any employment agreement; and
the consideration paid to any such Shareholder-employee will be for
services actually rendered and will be commensurate with amounts paid to
third parties bargaining at arm's-length for similar services; and

4.3.9. Immediately after the Reorganization, the Shareholders will
not own shares constituting "control" of Acquiring Fund within the meaning
of section 304(c) of the Code.

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<PAGE>

5. COVENANTS
---------

5.1. Each Fund covenants to operate its respective business in the
ordinary course between the date hereof and the Closing, it being understood
that (a) such ordinary course will include declaring and paying customary
dividends and other distributions and such changes in operations as are
contemplated by each Fund's normal business activities and (b) each Fund will
retain exclusive control of the composition of its portfolio until the Closing;
provided that Target shall not dispose of more than an insignificant portion of
its historic business assets during such period without Acquiring Fund's prior
consent.

5.2. Target covenants to call a shareholders' meeting to consider and act
upon this Agreement and to take all other action necessary to obtain approval of
the transactions contemplated hereby.

5.3. Target covenants that the Acquiring Fund Shares to be delivered
hereunder are not being acquired for the purpose of making any distribution
thereof, other than in accordance with the terms hereof.

5.4. Target covenants that it will assist PW Corporation in obtaining such
information as PW Corporation reasonably requests concerning the beneficial
ownership of Target Shares.

5.5. Target covenants that Target's books and records (including all books
and records required to be maintained under the 1940 Act and the rules and
regulations thereunder) will be turned over to PW Corporation at the Closing.

5.6. Each Fund covenants to cooperate in preparing the Proxy Statement in
compliance with applicable federal securities laws.

5.7. Each Fund covenants that it will, from time to time, as and when re-
quested by the other Fund, execute and deliver or cause to be executed and
delivered all such assignments and other instruments, and will take or cause to
be taken such further action, as the other Fund may deem necessary or desirable
in order to vest in, and confirm to, (a) Acquiring Fund, title to and possession
of all the Assets, and (b) Target, title to and possession of the Acquiring Fund
Shares to be delivered hereunder, and otherwise to carry out the intent and pur-
pose hereof.

5.8. PW Corporation covenants to use all reasonable efforts to obtain the
approvals and authorizations required by the 1933 Act, the 1940 Act, and such
state securities laws it may deem appropriate in order to continue its
operations after the Effective Time.

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<PAGE>

5.9. Subject to this Agreement, each Fund covenants to take or cause to be
taken all actions, and to do or cause to be done all things reasonably
necessary, proper, or advisable to consummate and effectuate the transactions
contemplated hereby.

6. CONDITIONS PRECEDENT
--------------------

Each Fund's obligations hereunder shall be subject to (a) performance by
the other Fund of all the obligations to be performed hereunder at or before the
Effective Time, (b) all representations and warranties of the other Fund
contained herein being true and correct in all material respects as of the date
hereof and, except as they may be affected by the transactions contemplated
hereby, as of the Effective Time, with the same force and effect as if made at
and as of the Effective Time, and (c) the following further conditions that, at
or before the Effective Time:

6.1. This Agreement and the transactions contemplated hereby shall have
been duly adopted and approved by Target's board of directors and shall have
been approved by Target's shareholders in accordance with applicable law.

6.2. All necessary filings shall have been made with the SEC and state
securities authorities, and no order or directive shall have been received that
any other or further action is required to permit the parties to carry out the
transactions contemplated hereby. The Registration Statement shall have become
effective under the 1933 Act, no stop orders suspending the effectiveness
thereof shall have been issued, and the SEC shall not have issued an unfavorable
report with respect to the Reorganization under section 25(b) of the 1940 Act
nor instituted any proceedings seeking to enjoin consummation of the
transactions contemplated hereby under section 25(c) of the 1940 Act. All
consents, orders, and permits of federal, state, and local regulatory authori-
ties (including the SEC and state securities authorities) deemed necessary by
either Fund to permit consummation, in all material respects, of the transac-
tions contemplated hereby shall have been obtained, except where failure to
obtain same would not involve a risk of a material adverse effect on the assets
or properties of either Fund, provided that either Fund may for itself waive any
of such conditions.

6.3. At the Effective Time, no action, suit, or other proceeding shall be
pending before any court or governmental agency in which it is sought to
restrain or prohibit, or to obtain damages or other relief in connection with,
the transactions contemplated hereby.

6.4. Target shall have received an opinion of Kirkpatrick & Lockhart LLP,
counsel to PW Corporation, substantially to the effect that:

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<PAGE>

6.4.1. Acquiring Fund is a duly established series of PW Corporation,
a corporation duly organized and validly existing under the laws of the
State of Maryland with power under its Articles of Incorporation to own all
of its properties and assets and, to the knowledge of such counsel, to
carry on its business as presently conducted;

6.4.2. This Agreement (a) has been duly authorized, executed, and
delivered by PW Corporation on behalf of Acquiring Fund and (b) assuming
due authorization, execution, and delivery of this Agreement by Target, is
a valid and legally binding obligation of PW Corporation with respect to
Acquiring Fund, enforceable in accordance with its terms, except as the
same may be limited by bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium, and similar laws relating to or affecting cre-
ditors' rights and by general principles of equity;

6.4.3. The Acquiring Fund Shares to be issued and distributed to the
Shareholders under this Agreement, assuming their due delivery as
contemplated by this Agreement, will be duly authorized and validly issued
and outstanding and fully paid and non-assessable, and no shareholder of
Acquiring Fund has any preemptive right to subscribe for or purchase such
shares;

6.4.4. The execution and delivery of this Agreement did not, and the
consummation of the transactions contemplated hereby will not, materially
violate PW Corporation's Articles of Incorporation or By-Laws or any
provision of any agreement (known to such counsel, without any independent
inquiry or investigation) to which PW Corporation (with respect to Acquir-
ing Fund) is a party or by which it is bound or (to the knowledge of such
counsel, without any independent inquiry or investigation) result in the
acceleration of any obligation, or the imposition of any penalty, under any
agreement, judgment, or decree to which PW Corporation (with respect to Ac-
quiring Fund) is a party or by which it is bound, except as set forth in
such opinion or as previously disclosed in writing to and accepted by
Target;

6.4.5. To the knowledge of such counsel (without any independent
inquiry or investigation), no consent, approval, authorization, or order of
any court or governmental authority is required for the consummation by PW
Corporation on behalf of Acquiring Fund of the transactions contemplated
herein, except such as have been obtained under the 1933 Act, the 1934 Act,
and the 1940 Act and such as may be required under state securities laws;

6.4.6. PW Corporation is registered with the SEC as an investment
company, and to the knowledge of such counsel no

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<PAGE>

order has been issued or proceeding instituted to suspend such reg-
istration; and

6.4.7. To the knowledge of such counsel (without any independent
inquiry or investigation), (a) no litigation, administrative proceeding, or
investigation of or before any court or governmental body is pending or
threatened as to PW Corporation (with respect to Acquiring Fund) or any of
its properties or assets attributable or allocable to Acquiring Fund and
(b) PW Corporation (with respect to Acquiring Fund) is not a party to or
subject to the provisions of any order, decree, or judgment of any court or
governmental body that materially and adversely affects Acquiring Fund's
business, except as set forth in such opinion or as otherwise disclosed in
writing to and accepted by Target.

In rendering such opinion, such counsel may (i) rely, as to matters governed by
the laws of the State of Maryland, on an opinion of competent Maryland counsel,
(ii) make assumptions regarding the authenticity, genuineness, and/or conformity
of documents and copies thereof without independent verification thereof,
(iii) limit such opinion to applicable federal and state law, and (iv) define
the word "knowledge" and related terms to mean the knowledge of attorneys then
with such firm who have devoted substantive attention to matters directly
related to this Agreement and the Reorganization.

6.5. PW Corporation shall have received an opinion of Sullivan & Cromwell,
counsel to Target, substantially to the effect that:

6.5.1. Target is a corporation duly organized and validly existing
under the laws of the State of Maryland with power under its Articles of
Incorporation to own all of its properties and assets and, to the knowledge
of such counsel, to carry on its business as presently conducted;

6.5.2. This Agreement (a) has been duly authorized, executed, and
delivered by Target and (b) assuming due authorization, execution, and
delivery of this Agreement by PW Corporation on behalf of Acquiring Fund,
is a valid and legally binding obligation of Target, enforceable in
accordance with its terms, except as the same may be limited by bankruptcy,
insolvency, fraudulent transfer, reorganization, moratorium, and similar
laws relating to or affecting creditors' rights and by general principles
of equity;

6.5.3. The execution and delivery of this Agreement did not, and the
consummation of the transactions contemplated hereby will not, materially
violate Target's Articles of Incorporation or By-Laws or any provision of
any agreement (known to such counsel, without any independent inquiry or

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<PAGE>

investigation) to which Target is a party or by which it is bound or (to
the knowledge of such counsel, without any independent inquiry or
investigation) result in the acceleration of any obligation, or the
imposition of any penalty, under any agreement, judgment, or decree to
which Target is a party or by which it is bound, except as set forth in
such opinion or as previously disclosed in writing to and accepted by PW
Corporation;

6.5.4. To the knowledge of such counsel (without any independent
inquiry or investigation), no consent, approval, authorization, or order of
any court or governmental authority is required for the consummation by
Target of the transactions contemplated herein, except such as have been
obtained under the 1933 Act, the 1934 Act, and the 1940 Act and such as may
be required under state securities laws;

6.5.5. Target is registered with the SEC as an investment company,
and to the knowledge of such counsel no order has been issued or proceeding
instituted to suspend such registration; and

6.5.6. To the knowledge of such counsel (without any independent
inquiry or investigation), (a) no litigation, administrative proceeding, or
investigation of or before any court or governmental body is pending or
threatened as to Target or any of its properties or assets and (b) Target
is not a party to or subject to the provisions of any order, decree, or
judgment of any court or governmental body that materially and adversely
affects its business, except as set forth in such opinion or as otherwise
disclosed in writing to and accepted by PW Corporation.

6.6. PW Corporation shall have received an opinion of Kirkpatrick &
Lockhart LLP, its counsel, addressed to and in form and substance satisfactory
to it, and Target shall have received an opinion of Sullivan & Cromwell, its
counsel, addressed to and in form and substance satisfactory to it, each as to
the federal income tax consequences mentioned below (each a "Tax Opinion"). In
rendering its Tax Opinion, each such counsel may rely as to factual matters,
exclusively and without independent verification, on the

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<PAGE>

representations made in this Agreement (or in separate letters addressed to such
counsel) and the certificates delivered pursuant to paragraph 3.4. Each Tax
Opinion shall be substantially to the effect that, based on the facts and
assumptions stated therein, for federal income tax purposes:

6.6.1. Acquiring Fund's acquisition of the Assets in exchange solely
for Acquiring Fund Shares and Acquiring Fund's assumption of the Liabili-
ties, followed by Target's distribution of those shares to the Shareholders
constructively in exchange for the Shareholders' Target Shares, will con-
stitute a reorganization within the meaning of section 368(a)(1)(C) of the
Code, and each Fund will be "a party to a reorganization" within the
meaning of section 368(b) of the Code;

6.6.2. No gain or loss will be recognized to Target on the transfer
to Acquiring Fund of the Assets in exchange solely for Acquiring Fund
Shares and Acquiring Fund's assumption of the Liabilities or on the
subsequent distribution of those shares to the Shareholders in constructive
exchange for their Target Shares;

6.6.3. No gain or loss will be recognized to Acquiring Fund on its
receipt of the Assets in exchange solely for Acquiring Fund Shares and its
assumption of the Liabilities;

6.6.4. Acquiring Fund's basis for the Assets will be the same as the
basis thereof in Target's hands immediately before the Reorganization, and
Acquiring Fund's holding period for the Assets will include Target's
holding period therefor;

6.6.5. A Shareholder will recognize no gain or loss on the
constructive exchange of all its Target Shares solely for Acquiring Fund
Shares pursuant to the Reorganization; and

6.6.6. A Shareholder's basis for the Acquiring Fund Shares to be
received by it in the Reorganization will be the same as the basis for its
Target Shares to be constructively surrendered in exchange for those
Acquiring Fund Shares, and its holding period for those Acquiring Fund
Shares will include its holding period for those Target Shares, provided
they are held as capital assets by the Shareholder at the Effective Time.

Notwithstanding subparagraphs 6.6.2 and 6.6.4, each Tax Opinion may state that
no opinion is expressed as to the effect of the Reorganization on the Funds or
any Shareholder with respect to any asset as to which any unrealized gain or
loss is required to be recognized for federal income tax purposes at the end of
a taxable year (or on the termination or transfer thereof) under a mark-to-
market system of accounting.

A-17

<PAGE>

At any time before the Closing, (a) Acquiring Fund may waive any of the
foregoing conditions if, in the judgment of PW Corporation's board of directors,
such waiver will not have a material adverse effect on its shareholders'
interests, and (b) Target may waive any of the foregoing conditions if, in the
judgment of its board of directors, such waiver will not have a material adverse
effect on the Shareholders' interests.

7. BROKERAGE FEES AND EXPENSES
---------------------------

7.1. Each Investment Company represents and warrants to the other that
there are no brokers or finders entitled to receive any payments in connection
with the transactions provided for herein.

7.2. Except as otherwise provided herein, all expenses incurred in
connection with the transactions contemplated by this Agreement (whether or not
they are consummated) will be borne by the Funds proportionately, as follows:
each such expense will be borne by the Funds in proportion to their respective
net assets as of the close of business on the last business day of the month in
which such expense was incurred. Such expenses include: (a) expenses incurred
in connection with entering into and carrying out the provisions of this
Agreement; (b) expenses associated with the preparation and filing of the
Registration Statement; (c) registration or qualification fees and expenses of
preparing and filing such forms as are necessary under applicable state
securities laws to qualify the Acquiring Fund Shares to be issued in connection
herewith in each state in which Target's shareholders are resident as of the
date of the mailing of the Proxy Statement to such shareholders; (d) printing
and postage expenses; (e) legal and accounting fees; and (f) solicitation costs.

8. ENTIRE AGREEMENT; SURVIVAL
--------------------------

Neither party has made any representation, warranty, or covenant not set
forth herein, and this Agreement constitutes the entire agreement between the
parties. The representations, warranties, and covenants contained herein or in
any document delivered pursuant hereto or in connection herewith shall survive
the Closing.

9. TERMINATION OF AGREEMENT
------------------------

This Agreement may be terminated at any time at or prior to the Effective
Time, whether before or after approval by Target's shareholders:

9.1. By either Fund (a) in the event of the other Fund's material breach
of any representation, warranty, or covenant con-

A-18

<PAGE>
tained herein to be performed at or prior to the Effective Time, (b) if a
condition to its obligations has not been met and it reasonably appears that
such condition will not or cannot be met, or (c) if the Closing has not occurred
on or before March 31, 1996; or

9.2. By the parties' mutual agreement.

In the event of termination under paragraphs 9.1.(c) or 9.2, there shall be no
liability for damages on the part of either Fund, or the directors or officers
of either Investment Company, to the other Fund.

10. AMENDMENT
---------

This Agreement may be amended, modified, or supplemented at any time,
notwithstanding approval thereof by Target's shareholders, in such manner as may
be mutually agreed upon in writing by the parties; provided that following such
approval no such amendment shall have a material adverse effect on the Share-
holders' interests.

11. MISCELLANEOUS
-------------

11.1. This Agreement shall be governed by and construed in accordance with
the internal laws of the State of Maryland; provided that, in the case of any
conflict between such laws and the federal securities laws, the latter shall
govern.

11.2. Nothing expressed or implied herein is intended or shall be
construed to confer upon or give any person, firm, trust, or corporation other
than the parties and their respective successors and assigns any rights or
remedies under or by reason of this Agreement.

A-19

<PAGE>

IN WITNESS WHEREOF, each party has caused this Agreement to be executed by
its duly authorized officer.

ATTEST: PAINEWEBBER RMA MONEY FUND, INC.,
on behalf of its series,
PAINEWEBBER RMA U.S. GOVERNMENT
PORTFOLIO

By:
------------------- ------------------------------
Assistant Secretary Vice President

ATTEST: PAINEWEBBER/KIDDER, PEABODY GOVERNMENT
MONEY FUND, INC.

By:
------------------- ------------------------------
Assistant Secretary Vice President

A-20

<PAGE>
APPENDIX B

BENEFICIAL OWNERSHIP OF SHARES OF PW FUND AND PW/KP FUND

Number
Name Address (and Percentage) of Shares
---- ------- Beneficially Owned
------------------

<PAGE>
PAINEWEBBER RMA MONEY FUND, INC.
PART B

<PAGE>
PAINEWEBBER RMA U.S. GOVERNMENT PORTFOLIO
(a series of PaineWebber RMA Money Fund, Inc.)

PAINEWEBBER/KIDDER, PEABODY GOVERNMENT MONEY FUND, INC.

1285 Avenue of the Americas
New York, New York 10019

STATEMENT OF ADDITIONAL INFORMATION

This Statement of Additional Information relates to the proposed
reorganization whereby PaineWebber RMA U.S. Government Portfolio ("PW Fund"), a
series of PaineWebber RMA Money Fund, Inc., would acquire the assets of
PaineWebber/Kidder, Peabody Government Money Fund, Inc. ("PW/KP Fund") in
exchange solely for shares of beneficial interest in PW Fund and the assumption
by PW Fund of PW/KP Fund's liabilities. This Statement of Additional
Information consists of this cover page and the following described documents
each of which is incorporated by reference herein:

(1) The Statement of Additional Information of PW Fund dated August
29, 1995 previously filed on EDGAR, under Accession Number:
0000950112-95-002296

(2) The Statement of Additional Information of PW/KP Fund dated
August 1, 1995 previously filed on EDGAR, under Accession Number:
0000950117-95-000194

(3) The Annual Report to Shareholders of PW Fund for fiscal year
ended June 30, 1995 previously filed on EDGAR, under Accession
Number: 0000950112-95-002312

(4) The Annual Report to Shareholders of PW/KP Fund for fiscal year
ended March 31, 1995 previously filed on EDGAR, under Accession
Number: 0000950146-95-000313

(5) Pro Forma Financial Statements for PW/KP Fund for the Twelve Months
Ended June 30, 1995

This Statement of Additional Information is not a prospectus and should be
read only in conjunction with the Prospectus/Proxy Statement dated October __,
1995 relating to the above described transaction. A copy of the
Prospectus/Proxy Statement may be obtained by calling any PaineWebber
Incorporated ("PaineWebber") investment executive or correspondent firm or by
calling toll-free 1-800-647-1568. This Statement of Additional Information is
dated October __, 1995.

<PAGE>

PaineWebber RMA U.S. Government Portfolio & PaineWebber/Kidder, Peabody
Government Money Fund, Inc.

Statement of Net Assets
June 30, 1995 (unaudited)

Principal PaineWebber
Amount Maturity Interest RMA US Govt
(000) Dates Rates Value
-----------
<S> <C> <C> <C>
U.S. GOVERNMENT OBLIGATIONS - 53.81% %
$380,000 U.S. Treasury Bills......................................... 07/13/95 to 05/02/96 5.385 to 6.620%@ $374,353,313
65,000 U.S. Treasury Notes......................................... 07/31/95 to 05/15/96 3.875 to 4.250 64,636,271
Total U.S. Government Obligations (cost-$438,989,584)............... 438,989,584

U.S. GOVERNMENT AGENCY OBLIGATIONS - %
38,000 Federal Farm Credit Bank.................................... 07/24/95 to 09/01/95 5.780 to 5.968@
55,000 Federal Home Loan Bank...................................... 07/03/95 to 06/03/95 5.730 to 6.015@
66,290 Federal Home Loan Mortgage Corporation...................... 07/03/95 to 05/13/95 5.750 to 6.210@
43,025 Federal National Mortgage Association....................... 07/05/95 to 04/18/95 5.750 to 6.430@
39,000 Tennessee Valley Authority.................................. 07/11/95 to 07/27/95 5.780 to 5.900@
Total U.S. Government Agency Obligations (cost-$240,694,615)........

REPURCHASE AGREEMENTS - 46.29%%

30,000 Repurchase Agreement dated 06/30/95, with Citicorp
Securities, Inc., collateralized by $29,640,000
U.S. Treasury Notes, 7.750% due 03/31/96;
proceeds: $30,015,313......................................... 07/03/95 6.125 30,000,000
3,566 Repurchase Agreement dated 06/30/95, with Citicorp
Securities, Inc., collateralized by $3,600,000
U.S. Treasury Notes, 6.125% due 05/15/98;
proceeds: $3,567,820.......................................... 07/03/95 6.125
38,000 Repurchase Agreement dated 06/30/95, with Daiwa
Securities America, Inc., collateralized by $39,795,000
U.S. Treasury Bills, due 12 /14/95;
proceeds: $38,019,396......................................... 07/03/95 6.125 38,000,000
38,000 Repurchase Agreement dated 06/30/95, with First Chicago
Capital Markets, Inc., collateralized by $39,780,000
U.S. Treasury Bills, due 12 /14/95;
proceeds: $38,019,396 ........................................ 07/03/95 6.125 38,000,000
38,000 Repurchase Agreement dated 06/30/95, with Fuji Securities Inc.
collateralized by $38,760,000 U.S. Treasury Notes,
4.750% due 02/15/97; proceeds: $38,019,317 ................... 07/03/95 6.100 38,000,000
13,638 Repurchase Agreement dated 06/30/95, with Goldman, Sachs
& Co., collateralized by $9,500,000 U.S. Treasury Bonds,
10.625% due 08/15/15; proceeds: $13,644,819 ................. 07/03/95 6.000 13,638,000
38,000 Repurchase Agreement dated 06/30/95, with Lehman
Government Securities Inc., collateralized by $36,235,000
U.S. Treasury Bonds, 7.250% due 05/15/16;
proceeds: $38,019,317 ........................................ 07/03/95 6.100 38,000,000
30,000 Repurchase Agreement dated 06/30/95, with Morgan
Stanley Group, Inc., collateralized by $20,185,000
U.S. Treasury Bonds, 12.000% due 08/15/13;
proceeds: $30,015,125 ...................................... 07/03/95 6.050 30,000,000
38,000 Repurchase Agreement dated 06/30/95, with NationsBank,
collateralized by $38,400,000 U.S. Treasury Notes,
6.125% due 05/15/98; proceeds: $38,019,792 .................. 07/03/95 6.250 38,000,000
12,000 Repurchase Agreement dated 06/30/95, with NationsBank,
collateralized by $12,200,000 U.S. Treasury Notes,
5.875% due 03/31/99; proceeds: $12,006,250 .................. 07/03/95 6.250
38,000 Repurchase Agreement dated 06/30/95, with Nomura
Securities International, Inc., collateralized by $37,230,000
U.S. Treasury Notes, 6.375% due 01/15/00; proceeds:
$38,019,317 ................................................. 07/03/95 6.100 38,000,000
38,000 Repurchase Agreement dated 06/30/95, with Salomon
Brothers, Inc., collateralized by $38,188,000 U.S.
Treasury Notes, 5.500% due 07/31/97; proceeds:
$38,019,475 ................................................. 07/03/95 6.150 38,000,000

Principal PW/KP Pro Forma
Amount Govt Money Combined
(000) Value Value
-----------
<S> <C> <C>
U.S. GOVERNMENT OBLIGATIONS - 40.96
$380,000 U.S. Treasury Bills......................................... $374,353,313
65,000 U.S. Treasury Notes......................................... 64,636,271
Total U.S. Government Obligations (cost-$438,989,584)............... 438,989,584

U.S. GOVERNMENT AGENCY OBLIGATIONS - 94.07% 22.46
38,000 Federal Farm Credit Bank.................................... $37,835,891 * 37,835,891
55,000 Federal Home Loan Bank...................................... 54,885,293 * 54,885,293
66,290 Federal Home Loan Mortgage Corporation...................... 66,121,858 * 66,121,858
43,025 Federal National Mortgage Association....................... 42,948,912 * 42,948,912
39,000 Tennessee Valley Authority.................................. 38,902,661 * 38,902,661
Total U.S. Government Agency Obligations (cost-$240,694,615)........ 240,694,615 240,694,615

REPURCHASE AGREEMENTS - 6.08% 36.69

30,000 Repurchase Agreement dated 06/30/95, with Citicorp
Securities, Inc., collateralized by $29,640,000
U.S. Treasury Notes, 7.750% due 03/31/96;
proceeds: $30,015,313........................................ 30,000,000
3,566 Repurchase Agreement dated 06/30/95, with Citicorp
Securities, Inc., collateralized by $3,600,000
U.S. Treasury Notes, 6.125% due 05/15/98;
proceeds: $3,567,820......................................... 3,566,000 3,566,000
38,000 Repurchase Agreement dated 06/30/95, with Daiwa
Securities America, Inc., collateralized by $39,795,000
U.S. Treasury Bills, due 12 /14/95;
proceeds: $38,019,396........................................ 38,000,000
38,000 Repurchase Agreement dated 06/30/95, with First Chicago
Capital Markets, Inc., collateralized by $39,780,000
U.S. Treasury Bills, due 12 /14/95;
proceeds: $38,019,396 ....................................... 38,000,000
38,000 Repurchase Agreement dated 06/30/95, with Fuji Securities Inc.
collateralized by $38,760,000 U.S. Treasury Notes,
4.750% due 02/15/97; proceeds: $38,019,317 .................. 38,000,000
13,638 Repurchase Agreement dated 06/30/95, with Goldman, Sachs
& Co., collateralized by $9,500,000 U.S. Treasury Bonds,
10.625% due 08/15/15; proceeds: $13,644,819 ................ 13,638,000
38,000 Repurchase Agreement dated 06/30/95, with Lehman
Government Securities Inc., collateralized by $36,235,000
U.S. Treasury Bonds, 7.250% due 05/15/16;
proceeds: $38,019,317 ....................................... 38,000,000
30,000 Repurchase Agreement dated 06/30/95, with Morgan
Stanley Group, Inc., collateralized by $20,185,000
U.S. Treasury Bonds, 12.000% due 08/15/13;
proceeds: $30,015,125 ..................................... 30,000,000
38,000 Repurchase Agreement dated 06/30/95, with NationsBank,
collateralized by $38,400,000 U.S. Treasury Notes,
6.125% due 05/15/98; proceeds: $38,019,792 ................. 38,000,000
12,000 Repurchase Agreement dated 06/30/95, with NationsBank,
collateralized by $12,200,000 U.S. Treasury Notes,
5.875% due 03/31/99; proceeds: $12,006,250 ................. 12,000,000 12,000,000
38,000 Repurchase Agreement dated 06/30/95, with Nomura
Securities International, Inc., collateralized by $37,230,000
U.S. Treasury Notes, 6.375% due 01/15/00; proceeds:
$38,019,317 ................................................ 38,000,000
38,000 Repurchase Agreement dated 06/30/95, with Salomon
Brothers, Inc., collateralized by $38,188,000 U.S.
Treasury Notes, 5.500% due 07/31/97; proceeds:
$38,019,475 ................................................ 38,000,000

</TABLE>

<PAGE>

PaineWebber RMA U.S. Government Portfolio & PaineWebber/Kidder, Peabody
Government Money Fund, Inc.;

Statement of Net Assets (concluded)
June 30, 1995 (unaudited)
<TABLE><CAPTION>

Principal PaineWebber PW/KP
Amount Maturity Interest RMA US Govt Govt Money
(000) Date Rate Value Value
---------- -------- -------- ----------- ----------
<S> <C> <C> <C> <C>
REPURCHASE AGREEMENTS - (concluded)

$38,000 Repurchase Agreement dated 06/30/95,
with Smith Barney Inc., collateralized
by $41,085,000 U.S. Treasury Bills, due
06/27/96; proceeds: $38,019,158 .............................. 07/03/95 6.050% $38,000,000
-----------
Total Repurchase Agreements (cost - $377,638,000, $15,566,000 and
$393,204,000 respectively) 377,638,000 $15,566,000
-------------------------
Total Investments (cost - $816,627,584, $256,260,615 and $1,072,888,199
respectively, which approximate cost for federal income tax purposes) -
100.10%, 100.15% and 100.11% respectively............................... 816,627,584 256,260,615
Other liabilities in excess of assets - (0.10%), (0.15%) and (0.11%)
respectively............................................................ (846,723) (384,766)
-------------------------
Net Assets -(applicable to 815,864,869 Series B, 255,876,801 and 1,071,741,670
respectively , Common Stock outstanding at $1.00 per share) - 100.00%.. $815,780,861 $255,875,849
=========================
@ Yield to maturity for discounted securities.
* Security does not conform to investment restrictions of
PaineWebber RMA U.S. Government Portfolio and will be sold
prior to the reorganization.

Principal Pro Forma
Amount Combined
(000) Value
---------- ---------
<S> <C>
REPURCHASE AGREEMENTS - (concluded)

$38,000 Repurchase Agreement dated 06/30/95,
with Smith Barney Inc., collateralized
by $41,085,000 U.S. Treasury Bills, due
06/27/96; proceeds: $38,019,158 .............................. $38,000,000
-------------
Total Repurchase Agreements (cost - $377,638,000, $15,566,000 and
$393,204,000 respectively) 393,204,000
-------------
Total Investments (cost - $816,627,584, $256,260,615 and $1,072,888,199
respectively, which approximate cost for federal income tax purposes) -
100.10%, 100.15% and 100.11% respectively............................... 1,072,888,199
Other liabilities in excess of assets - (0.10%), (0.15%) and (0.11%)
respectively............................................................ (1,231,489)
-------------
Net Assets -(applicable to 815,864,869 Series B, 255,876,801 and 1,071,741,670
respectively , Common Stock outstanding at $1.00 per share) - 100.00%.. 1,071,656,710
=============
@ Yield to maturity for discounted securities.
* Security does not conform to investment restrictions of
PaineWebber RMA U.S. Government Portfolio and will be sold
prior to the reorganization.

</TABLE>
Weighted average maturity - 54, 43 and 52 days respectively.

See Notes to Pro Forma Financial Statements

<PAGE>

Pro Forma Combined
Statement of Operations
(Unaudited)
For the Twelve Months Ended June 30, 1995

PaineWebber PW/KP
RMA U.S. Government
Government Money Pro Forma
Portfolio Fund Adjustments Combined
----------- ---------- ----------- ---------
<S> <C> <C> <C> <C>
Investment Income
Interest $42,668,517 $15,454,673 $0 $58,123,190
----------- ----------- ----------- ---------
Expenses
Investment advisory and administration fees 3,746,439 1,434,545 (404,791) 4,776,193
Distribution fees 659,208 344,292 (115,458) 888,042
Transfer agency and service fees 308,178 85,925 (31,057) 363,046
Custody fees 154,055 43,198 (31,497) 165,756
Other 290,220 131,847 (102,644) 319,423
----------- ----------- ----------- ----------
5,158,100 2,039,807 (685,447) 6,512,460
----------- ----------- ----------- ----------
Net Investment Income 37,510,417 13,414,866 685,447 51,610,730
----------- ----------- ----------- ----------
Realized gains (losses) from investment transactions 79,003 (758,500) (679,497)
----------- ----------- ----------- ----------
Net increase in net assets resulting from operations $37,589,420 $12,656,366 $685,447 $50,931,233
=========== =========== =========== ==========
</TABLE>

See Notes to Pro Forma Combined Financial Statements

<PAGE>

Pro Forma Capitalization
as of June 30, 1995
(Unaudited)
<TABLE><CAPTION>
PaineWebber
PaineWebber PW/KP RMA U.S.
RMA U.S. Government Government
Government Money Portfolio
Portfolio Fund (As Adjusted) (1)
----------- ---------- -------------
<S> <C> <C> <C>
Shareholders' Equity:
Beneficial interest shares of $0.001 par value per share
(unlimited amount authorized) :
815,864,869 shares outstanding for PW RMA U.S. Government
Portfolio (Actual) 255,876,801 shares outstanding for PW/KP
Government Money Fund (Actual) 1,071,741,670 shares
outstanding for PW RMA U.S. Government Portfolio (As
Adjusted) 815,864,869 255,876,801 1,071,741,670 (2) (3)
Accumulated net realized gains (losses) from investments (84,008) (952) (84,960) (4)
Net Assets $815,780,861 $255,875,849 $1,071,656,710

</TABLE>

(1) The adjusted balances are presented as if the Reorganization involving
both Funds was effective as of June 30, 1995 for information purposes
only. The actual effective time of the Reorganization is expected to be
November 1995, at which time the results would be reflective of the
actual composition of shareholders' equity at that date.

(2) Assumes the issuance of 255,876,801 shares in exchange for the net
assets applicable to beneficial interest holders of PW/KP Government
Money Fund. The exchange is based on net asset value for PW RMA U.S.
Government Portfolio of $1.00, and the net assets applicable to
beneficial interest holders of PW/KP Government Money as of June 30,
1995.

(3) Does not include the impact of estimated Reorganization costs of
$225,000.

(4) Assumes PW/KP Government Money 's net realized gains(losses) from
investment transactions carry forward into PW RMA U.S. Government
Portfolio.

See Notes to Pro Forma Combined Financial Statements

<PAGE>

Notes To Pro Forma Combined Financial Statements
(unaudited)

Basis of Presentation:

Subject to approval of the Plan of Reorganization by the shareholders of
PaineWebber/Kidder, Peabody Government Money Fund ("PW/KP Govt Money"),
PaineWebber RMA U.S. Government Portfolio ("RMA U.S. Govt") would acquire the
assets of PW/KP Govt Money in exchange solely for the assumption by RMA U.S.
Govt of PW/KP Govt Money's liabilities and shares of RMA U.S. Govt that
correspond, in aggregate, to the outstanding shares of PW/KP Govt Money. Shares
of RMA U.S. Govt will be distributed to PW/KP Govt Money's shareholders at $1.00
per share, and PW/KP Govt Money will be terminated as soon as practicable
thereafter. Each PW/KP Govt Money shareholder will receive the number of full
and fractional shares of RMA U.S. Govt equal in value to such shareholders'
holdings in the corresponding shares of PW/KP Govt Money as of the closing date
of the merger.

If the shareholders approve the Plan of Reorganization at a meeting in
November, PW/KP Govt Money will merge into RMA U.S. Govt in November 1995. The
pro forma combined financial statements reflect the financial position of RMA
U.S. Govt and PW/KP Govt Money at June 30, 1995 and the combined results of
operations of RMA U.S. Govt and PW/KP Govt Money for the twelve months ended
June 30, 1995. Certain expenses have been adjusted to reflect the expected
combined entity. Pro forma operating expenses include the actual expenses of the
Funds and the combined Fund adjusted for certain items.

As a result of the Reorganization, expenses will be reduced due to duplication
of certain fixed expenses. It is estimated that costs of approximately $225,000
associated with the merger will be charged to the Funds in proportion to then'
respective net assets.

The pro forma combined financial statements are presented for the information of
the reader and may not necessarily be representative of what the actual
combined financial statements would have been had the Reorganization occurred
at June 30, 1995. The pro forma combined financial statements should be read in
conjunction with the historical financial statements of the constituent Funds
included in the statement of additional information.

<PAGE>

PAINEWEBBER RMA MONEY FUND, INC.
PART C

OTHER INFORMATION

Item 15. Indemnification
---------------

Article Fourteenth of the Articles of Incorporation provides that the
directors and officers of the Registrant shall not be liable to the Registrant
or to any of its stockholders for monetary damages. Article Fourteenth also
provides that no amendment, alteration or repeal of the contents contained in
the preceding sentence or the adoption, alteration or amendment of any other
provision of the Articles or By-Laws inconsistent with Article Fourteenth shall
adversely affect any limitation of liability of any director or officer of the
Registrant with respect to any act or failure to act which occurred prior to
such amendment, alteration, repeal or adoption.

Section 10.01 of Article X of the Bylaws provides that the Registrant shall
indemnify its present and past directors, officers, employees and agents, and
any persons who are serving or have served at the request of the corporation as
a director, officer, employee or agent of another corporation, partnership,
joint venture, trust, or enterprise, to the fullest extent permitted by law.

Section 10.02 of Article X of the Bylaws further provides that the
Registrant may purchase and maintain insurance on behalf of any person who is or
was a director, officer or employee of the Registrant, or is or was serving at
the request of the Registrant as a director, officer or employee of a
corporation, partnership, joint venture, trust or other enterprise against any
liability asserted against him or out of his or her status as such whether or
not the Registrant would have the power to indemnify him or her against such
liability.

Section 9 of the Investment Advisory and Administration Contract provides
that PaineWebber shall not be liable for any error of judgment or mistake of law
or for any loss suffered by Registrant in connection with the matters to which
the Contract relates except for a loss resulting from willful misfeasance, bad
faith or gross negligence of PaineWebber in the performance of its duties or
from its reckless disregard of its obligations and duties under the Contract.
Section 9 further provides that any person, even though also an officer,
partner, employee or agent of PaineWebber, who may be or become an officer,
director, employee or agent of Registrant shall be deemed, when rendering
services to the Registrant or acting with respect to any business of the
Registrant, to be rendering such service to or acting solely for the Registrant
and not as an officer, partner, employee, or agent or one under the control or
direction of PaineWebber even though paid by it.

Section 8 of the Sub-Advisory and Sub-Administration Contract provides that
Mitchell Hutchins will not be liable for any error of judgment or mistake of law
or for any loss suffered by PaineWebber or the Registrant or its shareholders in
connection with the performance of those Contracts, except a loss resulting from
willful misfeasance, bad faith or gross negligence on its part in the
performance of its duties or from reckless disregard by it of its obligations or
duties under the Contracts.

Section 9 of the Distribution Contract provides that the Registrant will
indemnify PaineWebber and its officers, directors or controlling persons against
all liabilities arising from any alleged untrue statement of material fact in
the Registration Statement or from alleged omission to state in the Registration
Statement a material fact required to be stated in it or necessary to make the
statements in it, in light of the circumstances under which they were made, not
misleading, except insofar as liability arises from untrue statements or
omissions made in reliance upon and in conformity with information furnished by
PaineWebber to the Registrant for use in the Registration Statement; and
provided that this indemnity agreement shall not protect any such persons
against liabilities arising by reason of their bad faith, gross negligence or
willful misfeasance; and shall not inure to the benefit of any such persons
unless a court of competent jurisdiction or controlling precedent determines
that such result is not against public policy as expressed in the Securities Act
of 1933. Section 9 of the Distribution Contract also provides that PaineWebber
agrees to indemnify, defend and hold

<PAGE>

the Registrant, its officers and directors free and harmless of any claims
arising out of any alleged untrue statement or any alleged omission of material
fact contained in information furnished by PaineWebber for use in the
Registration Statement or arising out of an agreement between PaineWebber and
any retail dealer, or arising out of supplementary literature or advertising
used by PaineWebber in connection with the Contract.

Section 7 of the Service Contract provides that PaineWebber shall be
indemnified and held harmless by the Registrant against all liabilities, except
those arising out of bad faith, gross negligence, willful misfeasance or
reckless disregard of its duties under the Contract.

Insofar as indemnification for liabilities arising under the Securities Act
of 1933 ("Act"), as amended, may be provided to directors, 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 Act and is, therefore, unenforceable. In the event that a
claim for indemnification against such liabilities (other than the payment by
the Registrant of expenses incurred or paid by a director, officer or
controlling person of the Registrant in connection with the successful defense
of any action, suit or proceeding or payment pursuant to any insurance policy)
is asserted against the Registrant by such director, officer or controlling
person in connection with the securities being registered, the Registrant will,
unless in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the Act and
will be governed by the final adjudication of such issue.

Item 16. Exhibits
--------

(1) (a) Amended and Restated Articles of Incorporation1
/
-
(b) Articles Supplementary effective February 9, 19882/
-
(c) Articles of Amendment effective August 4, 19893/
-
(2) (a) By-Laws4/
-
(b) Amendment dated September 28, 1994 to By-Laws5/
-
(3) Voting trust agreement - none
(4) Agreement and Plan of Reorganization and Dissolution
(filed herewith)
(5) Instruments defining the rights of holders of the Registrant's
shares of common stock 6/
-
(6) (a) Investment Advisory and Administration Contract7/
-
(b) Sub-Advisory and Sub-Administration Contract7/
-
(7) Distribution Contract8/
-
(8) Bonus, profit sharing or pension plans - none
(9) (a) Custodian Contract9/
-
(10) Plan pursuant to Rule 12b-18/
-
(11) Opinion and consent of Kirkpatrick & Lockhart LLP regarding
the legality of securities being registered (filed herewith)
(12)(a) Opinion and Consent of Kirkpatrick & Lockhart LLP regarding
certain tax matters (filed herewith)
(b) Opinion and consent of Sullivan & Cromwell regarding certain
tax matters (filed herewith)
(13)(a) Transfer Agency Agreement9/
-
(b) Service Contract7/
-
(14)(a) Consent of Ernst & Young LLP (filed herewith)
(b) Consent of Deloitte & Touche LLP (filed herewith)
(15) Financial statements omitted from Part B - none
(16) Copies of manually signed Powers of Attorney - none
(17) Additional Exhibits
(a) Declaration of Rule 24f-2 (filed herewith)

<PAGE>

(b) Proxy Cards (filed herewith)
(27) Financial Data Schedules (filed herewith)

--------------------
1/ Incorporated by reference from Pre-Effective Amendment No. 2 to
-
registration statement, SEC File No. 2-78309, filed October 4, 1982.
2/ Incorporated by reference from Post-Effective Amendment No. 12 to
-
registration statement, SEC File No. 2-78309, filed February 12, 1988.
3/ Incorporated by reference from Post-Effective Amendment No. 17
-
to registration statement, SEC File No. 2-78309, filed August 29, 1989.
4/ Incorporated by reference from Post-Effective Amendment No. 18 to
-
registration statement, SEC File No. 2-78309, filed August 29, 1990.
5/ Incorporated by reference from Post Effective Amendment No.29 to the
-
registration statement, SEC File No. 2-78309, filed August 29, 1995.
6/ Incorporated by reference from Articles Fifth, Sixth, Seventh, Ninth,
-
Tenth, Twelfth and Fourteenth of the Registrant's Articles of
Incorporation, as amended February 9, 1988 and August 4, 1989 and from
Articles II, III, VIII, X, XI, XII and XIII of the Registrant's By-Laws, as
amended September 28, 1994.
7/ Incorporated by reference from Post-Effective Amendment No. 15 to
-
registration statement, SEC File No. 2-78309, filed June 5, 1989.
8/ Incorporated by reference from Post Effective Amendment No.28 to the
-
registration statement, SEC File No. 2-89016, filed August 29, 1994.
9/ Incorporated by reference from Post-Effective Amendment No. 1 to
-
registration statement, SEC File No. 2-78309, filed February 8, 1983.
10/ Incorporated by reference from Post-Effective Amendment No. 19 to
--
registration statement, SEC File No. 2-78309, filed August 29, 1991.

Item 17. Undertakings
------------

(1) The undersigned Registrant agrees that prior to any public re-
offering of the securities registered through the use of the
prospectus which is a part of this Registration Statement by any
person or party who is deemed to be an underwriter within the meaning
of Rule 145(c) of the Securities Act of 1933, the re-offering
prospectus will contain the information called for by the applicable
registration form for re-offering by persons who may be deemed
underwriters, in addition to the information called for by the other
items of the applicable form.

(2) The undersigned Registrant agrees that every prospectus that is filed
under paragraph (1) above will be filed as a part of an amendment to
the Registration Statement and will not be used until the amendment
is effective, and that, in determining any liability under the
Securities Act of 1933, each post-effective amendment shall be deemed
to be a new Registration Statement for the securities offered
therein, and the offering of the securities at that time shall be
deemed to be the initial bona fide offering of them.

<PAGE>

SIGNATURES

As required by the Securities Act of 1933, as amended, this Registration
Statement has been signed on behalf of the Registrant, in the City of New York
and the State of New York, on this 8th day of September, 1995.

PAINEWEBBER RMA MONEY FUND, INC.

By: /s/ Dianne E. O'Donnell
--------------------------------
Dianne E. O'Donnell
Vice President, Secretary

Each of the undersigned directors and officers of PaineWebber RMA Money
Fund, Inc. ("Fund") hereby severally constitutes and appoints Victoria E.
Schonfeld, Dianne E. O'Donnell, Gregory K. Todd, Elinor W. Gammon and Robert A.
Wittie, and each of them singly, our true and lawful attorneys, with full power
to them to sign for each of us, and in each of our names and in the capacities
indicated below, any and all amendments to the Registration Statement of the
Fund, and all instruments necessary or desirable in connection therewith, filed
with the Securities and Exchange Commission, hereby ratifying and confirming our
signatures as they may be signed by said attorney to any and all amendments to
said Registration Statement.

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:

Signature Title Date
--------- ----- ----

/s/ Margo N. Alexander President September 8,
---------------------------- (Chief Executive 1995
Margo N. Alexander Officer)

/s/ E. Garrett Bewkes,Jr. Trustee and Chairman September 8,
----------------------------- of the Board of 1995
E. Garrett Bewkes, Jr. Trustees

/s/ Meyer Feldberg Trustee September 8,
--------------------------- 1995
Meyer Feldberg

/s/ George W. Gowen Trustee September 8,
---------------------------- 1995
George W. Gowen

/s/ Frederic V. Malek Trustee September 8,
---------------------------- 1995
Frederic V. Malek

/s/ Frank P.L. Minard Trustee September 8,
---------------------------- 1995
Frank P. L. Minard

/s/ Judith Davidson Moyers Trustee September 8,
---------------------------- 1995

Judith Davidson Moyers
/s/ Thomas F. Murray Trustee September 8,
---------------------------- 1995
Thomas F. Murray

/s/ Julian F. Sluyters Vice President and September 8,
----------------------------- Treasurer (Principal 1995
Julian F. Sluyters Financial and Accounting
Officer)

<PAGE>

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

EXHIBITS FILED WITH

FORM N-14

REGISTRATION STATEMENT UNDER [X]
THE SECURITIES ACT OF 1933

PRE-EFFECTIVE AMENDMENT NO.
---

POST-EFFECTIVE AMENDMENT NO.
----

PaineWebber RMA Money Fund, Inc.
File No. 33-______

<PAGE>

PAINEWEBBER RMA MONEY FUND, INC.
EXHIBIT INDEX
--------------------------------------------

Exhibit
Number Page
------- ----

(1) (a) Amended and Restated Articles of Incorporation1
/
-
(b) Articles Supplementary effective February 9, 19882/
-
(c) Articles of Amendment effective August 4, 19893/
-
(2) (a) By-Laws4/
-
(b) Amendment dated September 28, 1994 to By-Laws5/
-
(3) Voting trust agreement - none
(4) Agreement and Plan of Reorganization and Dissolution
(filed herewith)
(5) Instruments defining the rights of holders of the
Registrant's shares of common stock 6/
-
(6) (a) Investment Advisory and Administration Contract7/
-
(b) Sub-Advisory and Sub-Administration Contract7/
-
(7) Distribution Contract8/
-
(8) Bonus, profit sharing or pension plans - none
(9) (a) Custodian Contract9/
-
(10) Plan pursuant to Rule 12b-18/
-
(11) Opinion and consent of Kirkpatrick & Lockhart LLP regarding
the legality of securities being registered (filed herewith)
(12)(a) Opinion and Consent of Kirkpatrick & Lockhart LLP regarding
certain tax matters (filed herewith)
(b) Opinion and consent of Sullivan & Cromwell regarding certain
tax matters (filed herewith)
(13)(a) Transfer Agency Agreement9/
-
(b) Service Contract7/
-
(14)(a) Consent of Ernst & Young LLP (filed herewith)
(b) Consent of Deloitte & Touche LLP (filed herewith)
(15) Financial statements omitted from Part B - none
(16) Copies of manually signed Powers of Attorney - none
(17) Additional Exhibits
(a) Declaration of Rule 24f-2 (filed herewith)
(b) Proxy Cards (filed herewith)
(27) Financial Data Schedules (filed herewith)

<PAGE>
8/ Incorporated by reference from Post Effective Amendment No.28 to the
-
registration statement, SEC File No. 2-89016, filed August 29, 1994.
9/ Incorporated by reference from Post-Effective Amendment No. 1 to
-
registration statement, SEC File No. 2-78309, filed February 8, 1983.
10/ Incorporated by reference from Post-Effective Amendment No. 19 to
--
registration statement, SEC File No. 2-78309, filed August 29, 1991.

Exhibit 4

AGREEMENT AND PLAN OF REORGANIZATION AND DISSOLUTION
----------------------------------------------------

THIS AGREEMENT AND PLAN OF REORGANIZATION AND DISSOLUTION
("Agreement") is made as of September 7, 1995, between PaineWebber RMA Money
Fund, Inc., a Maryland corporation ("PW Corporation"), on behalf of
PaineWebber RMA U.S. Government Portfolio, a segregated portfolio of assets
("series") thereof ("Acquiring Fund"), and PaineWebber/Kidder, Peabody
Government Money Fund, Inc., a Maryland corporation ("Target"). (Acquiring
Fund and Target are sometimes referred to herein individually as a "Fund"
and collectively as the "Funds," and PW Corporation and Target are
sometimes referred to herein individually as an "Investment Company" and
collectively as the "Investment Companies.")

This Agreement is intended to be, and is adopted as, a plan of a
reorganization described in section 368(a)(1)(C) of the Internal Revenue
Code of 1986, as amended ("Code"). The reorganization will involve the
transfer to Acquiring Fund of Target's assets solely in exchange for voting
shares of common stock in Acquiring Fund ("Acquiring Fund Shares") and the
assumption by Acquiring Fund of Target's liabilities, followed by the
constructive distribution of the Acquiring Fund Shares to the holders of
shares of common stock in Target ("Target Shares") in exchange therefor,
all upon the terms and conditions set forth herein. The foregoing transac-
tions are referred to herein as the "Reorganization." All agreements,
representations, actions, and obligations described herein made or to be
taken or undertaken by Acquiring Fund are made and shall be taken or
undertaken by PW Corporation on its behalf.

In consideration of the mutual promises herein, the parties covenant
and agree as follows:

1. PLAN OF REORGANIZATION AND DISSOLUTION OF TARGET
------------------------------------------------

1.1. Target agrees to assign, sell, convey, transfer, and deliver all
of its assets described in paragraph 1.2 ("Assets") to Acquiring Fund.
Acquiring Fund agrees in exchange therefor --

(a) to issue and deliver to Target the number of full and
fractional Acquiring Fund Shares determined by dividing the net value
of Target (computed as set forth in paragraph 2.1) by the net asset
value (computed as set forth in paragraph 2.2) ("NAV") of an Acquiring
Fund Share; and

(b) to assume all of Target's liabilities described in paragraph
1.3 ("Liabilities").

<PAGE>

Such transactions shall take place at the Closing (as defined in paragraph
3.1).

1.2. The Assets shall include, without limitation, all cash, cash
equivalents, securities, receivables (including interest and dividends
receivable), claims and rights of action, rights to register shares under
applicable securities laws, books and records, deferred and prepaid
expenses shown as assets on Target's books, and other property owned by
Target at the Effective Time (as defined in paragraph 3.1).

1.3. The Liabilities shall include (except as otherwise provided
herein) all of Target's liabilities, debts, obligations, and duties of
whatever kind or nature, whether absolute, accrued, contingent, or
otherwise, whether or not arising in the ordinary course of business,
whether or not determinable at the Effective Time, and whether or not
specifically referred to in this Agreement, including without limitation
Target's share of the expenses described in paragraph 7.2. Notwithstanding
the foregoing, Target agrees to use its best efforts to discharge all of
its known Liabilities prior to the Effective Time.

1.4. At or immediately before the Effective Time, Target shall
declare and pay to its shareholders a dividend in an amount large enough so
that it will have distributed substantially all (and in any event not less
than 90%) of its investment company taxable income (computed without regard
to any deduction for dividends paid) for the current taxable year through
the Effective Time.

1.5. At the Effective Time (or as soon thereafter as is reasonably
practicable), Target shall constructively distribute the Acquiring Fund
Shares received by it pursuant to paragraph 1.1 to Target's shareholders of
record, determined as of the Effective Time (collectively "Shareholders"
and individually a "Shareholder"), in exchange for their Target Shares.
Such distribution shall be accomplished by the Funds' transfer agent
("Transfer Agent") opening accounts on Acquiring Fund's share transfer
books in the Shareholders' names and transferring such Acquiring Fund
Shares thereto. Each Shareholder's account shall be credited with the
respective pro rata number of full and fractional (rounded to the third
decimal place) Acquiring Fund Shares due that Shareholder. All outstanding
Target Shares, including any represented by certificates, shall
simultaneously be canceled on Target's share transfer records. Acquiring
Fund shall not issue certificates representing the Acquiring Fund Shares in
connection with the Reorganization.

1.6. As soon as reasonably practicable after distribution of the
Acquiring Fund Shares pursuant to paragraph 1.5, Target shall be dissolved
and any further actions shall be taken in connection therewith as required
by applicable law.

<PAGE>

1.7. Any reporting responsibility of Target to a public authority is
and shall remain its responsibility up to and including the date on which
it is dissolved.

1.8. Any transfer taxes payable upon issuance of Acquiring Fund
Shares in a name other than that of the registered holder on Target's books
of the Target Shares constructively exchanged therefor shall be paid by the
person to whom such Acquiring Fund Shares are to be issued, as a condition
of such transfer.

2. VALUATION
---------

2.1. For purposes of paragraph 1.1(a), Target's net value shall be
(a) the value of the Assets computed as of the close of regular trading on
the New York Stock Exchange, Inc. ("NYSE") on the date of the Closing
("Valuation Time"), using the valuation procedures set forth in Target's
then-current prospectus and statement of additional information less
(b) the amount of the Liabilities as of the Valuation Time.

2.2. For purposes of paragraph 1.1(a), the NAV of an Acquiring Fund
Share shall be computed as of the Valuation Time, using the valuation
procedures set forth in Acquiring Fund's then-current prospectus and
statement of additional information.

2.3. All computations pursuant to paragraphs 2.1 and 2.2 shall be
made by or under the direction of Mitchell Hutchins Asset Management Inc.

2.4 If the difference between the NAVs per share of the Funds equals
or exceeds $.0025 at 5:00 p.m., Eastern time, at the Valuation Time, or
such earlier or later day and time as the parties may agree and set forth
in writing signed by their duly authorized officers, as computed by using
the market values of the Funds' assets in accordance with the policies and
procedures established by the Funds (or as otherwise mutually determined by
the Investment Companies' boards of directors), either Fund may postpone
the Valuation Time until such time as such per share NAV difference is less
than $.0025.

3. CLOSING AND EFFECTIVE TIME
--------------------------

3.1. The Reorganization, together with related acts necessary to
consummate the same ("Closing"), shall occur at the Funds' principal office
on November 17, 1995, or at such other place and/or on such other date as
the parties may agree. All acts taking place at the Closing shall be
deemed to take place simultaneously as of 12:00 noon on the date
thereof or at such other time as the parties may agree ("Effective Time").
If, immediately before the Valuation Time, (a) the NYSE is closed to
trading or trading thereon is restricted or (b) trading or the reporting of
trading on

<PAGE>

the NYSE or elsewhere is disrupted, so that accurate appraisal of the net
value of Target and the NAV per Acquiring Fund Share is impracticable, the
Effective Time shall be postponed until the first business day after the
day when such trading shall have been fully resumed and such reporting
shall have been restored.

3.2. Target shall deliver to PW Corporation at the Closing a schedule
of the Assets as of the Effective Time, which shall set forth for all
portfolio securities included therein their adjusted tax basis and holding
period by lot. Target's custodian shall deliver at the Closing a certi-
ficate of an authorized officer stating that (a) the Assets held by the
custodian will be transferred to Acquiring Fund at the Effective Time and
(b) all necessary taxes in conjunction with the delivery of the Assets, in-
cluding all applicable federal and state stock transfer stamps, if any,
have been paid or provision for payment has been made.

3.3. Target shall deliver to PW Corporation at the Closing a list of
the names and addresses of the Shareholders and the number of outstanding
Target Shares owned by each Shareholder, all as of the Effective Time,
certified by the Secretary or Assistant Secretary of Target. The Transfer
Agent shall deliver at the Closing a certificate as to the opening on
Acquiring Fund's share transfer books of accounts in the Shareholders'
names. PW Corporation shall issue and deliver a confirmation to Target
evidencing the Acquiring Fund Shares to be credited to Target at the Effec-
tive Time or provide evidence satisfactory to Target that such Acquiring
Fund Shares have been credited to Target's account on Acquiring Fund's
books. At the Closing, each party shall deliver to the other such bills of
sale, checks, assignments, stock certificates, receipts, or other documents
as the other party or its counsel may reasonably request.

3.4. Each Investment Company shall deliver to the other at the
Closing a certificate executed in its name by its President or a Vice
President in form and substance satisfactory to the recipient and dated the
Effective Time, to the effect that the representations and warranties it
made in this Agreement are true and correct at the Effective Time except as
they may be affected by the transactions contemplated by this Agreement.

4. REPRESENTATIONS AND WARRANTIES
------------------------------

4.1. Target represents and warrants as follows:

4.1.1. Target is a corporation duly organized, validly existing,
and in good standing under the laws of the State of Maryland, and a
copy of its Articles of Incorporation is on file with the Department
of Assessments and Taxation of Maryland;

<PAGE>

4.1.2. Target is duly registered as an open-end management
investment company under the Investment Company Act of 1940 ("1940
Act"), and such registration will be in full force and effect at the
Effective Time;

4.1.3. At the Closing, Target will have good and marketable
title to the Assets and full right, power, and authority to sell,
assign, transfer, and deliver the Assets free of any liens or other
encumbrances; and upon delivery and payment for the Assets, Acquiring
Fund will acquire good and marketable title thereto;

4.1.4. Target's current prospectus and statement of additional
information conform in all material respects to the applicable
requirements of the Securities Act of 1933 ("1933 Act") and the 1940
Act and the rules and regulations thereunder and do not include any
untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading;

4.1.5. Target is not in violation of, and the execution and
delivery of this Agreement and consummation of the transactions
contemplated hereby will not conflict with or violate, Maryland law or
any provision of Target's Articles of Incorporation or By-Laws or of
any agreement, instrument, lease, or other undertaking to which Target
is a party or by which it is bound or result in the acceleration of
any obligation, or the imposition of any penalty, under any agreement,
judgment, or decree to which Target is a party or by which it is
bound, except as previously disclosed in writing to and accepted by PW
Corporation;

4.1.6. Except as disclosed in writing to and accepted by PW
Corporation, all material contracts and other commitments of or
applicable to Target (other than this Agreement and investment
contracts) will be terminated, or provision for discharge of any
liabilities of Target thereunder will be made, at or prior to the
Effective Time, without either Fund's incurring any liability or
penalty with respect thereto and without diminishing or releasing any
rights Target may have had with respect to actions taken or omitted to
be taken by any other party thereto prior to the Closing;

4.1.7. Except as otherwise disclosed in writing to and accepted
by PW Corporation, no litigation, administrative proceeding, or
investigation of or before any court or governmental body is presently
pending or (to Target's knowledge) threatened against Target or any of
its properties or assets that, if adversely determined, would
materially and adversely affect Target's financial condition or the
conduct of its

<PAGE>

business; Target knows of no facts that might form the basis for the
institution of any such litigation, proceeding, or investigation and
is not a party to or subject to the provisions of any order, decree,
or judgment of any court or governmental body that materially or
adversely affects its business or its ability to consummate the
transactions contemplated hereby;

4.1.8. The execution, delivery, and performance of this
Agreement have been duly authorized as of the date hereof by all
necessary action on the part of Target's board of directors, which has
made the determinations required by Rule 17a-8(a) under the 1940 Act;
and, subject to approval by Target's shareholders and receipt of any
necessary exemptive relief or no-action assurances requested from the
Securities and Exchange Commission ("SEC") or its staff with respect
to sections 17(a) and 17(d) of the 1940 Act, this Agreement will
constitute a valid and legally binding obligation of Target, enforce-
able in accordance with its terms, except as the same may be limited
by bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium, and similar laws relating to or affecting creditors'
rights and by general principles of equity;

4.1.9. At the Effective Time, the performance of this Agreement
shall have been duly authorized by all necessary action by Target's
shareholders;

4.1.10. No governmental consents, approvals, authorizations, or
filings are required under the 1933 Act, the Securities Exchange Act
of 1934 ("1934 Act"), or the 1940 Act for the execution or performance
of this Agreement by Target, except for (a) the filing with the SEC of
a registration statement by PW Corporation on Form N-14 relating to
the Acquiring Fund Shares issuable hereunder, and any supplement or
amendment thereto ("Registration Statement"), including therein a
prospectus/proxy statement ("Proxy Statement"), (b) receipt of the
exemptive relief referenced in subparagraph 4.1.8, and (c) such
consents, approvals, authorizations, and filings as have been made or
received or as may be required subsequent to the Effective Time;

4.1.11. On the effective date of the Registration Statement, at
the time of the shareholders' meeting referred to in paragraph 5.2,
and at the Effective Time, the Proxy Statement will (a) comply in all
material respects with the applicable provisions of the 1933 Act, the
1934 Act, and the 1940 Act and the regulations thereunder and (b) not
contain any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which such
statements were made, not misleading; provided that the fore-

<PAGE>

going shall not apply to statements in or omissions from the Proxy
Statement made in reliance on and in conformity with information
furnished by PW Corporation for use therein;

4.1.12. The Liabilities were incurred by Target in the ordinary
course of its business;

4.1.13. Target qualified for treatment as a regulated investment
company under Subchapter M of the Code ("RIC") for each past taxable
year since it commenced operations and will continue to meet all the
requirements for such qualification for its current taxable year; and
it has no earnings and profits accumulated in any taxable year in
which the provisions of Subchapter M did not apply to it. The Assets
shall be invested at all times through the Effective Time in a manner
that ensures compliance with the foregoing;

4.1.14. Target is not under the jurisdiction of a court in a
proceeding under Title 11 of the United States Code or similar case
within the meaning of section 368(a)(3)(A) of the Code;

4.1.15. Not more than 25% of the value of Target's total assets
(excluding cash, cash items, and U.S. government securities) is
invested in the stock and securities of any one issuer, and not more
than 50% of the value of such assets is invested in the stock and
securities of five or fewer issuers; and

4.1.16. Target will be dissolved as soon as reasonably
practicable after the Reorganization, but in all events within six
months after the Effective Time.

4.2. Acquiring Fund represents and warrants as follows:

4.2.1. PW Corporation is a corporation duly organized, validly
existing, and in good standing under the laws of the State of
Maryland, and a copy of its Articles of Incorporation is on file with
the Department of Assessments and Taxation of Maryland;

4.2.2. PW Corporation is duly registered as an open-end manage-
ment investment company under the 1940 Act, and such registration will
be in full force and effect at the Effective Time;

4.2.3. Acquiring Fund is a duly established and designated
series of PW Corporation;

4.2.4. No consideration other than Acquiring Fund Shares (and
Acquiring Fund's assumption of the Liabilities) will be issued in ex-
change for the Assets in the Reorganization;

<PAGE>

4.2.5. The Acquiring Fund Shares to be issued and delivered to
Target hereunder will, at the Effective Time, have been duly author-
ized and, when issued and delivered as provided herein, will be duly
and validly issued and outstanding shares of Acquiring Fund, fully
paid and non-assessable. Except as contemplated by this Agreement,
Acquiring Fund does not have outstanding any options, warrants, or
other rights to subscribe for or purchase any of its shares, nor is
there outstanding any security convertible into any of its shares;

4.2.6. Acquiring Fund's current prospectus and statement of
additional information conform in all material respects to the
applicable requirements of the 1933 Act and the 1940 Act and the rules
and regulations thereunder and do not include any untrue statement of
a material fact or omit to state any material fact required to be
stated therein or necessary to make the statements therein, in light
of the circumstances under which they were made, not misleading;

4.2.7. Acquiring Fund is not in violation of, and the execution
and delivery of this Agreement and consummation of the transactions
contemplated hereby will not conflict with or violate, Maryland law or
any provision of PW Corporation's Articles of Incorporation or By-Laws
or of any provision of any agreement, instrument, lease, or other
undertaking to which Acquiring Fund is a party or by which it is bound
or result in the acceleration of any obligation, or the imposition of
any penalty, under any agreement, judgment, or decree to which
Acquiring Fund is a party or by which it is bound, except as
previously disclosed in writing to and accepted by Target;

4.2.8. Except as otherwise disclosed in writing to and accepted
by Target, no litigation, administrative proceeding, or investigation
of or before any court or governmental body is presently pending or
(to Acquiring Fund's knowledge) threatened against PW Corporation with
respect to Acquiring Fund or any of its properties or assets that, if
adversely determined, would materially and adversely affect Acquiring
Fund's financial condition or the conduct of its business; Acquiring
Fund knows of no facts that might form the basis for the institution
of any such litigation, proceeding, or investigation and is not a
party to or subject to the provisions of any order, decree, or
judgment of any court or governmental body that materially or
adversely affects its business or its ability to consummate the
transactions contemplated hereby;

4.2.9. The execution, delivery, and performance of this
Agreement have been duly authorized as of the date hereof by all
necessary action on the part of PW Corporation's board of directors,
which has made the determinations required by Rule 17a-8(a) under the
1940 Act; and, subject to receipt of any

<PAGE>

necessary exemptive relief or no-action assurances requested from the
SEC or its staff with respect to sections 17(a) and 17(d) of the 1940
Act, this Agreement will constitute a valid and legally binding obli-
gation of Acquiring Fund, enforceable in accordance with its terms,
except as the same may be limited by bankruptcy, insolvency,
fraudulent transfer, reorganization, moratorium, and similar laws
relating to or affecting creditors' rights and by general principles
of equity;

4.2.10. No governmental consents, approvals, authorizations, or
filings are required under the 1933 Act, the 1934 Act, or the 1940 Act
for the execution or performance of this Agreement by PW Corporation,
except for (a) the filing with the SEC of the Registration Statement,
(b) receipt of the exemptive relief referenced in subparagraph 4.2.9,
and (c) such consents, approvals, authorizations, and filings as have
been made or received or as may be required subsequent to the
Effective Time;

4.2.11. On the effective date of the Registration Statement, at
the time of the shareholders' meeting referred to in paragraph 5.2,
and at the Effective Time, the Proxy Statement will (a) comply in all
material respects with the applicable provisions of the 1933 Act, the
1934 Act, and the 1940 Act and the regulations thereunder and (b) not
contain any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which such
statements were made, not misleading; provided that the foregoing
shall not apply to statements in or omissions from the Proxy Statement
made in reliance on and in conformity with information furnished by
Target for use therein;

4.2.12. Acquiring Fund is a "fund" as defined in section
851(h)(2) of the Code; it qualified for treatment as a RIC for each
past taxable year since it commenced operations and will continue to
meet all the requirements for such qualification for its current tax-
able year; Acquiring Fund intends to continue to meet all such
requirements for the next taxable year; and it has no earnings and
profits accumulated in any taxable year in which the provisions of
Subchapter M of the Code did not apply to it;

4.2.13. Acquiring Fund has no plan or intention to issue addi-
tional Acquiring Fund Shares following the Reorganization except for
shares issued in the ordinary course of its business as a series of an
open-end investment company; nor does Acquiring Fund have any plan or
intention to redeem or otherwise reacquire any Acquiring Fund Shares
issued to the Shareholders pursuant to the Reorganization, other than
through redemptions arising in the ordinary course of that business;

<PAGE>

4.2.14. Acquiring Fund (a) will actively continue Target's busi-
ness in substantially the same manner that Target conducted that busi-
ness immediately before the Reorganization, (b) has no plan or
intention to sell or otherwise dispose of any of the Assets, except
for dispositions made in the ordinary course of that business and
dispositions necessary to maintain its status as a RIC, and
(c) expects to retain substantially all the Assets in the same form as
it receives them in the Reorganization, unless and until subsequent
investment circumstances suggest the desirability of change or it
becomes necessary to make dispositions thereof to maintain such
status;

4.2.16. Immediately after the Reorganization, (a) not more than
25% of the value of Acquiring Fund's total assets (excluding cash,
cash items, and U.S. government securities) will be invested in the
stock and securities of any one issuer and (b) not more than 50% of
the value of such assets will be invested in the stock and securities
of five or fewer issuers; and

4.2.17. Acquiring Fund does not own, directly or indirectly, nor
at the Effective Time will it own, directly or indirectly, nor has it
owned, directly or indirectly, at any time during the past five years,
any shares of Target.

4.3. Each Fund represents and warrants as follows:

4.3.1. The fair market value of the Acquiring Fund Shares, when
received by the Shareholders, will be approximately equal to the fair
market value of their Target Shares constructively surrendered in
exchange therefor;

4.3.2. Its management (a) is unaware of any plan or intention of
Shareholders to redeem or otherwise dispose of any portion of the
Acquiring Fund Shares to be received by them in the Reorganization and
(b) does not anticipate dispositions of those Acquiring Fund Shares at
the time of or soon after the Reorganization to exceed the usual rate
and frequency of dispositions of shares of Target as an open-end
investment company. Consequently, its management expects that the
percentage of Shareholder interests, if any, that will be disposed of
as a result of or at the time of the Reorganization will be de
minimis. Nor does its management anticipate that there will be
extraordinary redemptions of Acquiring Fund Shares immediately
following the Reorganization;

<PAGE>

4.3.3. The Shareholders will pay their own expenses, if any,
incurred in connection with the Reorganization;

4.3.4. Immediately following consummation of the Reorganization,
Acquiring Fund will hold substantially the same assets and be subject
to substantially the same liabilities that Target held or was subject
to immediately prior thereto, plus any liabilities and expenses of the
parties incurred in connection with the Reorganization;

4.3.5. The fair market value on a going concern basis of the
Assets will equal or exceed the Liabilities to be assumed by Acquiring
Fund and those to which the Assets are subject;

4.3.6. There is no intercompany indebtedness between the Funds
that was issued or acquired, or will be settled, at a discount;

4.3.7. Pursuant to the Reorganization, Target will transfer to
Acquiring Fund, and Acquiring Fund will acquire, at least 90% of the
fair market value of the net assets, and at least 70% of the fair
market value of the gross assets, held by Target immediately before
the Reorganization. For the purposes of this representation, any
amounts used by Target to pay its Reorganization expenses and
redemptions and distributions made by it immediately before the
Reorganization (except for (a) distributions made to conform to its
policy of distributing all or substantially all of its income and
gains to avoid the obligation to pay federal income tax and/or the
excise tax under section 4982 of the Code and (b) redemptions not made
as part of the Reorganization) will be included as assets thereof held
immediately before the Reorganization;

4.3.8. None of the compensation received by any Shareholder who
is an employee of Target will be separate consideration for, or
allocable to, any of the Target Shares held by such Shareholder-
employee; none of the Acquiring Fund Shares received by any such
Shareholder-employee will be separate consideration for, or allocable
to, any employment agreement; and the consideration paid to any such
Shareholder-employee will be for services actually rendered and will
be commensurate with amounts paid to third parties bargaining at
arm's-length for similar services; and

4.3.9. Immediately after the Reorganization, the Shareholders
will not own shares constituting "control" of Acquiring Fund within
the meaning of section 304(c) of the Code.

<PAGE>

5. COVENANTS
---------

5.1. Each Fund covenants to operate its respective business in the
ordinary course between the date hereof and the Closing, it being
understood that (a) such ordinary course will include declaring and paying
customary dividends and other distributions and such changes in operations
as are contemplated by each Fund's normal business activities and (b) each
Fund will retain exclusive control of the composition of its portfolio
until the Closing; provided that Target shall not dispose of more than an
insignificant portion of its historic business assets during such period
without Acquiring Fund's prior consent.

5.2. Target covenants to call a shareholders' meeting to consider and
act upon this Agreement and to take all other action necessary to obtain
approval of the transactions contemplated hereby.

5.4. Target covenants that it will assist PW Corporation in obtaining
such information as PW Corporation reasonably requests concerning the
beneficial ownership of Target Shares.

5.5. Target covenants that Target's books and records (including all
books and records required to be maintained under the 1940 Act and the
rules and regulations thereunder) will be turned over to PW Corporation at
the Closing.

5.6. Each Fund covenants to cooperate in preparing the Proxy State-
ment in compliance with applicable federal securities laws.

5.7. Each Fund covenants that it will, from time to time, as and when
requested by the other Fund, execute and deliver or cause to be executed
and delivered all such assignments and other instruments, and will take or
cause to be taken such further action, as the other Fund may deem necessary
or desirable in order to vest in, and confirm to, (a) Acquiring Fund, title
to and possession of all the Assets, and (b) Target, title to and
possession of the Acquiring Fund Shares to be delivered hereunder, and
otherwise to carry out the intent and purpose hereof.

5.8. PW Corporation covenants to use all reasonable efforts to obtain
the approvals and authorizations required by the 1933 Act, the 1940 Act,
and such state securities laws it may deem appropriate in order to continue
its operations after the Effective Time.

<PAGE>

5.9. Subject to this Agreement, each Fund covenants to take or cause
to be taken all actions, and to do or cause to be done all things
reasonably necessary, proper, or advisable to consummate and effectuate the
transactions contemplated hereby.

6. CONDITIONS PRECEDENT
--------------------

Each Fund's obligations hereunder shall be subject to (a) performance
by the other Fund of all the obligations to be performed hereunder at or
before the Effective Time, (b) all representations and warranties of the
other Fund contained herein being true and correct in all material respects
as of the date hereof and, except as they may be affected by the
transactions contemplated hereby, as of the Effective Time, with the same
force and effect as if made at and as of the Effective Time, and (c) the
following further conditions that, at or before the Effective Time:

6.1. This Agreement and the transactions contemplated hereby shall
have been duly adopted and approved by Target's board of directors and
shall have been approved by Target's shareholders in accordance with
applicable law.

6.2. All necessary filings shall have been made with the SEC and
state securities authorities, and no order or directive shall have been
received that any other or further action is required to permit the parties
to carry out the transactions contemplated hereby. The Registration
Statement shall have become effective under the 1933 Act, no stop orders
suspending the effectiveness thereof shall have been issued, and the SEC
shall not have issued an unfavorable report with respect to the
Reorganization under section 25(b) of the 1940 Act nor instituted any
proceedings seeking to enjoin consummation of the transactions contemplated
hereby under section 25(c) of the 1940 Act. All consents, orders, and
permits of federal, state, and local regulatory authorities (including the
SEC and state securities authorities) deemed necessary by either Fund to
permit consummation, in all material respects, of the transactions
contemplated hereby shall have been obtained, except where failure to
obtain same would not involve a risk of a material adverse effect on the
assets or properties of either Fund, provided that either Fund may for
itself waive any of such conditions.

6.3. At the Effective Time, no action, suit, or other proceeding
shall be pending before any court or governmental agency in which it is
sought to restrain or prohibit, or to obtain damages or other relief in
connection with, the transactions contemplated hereby.

6.4. Target shall have received an opinion of Kirkpatrick & Lockhart
LLP, counsel to PW Corporation, substantially to the effect that:

<PAGE>

6.4.1. Acquiring Fund is a duly established series of PW
Corporation, a corporation duly organized and validly existing under
the laws of the State of Maryland with power under its Articles of
Incorporation to own all of its properties and assets and, to the
knowledge of such counsel, to carry on its business as presently
conducted;

6.4.2. This Agreement (a) has been duly authorized, executed,
and delivered by PW Corporation on behalf of Acquiring Fund and
(b) assuming due authorization, execution, and delivery of this
Agreement by Target, is a valid and legally binding obligation of PW
Corporation with respect to Acquiring Fund, enforceable in accordance
with its terms, except as the same may be limited by bankruptcy, in-
solvency, fraudulent transfer, reorganization, moratorium, and similar
laws relating to or affecting creditors' rights and by general prin-
ciples of equity;

6.4.3. The Acquiring Fund Shares to be issued and distributed to
the Shareholders under this Agreement, assuming their due delivery as
contemplated by this Agreement, will be duly authorized and validly
issued and outstanding and fully paid and non-assessable, and no
shareholder of Acquiring Fund has any preemptive right to subscribe
for or purchase such shares;

6.4.4. The execution and delivery of this Agreement did not, and
the consummation of the transactions contemplated hereby will not,
materially violate PW Corporation's Articles of Incorporation or By-
Laws or any provision of any agreement (known to such counsel, without
any independent inquiry or investigation) to which PW Corporation
(with respect to Acquiring Fund) is a party or by which it is bound or
(to the knowledge of such counsel, without any independent inquiry or
investigation) result in the acceleration of any obligation, or the
imposition of any penalty, under any agreement, judgment, or decree to
which PW Corporation (with respect to Acquiring Fund) is a party or by
which it is bound, except as set forth in such opinion or as
previously disclosed in writing to and accepted by Target;

6.4.5. To the knowledge of such counsel (without any independent
inquiry or investigation), no consent, approval, authorization, or
order of any court or governmental authority is required for the
consummation by PW Corporation on behalf of Acquiring Fund of the
transactions contemplated herein, except such as have been obtained
under the 1933 Act, the 1934 Act, and the 1940 Act and such as may be
required under state securities laws;

6.4.6. PW Corporation is registered with the SEC as an invest-
ment company, and to the knowledge of such counsel no

<PAGE>

order has been issued or proceeding instituted to suspend such reg-
istration; and

6.4.7. To the knowledge of such counsel (without any independent
inquiry or investigation), (a) no litigation, administrative
proceeding, or investigation of or before any court or governmental
body is pending or threatened as to PW Corporation (with respect to
Acquiring Fund) or any of its properties or assets attributable or
allocable to Acquiring Fund and (b) PW Corporation (with respect to
Acquiring Fund) is not a party to or subject to the provisions of any
order, decree, or judgment of any court or governmental body that
materially and adversely affects Acquiring Fund's business, except as
set forth in such opinion or as otherwise disclosed in writing to and
accepted by Target.

In rendering such opinion, such counsel may (i) rely, as to matters
governed by the laws of the State of Maryland, on an opinion of competent
Maryland counsel, (ii) make assumptions regarding the authenticity,
genuineness, and/or conformity of documents and copies thereof without
independent verification thereof, (iii) limit such opinion to applicable
federal and state law, and (iv) define the word "knowledge" and related
terms to mean the knowledge of attorneys then with such firm who have
devoted substantive attention to matters directly related to this Agreement
and the Reorganization.

6.5. PW Corporation shall have received an opinion of Sullivan &
Cromwell, counsel to Target, substantially to the effect that:

6.5.1. Target is a corporation duly organized and validly exist-
ing under the laws of the State of Maryland with power under its
Articles of Incorporation to own all of its properties and assets and,
to the knowledge of such counsel, to carry on its business as
presently conducted;

6.5.2. This Agreement (a) has been duly authorized, executed,
and delivered by Target and (b) assuming due authorization, execution,
and delivery of this Agreement by PW Corporation on behalf of
Acquiring Fund, is a valid and legally binding obligation of Target,
enforceable in accordance with its terms, except as the same may be
limited by bankruptcy, insolvency, fraudulent transfer, reorgan-
ization, moratorium, and similar laws relating to or affecting
creditors' rights and by general principles of equity;

6.5.3. The execution and delivery of this Agreement did not, and
the consummation of the transactions contemplated hereby will not,
materially violate Target's Articles of Incorporation or By-Laws or
any provision of any agreement (known to such counsel, without any
independent inquiry or

<PAGE>

investigation) to which Target is a party or by which it is bound or
(to the knowledge of such counsel, without any independent inquiry or
investigation) result in the acceleration of any obligation, or the
imposition of any penalty, under any agreement, judgment, or decree to
which Target is a party or by which it is bound, except as set forth
in such opinion or as previously disclosed in writing to and accepted
by PW Corporation;

6.5.4. To the knowledge of such counsel (without any independent
inquiry or investigation), no consent, approval, authorization, or
order of any court or governmental authority is required for the
consummation by Target of the transactions contemplated herein, except
such as have been obtained under the 1933 Act, the 1934 Act, and the
1940 Act and such as may be required under state securities laws;

6.5.5. Target is registered with the SEC as an investment
company, and to the knowledge of such counsel no order has been issued
or proceeding instituted to suspend such registration; and

6.5.6. To the knowledge of such counsel (without any independent
inquiry or investigation), (a) no litigation, administrative
proceeding, or investigation of or before any court or governmental
body is pending or threatened as to Target or any of its properties or
assets and (b) Target is not a party to or subject to the provisions
of any order, decree, or judgment of any court or governmental body
that materially and adversely affects its business, except as set
forth in such opinion or as otherwise disclosed in writing to and
accepted by PW Corporation.

In rendering such opinion, such counsel may (i) rely, as to matters
governed by the laws of the State of Maryland, on an opinion of competent
Maryland counsel, (ii) make assumptions regarding the authenticity,
genuineness, and/or conformity of documents and copies thereof without
independent verification thereof, (iii) limit such opinion to applicable
federal and state law, and (iv) define the word "knowledge" and related
terms to mean the knowledge of attorneys then with such firm who have
devoted substantive attention to matters directly related to this Agreement
and the Reorganization.

6.6. PW Corporation shall have received an opinion of Kirkpatrick &
Lockhart LLP, its counsel, addressed to and in form and substance
satisfactory to it, and Target shall have received an opinion of Sullivan &
Cromwell, its counsel, addressed to and in form and substance satisfactory
to it, each as to the federal income tax consequences mentioned below (each
a "Tax Opinion"). In rendering its Tax Opinion, each such counsel may rely
as to factual matters, exclusively and without independent verification, on
the

<PAGE>

representations made in this Agreement (or in separate letters addressed to
such counsel) and the certificates delivered pursuant to paragraph 3.4.
Each Tax Opinion shall be substantially to the effect that, based on the
facts and assumptions stated therein, for federal income tax purposes:

6.6.1. Acquiring Fund's acquisition of the Assets in exchange
solely for Acquiring Fund Shares and Acquiring Fund's assumption of
the Liabilities, followed by Target's distribution of those shares to
the Shareholders constructively in exchange for the Shareholders'
Target Shares, will constitute a reorganization within the meaning of
section 368(a)(1)(C) of the Code, and each Fund will be "a party to a
reorganization" within the meaning of section 368(b) of the Code;

6.6.2. No gain or loss will be recognized to Target on the
transfer to Acquiring Fund of the Assets in exchange solely for Ac-
quiring Fund Shares and Acquiring Fund's assumption of the Liabilities
or on the subsequent distribution of those shares to the Shareholders
in constructive exchange for their Target Shares;

6.6.3. No gain or loss will be recognized to Acquiring Fund on
its receipt of the Assets in exchange solely for Acquiring Fund Shares
and its assumption of the Liabilities;

6.6.4. Acquiring Fund's basis for the Assets will be the same as
the basis thereof in Target's hands immediately before the Reorgan-
ization, and Acquiring Fund's holding period for the Assets will in-
clude Target's holding period therefor;

6.6.5. A Shareholder will recognize no gain or loss on the
constructive exchange of all its Target Shares solely for Acquiring
Fund Shares pursuant to the Reorganization; and

6.6.6. A Shareholder's basis for the Acquiring Fund Shares to be
received by it in the Reorganization will be the same as the basis for
its Target Shares to be constructively surrendered in exchange for
those Acquiring Fund Shares, and its holding period for those
Acquiring Fund Shares will include its holding period for those Target
Shares, provided they are held as capital assets by the Shareholder at
the Effective Time.

Notwithstanding subparagraphs 6.6.2 and 6.6.4, each Tax Opinion may state
that no opinion is expressed as to the effect of the Reorganization on the
Funds or any Shareholder with respect to any asset as to which any
unrealized gain or loss is required to be recognized for federal income tax
purposes at the end of a taxable year (or on the termination or transfer
thereof) under a mark-to-market system of accounting.

<PAGE>

At any time before the Closing, (a) Acquiring Fund may waive any of
the foregoing conditions if, in the judgment of PW Corporation's board of
directors, such waiver will not have a material adverse effect on its
shareholders' interests, and (b) Target may waive any of the foregoing
conditions if, in the judgment of its board of directors, such waiver will
not have a material adverse effect on the Shareholders' interests.

7. BROKERAGE FEES AND EXPENSES
---------------------------

7.1. Each Investment Company represents and warrants to the other
that there are no brokers or finders entitled to receive any payments in
connection with the transactions provided for herein.

7.2. Except as otherwise provided herein, all expenses incurred in
connection with the transactions contemplated by this Agreement (whether or
not they are consummated) will be borne by the Funds proportionately, as
follows: each such expense will be borne by the Funds in proportion to
their respective net assets as of the close of business on the last
business day of the month in which such expense was incurred. Such
expenses include: (a) expenses incurred in connection with entering into
and carrying out the provisions of this Agreement; (b) expenses associated
with the preparation and filing of the Registration Statement; (c) regis-
tration or qualification fees and expenses of preparing and filing such
forms as are necessary under applicable state securities laws to qualify
the Acquiring Fund Shares to be issued in connection herewith in each state
in which Target's shareholders are resident as of the date of the mailing
of the Proxy Statement to such shareholders; (d) printing and postage
expenses; (e) legal and accounting fees; and (f) solicitation costs.

8. ENTIRE AGREEMENT; SURVIVAL
--------------------------

Neither party has made any representation, warranty, or covenant not
set forth herein, and this Agreement constitutes the entire agreement
between the parties. The representations, warranties, and covenants
contained herein or in any document delivered pursuant hereto or in
connection herewith shall survive the Closing.

9. TERMINATION OF AGREEMENT
------------------------

This Agreement may be terminated at any time at or prior to the
Effective Time, whether before or after approval by Target's shareholders:

9.1. By either Fund (a) in the event of the other Fund's material
breach of any representation, warranty, or covenant con-

<PAGE>

tained herein to be performed at or prior to the Effective Time, (b) if a
condition to its obligations has not been met and it reasonably appears
that such condition will not or cannot be met, or (c) if the Closing has
not occurred on or before March 31, 1996; or

9.2. By the parties' mutual agreement.

In the event of termination under paragraphs 9.1.(c) or 9.2, there shall be
no liability for damages on the part of either Fund, or the directors or
officers of either Investment Company, to the other Fund.

10. AMENDMENT
---------

This Agreement may be amended, modified, or supplemented at any time,
notwithstanding approval thereof by Target's shareholders, in such manner
as may be mutually agreed upon in writing by the parties; provided that
following such approval no such amendment shall have a material adverse
effect on the Shareholders' interests.

11. MISCELLANEOUS
-------------

11.1. This Agreement shall be governed by and construed in accordance
with the internal laws of the State of Maryland; provided that, in the case
of any conflict between such laws and the federal securities laws, the
latter shall govern.

11.2. Nothing expressed or implied herein is intended or shall be
construed to confer upon or give any person, firm, trust, or corporation
other than the parties and their respective successors and assigns any
rights or remedies under or by reason of this Agreement.

<PAGE>

IN WITNESS WHEREOF, each party has caused this Agreement to be
executed by its duly authorized officer.

ATTEST: PAINEWEBBER RMA MONEY FUND, INC.,
on behalf of its series,
PAINEWEBBER RMA U.S. GOVERNMENT
PORTFOLIO

By: /s/ Ilene Shore /s/ Dianne E. O'Donnell
------------------- ------------------------------
Assistant Secretary Vice President

ATTEST: PAINEWEBBER/KIDDER, PEABODY GOVERN-
MENT MONEY FUND, INC.

By: /s/ Stephanie F. Johnson /s/ Scott M. Griff
------------------------- ------------------------------
Assistant Secretary Vice President

[KIRKPATRICK & LOCKHART LLP LETTERHEAD]

Exhibit 11

ELINOR W. GAMMON
(202) 778-9090
[email protected]

September 8, 1995

PaineWebber RMA Money Fund, Inc.
1285 Avenue of the Americas
New York, New York 10019

Ladies and Gentlemen:

You have requested our opinion as to certain matters regarding the
issuance by PaineWebber RMA Money Fund, Inc. ("Company"), a corporation
organized under the laws of the State of Maryland, of shares of common
stock (the "Shares") of PaineWebber RMA U.S. Government Portfolio ("PW
Fund"), a series of the Company, pursuant to an Agreement and Plan of
Reorganization and Dissolution ("Plan") between the Company, on behalf of
PW Fund, and PaineWebber/Kidder, Peabody Government Money Fund, Inc.
("PW/KP Fund"). Under the Plan, PW Fund would acquire the assets of PW/KP
Fund in exchange for the Shares and the assump-tion by PW Fund of PW/KP
Fund's liabilities. In connection with the Plan, the Company is about to
file a Registration Statement on Form N-14 (the "N-14") for the purpose of
registering the Shares under the Securities Act of 1933, as amended ("1933
Act"), to be issued pursuant to the Plan.

We have examined originals or copies believed by us to be genuine of
the Company's Articles of Incorporation and By-Laws, minutes of meetings of
the Company's board of directors, the form of Plan, and such other
documents relating to the authorization and issuance of the Shares as we
have deemed relevant. Based upon that examination, we are of the opinion
that the Shares being registered by the N-14 may be issued in accordance
with the Plan and the Company's Articles of Incorporation and By-Laws,
subject to compliance with the 1933 Act, the Investment Company Act of
1940, as amended, and applicable state laws regulating the distribution of
securities, and when so issued, those Shares will be legally issued, fully
paid and non-assessable.

<PAGE>

[KIRKPATRICK & LOCKHART LLP LETTERHEAD]

PaineWebber RMA Money Fund, Inc.
September 8, 1995
Page 2

We hereby consent to this opinion accompanying the Form N-14 that the
Company plans to file with the Securities and Exchange Commission and to
the reference to our firm under the caption "Miscellaneous -- Legal
Matters" in the Prospectus/Proxy Statement filed as part of the Form N-14.

Sincerely yours,

KIRKPATRICK & LOCKHART LLP

By: /s/ Elinor W. Gammon
---------------------------
Elinor W. Gammon

EXHIBIT 12(a)

THEODORE L. PRESS
(202) 778-9025
[email protected]
September 8, 1995

PaineWebber RMA Money Fund, Inc.
1285 Avenue of the Americas
New York, NY 10019

Ladies and Gentlemen:

PaineWebber RMA Money Fund, Inc. ("PW Corporation"), on behalf of
PaineWebber RMA U.S. Government Portfolio, a segregated portfolio of assets
("series") thereof ("Acquiring Fund"), has requested our opinion as to certain
federal income tax consequences of the proposed acquisition by Acquiring Fund of
PaineWebber/Kidder, Peabody Government Money Fund, Inc. ("Target"),1/ pursuant
-
to an Agreement and Plan of Reorganization and Dissolution between them dated as
of September 7, 1995 ("Plan"), attached as an exhibit to the prospectus/proxy
statement to be furnished in connection with the solicitation of proxies by
Target's board of directors for use at a special meeting of Target shareholders
("Special Meeting") to be held on November 10, 1995 ("Proxy"), included in the
registration statement on Form N-14 to be filed with the Securities and Exchange
Commission ("SEC") on or about the date hereof ("Registration Statement").
Specifically, PW Corporation has requested our opinion:

(1) that the acquisition by Acquiring Fund of Target's assets in
exchange solely for voting shares of common stock in Acquiring Fund
and the assumption by Acquiring Fund of Target's liabilities, followed
by the distribution of those shares by Target pro rata to its share-
holders of record as of the close of regular trading on the New York
Stock Exchange, Inc. on the date of the Closing (as hereinafter
defined) ("Shareholders") constructively in exchange for their shares
of common stock in Target ("Target Shares") (such transaction some-
times being

--------------------

1/ Acquiring Fund and Target are referred to herein individually either by such
-
names or as a "Fund" and collectively as the "Funds," and PW Corporation and
Target are referred to herein individually either by such names or as an
"Investment Company" and collectively as the "Investment Companies."

<PAGE>
PaineWebber RMA Money Fund, Inc.
September 8, 1995
Page 2

referred to herein as the "Reorganization"), will constitute a "reorganiza-
tion" within the meaning of section 368(a)(1)(C)2/ and that each Fund
-
will be a "party to a reorganization" within the meaning of section 368(b),

(2) that Target, the Shareholders, and Acquiring Fund will
recognize no gain or loss upon the Reorganization, and

(3) regarding the basis and holding period after the Reorganiza-
tion of the transferred assets and the shares of Acquiring Fund issued
pursuant thereto.

In rendering this opinion, we have examined (1) Target's currently
effective prospectus and statement of additional information ("SAI"), both dated
August 1, 1995, and Acquiring Fund's currently effective prospectus and SAI,
both dated August 29, 1995, (2) the Proxy, (3) the Plan, and (4) such other
documents as we have deemed necessary or appropriate for the purposes hereof.
As to various matters of fact material to this opinion, we have relied, exclu-
sively and without independent verification, on statements of responsible
officers of each Investment Company and the representations described below and
made in the Plan (as contemplated in paragraph 6.6 thereof) (collectively
"Representations").

FACTS
-----

PW Corporation is a corporation organized under the laws of the State of
Maryland pursuant to Articles of Incorporation dated July 2, 1982; Acquiring
Fund commenced operations as a series thereof on October 4, 1982. Target is a
Maryland corporation organized pursuant to Articles of Incorporation dated
February 2, 1983, and commenced operations on May 17, 1983. Each Investment
Company is registered with the SEC as an open-end management investment company
under the Investment Company Act of 1940 ("1940 Act"). PaineWebber Incorporated
("PaineWebber") serves as each Fund's investment adviser and administrator and
is the distributor of each Fund's shares. Mitchell Hutchins Asset Management
Inc. ("Mitchell Hutchins"), a wholly owned subsidiary of PaineWebber, serves as
sub-adviser and sub-administrator to each Fund.

At or immediately before the close of business on the date on which the
Reorganization, together with all related acts necessary to consummate the same
("Closing") occurs, scheduled for November 17, 1995 (or on such other date or at
such other time as the parties may agree) ("Effective Time"), Target shall
declare and pay to its shareholders a dividend in an amount large

--------------------

2/ All section references are to the Internal Revenue Code of 1986, as amended
-
("Code"), and all "Treas. Reg. Sec." references are to the regulations under the
Code ("Regulations").

<PAGE>
PaineWebber RMA Money Fund, Inc.
September 8, 1995
Page 3

enough so that it will have distributed substantially all (and in any event not
less than 90%) of its investment company taxable income (computed without regard
to any deduction for dividends paid) for the current taxable year through the
Effective Time.

The Funds' investment objectives, which are substantially identical, and
investment policies, which are generally similar, are described in the Proxy and
their respective prospectuses and SAIs. Although there are differences in those
policies, it is not expected that Acquiring Fund will revise its investment
policies following the Reorganization to reflect Target's. Because Target is
permitted to invest in securities having characteristics different from those
permitted for Acquiring Fund, certain of the securities currently held by Target
may need to be sold rather than transferred to Acquiring Fund. If the Reorgan-
ization is approved, Target will sell prior to the Effective Time any assets
that are inconsistent with Acquiring Fund's investment policies, and the pro-
ceeds thereof will be held in temporary investments or reinvested in assets that
qualify to be held by Acquiring Fund.

The Reorganization was recommended by Mitchell Hutchins to each Investment
Company's board of directors (each a "board") at meetings thereof held on July
20, 1995. In considering the Reorganization, each board made an extensive in-
quiry into a number of factors (which are described in the Proxy, together with
Mitchell Hutchins's advice and recommendations to the boards and the purposes of
the Reorganization). Pursuant thereto, each board approved the Plan, subject to
approval of Target's shareholders. In doing so, each board, including a major-
ity of its members who are not "interested persons" (as that term is defined in
the 1940 Act) of either Investment Company, determined that the Reorganization
is in its Fund's best interests, that the terms of the Reorganization are fair
and reasonable, and that its Fund's shareholders' interests will not be diluted
as a result of the Reorganization.

The Plan, which specifies that it is intended to be, and is adopted as, a
plan of a reorganization described in section 368(a)(1)(C), provides in relevant
part for the following:

(1) The acquisition by Acquiring Fund of all cash, cash
equivalents, securities, receivables (including interest and dividends
receivable), claims and rights of action, rights to register shares
under applicable securities laws, books and records, deferred and
prepaid expenses shown as assets on Target's books, and other property
owned by Target at the Effective Time (collectively "Assets") in ex-
change solely for

(a) the number of full and fractional shares of common
stock in Acquiring Fund ("Acquiring Fund Shares") determined
by dividing the net value of Target by the net asset value
("NAV") of an Acquiring Fund Share, and

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PaineWebber RMA Money Fund, Inc.
September 8, 1995
Page 4

(b) Acquiring Fund's assumption of all of Target's lia-
bilities, debts, obligations, and duties of whatever kind or
nature, whether absolute, accrued, contingent, or otherwise,
whether or not arising in the ordinary course of business,
whether or not determinable at the Effective Time, and
whether or not specifically referred to in the Plan,
including without limitation Target's share of the expenses
incurred in connection with the Reorganization (collectively
"Liabilities") (Target having agreed in the Plan to use its
best efforts to discharge all of its known liabilities and
obligations prior to the Effective Time),

(2) The constructive distribution of such Acquiring Fund Shares
to the Shareholders, and

(3) The subsequent dissolution of Target.

The distribution described in (2) will be accomplished by transferring the
Acquiring Fund Shares then credited to Target's account on Acquiring Fund's
share transfer records to open accounts on those records established in the
Shareholders' names, with each Shareholder's account being credited with the re-
spective pro rata number of full and fractional (rounded to three decimal
places) Acquiring Fund Shares due such Shareholder. All outstanding Target
Shares, including any represented by certificates, simultaneously will be
canceled on Target's share transfer records.

REPRESENTATIONS
---------------

The representations enumerated below have been made to us by appropriate
officers of each Investment Company.

Each of PW Corporation, on behalf of Acquiring Fund, and Target has
represented and warranted to us as follows:

1. The fair market value of the Acquiring Fund Shares, when received
by the Shareholders, will be approximately equal to the fair market value
of their Target Shares constructively surrendered in exchange therefor;

2. Its management (a) is unaware of any plan or intention of
Shareholders to redeem or otherwise dispose of any portion of the Acquiring
Fund Shares to be received by them in the Reorganization and (b) does not
anticipate dispositions of those Acquiring Fund Shares at the time of or
soon after the Reorganization to exceed the usual rate and

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PaineWebber RMA Money Fund, Inc.
September 8, 1995
Page 5

frequency of dispositions of shares of Target as an open-end investment
company. Consequently, its management expects that the percentage of
Shareholder interests, if any, that will be disposed of as a result of or
at the time of the Reorganization will be de minimis. Nor does its
management anticipate that there will be extraordinary redemptions of
Acquiring Fund Shares immediately following the Reorganization;

3. The Shareholders will pay their own expenses, if any, incurred in
connection with the Reorganization;

4. Immediately following consummation of the Reorganization,
Acquiring Fund will hold substantially the same assets and be subject to
substantially the same liabilities that Target held or was subject to im-
mediately prior thereto, plus any liabilities and expenses of the parties
incurred in connection with the Reorganization;

5. The fair market value on a going concern basis of the Assets will
equal or exceed the Liabilities to be assumed by Acquiring Fund and those
to which the Assets are subject;

6. There is no intercompany indebtedness between the Funds that was
issued or acquired, or will be settled, at a discount;

7. Pursuant to the Reorganization, Target will transfer to Acquiring
Fund, and Acquiring Fund will acquire, at least 90% of the fair market
value of the net assets, and at least 70% of the fair market value of the
gross assets, held by Target immediately before the Reorganization. For
the purposes of this representation, any amounts used by Target to pay its
Reorganization expenses and redemptions and distributions made by it
immediately before the Reorganization (except for (a) distributions made to
conform to its policy of distributing all or substantially all of its
income and gains to avoid the obligation to pay federal income tax and/or
the excise tax under section 4982 and (b) redemptions not made as part of
the Reorganization) will be included as assets thereof held immediately
before the Reorganization;

8. None of the compensation received by any Shareholder who is an
employee of Target will be separate consideration for, or allocable to, any
of the Target Shares held by such Shareholder-employee; none of the
Acquiring Fund Shares received by any such Shareholder-employee will be
separate consideration for, or allocable to, any employment agreement; and
the consideration paid to any such Shareholder-employee will be for
services actually rendered and will be commensurate with amounts paid to
third parties bargaining at arm's-length for similar services; and

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PaineWebber RMA Money Fund, Inc.
September 8, 1995
Page 6

9. Immediately after the Reorganization, the Shareholders will not
own shares constituting "control" of Acquiring Fund within the meaning of
section 304(c).

Target also has represented and warranted to us as follows:

1. The Liabilities were incurred by Target in the ordinary course of
its business;

2. Target qualified for treatment as a regulated investment company
("RIC") under Subchapter M of the Code ("Subchapter M") for each past
taxable year since it commenced operations and will continue to meet all
the requirements for such qualification for its current taxable year; and
it has no earnings and profits accumulated in any taxable year in which the
provisions of Subchapter M did not apply to it;

3. Target is not under the jurisdiction of a court in a proceeding
under Title 11 of the United States Code or similar case within the meaning
of section 368(a)(3)(A);

4. Not more than 25% of the value of Target's total assets (excluding
cash, cash items, and U.S. government securities) is invested in the stock
and securities of any one issuer, and not more than 50% of the value of
such assets is invested in the stock and securities of five or fewer
issuers; and

5. Target will be dissolved as soon as reasonably practicable after
the Reorganization, but in all events within six months after the Effective
Time.

PW Corporation also has represented and warranted to us on behalf of
Acquiring Fund as follows:

1. Acquiring Fund is a "fund" as defined in section 851(h)(2); it
qualified for treatment as a RIC under Subchapter M for each past taxable
year since it commenced operations and will continue to meet all the
requirements for such qualification for its current taxable year; Acquiring
Fund intends to continue to meet all such requirements for the next taxable
year; and it has no earnings and profits accumulated in any taxable year in
which the provisions of Subchapter M did not apply to it;

2. Acquiring Fund has no plan or intention to issue additional
Acquiring Fund Shares following the Reorganization except for shares issued
in the ordinary course of its business as a series of an open-end
investment company; nor does Acquiring Fund have any plan or intention to
redeem or otherwise reacquire any Acquiring Fund Shares issued to the
Shareholders pursuant to the Reorganization, other than through redemptions
arising in the ordinary course of that business;

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PaineWebber RMA Money Fund, Inc.
September 8, 1995
Page 7

3. Acquiring Fund (a) will actively continue Target's business in
substantially the same manner that Target conducted that business immedi-
ately before the Reorganization, (b) has no plan or intention to sell or
otherwise dispose of any of the Assets, except for dispositions made in the
ordinary course of that business and dispositions necessary to maintain its
status as a RIC under Subchapter M, and (c) expects to retain substantially
all the Assets in the same form as it receives them in the Reorganization,
unless and until subsequent investment circumstances suggest the
desirability of change or it becomes necessary to make dispositions thereof
to maintain such status;

4. There is no plan or intention for Acquiring Fund to be dissolved
or merged into another corporation or business trust or any "fund" thereof
(within the meaning of section 851(h)(2)) following the Reorganization;

5. Immediately after the Reorganization, (a) not more than 25% of the
value of Acquiring Fund's total assets (excluding cash, cash items, and
U.S. government securities) will be invested in the stock and securities of
any one issuer and (b) not more than 50% of the value of such assets will
be invested in the stock and securities of five or fewer issuers; and

6. Acquiring Fund does not own, directly or indirectly, nor at the
Effective Time will it own, directly or indirectly, nor has it owned,
directly or indirectly, at any time during the past five years, any shares
of Target.

OPINION
-------

Based solely on the facts set forth above, and conditioned on (1) the
Representations being true at the time of Closing and (2) the Reorganization
being consummated in accordance with the Plan, our opinion (as explained more
fully in the next section of this letter) is as follows:

1. Acquiring Fund's acquisition of the Assets in exchange solely for
the Acquiring Fund Shares and Acquiring Fund's assumption of the Lia-
bilities, followed by Target's distribution of those shares pro rata to the
Shareholders constructively in exchange for their Target Shares, will
constitute a reorganization within the meaning of section 368(a)(1)(C), and
each Fund will be "a party to a reorganization" within the meaning of
section 368(b);

2. No gain or loss will be recognized to Target on the transfer of
the Assets to Acquiring Fund in exchange solely for the Acquiring Fund
Shares and Acquiring Fund's assumption of the Liabilities or upon the
subsequent distribution of those shares to the Shareholders in constructive
exchange for their Target Shares (section 361);

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PaineWebber RMA Money Fund, Inc.
September 8, 1995
Page 8

3. No gain or loss will be recognized to Acquiring Fund on its
receipt of the Assets in exchange solely for the Acquiring Fund Shares and
its assumption of the Liabilities (section 1032(a));

4. Acquiring Fund's basis for the Assets will be the same as the
basis thereof in Target's hands immediately before the Reorganization
(section 362(b)), and Acquiring Fund's holding period for the Assets will
include Target's holding period therefor (section 1223(2));

5. A Shareholder will recognize no gain or loss on the constructive
exchange of all its Target Shares solely for Acquiring Fund Shares pursuant
to the Reorganization (section 354(a)); and

6. A Shareholder's basis for the Acquiring Fund Shares to be received
by it in the Reorganization will be the same as the basis for its Target
Shares to be constructively surrendered in exchange for those Acquiring
Fund Shares (section 358(a)), and its holding period for those Acquiring
Fund Shares will include its holding period for those Target Shares, pro-
vided they are held as capital assets by the Shareholder on the Closing
Date (section 1223(1)).

The foregoing opinion (1) is based on, and is conditioned on the continued
applicability of, the provisions of the Code and the Regulations, judicial
decisions, and rulings and other pronouncements of the Internal Revenue Service
("Service") in existence on the date hereof and (2) is applicable only to the
extent each Fund is solvent. We express no opinion about the tax treatment of
the transactions described herein if either Fund is insolvent.

ANALYSIS
--------

I. The Reorganization Will Be a Reorganization under Section
---------------------------------------------------------
368(a)(1)(C), and Each Fund Will Be a Party to a Reorganization.
---------------------------------------------------------------

A. Each Fund Is a Separate Corporation.
-----------------------------------

A reorganization under section 368(a)(1)(C) (a "C reorganization") involves
the acquisition by one corporation, in exchange solely for all or a part of its
voting stock, of substantially all of the properties of another corporation.
For the transaction to qualify under that section, therefore, both entities in-
volved therein must be corporations (or associations taxable as corporations).
Although Target is a corporation, and PW Corporation also is a corporation, the
latter is not participating in the Reorganization, but rather a series thereof
(Acquiring Fund) is the participant. Ordinarily, a transaction involving a
segregated pool of assets (such as Acquiring

<PAGE>
PaineWebber RMA Money Fund, Inc.
September 8, 1995
Page 9

Fund) could not qualify as a reorganization, because the pool would not be a
corporation. Under section 851(h), however, Acquiring Fund is treated as a
separate corporation for all purposes of the Code save the definitional require-
ment of section 851(a) (which is satisfied by PW Corporation). Thus, we believe
that Acquiring Fund will be a separate corporation, and Acquiring Fund's shares
will be treated as shares of corporate stock, for purposes of section
368(a)(1)(C).

B. Satisfaction of Section 368(a)(2)(F).
------------------------------------

Under section 368(a)(2)(F), if two or more parties to a transaction
described in section 368(a)(1) (other than subparagraph (E) thereof) are
"investment companies," the transaction will not be considered a reorganization
with respect to any such investment company or its shareholders unless, among
other things, the investment company is a RIC or --

(1) not more than 25% of the value of its total assets is
invested in the stock and securities of any one issuer and

(2) not more than 50% of the value of its total assets is
invested in the stock and securities of five or fewer
issuers.

Each Fund will meet the requirements for qualification and treatment as a RIC
for its respective current taxable year, and the foregoing percentage tests will
be satisfied by each Fund. Accordingly, we believe that section 368(a)(2)(F)
will not cause the Reorganization to fail to qualify as a C reorganization with
respect to either Fund.

C. Transfer of "Substantially All" of the Properties.
-------------------------------------------------

For an acquisition to qualify as a C reorganization, the acquiring
corporation must acquire "substantially all of the properties" of the transferor
corporation solely in exchange for all or part of the acquiring corporation's
stock. For purposes of issuing private letter rulings, the Service considers
the transfer of at least 70% of the transferor's gross assets, and at least 90%
of its net assets, held immediately before the reorganization to satisfy the
"substantially all" requirement. Rev. Proc. 77-37, 1977-2 C.B. 568. The
Reorganization will involve such a transfer. Accordingly, we believe that the
Reorganization will involve the transfer to Acquiring Fund of substantially all
of Target's properties.

D. Qualifying Consideration.
------------------------

For an acquisition to qualify as a C reorganization, the acquiring
corporation must acquire at least 80% (by fair market value) of the transferor's
property solely in exchange for voting stock. Section 368(a)(2)(B)(iii). The
assumption of liabilities by the acquiring corporation or

<PAGE>
PaineWebber RMA Money Fund, Inc.
September 8, 1995
Page 10

its acquisition of property subject to liabilities normally are disregarded
(section 368(a)(1)(C)), but the amount of any such liabilities will be treated
as money paid for the transferor's property if the acquiring corporation ex-
changes any money or property (other than its voting stock) therefor. Section
368(a)(2)(B). Because Acquiring Fund will exchange only the Acquiring Fund
Shares, and no money or other property, for the Assets, we believe that the
Reorganization will satisfy the solely-for-voting-stock requirement to qualify
as a C reorganization.

E. Requirements of Continuity.
--------------------------

Treasury Regulation section 1.368-1(b) sets forth two prerequisites to a
valid reorganization: (1) a continuity of the business enterprise under the
modified corporate form ("continuity of business") and (2) a continuity of
interest therein on the part of those persons who, directly or indirectly, were
the owners of the enterprise prior to the reorganization ("continuity of inter-
est").

1. Continuity of Business.
----------------------

The continuity of business enterprise test as set forth in Treas. Reg. Sec.
1.368-1(d)(2) requires that the acquiring corporation must either (i) continue
the acquired corporation's historic business ("business continuity") or (ii) use
a significant portion of the acquired corporation's historic business assets in
a business ("asset continuity").

While there is no authority that deals directly with the requirement of
continuity of business in the context of a transaction such as the Reorgan-
ization, Rev. Rul. 87-76, 1987-2 C.B. 84, deals with a somewhat similar
situation. In that ruling, P was a RIC that invested exclusively in municipal
securities. P acquired the assets of T in exchange for P common stock in a
transaction that was intended to qualify as a C reorganization. Prior to the
exchange, T sold its entire portfolio of corporate securities and purchased a
portfolio of municipal bonds. The Service held that this transaction did not
qualify as a reorganization for the following reasons: (1) because T had sold
its historic assets prior to the exchange, there was no asset continuity; and
(2) the failure of P to engage in the business of investing in corporate
securities after the exchange caused the transaction to lack business continuity
as well.

The Funds' investment objectives are substantially identical and their
investment policies are generally similar. Furthermore, Acquiring Fund will
actively continue Target's business in the same manner that Target conducted it
immediately before the Reorganization. Accordingly, there will be business
continuity.

Acquiring Fund not only will continue Target's historic business, but
Acquiring Fund also (1) has no plan or intention to sell or otherwise dispose of
any of the Assets, except for dispositions made in the ordinary course of its
business and dispositions necessary to maintain

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PaineWebber RMA Money Fund, Inc.
September 8, 1995
Page 11

its status as a RIC, and (2) expects to retain substantially all the Assets in
the same form as it receives them in the Reorganization, unless and until subse-
quent investment circumstances suggest the desirability of change or it becomes
necessary to make dispositions thereof to maintain such status. Accordingly,
there will be asset continuity as well.

For all the foregoing reasons, we believe that the Reorganization will meet
the continuity of business requirement.

2. Continuity of Interest.
----------------------

For purposes of issuing private letter rulings, the Service considers the
continuity of interest requirement of Treas. Reg. Sec. 1.368-1(b) satisfied if
ownership in an acquiring corporation on the part of a transferor corporation's
former shareholders is equal in value to at least 50% of the value of all the
formerly outstanding shares of the transferor corporation. Rev. Proc. 77-37,
supra; but see Rev. Rul. 56-345, 1956-2 C.B. 206 (continuity of interest was
----- --- ---
held to exist in a reorganization of two RICs where immediately after the reor-
ganization 26% of the shares were redeemed in order to allow investment in a
third RIC); also see Reef Corp. v. Commissioner, 368 F.2d 125 (5th Cir. 1966),
---- --- --------------------------
cert. denied, 386 U.S. 1018 (1967) (a redemption of 48% of a transferor corpora-
------------
tion's stock was not a sufficient shift in proprietary interest to disqualify a
transaction as a reorganization under section 368(a)(2)(F) ("F Reorganization"),
even though only 52% of the transferor's shareholders would hold all the
transferee's stock); Aetna Casualty and Surety Co. v. U.S., 568 F.2d 811, 822-23
-------------------------------------
(2d Cir. 1976) (redemption of a 38.39% minority interest did not prevent a
transaction from qualifying as an F Reorganization); Rev. Rul. 61-156, 1961-2
C.B. 62 (a transaction qualified as an F Reorganization even though the
transferor's shareholders acquired only 45% of the transferee's stock, while the
remaining 55% of that stock was issued to new shareholders in a public under-
writing immediately after the transfer).

No minimum holding period for shares of an acquiring corporation is imposed
under the Code on the acquired corporation's shareholders. Rev. Rul. 66-23,
1966-1 C.B. 67, provides generally that "unrestricted rights of ownership for a
period of time sufficient to warrant the conclusion that such ownership is
definite and substantial" will suffice and that "ordinarily, the Service will
treat five years of unrestricted . . . ownership as a sufficient period" for
continuity of interest purposes.

A preconceived plan or arrangement by or among an acquired corporation's
shareholders to dispose of more than 50% of an acquiring corporation's shares
could be problematic. Shareholders with no such preconceived plan or
arrangement, however, are basically free to sell any part of the shares received
by them in the reorganization without fear of breaking continuity of interest,
because the subsequent sale will be treated as an independent transaction from
the reorganization.

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PaineWebber RMA Money Fund, Inc.
September 8, 1995
Page 12

Neither Fund (1) is aware of any plan or intention of Shareholders to
dispose of any portion of the Acquiring Fund Shares to be received by them in
the Reorganization or (2) anticipates dispositions thereof at the time of or
soon after the Reorganization to exceed the usual rate and frequency of
dispositions of shares of Target as an open-end investment company. Conse-
quently, each Fund expects that the percentage of Shareholder interests, if any,
that will be disposed of as a result of or at the time of the Reorganization
will be de minimis. Accordingly, we believe that the Reorganization will meet
the continuity of interest requirement of Treas. Reg. Sec. 1.368-1(b).

F. Distribution by Target.
----------------------

Section 368(a)(2)(G)(i) provides that a transaction will not qualify as a C
reorganization unless the corporation whose properties are acquired distributes
the stock it receives and its other property in pursuance of the plan of reor-
ganization. Under the Plan -- which we believe constitutes a "plan of reorgani-
zation" within the meaning of Treas. Reg. Sec. 1.368-2(g) -- Target will
distribute all the Acquiring Fund Shares to its shareholders in constructive
exchange for their Target Shares; as soon as is reasonably practicable
thereafter, Target will be dissolved. Accordingly, we believe that the
requirements of section 368(a)(2)(G)(i) will be satisfied.

G. Business Purpose.
----------------

All reorganizations must meet the judicially imposed requirements of the
"business purpose doctrine," which was established in Gregory v. Helvering, 293
--------------------
U.S. 465 (1935), and is now set forth in Treas. Reg. Sec.Sec. 1.368-1(b), -1(c),
and -2(g) (the last of which provides that, to qualify as a reorganization, a
transaction must be "undertaken for reasons germane to the continuance of the
business of a corporation a party to the reorganization"). Under that doctrine,
a transaction must have a bona fide business purpose (and not a purpose to avoid
federal income tax) to constitute a valid reorganization. The substantial
business purposes of the Reorganization are described in the Proxy. According-
ly, we believe that the Reorganization is being undertaken for bona fide
business purposes (and not a purpose to avoid federal income tax) and
therefore meets the requirements of the business purpose doctrine.

For all the foregoing reasons, we believe that the Reorganization will
constitute a reorganization within the meaning of section 368(a)(1)(C).

H. Both Funds are Parties to the Reorganization.
--------------------------------------------

Section 368(b)(2) and Treas. Reg. Sec. 1.368-1(f) provide that if one
corporation transfers substantially all of its properties to a second
corporation in exchange for all or a part of the voting stock of the second
corporation, then both corporations are parties to a reorganization.

<PAGE>
PaineWebber RMA Money Fund, Inc.
September 8, 1995
Page 13

Target is transferring substantially all of its properties to Acquiring Fund in
exchange for Acquiring Fund Shares. Accordingly, we believe that each Fund will
be "a party to a reorganization."

II. No Gain or Loss Will Be Recognized to Target.
--------------------------------------------

Under sections 361(a) and (c), no gain or loss will be recognized to a
corporation that is a party to a reorganization (1) on the exchange of property,
pursuant to the plan of reorganization, solely for stock or securities in
another corporate party to the reorganization or (2) on the distribution to its
shareholders, pursuant to that plan, of stock in such other corporation that was
received by the distributing corporation in the exchange. (Such a distribution
is required by section 368(a)(2)(G)(i) for a reorganization to qualify as a C
reorganization.) Section 361(c)(4) provides that specified provisions requiring
recognition of gain on certain distributions shall not apply to a distribution
described in (2) above.

Section 357(a) provides in pertinent part that, except as provided in sec-
tion 357(b), if a taxpayer receives property that would be permitted to be
received under section 361 without recognition of gain if it were the sole
consideration and, as part of the consideration, another party to the exchange
assumes a liability of the taxpayer or acquires from the taxpayer property sub-
ject to a liability, then that assumption or acquisition shall not be treated as
money or other property and shall not prevent the exchange from being within
section 361. Section 357(b) applies where the principal purpose of the
assumption or acquisition was a tax avoidance purpose or not a bona fide
business purpose.

As noted above, the Reorganization will constitute a C reorganization, each
Fund will be a party to a reorganization, and the Plan constitutes a plan of
reorganization. Target will exchange the Assets solely for the Acquiring Fund
Shares and Acquiring Fund's assumption of the Liabilities and then will be
dissolved pursuant to the Plan, distributing those shares to its shareholders in
constructive exchange for their Target Shares. As also noted above, we believe
that the Reorganization is being undertaken for bona fide business purposes (and
not a purpose to avoid federal income tax); we also do not believe that the
principal purpose of Acquiring Fund's assumption of the Liabilities is avoidance
of federal income tax on the proposed transaction. Accordingly, we believe that
no gain or loss will be recognized to Target on the Reorganization.3/
-

--------------------

3/ Notwithstanding anything herein to the contrary, no opinion is expressed as
-
to the effect of the Reorganization on the Funds or any Shareholder with respect
to any asset as to which any unrealized gain or loss is required to be
recognized for federal income tax purposes at the end of a taxable year (or on
the termination or transfer thereof) under a mark-to-market system of
accounting.

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PaineWebber RMA Money Fund, Inc.
September 8, 1995
Page 14

III. No Gain or Loss Will Be Recognized to Acquiring Fund.
----------------------------------------------------

Section 1032(a) provides that no gain or loss will be recognized to a
corporation on the receipt by it of money or other property in exchange for its
shares. Acquiring Fund will issue the Acquiring Fund Shares to Target in
exchange for the Assets, which consist of money and securities. Accordingly, we
believe that no gain or loss will be recognized to Acquiring Fund on the Reor-
ganization.

IV. Acquiring Fund's Basis for the Assets Will Be a Carryover Basis, and
--------------------------------------------------------------------
Its Holding Period Will Include Target's Holding Period.
-------------------------------------------------------

Section 362(b) provides that property acquired by a corporation in
connection with a reorganization will have the same basis in that corporation's
hands as the basis of the property in the transferor corporation's hands
immediately before the exchange, increased by any gain recognized to the
transferor on the transfer. As noted above, the Reorganization will constitute
a C reorganization and Target will recognize no gain on the Reorganization under
section 361(a). Accordingly, we believe that Acquiring Fund's basis for the
Assets will be the same as the basis thereof in Target's hands immediately
before the Reorganization.

Section 1223(2) provides that where property acquired in an exchange has a
carryover basis, the property will have a holding period in the hands of the
acquiror that includes the holding period of the property in the transferor's
hands. As stated above, Acquiring Fund's basis for the Assets will be a carry-
over basis. Accordingly, we believe that Acquiring Fund's holding period for
the Assets will include Target's holding period therefor.

V. No Gain or Loss Will Be Recognized to a Shareholder.
----------------------------------------------------

Under section 354(a), no gain or loss is recognized to a shareholder who
exchanges shares for other shares pursuant to a plan of reorganization, where
the shares exchanged, as well as the shares received, are those of a corporation
that is a party to the reorganization. As stated above, the Reorganization will
constitute a C reorganization, the Plan constitutes a plan of reorganization,
and each Fund will be a party to a reorganization. Accordingly, we believe that
under section 354 a Shareholder will recognize no gain or loss on the
constructive exchange of all its Target Shares solely for Acquiring Fund Shares
pursuant to the Reorganization.

<PAGE>
PaineWebber RMA Money Fund, Inc.
September 8, 1995
Page 15

VI. A Shareholder's Basis for Acquiring Fund Shares Will Be a Substituted
---------------------------------------------------------------------
Basis, and its Holding Period therefor Will Include its Holding Period
----------------------------------------------------------------------
for its Target Shares.
---------------------

Section 358(a)(1) provides, in part, that in the case of an exchange to
which section 354 applies, the basis of any shares received in the transaction
without the recognition of gain is the same as the basis of the property
transferred in exchange therefor, decreased by, among other things, the fair
market value of any other property and the amount of any money received in the
transaction and increased by the amount of any gain recognized on the exchange
by the shareholder.

As noted above, the Reorganization will constitute a C reorganization and
under section 354 no gain or loss will be recognized to a Shareholder on the
constructive exchange of its Target Shares for Acquiring Fund Shares in the
Reorganization. No property will be distributed to the Shareholders other than
the Acquiring Fund Shares, and no money will be distributed to them pursuant to
the Reorganization. Accordingly, we believe that a Shareholder's basis for the
Acquiring Fund Shares to be received by it in the Reorganization will be the
same as the basis for its Target Shares to be constructively surrendered in
exchange for those Acquiring Fund Shares.

Under section 1223(1), the holding period of property received in an
exchange includes the holding period of the property exchanged therefor if the
acquired property has, for the purpose of determining gain or loss, the same
basis in the holder's hands as the property exchanged therefor ("substituted
basis") and such property was a capital asset. As noted above, a Shareholder
will have a substituted basis for the Acquiring Fund Shares it receives in the
Reorganization; accordingly, provided that the Shareholder held its Target
Shares as capital assets on the Closing Date, we believe its holding period for
those Acquiring Fund Shares will include its holding period for those Target
Shares.

<PAGE>
PaineWebber RMA Money Fund, Inc.
September 8, 1995
Page 16

We hereby consent to this opinion accompanying the Registration Statement
and to the references to our firm under the captions "Synopsis -- Federal Income
Tax Consequences of the Reorganization" and "The Proposed Transaction -- Federal
Income Tax Considerations" in the Proxy.

Very truly yours,

KIRKPATRICK & LOCKHART LLP

By:
---------------------------------------
Theodore L. Press

[SULLIVAN & CORMWELL]

Exhibit 12(b)

September 8, 1995

PaineWebber/Kidder, Peabody
Government Money Fund, Inc.
1285 Avenue of the Americas
New York, New York ]0019

Ladies and Gentlemen:

We have acted as counsel to PaineWebber/Kidder, Peabody Government Money

Fund, Inc., a Maryland corporation ("Target"), in connection with the

Agreement and Plan of Reorganization and Dissolution dated as of September

7, 1995 (the "Agreement"), between PaineWebber RMA Money Fund, Inc. a

Maryland corporation ("PW Corporation") on behalf of PaineWebber RMA U.S.

Government Portfolio, a series thereof ("Acquiring Fund"), and Target, and

we render this opinion to you pursuant to paragraph 6.6 of the Agreement.

Capitalized terms used but not defined herein have the meanings

ascribed to them in the Agreement.

For the purposes of the opinion set forth below, we have relied in

part, with your consent, upon the representations set forth in letters

dated September 8, 1995

<PAGE>

PaineWebber/Kidder, Peabody
Government Money Fund, Inc. -2-

from each of PW Corporation and Target, and upon the accuracy and

completeness of the statements and representations contained in the

Agreement and in the Prospectus/Proxy Statement which will be distributed

to the shareholders of Target in connection with the Reorganization. With

your consent we have not attempted to verify independently the accuracy of

any information in these documents and have assumed that the statements and

representations contained therein will be true at the Effective Time.

In connection with this opinion we have also assumed, with your

consent, that the Reorganization will be effected in accordance with the

terms of the Agreement.

On the basis of the foregoing, and our consideration of such other

matters as we have considered relevant, we advise you that, in our opinion:

1. The Reorganization will constitute a reorganization within the

meaning of Section 368(a) (1)(C) of the Code, and each Fund will be "a

party to a reorganization" within the meaning of section 368{b) of the

Code;

2. Target will not recognize any gain or loss on the transfer to

Acquiring Fund of the Assets in exchange

<PAGE>

PaineWebber/Kidder, Peabody
Government Money Fund, Inc. -3-

solely for Acquiring Fund Shares and Acquiring Fund's assumption of the

Liabilities or on the subsequent distribution of those shares to the

Shareholders in constructive exchange for their Target Shares;

3. Acquiring Fund will not recognize any gain or loss on its receipt of

the Assets in exchange solely for

Acquiring Fund Shares and its assumption of the Liabilities;

4. Acquiring Fund's basis for the Assets will be

the same as the basis thereof to Target immediately before the

Reorganization, and Acquiring Fund'$ holding period for the Assets will

include Target's holding period therefor;

5. A Shareholder will not recognize any gain or loss on the

constructive exchange of all its Target Shares solely for Acquiring Fund

Shares pursuant to the Reorganization; and

6. A Shareholder's basis for the Acquiring Fund Shares to be received

by it in the Reorganization will be the same as the basis for its Target

Shares to be constructively surrendered in exchange for those Acquiring

Fund Shares, and its holding period for those Acquiring Fund Shares will

include its holding period for those Target Shares, provided they are held

as capital assets by the Shareholder at the Effective Time.

<PAGE>

PaineWebber/Kidder, Peabody
Government Money Fund, Inc. -4-

We express no opinion as to the effect of the Reorganization on the

Funds or any Shareholder in respect of any asset as to which unrealized

gain or loss is required to be recognized for U.S. Federal income tax

purposes at the end of each year under a mark-to-market system of

accounting.

The tax consequences described above may not be applicable to a Target

Shareholder who acquired Target Shares pursuant to the exercise of an

employee stock option or otherwise as compensation.

We hereby consent to the reference to us under the heading "Federal

Income Tax Consequences of the Reorganization" and "The Proposed

Transactions - Federal Income Tax Considerations" in the Prospectus/Proxy

Statement of Acquiring Fund and Target and to the filing of this opinion as

an Exhibit to the Registration Statement on Form N-14 of Acquiring Fund

including the Prospectus/Proxy Statement filed with the Securities and Exchange

Commission. In giving this consent we do not thereby admit that we are

within the category of persons whose consent is required

<PAGE>

PaineWebber/Kidder, Peabody
Government Money Fund, Inc. -5-

under Section 7 of the Securities Act of 1933, as amended, or the rules or

regulations of the Securities and Exchange Commission thereunder.

Very truly yours,

SULLIVAN & CROMWELL

EXHIBIT 14(a)

Consent Of Independent Auditors

We consent to the reference to our firm under the caption
"Experts" and to the incorporation by reference of our report
on PaineWebber RMA U.S. Government Portfolio dated August 17,
1995, in this Registration Statement (Form N-14) of PaineWebber
RMA Money Fund, Inc.

ERNST & YOUNG LLP

New York, New York
September 7, 1995

EXHIBIT 14(b)

CONSENT OF INDEPENDENT AUDITORS

PaineWebber/Kidder, Peabody Government Money Fund, Inc.:

We consent to the incorporation by reference in this Registration Statement
on Form N-14 our report dated May 18, 1995, appearing in the annual report
to shareholders for the year ended March 31, 1995, and to the reference to
us under the caption "Experts" appearing in the Prospectus/Prospectus,
which is a part of such Registration Statement.

Deloitte & Touche LLP
New York, New York
September 6, 1995

Exhibit 17(a)

As filed with the Securities and Exchange Commission on August 29, 1984.

Registration 2-78309

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM N-1A

REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1993 [ X ]
-------

Pre-Effective Amendment No. [ ]
------- -------

Post-Effective Amendment No. 5 [ X ]
------- -------

REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 [ X ]
-------

Amendment No.
-------

(Check appropriate box or boxes.)

PAINE WEBBER RMA MONEY FUND, INC.
(Exact name of registrant as specified in charter)

140 Broadway
New York, New York 10005
(Address of principal executive offices)

Registrant's telephone number, including area code: (202) 887-6000

SAM SCOTT MILLER, Esq.
LAURA A. CORSELL, Esq.
PaineWebber Incorporated
140 Broadway
New York, New York 10005
(Name and address of agent for service)

Copies to:

RICHARD M. PHILLIPS, Esq.
ARTHUR J. BROWN, Esq.
Kirkpatrick, Lockhart, Hill, Christopher & Phillips
1900 M Street, N.W.
Washington, D.C. 20036
Telephone: (202) 452-7000

<PAGE>

It is proposed that this filing will become effective:

[ ] Immediately upon filing pursuant to paragraph (b) of Rule 485.
[ ] On pursuant to paragraph (b) of Rule 485.
[ ] 60 days after filing pursuant to paragraph (a) of Rule 485.
[ X ] On October 31, 1984 pursuant to paragraph (a) of Rule 485.

Registrant has filed a declaration pursuant to Rule 24f-2 under the
Investment Company Act of 1940 and will file the notice required by such
Rule on August 28, 1985.

Exhibit 17(b)

PROXY
-----

PAINEWEBBER/KIDDER, PEABODY GOVERNMENT MONEY FUND, INC.
Special Meeting of Shareholders - November 10, 1995

The undersigned hereby appoints as proxies Dianne E. O'Donnell and Jennifer
A. Farrell and each of them (with power of substitution) to vote for the
undersigned all shares of beneficial interest of the undersigned at the
aforesaid meeting and any adjournment thereof with all the power the
undersigned would have if personally present. The shares represented by
this proxy will be voted as instructed. Unless indicated to the contrary,
this proxy shall be deemed to grant authority to vote "FOR" all proposals.
This proxy is solicited on behalf of the Board of Directors of
PaineWebber/Kidder, Peabody Government Money Fund, Inc.

YOUR VOTE IS IMPORTANT
Please date and sign this proxy on the reverse side and return it in the
enclosed envelope to Alamo Direct Mail Services, Inc., 10 Lucon Drive, Deer
Park, NY 11729.

Please indicate your vote by an "X" in the appropriate box below.
The Board of Directors recommends a vote "FOR"

1. Approval of an Amended and Restated Agreement and Plan of Reorganization
and Dissolution between PaineWebber/Kidder, Peabody Government Money Fund,
Inc. and PaineWebber RMA U.S. Government Portfolio.

FOR AGAINST ABSTAIN

--- --- ---

Continued and to be signed on reverse side

<PAGE>

This proxy will not be voted unless it is dated and signed exactly
as instructed below

If shares are held jointly, each Shareholder named should sign. If only one
signs, his or her signature will be binding. If the Shareholder is a
corporation, the President or a Vice President should sign in his or her own
name, indicating title. If the Shareholder is a partnerhip, a partner should
sign in his her own name, indicating that he or she is a "Partner".

Sign exactly as name appears hereon

--------------------- (L.S.)

Date , 1995
----------------

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<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> JUN-30-1995
<PERIOD-END> JUN-30-1995
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<INVESTMENTS-AT-VALUE> 816,628
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<ASSETS-OTHER> 75
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<DISTRIBUTIONS-OF-INCOME> (37,510)
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<NUMBER-OF-SHARES-SOLD> 4,573,104
<NUMBER-OF-SHARES-REDEEMED> (4,649,073)
<SHARES-REINVESTED> 36,743
<NET-CHANGE-IN-ASSETS> (39,147)
<ACCUMULATED-NII-PRIOR> 0
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<OVERDISTRIB-NII-PRIOR> 0
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<GROSS-EXPENSE> (5,158)
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</TABLE>