<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JUNE 2, 1995
SECURITIES ACT FILE NO. 2-81760
INVESTMENT COMPANY ACT FILE NO. 811-3663
________________________________________________________________________________
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 [x]
PRE-EFFECTIVE AMENDMENT NO. [ ]
POST-EFFECTIVE AMENDMENT NO. 13 [x]
AND/OR
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 [x]
AMENDMENT NO. 14 [x]
(CHECK APPROPRIATE BOX OR BOXES)
------------------------
PAINEWEBBER/KIDDER, PEABODY GOVERNMENT MONEY FUND, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN CHARTER)
<TABLE>
<S> <C>
1285 AVENUE OF THE AMERICAS 10019
NEW YORK, NEW YORK (ZIP CODE)
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICE)
</TABLE>
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (212) 713-2000
DIANNE E. O'DONNELL
MITCHELL HUTCHINS ASSET MANAGEMENT INC.
1285 AVENUE OF THE AMERICAS
NEW YORK, NEW YORK 10019
(NAME AND ADDRESS OF AGENT FOR SERVICE)
COPY TO:
JOHN E. BAUMGARDNER, JR., ESQ.
SULLIVAN & CROMWELL
125 BROAD STREET
NEW YORK, NEW YORK 10004
------------------------
IT IS PROPOSED THAT THIS FILING WILL BECOME EFFECTIVE (CHECK APPROPRIATE
BOX)
[ ] IMMEDIATELY UPON FILING PURSUANT TO PARAGRAPH (B) OF RULE 485
[ ] ON PURSUANT TO PARAGRAPH (B) OF RULE 485
[x] 60 DAYS AFTER FILING PURSUANT TO PARAGRAPH (A)(1) OF RULE 485
[ ] ON PURSUANT TO PARAGRAPH (A)(1) OF RULE 485
[ ] 75 DAYS AFTER FILING PURSUANT TO PARAGRAPH (A)(2) OF RULE 485
[ ] ON PURSUANT TO PARAGRAPH (A)(2) OF RULE 485.
---------------------------------
THE REGISTRANT HAS REGISTERED AN INDEFINITE NUMBER OF ITS SHARES UNDER THE
SECURITIES ACT OF 1933 PURSUANT TO RULE 24F-2 UNDER THE INVESTMENT COMPANY ACT
OF 1940. THE NOTICE REQUIRED BY SUCH RULE FOR THE REGISTRANT'S MOST RECENT
FISCAL YEAR WAS FILED ON MAY 31, 1995.
________________________________________________________________________________
<PAGE>
PAINEWEBBER/KIDDER, PEABODY GOVERNMENT MONEY FUND, INC.
REGISTRATION STATEMENT ON FORM N-1A
CROSS REFERENCE SHEET
<TABLE>
<CAPTION>
N-1A
ITEM
NO. LOCATION
- ---- ------------------------------------------------------
<S> <C> <C>
PART A
1. Cover Page............................................ Cover Page
2. Synopsis.............................................. Fee Table
3. Condensed Financial Information....................... Financial Highlights
4. General Description of Registrant..................... Cover Page; Investment Objective and Management
Policies; Additional Information About the Fund
5. Management of the Fund................................ Management of the Fund; Portfolio Transactions;
Custodian and Transfer, Dividend and Recordkeeping
Agent
6. Capital Stock and Other Securities.................... Cover Page; Dividends, Distributions and Taxes;
Additional Information About the Fund
7. Purchase of Securities Being Offered.................. Management of the Fund; Purchase of Shares; The
Distributor; Exchange Privilege; Determination of
Net Asset Value
8. Redemption or Repurchase.............................. Redemption of Shares
9. Pending Legal Proceedings............................. Not applicable
PART B
10. Cover Page............................................ Cover Page
11. Table of Contents..................................... Back Page
12. General Information and History....................... Additional Information About the Fund
13. Investment Objectives and Policies.................... Investment Objective and Policies
14. Management of the Fund................................ Management of the Fund
15. Control Persons and Principal Holders of Securities... Management of the Fund
16. Investment Advisory and Other Services................ Investment Advisory and Other Services
17. Brokerage Allocation.................................. Portfolio Transactions
18. Capital Stock and Other Securities.................... Additional Information About the Fund
19. Purchase, Redemption and Pricing of Securities Being
Offered............................................. Redemption of Shares; Exchange of Shares;
Determination of Net Asset Value
20. Tax Status............................................ Dividends, Distributions and Taxes
21. Underwriters.......................................... Investment Advisory and Other Services
22. Calculations of Yield Quotations of Money Market
Funds............................................... Determination of Current and Effective Yields
23. Financial Statements.................................. Financial Statements
</TABLE>
PART C
Information required to be included in Part C is set forth under the
appropriate Item, so numbered, in Part C to this Registration Statement.
<PAGE>
Prospectus August 1, 1995
- --------------------------------------------------------------------------------
PaineWebber/Kidder, Peabody Government Money Fund, Inc.
1285 AVENUE OF THE AMERICAS NEW YORK, NEW YORK 10019 (800) 647-1568
PaineWebber/Kidder, Peabody Government Money Fund, Inc. (the 'Fund') is a
diversified, open-end management investment company whose objective is the
maximization of current income to the extent consistent with the preservation of
capital and the maintenance of liquidity. It pursues this objective by investing
in short-term money market instruments issued or guaranteed by the U.S.
Government or its agencies or instrumentalities.
An investment in the Fund is neither insured nor guaranteed by the U.S.
Government. The Fund seeks to maintain a stable net asset value of $1.00 per
share, although there can be no assurance that it will be able to do so at all
times.
PaineWebber Incorporated ('PaineWebber'), 1285 Avenue of the Americas, New York,
New York 10019, serves as the Fund's investment adviser, administrator and
distributor. Mitchell Hutchins Asset Management Inc. ('Mitchell Hutchins'), 1285
Avenue of the Americas, New York, New York 10019, a wholly owned subsidiary of
PaineWebber, serves at the Fund's sub-adviser and sub-administrator. See
'Management of the Fund -- Investment Adviser and Administrator.' PaineWebber
receives an annual fee of .50% of the Fund's average daily net assets.
PaineWebber pays Mitchell Hutchins an annual fee of 20% of the fee received by
PaineWebber from the Fund.
The Fund's Board of Directors has approved a Plan of Distribution pursuant to
Rule 12b-1 (the 'Plan of Distribution') pursuant to which the Fund pays an
annual fee of .12% of its average daily net assets to PaineWebber. See 'The
Distributor.'
This Prospectus sets forth concisely the information about the Fund that a
prospective investor ought to know before investing. Investors should read this
Prospectus and retain it for future reference. Additional information about the
Fund has been filed with the Securities and Exchange Commission (the 'SEC') in a
Statement of Additional Information dated August 1, 1995 which is hereby
incorporated by reference and is available without charge upon request made to
the Fund at the above address. Shareholder inquiries may be directed to the Fund
at the above address.
- --------------------------------------------------------------------------------
INVESTMENT ADVISER , ADMINISTRATOR AND DISTRIBUTOR
PaineWebber Incorporated
SUB-ADVISER AND SUB-ADMINISTRATOR
Mitchell Hutchins Asset Management Inc.
- --------------------------------------------------------------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS
THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
<PAGE>
- --------------------------------------------------------------------------------
FEE TABLE
The purpose of the Fee Table is to assist the investor in understanding the
various costs and expenses that an investor in the Fund will bear directly or
indirectly. For more detailed information on these costs and expenses, see
'Management of the Fund' and 'The Distributor.'
<TABLE>
<S> <C> <C>
SHAREHOLDER TRANSACTION EXPENSES
Maximum Sales Load Imposed on Purchases (as a percentage of offering price)....................... 0%
---
Maximum Sales Load Imposed on Reinvested Dividends (as a percentage of offering price)............ 0
---
Deferred Sales Load (as a percentage of original purchase price or redemption proceeds, as
applicable)..................................................................................... 0
---
Redemption Fees (as a percentage of amount redeemed, if applicable)............................... 0
---
Exchange Fee...................................................................................... 0
---
ANNUAL FUND OPERATING EXPENSES FOR THE FISCAL YEAR ENDED MARCH 31, 1995
(as a percentage of average net assets)
Management Fees................................................................................... .50
12b-1 Fees........................................................................................ .12
Other Expenses.................................................................................... .10
---
Shareholder Services, Reports and Pricing............................................... .04%
Professional, Custodian and Directors................................................... .03%
Registration and Miscellaneous.......................................................... .03%
Total Fund Operating Expenses..................................................................... .72%
---
---
</TABLE>
<TABLE>
<CAPTION>
EXAMPLE 1 YEAR 3 YEARS 5 YEARS 10 YEARS
------ ------- ------- --------
<S> <C> <C> <C> <C>
You would pay the following expenses on a $1,000 investment,
assuming (1) 5% annual return, (2) an operating expense ratio
of .71% and (3) redemption at the end of each time period:.... $7 $23 $40 $ 89
-- --- --- ----
</TABLE>
- ------------
The amounts shown in the example assume reinvestment of all dividends and
distributions and should not be considered a representation of past or future
expenses. Actual expenses may be greater or less than those shown. The assumed
5% annual return is hypothetical and should not be considered a representation
of past or future annual return. The actual return of the Fund may be greater or
less than the assumed return. See 'The Distributor.'
2
<PAGE>
- --------------------------------------------------------------------------------
HIGHLIGHTS
<TABLE>
<S> <C>
- ------------------------------------------------------------------------------------------------------------------
- -------------------
The Fund
The Fund is a diversified, open-end, management investment company whose investment objective
is the maximization of current income to the extent consistent with the preservation of capital
and the maintenance of liquidity through investments only in short-term money market
instruments issued or guaranteed by the U.S. Government, or its agencies or instrumentalities.
- ------------------------------------------------------------------------------------------------------------------
- -------------------
Benefits of
Investment
in the
Fund
Mutual funds, such as the Fund, are flexible investment tools that are increasingly
popular -- one of four American households now owns shares of at least one mutual fund -- for
very sound reasons. The Fund offers investors the following important benefits:
Professional Management
By pooling the funds of many investors, the Fund enables shareholders to obtain the benefits
of full-time professional management and a degree of diversification of investment that is
beyond the means of most investors. The Fund's investment adviser reviews the fundamental
characteristics of far more securities than can a typical individual investor and may employ
portfolio management techniques that frequently are not used by an individual investor.
Additionally, the larger denominations of securities in which the Fund invests may result in
better overall prices for the investments. See 'Investment Objective and Management Policies.'
Transaction Savings
By investing in the Fund, a shareholder is able to acquire ownership in a diversified
portfolio of securities without paying the higher transaction costs associated with a series
of small securities purchases.
Convenience
Fund shareholders are relieved of the administrative and recordkeeping burdens and
coordination of maturities normally associated with direct ownership of securities.
Quality
All securities in which the Fund invests will be determined to be of high quality by a
nationally recognized rating organization, or determined to be of comparable quality by the
Fund's investment adviser acting under the supervision of the Board of Directors if not so
rated, and will also be determined to present minimal credit risks. Any purchase of unrated
securities or securities that are rated only by a single rating agency must be approved or
ratified by the Directors.
Liquidity
The Fund's convenient purchase and redemption procedures provide shareholders with ready
access to their money and reduce the delays frequently involved in the direct purchase and
sale of securities. See 'Purchase of Shares' and 'Redemption of Shares.'
</TABLE>
3
<PAGE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
Exchange Privilege
Shareholders of the Fund may exchange all or a portion of their shares for shares of certain
other PaineWebber/Kidder, Peabody funds. See 'Exchange Privilege.'
- ------------------------------------------------------------------------------------------------------------------
- -------------------
Purchase of
Shares
Shares of the Fund are offered exclusively to existing shareholders of the Fund. The purchase
price for shares of the Fund is the net asset value per share next determined after receipt by
the Fund of a purchase order in proper form. The Fund seeks to maintain a constant net asset
value of $1.00, although there is no assurance it will be able to do so. See 'Purchase of
Shares' and 'Determination of Net Asset Value.'
- ------------------------------------------------------------------------------------------------------------------
- -------------------
Redemption of
Shares
Shares of the Fund may be redeemed at the Fund's net asset value per share next determined
after receipt by the transfer agent of instructions from PaineWebber Incorporated
('PaineWebber'). See 'Redemption of Shares' for a discussion of the various alternative methods
of redeeming shares of the Fund and 'Determination of Net Asset Value.'
- ------------------------------------------------------------------------------------------------------------------
- -------------------
Management PaineWebber serves as investment adviser and administrator of the Fund and receives an annual
Services fee of .50% of the Fund's average daily net assets. Mitchell Hutchins Asset Management Inc.
('Mitchell Hutchins') serves as the Fund's sub-adviser and sub-administrator and receives from
PaineWebber (not the Fund) 20% of the fee received by PaineWebber from the Fund.
- ------------------------------------------------------------------------------------------------------------------
- -------------------
Distributor
PaineWebber serves as distributor of the Fund's shares.
- ------------------------------------------------------------------------------------------------------------------
- -------------------
Dividends
The Fund declares dividends on each day the New York Stock Exchange is open for business of all
of its daily net income to shareholders of record. See 'Dividends, Distributions and Taxes.'
- ------------------------------------------------------------------------------------------------------------------
- -------------------
Risk Factors
The Fund may enter into repurchase agreements. In the event the other party to a repurchase
agreement defaults, the 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.
</TABLE>
4
<PAGE>
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
The financial information for shares of the Fund has been presented in the table
below for each of the periods shown. This information is supplemented by the
financial statements and accompanying notes appearing in the Fund's Annual
Report to Shareholders for the fiscal year ended March 31, 1995, which are
incorporated by reference into the Statement of Additional Information. The
financial statements and notes, as well as the information in the table
appearing below, have been audited by Deloitte & Touche LLP, independent
auditors, whose report thereof is included in the Annual Report to Shareholders.
SELECTED DATA FOR A SHARE OF COMMON STOCK
OUTSTANDING THROUGHOUT EACH YEAR:
<TABLE>
<CAPTION>
YEAR ENDED MARCH 31,
--------------------------------------------------------------------------------------------
1986 1987 1988 1989 1990 1991 1992 1993
-------- -------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF
YEAR.......................... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
-------- -------- -------- -------- -------- -------- -------- --------
INCOME FROM INVESTMENT
OPERATIONS
Net investment income.......... $ 0.0707 $ 0.0558 $ 0.0609 $ 0.0734 $ 0.0809 $ 0.0700 $ 0.0467 $ 0.0282
DISTRIBUTIONS TO SHAREHOLDERS
FROM
Net investment income.......... ($0.0707) ($0.0558) ($0.0609) ($0.0734) ($0.0809) ($0.0700) ($0.0467) ($0.0282)
-------- -------- -------- -------- -------- -------- -------- --------
Net asset value, end of year... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
-------- -------- -------- -------- -------- -------- -------- --------
-------- -------- -------- -------- -------- -------- -------- --------
Total return................ 7.32% 5.65% 6.39% 7.52% 8.37% 7.20% 4.78% 2.90%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of year (in
thousands).................... $180,557 $233,518 $343,888 $334,982 $375,270 $638,167 $511,065 $361,278
RATIOS TO AVERAGE NET ASSETS
Expenses, including
distribution fees............. 0.64% 0.62% 0.59% 0.61% 0.70% 0.69% 0.69% 0.71%
Net investment income.......... 7.07% 5.56% 6.14% 7.36% 8.06% 6.88% 4.69% 2.84%
<CAPTION>
1994 1995
-------- --------
<S> <C> <C>
NET ASSET VALUE, BEGINNING OF
YEAR.......................... $ 1.00 $
-------- --------
INCOME FROM INVESTMENT
OPERATIONS
Net investment income.......... $ 0.0251 $
DISTRIBUTIONS TO SHAREHOLDERS
FROM
Net investment income.......... ($0.0251) $
-------- --------
Net asset value, end of year... $ 1.00 $
-------- --------
-------- --------
Total return................ 2.54% %
RATIOS/SUPPLEMENTAL DATA
Net assets, end of year (in
thousands).................... $356,138 $
RATIOS TO AVERAGE NET ASSETS
Expenses, including
distribution fees............. 0.71% %
Net investment income.......... 2.51% %
</TABLE>
5
<PAGE>
- --------------------------------------------------------------------------------
YIELD
The chart below shows the current and effective yields, calculated in accordance
with rules of the SEC, and the average portfolio maturity for the seven-day
periods ended March 31, 1995 and July 1, 1995.
<TABLE>
<CAPTION>
MARCH 31, JULY 1,
1995 1995
--------- --------
<S> <C> <C>
Current Yield......................................................... 5.30% %
Effective Yield....................................................... 5.44% %
Average Portfolio Maturity............................................ 25 days days
</TABLE>
From time to time the Fund advertises its 'current yield' and 'effective
yield.' Both yield figures are based on historical earnings and are not intended
to indicate future performance. The 'current yield' of the Fund refers to the
income generated by an investment in the Fund over a seven-day period (which
period will be stated in the advertisement). This income is then 'annualized.'
That is, the amount of income generated by the investment during that week is
assumed to be generated each week over a 52-week period and is shown as a
percentage of the investment. The 'effective yield' is calculated similarly but,
when annualized, the income earned by an investment in the Fund is assumed to be
reinvested. The 'effective yield' will be slightly higher than the 'current
yield' because of the compounding effect of this assumed reinvestment. The
Statement of Additional Information describes in more detail the methods used to
calculate the yields of the Fund.
Performance data for the Fund may, in reports and promotional literature,
be compared to: (i) other mutual funds tracked by IBC/Donoghue's Money Fund
Report and Lipper Analytical Services, widely used independent research firms
which rank mutual funds by overall performance, investment objectives, and
assets, or tracked by other services, companies, publications, or persons who
rank mutual funds on overall performance or other criteria; (ii) unmanaged
indices so that investors may compare the Fund's results with those of a group
of unmanaged securities widely regarded by investors as representative of the
securities markets in general; and (iii) the Consumer Price Index (inflation
measure). Promotional and advertising literature also may refer to discussions
of the Fund and comparative mutual fund data and ratings reported in independent
periodicals.
INVESTMENT OBJECTIVE AND MANAGEMENT POLICIES
The Fund seeks to maximize current income to the extent consistent with the
preservation of capital and the maintenance of liquidity. The Fund pursues this
objective by investing only in short-term money market instruments issued or
guaranteed by the U.S. Government or its agencies or instrumentalities
('Eligible Investments'). The Fund's investment objective and its policy of
investing only in Eligible Investments cannot be changed without approval by the
holders of a majority of the outstanding shares of the Fund, as defined in the
Investment Company Act of 1940, as amended (the 'Act'). See 'Additional
Information About the Fund.'
Securities issued or guaranteed by the U.S. Government include a variety of
Treasury securities, which differ only in their interest rates, maturities and
dates of issuance. Treasury Bills have maturities of one year or less. Treasury
Notes have maturities of one to ten years and
6
<PAGE>
- --------------------------------------------------------------------------------
Treasury Bonds generally have maturities of greater than ten years at the date
of issuance. Treasury securities are backed by the full faith and credit of the
United States.
Some obligations of U.S. Government agencies and instrumentalities are
supported by the full faith and credit of the United States, others by the right
of the issuer to borrow from the Treasury, while still others are supported only
by the credit of the instrumentality. Because the U.S. Government is not
obligated by law to provide support to an instrumentality it sponsors, the Fund
will invest in such securities only when Mitchell Hutchins determines that the
credit risk with respect to the instrumentality does not make its securities
unsuitable investments for the Fund.
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. A repurchase agreement is an instrument under which the
purchaser (i.e., the Fund) acquires a debt security and the seller agrees, at
the time of the sale, to repurchase the obligation at a mutually agreed upon
time and price, thereby determining the yield during the purchaser's holding
period. While the maturities of the underlying securities in repurchase
agreement transactions may be more than one year, the term of each repurchase
agreement will always be less than one year. If the seller defaults, the
underlying security constitutes collateral (whose market value, including
accrued interest, must be at least equal to 100% of the dollar amount invested
by the Fund in each repurchase agreement) for the seller's obligation to pay
although the Fund may experience difficulties and incur certain costs in
exercising its rights to the collateral and may lose the interest it expected to
receive. Repurchase agreements usually are for short periods, such as one week
or less, but may be longer. The Fund will not enter into repurchase agreements
of more than seven days duration if more than 10% of the market value of its
total assets would be so invested together with any other investment the Fund
may hold for which market quotations are not readily available.
The 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 the
securities are fixed on the transaction date. The securities so purchased are
subject to market fluctuation; therefore, at the time of delivery and payment
the market price may be higher or lower than the purchase price. No interest
accrues to the Fund until delivery and payment take place. At the time the Fund
makes the commitment to purchase securities on a when-issued or delayed delivery
basis, it will record the transaction and thereafter reflect the value of such
securities in determining its net asset value each day. The Fund will make
commitments for such when-issued transactions only with the intention of
actually acquiring the securities, and, to facilitate such acquisitions, the
Fund's custodian will maintain, in a separate account of the Fund, portfolio
securities having a value equal to or greater than such commitments. On delivery
dates for such transactions, the Fund will meet its obligations from maturities
or sales of the securities held in the separate account, and/or from then
available cash flow. 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.
The Fund attempts to increase yields by trading to take advantage of
short-term market variations. This policy may result in a high portfolio
turnover rate. See 'Portfolio Transactions.'
7
<PAGE>
- --------------------------------------------------------------------------------
The Fund may lend its portfolio securities to brokers, dealers and
financial institutions, and receive collateral in cash or securities issued or
guaranteed by the U.S. Government which will be maintained at all times in an
amount equal to at least 100% of the current market value of the loaned
securities. Such collateral, if cash, will be invested in Eligible Investments,
the income from which will increase the return to the Fund. Such loans will be
terminable at any time. No such loans will be made to PaineWebber. The Fund will
have 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. The Fund
may pay reasonable fees to persons unaffiliated with the Fund in connection with
arranging such loans.
The Fund may not borrow money except from banks for temporary or emergency
purposes, including the meeting of redemption requests which might otherwise
require the untimely disposition of securities. Borrowing in the aggregate may
not exceed 10%, and borrowing for purposes other than meeting redemptions may
not exceed 5%, of the value of the Fund's total assets (including the amount
borrowed) valued at the lesser of cost or value less liabilities (not including
the amount borrowed) at the time the borrowing is made. The borrowings will be
repaid before any additional investments are made.
The Fund will maintain a dollar-weighted average portfolio maturity of 90
days or less. All securities in which the Fund invests will have remaining
maturities of 397 days or less on the date of purchase, will be denominated in
U.S. dollars and will have been determined to be of high quality by nationally
recognized statistical rating organizations or determined to be of comparable
quality if not so rated. Mitchell Hutchins, acting under the supervision of and
procedures adopted by the Board of Directors, will determine that unrated
securities purchased by the Fund are of high quality and will determine that all
securities purchased by the Fund present minimal credit risks and any purchase
of unrated securities or securities that are rated only by a single rating
agency will be approved or ratified by the Board of Directors. Mitchell Hutchins
will, under the supervision of the Board of Directors, cause the Fund to dispose
of any security as soon as practicable if the security is no longer of high
quality, unless the Board of Directors determines that this action would not be
in the best interest of the Fund. High quality, short term instruments may
result in a lower yield than instruments with a lower quality or a longer term.
Further information about the investment policies of the Fund, including a
list of the Fund's investment restrictions which cannot be changed without
approval by the holders of a majority of the outstanding shares of the Fund,
appears in the Statement of Additional Information.
MANAGEMENT OF THE FUND
DIRECTORS AND OFFICERS
Overall responsibility for management and supervision of the Fund rests with its
Board of Directors. The day-to-day operations of the Fund are conducted through
or under the direction of its officers. There are five members of the Fund's
Board of Directors, one of whom is employed by Mitchell Hutchins. The Statement
of Additional Information contains general background information regarding each
Director and officer of the Fund.
8
<PAGE>
- --------------------------------------------------------------------------------
MANAGEMENT
At a special meeting of shareholders that took place on April 13, 1995,
shareholders approved a new investment advisory and administration agreement
with PaineWebber and a new sub-advisory and sub-administration agreement with
Mitchell Hutchins. PaineWebber and Mitchell Hutchins are located at 1285 Avenue
of the Americas, New York, New York 10019. Mitchell Hutchins is a wholly owned
subsidiary of PaineWebber, which in turn is wholly owned by Paine Webber Group
Inc., a publicly owned financial services holding company. As of June 30, 1995,
PaineWebber or Mitchell Hutchins served as investment adviser or sub-adviser to
[42] investment companies with an aggregate of [77] separate portfolios and
aggregate assets of approximately [$26] billion.
The Fund pays the same fee for investment advisory and administration
services to PaineWebber as previously paid to Kidder Peabody Asset Management,
Inc. ('KPAM'), the Fund's predecessor investment adviser and administrator.
PaineWebber (not the Fund) pays Mitchell Hutchins a fee for sub-advisory and
sub-administration services at the annual rate of 20% of the fee received by
PaineWebber from the Fund. PaineWebber and Mitchell Hutchins continue to manage
the Fund in accordance with the Fund's investment objective, policies and
restrictions.
As compensation for PaineWebber's services, the Fund pays a fee, computed
daily and paid monthly, at an annual rate of .50% of the Fund's average daily
net assets. For the fiscal year ended March 31, 1995, the Fund's total expenses
represented .72% of its average net assets. From time to time, PaineWebber in
its sole discretion may waive all or a portion of its fee and/or reimburse all
or a portion of the Fund's operating expenses.
Mitchell Hutchins manages the Fund's portfolio in accordance with the
stated policies of the Fund, makes investment decisions for the Fund and places
the purchase and sale orders for portfolio transactions. Although investment
decisions for the Fund are made independently from those of the other accounts
managed by Mitchell Hutchins, investments of the type the Fund may make may also
be made by those other accounts. When the Fund and one or more other accounts
managed by Mitchell Hutchins are prepared to invest in, or desire to dispose of,
the same security, available investments or opportunities for sales are
allocated in a manner believed by Mitchell Hutchins to be equitable to each. In
some cases, this procedure may adversely affect the price paid or received by
the Fund or the size of the position obtained or disposed of by the Fund.
PORTFOLIO TRANSACTIONS
Mitchell Hutchins places the orders for the purchase and sale of the Fund's
portfolio securities. Transactions are allocated to various dealers by Mitchell
Hutchins in its best judgment. The primary consideration is prompt and effective
execution of orders at the most favorable price. Subject to that primary
consideration, dealers may be selected for research, statistical or other
services to enable Mitchell Hutchins to supplement its own research and analysis
with the views and information of other securities firms. No brokerage
commissions have been paid to date.
Investment decisions for the Fund are made independently from those of any
other fund(s) managed by Mitchell Hutchins. If, however, funds managed by
Mitchell Hutchins are
9
<PAGE>
- --------------------------------------------------------------------------------
simultaneously engaged in the purchase or sale of the same security, the
transactions are averaged as to price and allocated equitably to each fund. In
some cases, this system might adversely affect the price paid or received by the
Fund or the size of the position obtainable for the Fund.
PURCHASE OF SHARES
GENERAL INFORMATION
PaineWebber serves as the Fund's distributor. Shares of the Fund are offered
exclusively to existing shareholders and must be maintained through a brokerage
account with PaineWebber (an 'Account'). Thus, an investor who wishes to
purchase shares but has no existing Account must establish one. PaineWebber
charges no maintenance fee in connection with an Account through which an
investor purchases or holds shares of the Fund.
Shares are sold on a continuous basis at their net asset value next
determined after an order and good funds (e.g., cash, Federal funds or certified
checks drawn on a United States bank) are received. PaineWebber regards
instructions received from an investor as merely an indication of interest until
the existence of good funds can be verified. During the period prior to the
receipt of good funds, an investor's money will not be invested. When
verification is obtained, an indication of interest becomes an order. If an
investor does not have a sufficient credit balance in his Account, payment for
shares must be converted into Federal funds before an order to purchase is
effective. Purchase orders received before 12:00 noon, Eastern time, for which
payment has been received by PaineWebber will be executed at that time and the
shareholder will receive the dividend declared on that day. Purchase orders
received after 12:00 noon, Eastern time, and purchase orders received earlier in
the same day for which payment has not been received by 12:00 noon, Eastern
time, will be executed at the close of regular trading on the New York Stock
Exchange, if payment has been received by PaineWebber by that time and the
shareholder will receive the dividend declared on the following day.
Credit balances of $1 or more in an RMA or BSA will be swept automatically
into shares of the Fund daily. Credit balances for non-RMA and non-BSA amounts
from $1 to $4,999 will be swept as of the close of business each Friday for
settlement on the next business day and credit balances of $5,000 or more will
be swept daily for settlement on the next business day. The Fund reserves the
right at any time to impose minimum purchase and subsequent purchase amounts.
PURCHASES WITH FUNDS HELD AT PAINEWEBBER
All deposits to a brokerage account and any free credit cash balances that may
arise in a brokerage account will be automatically invested in shares of their
Primary Sweep Money Fund, according to sweep rules described above provided that
Federal funds are available for the investment. Federal funds normally are
available for cash balances arising from the sale of securities held in a
brokerage account on the Business Day following settlement, but in some cases
can take longer.
10
<PAGE>
- --------------------------------------------------------------------------------
PURCHASES BY WIRE
Shares of the Fund may also be purchased by transferring Federal funds by wire
to a PaineWebber brokerage account. Wire transfers should be directed to: Bank
of New York, ABA 021000018, PaineWebber Inc., for RMAs/BSAs A/C 890-0114-088 and
for all other accounts A/C 890-0114-096 OBI-FBO [Account Name]/[Brokerage
Account Number]. The wire must include the investor's name and PaineWebber
brokerage account number. Participants wishing to transfer Federal funds into
their accounts should contact their PaineWebber investment executives or
correspondent firms to determine the appropriate wire instructions.
To the extent that the amounts transferred by wire create a cash balance in
an investor's account, that cash balance will be automatically invested in the
investor's Primary Sweep Money Fund, as described above under 'Purchases with
Funds Held at PaineWebber.' Participants wishing to invest amounts transferred
by wire in the Fund should so instruct their PaineWebber investment executives
or correspondent firms.
If PaineWebber receives a notice from an investor's bank of a wire transfer
of Federal funds by 12:00 noon, Eastern time, on a Business Day, the automatic
investment will be executed on that Business Day. Otherwise, the automatic
investment will be executed at 12:00 noon, Eastern time, on the next Business
Day. PaineWebber and/or an investor's bank may impose a service charge for wire
transfers.
REDEMPTION OF SHARES
A shareholder may redeem shares on any day that net asset value is determined by
following the procedures set forth below.
REDEMPTION THROUGH PAINEWEBBER
PaineWebber wires the terms of any redemption request properly received to PFPC
Inc. The price at which a redemption request is executed is the net asset value
per share next determined after proper redemption instructions are received.
Payment for redemption orders, if any, that are received before 12:00 noon,
Eastern time, normally is made on the same business day. Shares redeemed in this
manner will not be entitled to the dividend declared on the day of redemption.
Redemption orders, if any, that are received between 12:00 noon, Eastern time,
and the close of regular trading on the New York Stock Exchange are effective at
the 4:00 p.m. price on that day, but payment normally is made on the next
business day following the redemption. Shares redeemed in this manner are
entitled to the dividend declared on the day of redemption. Proceeds of a
redemption generally are credited to the shareholder's Account, or sent to the
shareholder, as applicable.
REDEMPTION BY MAIL
Shares may also be redeemed by submitting a written request in 'good order' to
PFPC Inc. at the following address:
PFPC Inc.
P.O. Box 8950
Wilmington, Delaware 19899
Attn: PaineWebber/Kidder, Peabody
Government Money Fund, Inc.
11
<PAGE>
- --------------------------------------------------------------------------------
Redemption requests received by PFPC Inc. by mail are processed by PFPC
Inc. which will mail a check in the appropriate redemption amount to the
shareholder the next Business Day after receipt of a redemption request in 'Good
Order.'
A redemption request is considered to have been received in 'good order' if
the following conditions are satisfied:
(1) the request is in writing, states the number of shares to be
redeemed and identifies the shareholder's Fund account number;
(2) the request is signed by each registered owner exactly as the
shares are registered;
(3) if the shares to be redeemed were issued in certificate form, the
certificates are endorsed for transfer (or are themselves accompanied by an
endorsed stock power) and accompany the redemption request (which should be
sent by registered mail for the protection of shareholders); and
(4) the signatures on the written redemption request have been
guaranteed by a bank, broker-dealer, municipal securities broker or dealer,
government securities dealer or broker, credit union, a member firm of a
national securities exchange, registered securities association or clearing
agency, or savings association (the purpose of a signature guarantee is to
protect shareholders against the possibility of fraud). The transfer agent
may reject redemption instructions if the guarantor is neither a member of
nor a participant in a signature guarantee program (currently known as
'STAMPSM').
Additional supporting documents may be required for redemptions by
corporations, executors, administrators, trustees and guardians.
OTHER REDEMPTION POLICIES
Signature guarantees (as described above) are required in connection with any
redemption of shares by mail and share ownership transfer requests. These
requirements may be waived by the Fund in certain instances.
If the shares to be redeemed represent an investment for which the Fund has
not yet received good funds, the Fund reserves the right not to honor the
redemption request until such time as it has assured itself that good funds have
been collected which may take 15 or more business days. If purchases are made
with good funds, no redemption delay would occur.
Due to the relatively high cost of maintaining a Fund account, the Fund
reserves the right to redeem, upon not less than 45 days' notice, any Fund
account reduced by a shareholder to a value of $500 or less.
PaineWebber has established procedures pursuant to which shares of the Fund
held by a PaineWebber client having a deficiency (i.e., amount owed to
PaineWebber resulting from Account activity or otherwise and other amounts
authorized by the client to be paid to others from the Account, less the amount
of any free credit cash balance) in his Account will be redeemed automatically
to the extent of that deficiency, unless the client notifies PaineWebber to the
contrary in advance. The amount of the redemption will be the lesser of (a) the
total net asset value of Fund shares held in the client's Account or (b) the
deficiency in the client's cash account at the close of business on the
redemption day adjusted for purchase and sale transactions in
12
<PAGE>
- --------------------------------------------------------------------------------
other securities settling on the following business day. Accordingly, a
PaineWebber client who has previously consented to this automatic redemption
procedure and who wishes to pay for a securities transaction other than through
such automatic redemption procedure must do so not later than the day before the
settlement date for that transaction.
EXCHANGE PRIVILEGE
Shares of the Fund may be exchanged for shares of other PaineWebber/Kidder,
Peabody funds, to the extent such shares are offered for sale in the
shareholder's state of residence. For a list of the PaineWebber/Kidder, Peabody
funds for which shares may be exchanged, please see 'Exchange of Shares' in the
Statement of Additional Information.
Although the Fund currently imposes no limit on the number of times the
Exchange Privilege may be exercised by any shareholder, the Fund may impose such
limits in the future, in accordance with applicable provisions of the Act and
rules thereunder. In addition, the Exchange Privilege may be terminated or
revised at any time upon 60 days' prior written notice to Fund shareholders, and
is available only to residents of states in which exchanges are permitted under
state law. The exchange of shares of one fund for shares of another is treated
for Federal income tax purposes as a sale of the shares given in exchange by the
shareholder, so that a shareholder may recognize a taxable gain or loss on an
exchange, although a shareholder's losses may be limited. See 'Dividends,
Distributions and Taxes.'
Upon receipt of proper instructions and all necessary supporting documents,
Fund shares submitted for exchange are redeemed at their current net asset value
next determined and simultaneously invested in shares of the fund being
acquired. Settlement of the exchange would generally occur one business day
after the date on which the request for exchange was received in proper form,
unless the dollar amount of the transaction exceeds 5% of the Fund's total net
assets on any given day, in which case, settlement would occur within five
business days after the date on which the request for exchange was received in
proper form. The proceeds of a redemption of Fund shares made to facilitate the
exchange of those shares for shares of another fund must be equal to at least
(1) the minimum initial investment requirement imposed by the fund into which
the exchange is being sought if the shareholder seeking the exchange has not
previously invested in that fund or (2) the minimum subsequent investment
requirement imposed by the fund into which the exchange is being sought if the
shareholder has previously made an investment in that fund.
A shareholder of the Fund wishing to exercise the Exchange Privilege should
obtain from PaineWebber a copy of the current prospectus of the fund into which
an exchange is being sought and review that prospectus carefully before making
the exchange. PaineWebber reserves the right to reject any exchange request at
any time. Prior to or concurrently with the delivery of a confirmation of a
shareholder's exchange transaction, PaineWebber will deliver to that shareholder
a copy of the prospectus of the fund into which the exchange is being made.
THE DISTRIBUTOR
PaineWebber acts as distributor of the Fund's shares pursuant to a Distribution
Agreement dated April 13, 1995. To reimburse PaineWebber for the services it
provides and for the expenses it
13
<PAGE>
- --------------------------------------------------------------------------------
bears under the Distribution Agreement, the Fund has adopted the Plan of
Distribution under the Act. The Plan of Distribution was most recently amended
by the Board of Directors of the Fund on December 16, 1994 to substitute therein
the name of the new distributor, PaineWebber, for the former distributor,
Kidder, Peabody & Co. Incorporated.
The Plan of Distribution provides that the Fund reimburse PaineWebber its
expenses for distribution of the Fund's shares a fee at the annual rate of up to
.12% of the Fund's average daily net assets. The expenses that may be reimbursed
include, but are not limited to, compensation to and expenses of Investment
Executives and other employees of PaineWebber who engage in or support
distribution of the Fund's shares or who service shareholder accounts, and the
preparation, printing and distribution of sales literature and advertising
materials. PaineWebber anticipates that the amount of expenses reimbursed will
not exceed the amount of expenses incurred by PaineWebber and that there will be
no carry over of expenses from one year to the next. The expenses to be
reimbursed are for activities primarily intended to result in the sale of shares
of the Fund and the maintenance of Fund accounts and account balances.
PaineWebber currently intends that approximately .10% per annum of the Fund's
average daily net assets will be paid to its Investment Executives
proportionately in respect of Fund share balances maintained by their respective
clients and the balance on other activities. For the fiscal year ended March 31,
1995, the Fund reimbursed .12% of its average daily net assets to PaineWebber.
Pursuant to the Plan of Distribution, PaineWebber provides the Fund's
Directors, at least quarterly, with a written report of the amounts expended
under the Plan of Distribution. The report includes an itemization of the
distribution expenses incurred by PaineWebber on behalf of the Fund and the
purpose of such expenditures. In their quarterly review of the Plan of
Distribution, the Directors consider its continued appropriateness and the level
of compensation provided therein. For the fiscal year ended March 31, 1995,
PaineWebber and Kidder, Peabody & Co. Incorporated ('Kidder Peabody'), the
Fund's predecessor distributor, incurred distribution expenses of approximately
$ , of which approximately $ was recovered in the form of
reimbursements made by the Fund to PaineWebber and Kidder, Peabody at the rate
provided in the Plan of Distribution.
The Plan of Distribution remains in effect for as long as such continuance
is approved annually by vote of the Directors, including a majority of those
Directors who are not interested persons and who have no direct or indirect
financial interest in the Plan of Distribution ('Rule 12b-1 Directors'), cast in
person at a meeting called for such purpose. The Plan of Distribution may not be
amended to increase materially the amount to be spent for the services described
therein without approval of the shareholders of the Fund, and all material
amendments of the Plan of Distribution must also be approved by the Directors in
the manner described above. The Plan of Distribution may be terminated at any
time, by vote of a majority of the Rule 12b-1 Directors as described above, or
by vote by the holders of a majority of the outstanding voting securities of the
Fund, as defined in the Act. So long as the Plan of Distribution is in effect,
the election and nomination of Directors who are not interested persons of the
Fund shall be committed to the discretion of the Directors who are not
interested persons. The Directors have determined that, in their judgment, there
is a reasonable likelihood that the Plan of Distribution benefits the Fund and
its shareholders.
14
<PAGE>
- --------------------------------------------------------------------------------
DIVIDENDS, DISTRIBUTIONS AND TAXES
The Fund ordinarily declares dividends daily. Dividends are paid each month and
are reinvested in additional shares or, at the shareholder's option, paid in
cash. Dividends are declared on each day that the Fund is open for business. The
Fund's earnings for Saturdays, Sundays and holidays are declared as dividends on
the preceding business day. If a shareholder redeems all shares in his account
at any time during the month, all dividends to which the shareholder is entitled
are paid to him along with the proceeds of the redemption. Distributions of
realized securities profits, if any, generally are declared and paid at or near
the end of the Fund's fiscal year and at the end of the calendar year and are
reinvested in additional shares or, at the shareholder's option, paid in cash.
The Fund does not expect to realize long-term capital gains. The Fund intends to
maintain a net asset value of $1.00 per share for purposes of sales and
redemptions. To effectuate this policy, the Fund, under certain circumstances,
may consider selling portfolio instruments prior to maturity to realize capital
gains or losses, not declaring dividends and distributions or paying
distributions from capital or capital gains. See also 'Investment Objective and
Management Policies' and 'Determination of Net Asset Value.'
The Fund qualified for its fiscal year ended March 31, 1995, and intends to
remain qualified, as a 'regulated investment company' under the Internal Revenue
Code of 1986, as amended (the 'Code'). As a regulated investment company, the
Fund pays no Federal income tax on its income and gains which it distributes to
shareholders, provided the Fund distributes at least 90% of its net investment
income and net short-term capital gains for each year.
Dividends of net investment income (i.e., interest income, net of expenses)
and distributions of net short-term capital gains are taxable to shareholders as
ordinary income, whether paid in cash or reinvested in additional shares.
Dividends paid by the Fund will not qualify for the dividends received deduction
allowed for corporations because the Fund's income will not consist of dividends
paid by U.S. corporations. Distributions of net long-term capital gains, if any,
are taxable as long-term capital gains regardless of the length of time a
shareholder has held his shares.
Any gain or loss realized upon a sale or redemption of Fund shares by a
shareholder who is not a dealer in securities will generally be treated as
long-term capital gain or loss if the shares have been held for more than one
year, and otherwise as short-term capital gain or loss. Any loss realized by a
shareholder on the sale or redemption of Fund shares held for six months or less
will be treated as long-term capital loss, however, to the extent of any net
long-term capital gain distributions received by the shareholder with respect to
such shares. Any loss realized on a sale, redemption or exchange of shares of
the Fund by a shareholder will be disallowed to the extent the shares are
replaced within a 61-day period (beginning 30 days before the disposition of
shares). Shares purchased pursuant to the reinvestment of a dividend will
constitute a replacement of shares.
The Fund may be required to withhold U.S. Federal income tax at the rate of
31% ('backup withholding') of all taxable distributions, payable to shareholders
who fail to provide the Fund with their correct taxpayer identification number
or to make required certifications, or who have been notified by the Internal
Revenue Service that they are subject to backup withholding. Corporate
shareholders and other shareholders specified in the Code are exempt from such
15
<PAGE>
- --------------------------------------------------------------------------------
backup withholding. Backup withholding is not an additional tax. Any amounts
withheld may be credited against a shareholder's U.S. Federal income tax
liability.
Dividends of net investment income and distributions of net short-term
capital gains made to a non-resident alien individual, a foreign trust or
estate, foreign corporation, or foreign partnership not engaged in a trade or
business in the United States will be subject to U.S. withholding tax at the
rate of 30% (or lower treaty rate) upon the gross amount of the dividend.
Statements as to the tax status of each shareholder's dividends and
distributions are mailed annually by the Fund's transfer agent. Shareholders are
urged to consult their own tax advisers regarding specific questions as to
Federal, state or local taxes.
DETERMINATION OF NET ASSET VALUE
The Fund's net asset value per share is determined daily at 12:00 noon, Eastern
time, Monday through Friday, except that net asset value is not computed on a
day in which no orders to purchase, sell, exchange or redeem Fund shares have
been received, any day on which there is not sufficient trading in the Fund's
portfolio securities that the Fund's net asset value per share might be
materially affected by changes in the value of such portfolio securities or on
days on which the New York Stock Exchange is not open for trading. The Fund's
net asset value per share is computed by dividing the value of the net assets of
the Fund (i.e., the value of its assets less liabilities) by the total number of
shares outstanding. Expenses and fees of the Fund, including PaineWebber's fee,
are accrued daily and taken into account for the purpose of determining net
asset value. It is the policy of the Fund to attempt to maintain a net asset
value of $1.00 per share for purposes of sales and redemptions; accordingly, the
Fund employs the amortized cost method of valuing its portfolio securities.
There can be no assurance that the Fund will always be able to maintain a
constant net asset value of $1.00 per share. Further information regarding the
Fund's valuation policies is contained in the Statement of Additional
Information.
CUSTODIAN AND TRANSFER, DIVIDEND AND RECORDKEEPING AGENT
IFTC, 127 West 10th Street, Kansas City, Missouri 64105, acts as custodian of
the Fund's investments. PFPC Inc., a subsidiary of PNC Bank, National
Association, whose principal address is 400 Bellevue Parkway, Wilmington,
Delaware 19809, acts as the Fund's transfer, dividend and recordkeeping agent.
COUNSEL AND INDEPENDENT AUDITORS
Sullivan & Cromwell, 125 Broad Street, New York, New York 10004, is counsel for
the Fund. Deloitte & Touche LLP, Two World Financial Center, New York, New York
10281, has been selected as independent auditors of the Fund.
ADDITIONAL INFORMATION ABOUT THE FUND
The Fund was incorporated under the laws of the State of Maryland on February 2,
1983 and commenced operations on May 17, 1983.
16
<PAGE>
- --------------------------------------------------------------------------------
The authorized common stock of the Fund consists of 5,000,000,000 shares,
par value of $.01 per share. Each share has one vote and, when issued and paid
for in accordance with the terms of offering, is fully paid and non-assessable.
Shares have no preemptive, subscription or conversion rights and are freely
transferable.
As used in this Prospectus when referring to the approvals to be obtained
from shareholders, the term 'majority' means the vote of the lesser of (1) 67%
of the Fund's shares present at a meeting if the holders of more than 50% of the
outstanding shares are present in person or by proxy, or (2) more than 50% of
the Fund's outstanding shares.
Unless otherwise required by the Act, ordinarily it will not be necessary
for the Fund to hold meetings of shareholders annually. As a result, Fund
shareholders may not consider each year the election of Directors or the
appointment of independent auditors. However, pursuant to the Fund's By-Laws,
the holders of at least 10% of the shares outstanding and entitled to vote may
require the Fund to hold a special meeting of shareholders for any purpose. Fund
shareholders may remove a Director by the affirmative vote of a majority of the
Fund's outstanding voting shares. In addition, the Board of Directors will call
a meeting of shareholders for the purpose of electing Directors if, at any time,
less than a majority of the Directors holding office at the time were elected by
shareholders.
17
<PAGE>
No person has been authorized to give any information or to make any
representations not contained in this Prospectus or in the Fund's
Statement of Additional Information incorporated herein by reference
in connection with the offering made by this Prospectus, and, if
given or made, such other information or representations must not be
relied upon as having been authorized by the Fund or its
distributor. This Prospectus does not constitute an offering by the
Fund or by its distributor in any jurisdiction in which such
offering may not lawfully be made.
<TABLE>
<S> <C>
- ------------------------------------
Contents
- ------------------------------------
Fee Table 2
- ------------------------------------
Highlights 3
- ------------------------------------
Financial Highlights 5
- ------------------------------------
Yield 6
- ------------------------------------
Investment Objective and Management Policies 6
- ------------------------------------
Management of the Fund 8
- ------------------------------------
Portfolio Transactions 9
- ------------------------------------
Purchase of Shares 10
- ------------------------------------
Redemption of Shares 11
- ------------------------------------
Exchange Privilege 13
- ------------------------------------
The Distributor 13
- ------------------------------------
Dividends, Distributions and Taxes 15
- ------------------------------------
Determination of Net Asset Value 16
- ------------------------------------
Custodian and Transfer, Dividend and
Recordkeeping Agent 16
- ------------------------------------
Counsel and Independent Auditors 16
- ------------------------------------
Additional Information About the Fund 16
- ------------------------------------
</TABLE>
PaineWebber/
Kidder,
Peabody
Government
Money
Fund,
Inc.
Prospectus
August 1, 1995
<PAGE>
Statement of Additional Information August 1, 1995
- --------------------------------------------------------------------------------
PaineWebber/Kidder, Peabody Government Money Fund, Inc.
1285 AVENUE OF THE AMERICAS NEW YORK, NEW YORK 10019 (800) 647-1568
PaineWebber/Kidder, Peabody Government Money Fund, Inc. (the 'Fund') is a
diversified, open-end management investment company whose objective is the
maximization of current income to the extent consistent with the preservation of
capital and the maintenance of liquidity. The Fund attempts to achieve its
objective by investing in short-term money market instruments issued or
guaranteed by the U.S. Government or its agencies or instrumentalities.
This Statement of Additional Information relating to the Fund is not a
prospectus and should be read in conjunction with the Fund's prospectus. A copy
of the Fund's prospectus can be obtained from the Fund at the above address. The
date of the prospectus to which this Statement relates is August 1, 1995.
- --------------------------------------------------------------------------------
INVESTMENT ADVISER , ADMINISTRATOR AND DISTRIBUTOR
PaineWebber Incorporated
SUB-ADVISER AND SUB-ADMINISTRATOR
Mitchell Hutchins Asset Management Inc.
- --------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
INVESTMENT OBJECTIVE AND POLICIES
The investment objective and policies of the Fund are described in the Fund's
prospectus under the heading 'Investment Objective and Management Policies.' The
Fund believes that such description requires no general augmentation as of the
date hereof. However, the Fund has adopted the following investment restrictions
and fundamental policies which are not described in the prospectus and
accordingly are set forth below. These restrictions cannot be changed without
approval by the holders of a majority of the outstanding shares of the Fund, as
defined in the Investment Company Act of 1940, as amended (the 'Act'). See
'Additional Information About the Fund.' The Fund may not:
1. Purchase common stocks, preferred stocks, warrants, other equity
securities, corporate bonds or debentures, state bonds, municipal bonds or
industrial revenue bonds;
2. Enter into repurchase agreements with more than seven days to
maturity if as a result thereof more than 10% of the market value of the
Fund's total assets would be invested in such repurchase agreements
together with any other investment the Fund may hold for which market
quotations are not readily available;
3. Borrow money except from banks for temporary or emergency purposes,
including the meeting of redemption requests which might otherwise require
the untimely disposition of securities. Borrowing in the aggregate may not
exceed 10%, and borrowing for purposes other than meeting redemptions may
not exceed 5%, of the value of the Fund's total assets (including the
amount borrowed) valued at the lesser of cost or value less liabilities
(not including the amount borrowed) at the time the borrowing is made. The
borrowings will be repaid before any additional investments are made;
4. Pledge, hypothecate, mortgage or otherwise encumber its assets,
except in an amount up to 10% of the value of its net assets but only to
secure borrowings for temporary or emergency purposes;
5. Sell securities short or purchase securities on margin;
6. Write or purchase put or call options;
7. Underwrite the securities of other issuers or purchase securities
with contractual or other restrictions on resale;
8. Purchase or sell real estate, real estate investment trust
securities, commodities or commodity contracts, or oil and gas interests;
9. Make loans to others except through the purchase of qualified debt
obligations, loans of portfolio securities and entry into repurchase
agreements referred to under 'Investment Objective and Management Policies'
in the Fund's prospectus;
10. Invest in securities of other investment companies, except as they
may be acquired as part of a merger, consolidation or acquisition of
assets;
11. Lend its portfolio securities in excess of 20% of its total
assets, taken at value. Any loans of portfolio securities will be made
according to guidelines established by the Securities and Exchange
Commission (the 'SEC') and the Fund's Board of Directors,
2
<PAGE>
- --------------------------------------------------------------------------------
including maintenance of collateral of the borrower equal at all times to
the current value of the securities loaned.
If a percentage restriction is adhered to at the time of an investment, a
later increase or decrease in percentage resulting from a change in values or
assets will not constitute a violation of that restriction.
MANAGEMENT OF THE FUND
DIRECTORS AND OFFICERS
Directors and officers of the Fund, together with information as to their
principal business occupations during the last five years, are shown below. Each
Director who is an 'interested person' of the Fund, as defined in the Act, is
indicated by an asterisk.
David J. Beaubien, 60, Director. Chairman of Yankee Environmental Systems,
Inc., manufacturer of meteorological measuring instruments. Director of IEC,
Inc., manufacturer of electronic assemblies, Belfort Instruments, Inc.,
manufacturer of environmental instruments, and Oriel Corp., manufacturer of
optical instruments. Prior to January 1991, Senior Vice President of EG&G, Inc.,
a company which makes and provides a variety of scientific and technically
oriented products and services. Mr. Beaubien is a director or trustee of 12
other investment companies for which Mitchell Hutchins or PaineWebber serves as
investment adviser.
William W. Hewitt, Jr., 66, Director. Trustee of The Guardian Asset
Allocation Fund, The Guardian Baillie Gifford International Fund, The Guardian
Bond Fund, Inc., The Guardian Cash Fund, Inc., The Guardian Park Ave. Fund, The
Guardian Stock Fund, Inc., The Guardian Cash Management Trust and The Guardian
U.S. Government Trust. Mr. Hewitt is a director or trustee of 12 other
investment companies for which Mitchell Hutchins or PaineWebber serves as
investment adviser.
Thomas R. Jordan, 66, Director. Principal of The Dilenschneider Group,
Inc., a corporate communications and public policy counseling firm. Prior to
January 1992, Senior Vice President of Hill & Knowlton, a public relations and
public affairs firm. Prior to April 1991, President of The Jordan Group, a
management consulting and strategies development firm. Mr. Jordan is a director
or trustee of 12 other investment companies for which Mitchell Hutchins or
PaineWebber serves as investment adviser.
Carl W. Schafer, 59, Director. President of the Atlantic Foundation, a
charitable foundation supporting mainly oceanographic exploration and research.
Director of International Agritech Resources, Inc., an agribusiness investment
and consulting firm, Ardic Exploration and Development Ltd. and Hidden Lake Gold
Mines Ltd., gold mining companies, Wainoco Oil Corporation, Electronic Clearing
House, Inc., a financial transactions processing company, and BioTechniques
Laboratories, Inc., an agricultural biotechnology company. Prior to January
1993, chairman of the Investment Advisory Committee of the Howard Hughes Medical
Institute and director of Ecova Corporation, a toxic waste treatment firm. Prior
to April 1990, principal of Rockefeller and Company, Inc., manager of
investments. Mr. Schafer is a director or trustee of 12
3
<PAGE>
- --------------------------------------------------------------------------------
other investment companies for which Mitchell Hutchins or PaineWebber serves as
investment adviser.
* Frank P.L Minard, 49, Director and President. Mr. Minard is chairman of
Mitchell Hutchins, chairman of the board of Mitchell Hutchins Institutional
Investors Inc. and a director of PaineWebber. Prior to 1993, Mr. Minard was
managing director of Oppenheimer Capital in New York and Director of Oppenheimer
Capital Ltd. in London. Mr. Minard is a director or trustee of 26 other
investment companies for which Mitchell Hutchins or PaineWebber serves as
investment adviser.
Teresa M. Boyle, 36, Vice President. Ms. Boyle is a first vice president
and manager -- advisory administration of Mitchell Hutchins. Prior to November
1993, she was compliance manager of Hyperion Capital Management, Inc., an
investment advisory firm. Prior to April 1993, Ms. Boyle was a vice president
and manager -- legal administration of Mitchell Hutchins. Ms. Boyle is also a
vice president of 39 other investment companies for which Mitchell Hutchins or
PaineWebber serves as investment adviser.
Dennis L. McCauley, 48, Vice President. Mr. McCauley is a Managing Director
and Chief Investment Officer -- Fixed Income of Mitchell Hutchins. Prior to
December 1994 he was Director of Fixed Income Investments of IBM Corporation.
Mr. McCauley is also a vice president of 8 other investment companies for which
Mitchell Hutchins or PaineWebber serves as investment adviser.
Ann E. Moran, 37, Vice President and Assistant Treasurer. Ms. Moran is a
vice president of Mitchell Hutchins. Ms. Moran is also a vice president and
assistant treasurer of 39 other investment companies for which Mitchell Hutchins
or PaineWebber serves as investment adviser.
Dianne E. O'Donnell, 42, Vice President and Secretary. Ms. O'Donnell is a
senior vice president and deputy general counsel of Mitchell Hutchins. Ms.
O'Donnell is also a vice president and secretary of 39 other investment
companies for which Mitchell Hutchins or PaineWebber serves as investment
adviser.
Victoria E. Schonfeld, 44, Vice President. Ms. Schonfeld is a managing
director and general counsel of Mitchell Hutchins. From April 1990 to May 1994
she was a partner in the law firm of Arnold & Porter. Prior to April 1990, she
was a partner in the law firm of Shereff, Friedman, Hoffman & Goodman. Ms.
Schonfeld is also a vice president and assistant secretary of 39 other
investment companies for which Mitchell Hutchins or PaineWebber serves as
investment adviser.
Paul H. Schubert, 32, Vice President and Assistant Treasurer. Mr. Schubert
is a vice president of Mitchell Hutchins. From August 1992 to August 1994, he
was a vice president at BlackRock Financial Management L.P. Prior to August
1992, he was an audit manager with Ernst & Young LLP. Mr. Schubert is also a
vice president and assistant treasurer of 39 other investment companies for
which Mitchell Hutchins or PaineWebber serves as investment adviser.
Martha J. Slezak, 32, Vice President and Assistant Treasurer. Ms. Slezak is
a vice president of Mitchell Hutchins. From September 1991 to April 1992, she
was a fundraising director for a U.S. Senate campaign. Prior to September 1991,
she was a tax manager with Arthur Andersen & Co.
4
<PAGE>
- --------------------------------------------------------------------------------
Ms. Slezak is also a vice president and assistant treasurer of 39 other
investment companies for which Mitchell Hutchins or PaineWebber serves as
investment adviser.
Julian F. Sluyters, 34, Vice President and Treasurer. Mr. Sluyters is a
senior vice president and the director of the mutual fund finance division of
Mitchell Hutchins. Prior to 1991, he was an audit senior manager with Ernst &
Young LLP. Mr. Sluyters is also a vice president and treasurer of 39 other
investment companies for which Mitchell Hutchins or PaineWebber serves as
investment adviser.
Gregory K. Todd, 38, Vice President and Assistant Secretary. Mr. Todd is a
first vice president and associate general counsel of Mitchell Hutchins. Prior
to 1993, he was a partner with the law firm of Shereff, Friedman, Hoffman &
Goodman. Mr. Todd is also a vice president and assistant secretary of 39 other
investment companies for which Mitchell Hutchins or PaineWebber serves as
investment adviser.
Certain of the Directors and officers of the Fund are directors and/or
trustees and officers of other mutual funds managed by PaineWebber or Mitchell
Hutchins. The address of each of the non-interested Directors is: Mr. Beaubien,
Montague Industrial Park, 101 Industrial Road, Box 746, Turners Falls,
Massachusetts 01376; Mr. Hewitt, P.O. Box 2359, Princeton, New Jersey 08543-
2359; Mr. Jordan, 200 Park Avenue, New York, New York 10166; and Mr. Schafer,
P.O. Box 1164, Princeton, New Jersey 08542. The address of Mr. Minard and each
of the officers is 1285 Avenue of the Americas, New York, New York 10019.
By virtue of the responsibilities assumed by PaineWebber under the
Investment Advisory and Administration Agreement (the 'Agreement'), the Fund
requires no executive employees other than its officers, none of whom devotes
full time to the affairs of the Fund. See 'Investment Advisory and Other
Services -- Investment Adviser and Administrator.' Directors and officers of the
Fund, as a group, owned less than 1% of the Fund's outstanding shares as of July
1, 1995. No officer, director or employee of PaineWebber or Mitchell Hutchins or
of any affiliate receives any compensation from the Fund for serving as an
officer or Director of the Fund. The Fund pays each Director who is not an
officer, director or employee of PaineWebber or Mitchell Hutchins or any of its
affiliates an annual retainer of $1,500 and $525 for each Board of Directors
meeting attended, and reimburses the Director for out-of-pocket expenses
associated with attendance at Board meetings. The Chairman of the Board's audit
committee receives an annual fee of $250. No officer, director or employee of
Mitchell Hutchins, or any of its affiliates, receives any compensation from the
Fund for serving as an officer or Director of the Fund. The amount of
compensation paid by the Fund to each Director for the fiscal year ended March
31, 1995, and the aggregate amount of compensation paid to each such Director
for the year ended December 31, 1994 by all funds in the former Kidder Family of
Funds for which such person is a Board member were as follows:
5
<PAGE>
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
(5)
(3) TOTAL COMPENSATION
(2) PENSION OR (4) FROM FUND AND 12
(1) AGGREGATE RETIREMENT BENEFITS ESTIMATED ANNUAL OTHER INVESTMENT
NAME OF BOARD COMPENSATION FROM ACCRUED AS PART OF BENEFITS UPON COMPANIES IN THE
MEMBER FUND* FUND'S EXPENSES RETIREMENT FUND COMPLEX**
----------------- ----------------- ------------------- ---------------- ------------------
<S> <C> <C> <C> <C>
David J. Beaubien $ None None $ 80,700
William W. Hewitt, Jr. $ None None $ 74,425
Thomas R. Jordan $ None None $ 83,125
Carl W. Schafer $ None None $ 84,575
</TABLE>
- ------------
* Amount does not include reimbursed expenses for attending Board meetings,
which amounted to approximately $ for all Directors as a group.
** Represents total compensation paid to each Director during the calendar year
ended December 31, 1994.
INVESTMENT ADVISORY AND OTHER SERVICES
INVESTMENT ADVISER AND ADMINISTRATOR
PaineWebber, the Fund's investment adviser and administrator, and Mitchell
Hutchins, the Fund's sub-adviser and sub-administrator, are located at 1285
Avenue of the Americas, New York, New York 10019.
Mitchell Hutchins manages the Fund's portfolio in accordance with the
stated policies of the Fund, subject to the supervision and direction of the
Fund's Board of Directors. Mitchell Hutchins makes investment decisions for the
Fund and places the purchase and sale orders for portfolio transactions. In
addition, Mitchell Hutchins pays the salaries of all officers and employees who
are employed by both it and the Fund, maintains office facilities, furnishes
statistical and research data, clerical help, accounting, data processing,
bookkeeping, internal auditing and legal services and certain other services
required by the Fund, prepares reports to shareholders of the Fund, tax returns
to and filings with the SEC and state Blue Sky authorities and generally assists
in all aspects of the Fund's operations. Mitchell Hutchins bears all expenses in
connection with the performance of its services.
Expenses incurred in the operation of the Fund, including, but not limited
to, taxes, interest, brokerage fees and commissions, if any, fees of Directors
who are not officers, directors shareholders or employees of PaineWebber, SEC
fees and related expenses, state Blue Sky qualification fees, charges of the
custodian and transfer, dividend and recordkeeping agent, charges and expenses
of any outside service used for pricing of the Fund's portfolio securities and
calculating net asset value, certain insurance premiums, outside auditing and
legal expenses, and costs of maintenance of corporate existence, shareholder
services, printing of prospectuses and statements of additional information for
distribution to shareholders, shareholders' reports and corporate meetings, are
borne by the Fund. Notwithstanding the foregoing, PaineWebber currently bears
the costs of printing and distributing prospectuses and statements of additional
information (except those used for regulatory purposes or for distribution to
shareholders of the Fund).
6
<PAGE>
- --------------------------------------------------------------------------------
The Investment Advisory and Administration Agreement, dated April 13, 1995,
shall continue automatically for successive annual periods, provided such
continuance is specifically approved at least annually by (i) the Board of
Directors of the Fund or (ii) vote of the holders of a majority, as defined in
the Act, of the outstanding voting securities of the Fund, provided that in
either event the continuance is also approved by a majority of the Directors who
are not 'interested persons,' as defined in the Act, of the Fund or PaineWebber
or Mitchell Hutchins, by vote cast in person at a meeting called for the purpose
of voting on such approval. The Investment Advisory and Administration Agreement
is terminable without penalty, on 60 days' notice, by the Board of Directors of
the Fund or by vote of the holders of a majority of the Fund's shares or by
PaineWebber. The Investment Advisory and Administration Agreement will terminate
automatically in the event of its assignment.
As compensation for PaineWebber's services, the Fund pays a fee, computed
daily and paid monthly, at an annual rate of .50% of the Fund's average daily
net assets. The Fund has paid to Kidder Peabody Asset Management, Inc., the
Fund's predecessor investment adviser and administrator, total compensation of
$2,126,247, $1,832,861 and $ for the fiscal years ended March 31, 1993,
1994 and 1995, respectively. PaineWebber has agreed that if in any fiscal year
the aggregate expenses of the Fund (including fees pursuant to the Investment
Advisory and Administration Agreement but excluding interest, taxes, brokerage
and extraordinary expenses) exceed the expense limitation of any state having
jurisdiction over the Fund, PaineWebber will reimburse the Fund for such excess
expense. This expense reimbursement obligation is not limited to the amount of
PaineWebber's fees. Such expense reimbursement, if any, will be estimated,
reconciled and paid on a monthly basis. The Fund believes that currently the
most stringent state expense limitations are 2 1/2% of the first $30 million of
the average value of the Fund's net assets, 2% of the next $70 million and
1 1/2% of the remaining net assets of the Fund. During the fiscal year ended
March 31, 1995, the Fund's expenses did not exceed such limitations.
PaineWebber shall not be liable for any error of judgment or mistake of law
or for any loss suffered by the Fund in connection with the matters to which the
Investment Advisory and Administration Agreement relates, except for 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 and duties under the Investment Advisory and Administration
Agreement.
DISTRIBUTOR
PaineWebber, as distributor, conducts a continuous offering of the Fund's shares
and is acting on a best efforts basis. See 'The Distributor' in the Fund's
prospectus.
The Directors believe that the Fund's expenditures under the Fund's Plan of
Distribution pursuant to Rule 12b-1 benefit the Fund and its shareholders by
providing better shareholder services. For the fiscal year ended March 31, 1995,
PaineWebber received $ from the Fund, of which $ was spent on
payments to Investment Executives and $ was spent on printing and
overhead-related expenses.
7
<PAGE>
- --------------------------------------------------------------------------------
CUSTODIAN AND TRANSFER, DIVIDEND AND RECORDKEEPING AGENT
Investors Fiduciary Trust Company ('IFTC'), 127 West 10th Street, Kansas City,
Missouri 64105, serves as the Fund's custodian. PFPC Inc., a subsidiary of PNC
Bank, National Association, whose principal address is 400 Bellevue Parkway,
Wilmington, Delaware 19809, serves as the Fund's transfer, dividend and
recordkeeping agent. As custodian, IFTC maintains custody of the Fund's
portfolio securities. As transfer agent, PFPC Inc. maintains the Fund's official
record of shareholders, as dividend agent, it is responsible for crediting
dividends to shareholders' account, and as recordkeeping agent, it maintains
certain accounting and financial records of the Fund.
INDEPENDENT AUDITORS
Deloitte & Touche LLP, Two World Financial Center, New York, New York 10281,
acts as independent auditors for the Fund. In such capacity, Deloitte & Touche
LLP audits the Fund's annual financial statements.
COUNSEL
Sullivan & Cromwell, 125 Broad Street, New York, New York 10004, acts as counsel
for the Fund.
PORTFOLIO TRANSACTIONS
Purchases and sales of portfolio securities usually are principal transactions.
Portfolio securities normally are purchased directly from the issuer or from an
underwriter or market maker for the securities. There usually are no brokerage
commissions paid by the Fund for such purchases. Purchases from dealers serving
as market makers may include the spread between the bid and asked price. While
Mitchell Hutchins generally seeks competitive spreads or commissions, the Fund
may not necessarily pay the lowest spread or commission available on each
transaction. To date, no brokerage commissions have been incurred.
Transactions are allocated to various dealers by Mitchell Hutchins in its
best judgment. The primary consideration is prompt and effective execution of
orders at the most favorable price. Subject to that primary consideration,
dealers may be selected for research, statistical or other services to enable
Mitchell Hutchins to supplement its own research and analysis with the views and
information of other securities firms.
Information so received supplements but does not replace that to be
provided by Mitchell Hutchins, and the fees of Mitchell Hutchins are not reduced
as a consequence of the receipt of any such supplemental information. Such
information may be useful to Mitchell Hutchins in serving both the Fund and
other clients and, conversely, supplemental information obtained by the
placement of business of other clients may be useful to Mitchell Hutchins in
carrying out its obligations to the Fund.
Investment decisions for the Fund are made independently from those of any
other funds managed by Mitchell Hutchins. If, however, funds managed by Mitchell
Hutchins are simultaneously engaged in the purchase or sale of the same
security, the transactions are averaged as to price and allocated equitably to
each fund. In some cases, this system might
8
<PAGE>
- --------------------------------------------------------------------------------
adversely affect the price paid or received by the Fund or the size of the
position obtainable for the Fund.
No portfolio transactions are executed through PaineWebber. PaineWebber
engages in transactions in repurchase agreements and acts as a dealer in or
underwriter of securities of the U.S. Government and certain U.S. Government
agencies. PaineWebber's activities may have some effect on the market for the
Fund's portfolio of such securities and PaineWebber may be competing in the
market place with the Fund in the purchase and sale of such securities.
REDEMPTION OF SHARES
The right of redemption may be suspended or the date of payment postponed (a)
for any period during which the New York Stock Exchange ('NYSE') is closed other
than for customary weekend and holiday closings, (b) when trading in the markets
the Fund normally utilizes is restricted, or when an emergency, as defined by
the rules and regulations of the SEC, exists, making disposal of the Fund's
investments or determination of its net asset value not reasonably practicable,
or (c) for any other periods as the SEC by order may permit for protection of
the Fund's shareholders.
EXCHANGE OF SHARES
Shares of the Fund may be exchanged for shares of the following
PaineWebber/Kidder, Peabody funds:
PaineWebber/Kidder, Peabody California Tax Exempt Money Fund
PaineWebber/Kidder, Peabody Cash Reserve Fund, Inc.
PaineWebber/Kidder, Peabody Municipal Money Market
Series -- Connecticut Series
PaineWebber/Kidder, Peabody Municipal Money Market Series -- New
Jersey Series
PaineWebber/Kidder, Peabody Municipal Money Market Series -- New York
Series
PaineWebber/Kidder, Peabody Premium Account Fund
PaineWebber/Kidder, Peabody Tax Exempt Money Fund, Inc.
The right of exchange may be suspended or postponed if (a) there is a
suspension of the redemption of Fund shares under Section 22(e) of the Act, or
(b) the Fund temporarily delays or ceases the sale of its shares because it is
unable to invest amounts effectively in accordance with its applicable
investment objective, policies and restrictions.
DIVIDENDS, DISTRIBUTIONS AND TAXES
The Fund ordinarily declares dividends from its net investment income on each
day that the Fund or IFTC is open for business. The Fund's earnings for
Saturdays, Sundays and holidays are declared as dividends on the preceding
business day. Dividends are paid each month and are reinvested in additional
shares or, at the shareholder's option, paid in cash. If a shareholder redeems
all shares in his account at any time during the month, all dividends to which
the shareholder is entitled are paid to him along with the proceeds of the
redemption. Distributions of realized securities profits, if any, generally are
declared and paid at or near the end of the
9
<PAGE>
- --------------------------------------------------------------------------------
Fund's fiscal year and at the end of the calendar year and are reinvested in
additional shares or, at the shareholder's option, paid in cash.
The Fund intends to maintain a net asset value of $1.00 per share for
purposes of sales and redemptions. To effectuate this policy, the Fund, under
certain circumstances, may consider selling portfolio instruments prior to
maturity to realize capital gains or losses, not declaring dividends and
distributions or paying distributions from capital or a capital gain. See
'Determination of Net Asset Value.'
The Fund qualified for its fiscal year ended March 31, 1995, and intends to
remain qualified, as a 'regulated investment company' under the Internal Revenue
Code of 1986, as amended (the 'Code'). As a regulated investment company, the
Fund pays no Federal income tax on its income and gains which it distributes to
shareholders, provided it distributes at least 90% of its net investment income
and net short-term capital gains for each year. To qualify as a regulated
investment company, the Fund must, among other things, (a) derive at least 90%
of its annual gross income from dividends, interest, payments with respect to
securities loans, gains from the sale or other disposition of stock or
securities, and other income derived with respect to the Fund's business of
investing in such stock or securities; (b) derive less than 30% of its annual
gross income from the sale or other disposition of stock or securities held for
less than three months; and (c) diversify its holdings so that, at the end of
each quarter of the taxable year, (i) at least 50% of the value of the Fund's
assets is represented by cash, U.S. Government securities and other securities
limited, in respect of any one issuer, to an amount not greater than 5% of the
value of the Fund's assets and 10% of the outstanding voting securities of such
issuer, and (ii) not more than 25% of the value of the assets is invested in the
securities of any one issuer (other than U.S. Government securities). The term
'regulated investment company' does not imply the supervision of management or
investment practices or policies by any governmental agency.
The Fund will be subject to a nondeductible 4% excise tax to the extent it
fails to distribute by the end of any calendar year substantially all of its
ordinary income for that year and capital gain net income for the one-year
period ending on October 31 of that year, plus certain other amounts.
The Code provides that dividends declared in October, November or December
payable in January of the following year will be treated as having been received
by shareholders on December 31 of the year in which declared. Under this rule,
therefore, a shareholder may be taxed in a year on dividends or distributions
actually received in the following year.
Investors should consider carefully the tax implications of purchasing
shares of the Fund just prior to the declaration of a dividend. Although a
dividend paid shortly after shares have been purchased is in effect a return of
investment, it is subject to tax.
The Fund may be subject to state or local tax in certain states where it is
deemed to be doing business. Furthermore, in those states which have such income
tax laws, the tax treatment of the Fund and of shareholders with respect to
distributions by the Fund may differ from Federal tax treatment.
Statements as to the tax status of each shareholder's dividends and
distributions are mailed annually by the Fund's transfer agent. Shareholders are
urged to consult their own tax advisers regarding specific questions as to
Federal, state or local taxes.
10
<PAGE>
- --------------------------------------------------------------------------------
DETERMINATION OF NET ASSET VALUE
The net asset value of the Fund will not be calculated on the following NYSE
holidays: New Year's Day, Washington's Birthday (observed), Good Friday,
Memorial Day (observed), Independence Day, Labor Day, Thanksgiving and
Christmas. If one of these holidays falls on a Saturday or Sunday, the NYSE will
be closed on the preceding Friday or the following Monday, respectively. The
days on which net asset value is determined are the Fund's business days. The
Fund's net asset value per share is computed by dividing the value of the net
assets of the Fund (i.e., the value of its assets less liabilities) by the total
number of shares outstanding. Expenses and fees of the Fund, including
PaineWebber's fee, are accrued daily and taken into account for the purpose of
determining net asset value. It is the policy of the Fund to attempt to maintain
a net asset value of $1.00 per share for purposes of sales and redemptions
although there can be no assurance that the Fund will always be able to do so.
The Fund maintains a dollar-weighted average portfolio maturity of 90 days
or less, purchases only instruments having remaining maturities of 397 days or
less and invests only in securities which present minimal credit risks and are
of high quality as determined by any major rating service or, in the case of any
instrument that is not rated, of comparable quality as determined by the Board
of Directors.
The valuation of the Fund's portfolio securities is based upon their
amortized cost, which does not take into account unrealized capital gains or
losses. This involves valuing an instrument at its cost and thereafter assuming
a constant accretion or amortization to maturity of any discount or premium,
respectively, regardless of the impact of fluctuating interest rates on the
market value of the instrument. While this method provides certainty in
valuation, it may result in periods during which value, as determined by
amortized cost, is higher or lower than the price the Fund would receive if it
sold the instrument.
In connection with the utilization of the amortized cost method of
valuation, the Board of Directors has established procedures reasonably
designed, taking into account current market conditions and the Fund's
investment objective, to stabilize net asset value per share at $1.00. These
procedures include periodic review, as the Board of Directors deems appropriate
and at such intervals as are reasonable in light of current market conditions,
of the relationship between the amortized cost per share and the net asset value
per share based upon available indications of value. In such review, investments
for which market quotations are readily available are valued at the most recent
bid or yield equivalent for such securities or for securities of comparable
maturity, quality and type, as obtained from one or more of the major market
makers for the securities to be valued. Other investments and assets are valued
at fair value as determined in good faith by the Board of Directors.
The extent of any deviation between the Fund's net asset value based upon
available market quotations or market equivalents and $1.00 per share based on
amortized cost is examined by the Board of Directors. If such deviation exceeds
.50 of 1%, the Board of Directors promptly will consider what action, if any,
will be initiated. In the event the Board of Directors determines that a
deviation exists which may result in material dilution or other unfair results
to shareholders, it has agreed to take such corrective action as it regards as
necessary and appropriate, including: selling portfolio instruments prior to
maturity to realize capital gains or losses or to shorten average portfolio
maturity; not declaring dividends or paying distributions
11
<PAGE>
- --------------------------------------------------------------------------------
from capital or capital gains; redeeming shares in kind; or establishing a net
asset value per share by using available market quotations.
DETERMINATION OF CURRENT AND EFFECTIVE YIELDS
The Fund provides current and effective yield quotations based on its daily
dividends. See 'Dividends, Distributions and Taxes' in the Fund's prospectus.
Such quotations are made in reports, sales literature and advertisements
published by the Fund.
Current yield is computed by determining the net change exclusive of
capital changes in the value of a hypothetical pre-existing account having a
balance of one share at the beginning of a seven day calendar period, dividing
the net change in account value by the value of the account at the beginning of
the period and multiplying the return over the seven day period by 365/7. For
purposes of the calculation, net change in account value reflects the value of
additional shares purchased with dividends from the original share and dividends
declared on both the original share and any such additional shares, but does not
reflect realized gains or losses or unrealized appreciation or depreciation.
Effective yield is computed by annualizing the seven-day return with all
dividends reinvested in additional shares of the Fund.
Current and effective yields fluctuate and are not necessarily
representative of future results. The shareholder should remember that yield is
a function of the type and quality of the instruments in the portfolio,
portfolio maturity and operating expenses. See 'Investment Objective and
Management Policies' in the Fund's prospectus and 'Investment Advisory and Other
Services' above. Current and effective yield information is useful in reviewing
the Fund's performance but because current and effective yields will fluctuate
such information may not provide a basis for comparison with bank deposits,
other investments which pay a fixed yield for a stated period of time or other
investment companies which may use a different method of calculating yield.
A shareholder's principal in the Fund is not guaranteed. See 'Dividends,
Distributions and Taxes' and 'Determination of Net Asset Value' above for a
discussion of the manner in which the Fund's price per share is determined.
Historical and comparative yield information may be presented by the Fund.
ADDITIONAL INFORMATION ABOUT THE FUND
The Fund was incorporated under the laws of the State of Maryland on February 2,
1983 and commenced operations on May 17, 1983.
The authorized common stock of the Fund consists of 5,000,000,000 shares,
par value of $.01 per share. Each share has one vote and, when issued and paid
for in accordance with the terms of offering, is fully paid and non-assessable.
Shares have no preemptive, subscription or conversion rights and are freely
transferable.
As used in this Statement of Additional Information when referring to the
approvals to be obtained from shareholders, the term 'majority' means the vote
of the lesser of (1) 67% of the Fund's shares present at a meeting if the
holders of more than 50% of the outstanding shares are present in person or by
proxy, or (2) more than 50% of the Fund's outstanding shares.
Unless otherwise required by the Act, ordinarily it will not be necessary
for the Fund to hold meetings of shareholders annually. As a result, Fund
shareholders may not consider each year the election of Directors or the
appointment of independent auditors. However, pursuant to
12
<PAGE>
- --------------------------------------------------------------------------------
the Fund's By-Laws, the holders of at least 10% of the shares outstanding and
entitled to vote may require the Fund to hold a special meeting of shareholders
for any purpose. Fund shareholders may remove a Director by the affirmative vote
of a majority of the Fund's outstanding voting shares. In addition, the Board of
Directors will call a meeting of shareholders for the purpose of electing
Directors if, at any time, less than a majority of the Directors holding office
at the time were elected by shareholders.
The prospectus and this Statement of Additional Information do not contain
all the information set forth in the Registration Statement and the exhibits
relating thereto, which the Fund has filed with the SEC under the Securities Act
of 1933 and the Act, to which reference is hereby made.
FINANCIAL STATEMENTS
The Fund's Annual Report to Shareholders for the fiscal year ended March 31,
1995 is a separate document supplied with this Statement of Additional
Information and the financial statements, accompanying notes and report of
independent auditors appearing therein are incorporated by reference in this
Statement of Additional Information.
13
<PAGE>
<TABLE>
<S> <C>
- ---------------------------------------------
Contents
- ---------------------------------------------
Investment Objective and Policies 2
- ---------------------------------------------
Management of the Fund 3
- ---------------------------------------------
Investment Advisory and Other Services 6
- ---------------------------------------------
Portfolio Transactions 8
- ---------------------------------------------
Redemption of Shares 9
- ---------------------------------------------
Exchange of Shares 9
- ---------------------------------------------
Dividends, Distributions and Taxes 9
- ---------------------------------------------
Determination of Net Asset Value 11
- ---------------------------------------------
Determination of Current and Effective Yields 12
- ---------------------------------------------
Additional Information About the Fund 12
- ---------------------------------------------
Financial Statements 13
- ---------------------------------------------
</TABLE>
PaineWebber/
Kidder, Peabody
Government
Money
Fund, Inc.
Statement of
Additional
Information
August 1, 1995
<PAGE>
PART C
OTHER INFORMATION
ITEM 24. FINANCIAL STATEMENTS AND EXHIBITS.
(a) Financial Statements:
To be filed by subsequent amendment pursuant to Rule 485(d).
(b) Exhibits:
<TABLE>
<CAPTION>
EXHIBIT
NUMBER
- -------
<S> <C>
1 -- The Restatement of Articles of Incorporation dated January 17, 1989 is incorporated by reference to
Exhibit 1 of Post-Effective Amendment No. 7 to the Registration Statement on Form N-1A, filed on July 31,
1989.
2 -- The Registrant's By-Laws are incorporated by reference to Exhibit 2 of Pre-Effective Amendment No. 1 to
the Registration Statement on Form N-1, filed on April 29, 1983.
3 -- None
4 -- The specimen certificate for the Registrant's Common Stock, par value $.01 per share is incorporated by
reference to Exhibit 4 of Pre-Effective Amendment No. 1 to the Registration Statement on Form N-1, filed
on April 29, 1983.
5a -- Form of Investment Advisory and Administration Agreement.*
5b -- Form of Sub-Advisory and Sub-Administration Agreement.*
6 -- Form of Distribution Agreement.*
7 -- None
8 -- The Custody Agreement is incorporated by reference to Exhibit 8 of Post-Effective Amendment No. 7 to the
Registration Statement on Form N-1A, filed on July 31, 1989.
9 -- Form of Transfer Agency Agreement.*
10 -- The opinion and consent of Sullivan & Cromwell is incorporated by reference to Exhibit 10 of
Pre-Effective Amendment No. 1 to the Registration Statement on Form N-1, filed on April 29, 1983.
11 -- Consent of Deloitte & Touche LLP.*
12 -- None
13 -- Investment representation letter is incorporated by reference to Exhibit 13 of Pre-Effective Amendment
No. 1 to the Registration Statement on Form N-1, filed on April 29, 1983.
14 -- None
15a The Plan of Distribution pursuant to Rule 12b-1 ('Plan of Distribution') is incorporated by reference to
Exhibit 15 of Post-Effective Amendment No. 7 to the Registration Statement on Form N-1A, filed on July 31,
1989.
15b -- The amendment effective February 1, 1990 to the Plan of Distribution is incorporated by reference to
Exhibit 15 of Post-Effective Amendment No. 8 to the Registration Statement on Form N-1A, filed on July 30,
1990.
15c -- Amendment to the Plan of Distribution.*
16 -- Schedule for computation of current and effective yields is incorporated by reference to Exhibit 16 of
Post-Effective Amendment No. 9 to the Registration Statement on Form N-1A, filed on July 29, 1991.
17 -- Powers of Attorney.
</TABLE>
- ------------
* To be supplied by amendment.
ITEM 25. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH REGISTRANT.
No person is controlled by or under common control with the Registrant.
ITEM 26. NUMBER OF HOLDERS OF SECURITIES.
<TABLE>
<CAPTION>
NUMBER OF RECORDHOLDERS
TITLE OF CLASS ON MAY 5, 1995
- ---------------------------------------------------------------------------------- ------------------------------
<S> <C>
Common Stock, par value $.01 per share 6,807
</TABLE>
C-1
<PAGE>
ITEM 27. INDEMNIFICATION.
Reference is made to Section 2-418 of the General Corporation Law of
Maryland, as amended effective February 8, 1988.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
Registrant and the principal underwriter 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 and the principal underwriter in connection with the
successful defense of any action, suit or proceeding) is asserted against the
Registrant by such director, officer or controlling person or the principal
underwriter in connection with the shares 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 28. BUSINESS AND OTHER CONNECTIONS OF INVESTMENT ADVISER.
See 'Management of the Fund -- Investment Adviser and Administrator' in the
Prospectus and 'Investment Advisory and Other Services -- Investment Adviser and
Administrator' in the Statement of Additional Information.
I. PaineWebber Incorporated ('PaineWebber'), a Delaware corporation, is a
registered investment adviser and is wholly owned by Paine Webber Group Inc.
PaineWebber is primarily engaged in the financial services business. Information
as to the officers and directors of PaineWebber is included in its Form ADV
filed on March 31, 1995, with the Securities and Exchange Commission
(registration number 801-7163) and is incorporated herein by reference.
II. Mitchell Hutchins Asset Management Inc. ('Mitchell Hutchins'), a
Delaware corporation, is a registered investment adviser and is wholly owned by
PaineWebber. Mitchell Hutchins is primarily engaged in the investment advisory
business. Information as to the officers and directors of Mitchell Hutchins is
included in its Form ADV filed on April 3, 1995, with the Securities and
Exchange Commission (registration number 801-13219) and is incorporated herein
by reference.
ITEM 29. PRINCIPAL UNDERWRITERS.
(a) PaineWebber serves as principal underwriter and/or investment adviser
for the following other investment companies:
PaineWebber CashFund, Inc.
PaineWebber Managed Municipal Trust
PaineWebber RMA Money Fund, Inc.
PaineWebber RMA Tax-Free Fund, Inc.
PaineWebber/Kidder, Peabody California Tax Exempt Money Fund
PaineWebber/Kidder, Peabody Cash Reserve Fund, Inc.
C-2
<PAGE>
PaineWebber/Kidder, Peabody Municipal Money Market
Series -- Connecticut Series
PaineWebber/Kidder, Peabody Municipal Money Market Series -- New
Jersey Series
PaineWebber/Kidder, Peabody Municipal Money Market Series -- New
York Series
PaineWebber/Kidder, Peabody Premium Account Fund
PaineWebber/Kidder, Peabody Tax Exempt Money Fund, Inc.
(b) PaineWebber is the principal underwriter of the Registrant. The
directors and officers of PaineWebber, their principal business addresses, and
their positions and offices with PaineWebber are identified in its Form ADV
filed March 31, 1995, with the Securities and Exchange Commission (registration
number 801-7163), and such information is hereby incorporated herein by
reference. The information set forth below is furnished for those directors and
officers of PaineWebber who also serve as directors or officers of the
Registrant:
<TABLE>
<CAPTION>
NAME AND PRINCIPAL BUSINESS POSITION WITH POSITION AND OFFICES
ADDRESS REGISTRANT WITH UNDERWRITER
- ---------------------------- ----------------------- ---------------------
<S> <C> <C>
Frank P.L. Minard President and Director Director
1285 Avenue of the Americas
New York, NY 10019
</TABLE>
(c) None.
ITEM 30. LOCATION OF ACCOUNTS AND RECORDS.
All accounts, books and other documents required to be maintained by
Section 31(a) of the Investment Company Act of 1940 and the Rules thereunder are
maintained at the offices of Investors Fiduciary Trust Company, 127 West 10th
Street, Kansas City, Missouri 64105, PFPC Inc., 400 Bellevue Parkway,
Wilmington, Delaware 19809, and the Fund, 1285 Avenue of the Americas, New York,
New York 10019.
ITEM 31. MANAGEMENT SERVICES.
Inapplicable.
ITEM 32. UNDERTAKINGS.
Not applicable.
C-3
<PAGE>
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933 AND THE
INVESTMENT COMPANY ACT OF 1940, THE REGISTRANT HAS DULY CAUSED THIS
POST-EFFECTIVE AMENDMENT TO THE REGISTRATION STATEMENT TO BE SIGNED ON ITS
BEHALF BY THE UNDERSIGNED, THEREUNTO DULY AUTHORIZED, IN THIS CITY OF NEW YORK,
AND STATE OF NEW YORK, ON THE 1ST DAY OF JUNE 1995.
PAINEWEBBER/KIDDER, PEABODY
GOVERNMENT MONEY FUND, INC.
By: /s/ DIANNE E. O'DONNELL
____________________________________
(DIANNE E. O'DONNELL,
VICE PRESIDENT AND SECRETARY)
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Post-Effective Amendment to the Registrant's Registration Statement on Form
N-1A has been signed below by the following persons in the capacities and on the
dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- -------------------------------------------------------- -------------------------------------- -------------
<S> <C> <C>
Director and President (Chief June 1, 1995
/s/ FRANK P.L. MINARD* Executive Officer)
- -------------------------------------------------------
FRANK P.L. MINARD
Vice President and Treasurer (Chief June 1, 1995
/s/ JULIAN F. SLUYTERS Financial and Accounting Officer)
- -------------------------------------------------------
JULIAN F. SLUYTERS
Director June 1, 1995
/s/ DAVID J. BEAUBIEN**
- -------------------------------------------------------
DAVID J. BEAUBIEN
Director June 1, 1995
/s/ WILLIAM W. HEWITT, JR.***
- -------------------------------------------------------
WILLIAM W. HEWITT, JR.
Director June 1, 1995
/s/ THOMAS R. JORDAN****
- -------------------------------------------------------
THOMAS R. JORDAN
Director June 1, 1995
/s/ CARL W. SCHAFER*****
- -------------------------------------------------------
CARL W. SCHAFER
</TABLE>
- ------------
* Signature affixed by Dianne E. O'Donnell pursuant to power of attorney
dated May 18, 1995 and filed herewith.
** Signature affixed by Dianne E. O'Donnell pursuant to power of attorney
dated March 8, 1995 and filed herewith.
*** Signature affixed by Dianne E. O'Donnell pursuant to power of attorney
dated March 8, 1995 and filed herewith.
**** Signature affixed by Dianne E. O'Donnell pursuant to power of attorney
dated March 8, 1995 and filed herewith.
***** Signature affixed by Dianne E. O'Donnell pursuant to power of attorney
dated March 8, 1995 and filed herewith.
C-4
STATEMENT OF DIFFERENCES
<TABLE>
<S> <C>
The service mark symbol shall be expressed as ........... 'sm'
</TABLE>
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION PAGE
- ------- -------------------------------------------------------------------------------------------------- ----
<S> <C> <C> <C>
(17) -- Powers of Attorney................................................................................
</TABLE>
<PAGE>
<PAGE>
POWER OF ATTORNEY
I, Frank P.L. Minard, President and Director of Mitchell Hutchins/Kidder,
Peabody Equity Income Fund, Inc., Mitchell Hutchins/Kidder, Peabody Government
Income Fund, Inc., PaineWebber/Kidder, Peabody Cash Reserve Fund, Inc.,
PaineWebber/Kidder, Peabody Government Money Fund, Inc., and PaineWebber/Kidder,
Peabody Tax Exempt Money Fund, Inc. (collectively, the 'Funds'), hereby
constitute and appoint Victoria E. Schonfeld, Dianne E. O'Donnell, Gregory K.
Todd and Scott Griff, and each of them singly, my true and lawful attorneys,
with full power to them to sign for me, and in my capacity as President and
Director for each of the Funds, any and all amendments to each of the
particular registration statements of the Funds, and all instruments necessary
or desirable in connection therewith, filed with the Securities and Exchange
Commission, hereby ratifying and confirming my signature as it may be signed by
said attorneys to any and all amendments to said registration statements.
Pursuant to the requirements of the Securities Act of 1933, this instrument
has been signed below by the following in the capacity and on the date
indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- ------------------------------------------ ------------------------------------------------- ---------------
<S> <C> <C>
/s/ FRANK P.L. MINARD President and Director May 18, 1995
.........................................
(FRANK P.L. MINARD)
</TABLE>
<PAGE>
POWER OF ATTORNEY
I, David J. Beaubien, Director of Mitchell Hutchins/Kidder, Peabody Equity
Income Fund, Inc., Mitchell Hutchins/Kidder, Peabody Government Income Fund,
Inc., PaineWebber/Kidder, Peabody Cash Reserve Fund, Inc., PaineWebber/Kidder,
Peabody Government Money Fund, Inc., and PaineWebber/Kidder, Peabody Tax Exempt
Money Fund, Inc. (collectively, the 'Funds'), hereby constitute and appoint
Victoria E. Schonfeld, Dianne E. O'Donnell, Gregory K. Todd and Scott Griff, and
each of them singly, my true and lawful attorneys, with full power to them to
sign for me, and in my capacity as Director for each of the Funds, any and all
amendments to each of the particular registration statements of the Funds, and
all instruments necessary or desirable in connection therewith, filed with the
Securities and Exchange Commission, hereby ratifying and confirming my signature
as it may be signed by said attorneys to any and all amendments to said
registration statements.
Pursuant to the requirements of the Securities Act of 1933, this instrument
has been signed below by the following in the capacity and on the date
indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- ------------------------------------------ ------------------------------------------------- ---------------
<S> <C> <C>
/s/ DAVID J. BEAUBIEN Director March 8, 1995
.........................................
(DAVID J. BEAUBIEN)
</TABLE>
<PAGE>
POWER OF ATTORNEY
I, William W. Hewitt, Jr., Director of Mitchell Hutchins/Kidder, Peabody
Equity Income Fund, Inc., Mitchell Hutchins/Kidder, Peabody Government Income
Fund, Inc., PaineWebber/Kidder, Peabody Cash Reserve Fund, Inc.,
PaineWebber/Kidder, Peabody Government Money Fund, Inc., and PaineWebber/Kidder,
Peabody Tax Exempt Money Fund, Inc. (collectively, the 'Funds'), hereby
constitute and appoint Victoria E. Schonfeld, Dianne E. O'Donnell, Gregory K.
Todd and Scott Griff, and each of them singly, my true and lawful attorneys,
with full power to them to sign for me, and in my capacity as Director for each
of the Funds, any and all amendments to each of the particular registration
statements of the Funds, and all instruments necessary or desirable in
connection therewith, filed with the Securities and Exchange Commission, hereby
ratifying and confirming my signature as it may be signed by said attorneys to
any and all amendments to said registration statements.
Pursuant to the requirements of the Securities Act of 1933, this instrument
has been signed below by the following in the capacity and on the date
indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- ------------------------------------------ ------------------------------------------------- ---------------
<S> <C> <C>
/s/ WILLIAM W. HEWITT, JR. Director March 8, 1995
.........................................
(WILLIAM W. HEWITT, JR.)
</TABLE>
<PAGE>
POWER OF ATTORNEY
I, Thomas R. Jordan, Director of Mitchell Hutchins/Kidder, Peabody Equity
Income Fund, Inc., Mitchell Hutchins/Kidder, Peabody Government Income Fund,
Inc., PaineWebber/Kidder, Peabody Cash Reserve Fund, Inc., PaineWebber/Kidder,
Peabody Government Money Fund, Inc., and PaineWebber/Kidder, Peabody Tax Exempt
Money Fund, Inc. (collectively, the 'Funds'), hereby constitute and appoint
Victoria E. Schonfeld, Dianne E. O'Donnell, Gregory K. Todd and Scott Griff, and
each of them singly, my true and lawful attorneys, with full power to them to
sign for me, and in my capacity as Director for each of the Funds, any and all
amendments to each of the particular registration statements of the Funds, and
all instruments necessary or desirable in connection therewith, filed with the
Securities and Exchange Commission, hereby ratifying and confirming my signature
as it may be signed by said attorneys to any and all amendments to said
registration statements.
Pursuant to the requirements of the Securities Act of 1933, this instrument
has been signed below by the following in the capacity and on the date
indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- ------------------------------------------ ------------------------------------------------- ---------------
<S> <C> <C>
/s/ THOMAS R. JORDAN Director March 8, 1995
.........................................
(THOMAS R. JORDAN)
</TABLE>
<PAGE>
POWER OF ATTORNEY
I, Carl W. Schafer, Director of Mitchell Hutchins/Kidder, Peabody Equity
Income Fund, Inc., Mitchell Hutchins/Kidder, Peabody Government Income Fund,
Inc., PaineWebber/Kidder, Peabody Cash Reserve Fund, Inc., PaineWebber/Kidder,
Peabody Government Money Fund, Inc., and PaineWebber/Kidder, Peabody Tax Exempt
Money Fund, Inc. (collectively, the 'Funds'), hereby constitute and appoint
Victoria E. Schonfeld, Dianne E. O'Donnell, Gregory K. Todd and Scott Griff, and
each of them singly, my true and lawful attorneys, with full power to them to
sign for me, and in my capacity as Director for each of the Funds, any and all
amendments to each of the particular registration statements of the Funds, and
all instruments necessary or desirable in connection therewith, filed with the
Securities and Exchange Commission, hereby ratifying and confirming my signature
as it may be signed by said attorneys to any and all amendments to said
registration statements.
Pursuant to the requirements of the Securities Act of 1933, this instrument
has been signed below by the following in the capacity and on the date
indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- ------------------------------------------ ------------------------------------------------- ---------------
<S> <C> <C>
/s/ CARL W. SCHAFER Director March 8, 1995
.........................................
(CARL W. SCHAFER)
</TABLE>
