<PAGE> 1
As filed with the Securities and Exchange Commission on November 30, 1995
Registration No. 2-82278
============================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 /X/
POST-EFFECTIVE AMENDMENT NO. 14 /X/
and
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 /X/
AMENDMENT NO. 15 /X/
MUNICIPAL FUND FOR NEW YORK INVESTORS, INC.
(Exact Name of Registrant As Specified In Charter)
Bellevue Park Corporate Center
400 Bellevue Parkway, Suite 100
Wilmington, Delaware 19809
(Address of Principal Executive Offices)
Registrant's Telephone Number: (302) 792-2555
EDWARD J. ROACH
Bellevue Park Corporate Center
400 Bellevue Parkway, Suite 100
Wilmington, Delaware 19809
(Name and Address of Agent For Service)
Copies to:
MORGAN R. JONES, ESQ.
Drinker Biddle & Reath
1345 Chestnut Street, Suite 1100
Philadelphia, Pennsylvania 19107
It is proposed that this filing will become effective (check
appropriate box)
/x/ immediately upon filing pursuant to paragraph (b)
/ / on (date) pursuant to paragraph (b)
/ / 60 days after filing pursuant to paragraph (a)(i)
/ / on (date) pursuant to paragraph (a)(i)
/ / 75 days after filing pursuant to paragraph (a)(ii)
<PAGE> 2
/ / on (date) pursuant to paragraph (a)(ii) of Rule 485.
If appropriate, check the following box:
/ / this post-effective amendment designates a new effective date
for a previously filed post-effective amendment.
The Registrant has registered an indefinite number of securities under
the Securities Act of 1933 pursuant to Rule 24f-2. The Rule 24f-2 Notice for
the Registrant's fiscal year ended July 31, 1995 was filed on September 28,
1995.
<PAGE> 3
CALCULATION OF REGISTRATION FEE UNDER
THE SECURITIES ACT OF 1933(1)(2)
<TABLE>
<CAPTION>
Proposed
Maximum
Proposed Maximum Aggregate
Title of Securities Being Amount Being Offering Price Offering Price Amount of
Registered Registered (2)(3) Per Unit (2) (3) Registration Fee
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class A Common Stock, $.001
Par Value 193,692,033 $1.00 $290,000 $100
</TABLE>
(1) Registrant has also registered an indefinite number of shares of its
Class A Common Stock under the Securities Act of 1933 pursuant to Rule
24f-2 under the Investment Company Act of 1940. Registrant's Rule
24f-2 Notice for the fiscal year ended July 31, 1995 was filed on
September 28, 1995.
(2) Estimated solely for the purpose of calculating the registration fee.
(3) The maximum aggregate offering price for the Class A Common Stock is
calculated pursuant to Rule 24e-2 under the Investment Company Act of
1940. During the fiscal year ended July 31, 1995, Registrant redeemed
a total of 1,073,881,693 shares of its Class A Common Stock. Of these
redeemed shares, 880,479,660 shares were used for reductions pursuant
to paragraph (c) of Rule 24f-2 in Registrant's Rule 24f-2 Notice filed
on September 28, 1995 for the year ended July 31, 1995, and none of
the redeemed shares were used for reductions pursuant to Rule 24e-2 in
any previous post-effective amendments. As a result, 193,402,033
redeemed shares of Class A Common Stock are being used to reduce,
pursuant to paragraph (a) of Rule 24e-2, the number of shares for
which the registration fee is payable with respect to this
Post-Effective Amendment.
<PAGE> 4
MUNICIPAL FUND FOR NEW YORK INVESTORS, INC.
Cross Reference Sheet
<TABLE>
<CAPTION>
Form N-1A Item Prospectus Caption
- -------------- ------------------
<S> <C> <C>
1. Cover Page . . . . . . . . . . . . . . . . . . . . . . . . . Cover Page
2. Synopsis . . . . . . . . . . . . . . . . . . . . . . . . . . Background and Expense
Information
3. Condensed Financial Information . . . . . . . . . . . . . . Financial Highlights
4. General Description of Registrant . . . . . . . . . . . . . Certain Financial
Information; Investment
Objective and Policies
5. Management of the Fund . . . . . . . . . . . . . . . . . . . Management of the Fund
6. Capital Stock and Other Securities . . . . . . . . . . . . . Cover Page; Certain
Financial Information;
Dividends; Taxes;
Description of Shares and
Miscellaneous; Yield
7. Purchase of Securities Being
Offered . . . . . . . . . . . . . . . . . . . . . . . . . . Management of the Fund;
Purchase of Shares;
Redemption of Shares
8. Redemption or Repurchase . . . . . . . . . . . . . . . . . . Redemption of Shares
9. Legal Proceedings . . . . . . . . . . . . . . . . . . . . . Inapplicable
</TABLE>
<PAGE> 5
MUNICIPAL FUND FOR
NEW YORK INVESTORS, INC.
("New York Money Fund")
<TABLE>
<S> <C>
Bellevue Park Corporate Center For purchase and redemption orders call:
400 Bellevue Parkway 800-441-7450 (in Delaware: 302-478-6945);
Suite 100 For current yield information call:
Wilmington, Delaware 19809 800-821-6006
(Code: New York Money-53; New York Money
Dollar-55; New York Money Plus-56).
For other information call: 800-821-7432.
</TABLE>
Municipal Fund for New York Investors, Inc. (the "Fund") is designed
primarily to provide New York institutional investors and their customers with
as high a level of current interest income that is exempt from Federal income
tax and, to the extent possible, from New York State and New York City personal
income taxes as is consistent with the preservation of capital and relative
stability of principal. Portfolio securities held by the Fund will generally
have remaining maturities of 13 months or less and will be determined by the
Fund's investment adviser to have minimal credit risk. (See "Investment
Objective and Policies.")
PNC Institutional Management Corporation and PNC Bank, National Association
serve as the Fund's adviser and sub-adviser, respectively. PFPC Inc. ("PFPC")
and Provident Distributors, Inc. ("PDI") serve as the Fund's administrators. PDI
also serves as the Fund's distributor. Shares may not be purchased by
individuals directly but, as indicated above, institutional investors, such as
banks and broker-dealers, may purchase shares for accounts maintained by
individuals.
------------------------
SHARES OF THE FUND ARE NOT DEPOSITS OR OBLIGATIONS OF OR GUARANTEED OR
ENDORSED BY, PNC BANK, NATIONAL ASSOCIATION OR ANY OTHER BANK AND SHARES
OF THE FUND ARE NOT FEDERALLY INSURED BY, GUARANTEED BY, OBLIGATIONS OF
OR OTHERWISE SUPPORTED BY THE U.S. GOVERNMENT, THE FEDERAL DEPOSIT
INSURANCE CORPORATION, THE FEDERAL RESERVE BOARD OR ANY OTHER
GOVERNMENTAL AGENCY. INVESTMENTS IN SHARES OF THE FUND INVOLVE
INVESTMENT RISKS, INCLUDING THE POSSIBLE LOSS OF THE
PRINCIPAL AMOUNT INVESTED. THERE CAN BE NO ASSURANCE
THAT THE FUND WILL BE ABLE TO MAINTAIN A STABLE NET
ASSET VALUE OF $1.00 PER SHARE.
------------------------
This Prospectus briefly sets forth certain information about the Fund that
investors should know before investing. Investors are advised to read this
Prospectus and retain it for future reference. Additional information about the
Fund, contained in a Statement of Additional Information bearing the same date,
has been filed with the Securities and Exchange Commission. The current
Statement of Additional Information is available to investors without charge by
calling the Fund at 800-821-7432. The Statement of Additional Information, as
may be amended from time to time, is incorporated by reference in its entirety
into this Prospectus.
------------------------
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.
------------------------
December 1, 1995
<PAGE> 6
BACKGROUND AND EXPENSE INFORMATION
The Fund was organized as a Maryland corporation on March 4, 1983 and
currently offers three separate series of shares-New York Money ("Money"), New
York Money Dollar ("Dollar") and New York Money Plus ("Plus"). The public
offering of Money shares commenced on August 22, 1983, and the public offering
of Dollar and Plus shares commenced on October 8, 1985. Shares of each series
represent equal pro rata interests in a single portfolio of high quality,
short-term tax-exempt obligations maintained by the Fund (See "Investment
Objective and Policies"), except that Dollar and Plus shares bear service fees
payable by the Fund (at the rate of .25% per annum) to institutional investors
for distribution and/or support services they provide to the beneficial owners
of such shares. (See "Management of the Fund-Service Organizations.") Because of
the service fees borne by Dollar and Plus shares, the net yield on such shares
can be expected, at any given time, to be approximately .25% lower than the net
yield on Money shares.
EXPENSE SUMMARY
<TABLE>
<CAPTION>
MONEY DOLLAR PLUS
SHARES SHARES SHARES
------------- ------------- -------------
<S> <C> <C> <C> <C> <C> <C>
ANNUAL FUND OPERATING EXPENSES
(as a percentage of average net assets)
Management Fees After Fee Waivers............. .06% .06% .06%
12b-1 Fees.................................... -- -- .25%
Other Expenses................................ .14% .39% .14%
Administration Fees After Fee Waivers.... .06% .06% .06%
Non-12b-1 Fees........................... -- .25% --
Other Expenses........................... .08% .08% .08%
===== ===== =====
Total Fund Operating
Expenses After
Fee Waivers................................. .20% .45% .45%
</TABLE>
- ---------------
EXAMPLE
<TABLE>
<CAPTION>
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) an hypothetical 5% annual return and (2)
redemption at the end of each time period with respect to the
following shares:
Money Shares.............................................. $ 2 $ 6 $11 $ 26
Plus Shares............................................... $ 5 $14 $25 $ 57
Dollar Shares............................................. $ 5 $14 $25 $ 57
</TABLE>
The foregoing tables are intended to assist investors in understanding the
expenses the Fund pays. Investors bear these expenses indirectly since they
reduce the amount of income paid by the Fund to investors as dividends. In
addition, institutional investors may charge their customers fees for providing
services in connection with investments in the Fund's Dollar and Plus shares.
(For more complete descriptions of the various costs and expenses, see
"Management of the Fund" in the Prospectus and Statement of Additional
Information.) The investment adviser and administrators have voluntarily agreed
to waive the advisory and administration fees otherwise payable to them and to
reimburse the Fund for its operating expenses to the extent necessary to ensure
that the annual operating expense ratio of the Fund (excluding Non-12b-1 Fees
and 12b-1 Fees applicable to the
2
<PAGE> 7
Dollar shares and Plus shares, respectively) will not exceed .20% of the Fund's
average daily net assets for the year ended July 31, 1996. Absent such fee
waivers and expense reimbursements, estimated "Total Fund Operating Expenses"
for the Fund's Money, Dollar and Plus shares would be .49%, .74%, and .74%,
respectively, of the Fund's average daily net assets. The foregoing table has
not been audited by the Fund's independent accountants.
THE EXAMPLE SHOWN ABOVE SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST
OR FUTURE INVESTMENT RETURN OR OPERATING EXPENSES. ACTUAL INVESTMENT RETURN AND
OPERATING EXPENSES MAY BE MORE OR LESS THAN THOSE SHOWN.
3
<PAGE> 8
FINANCIAL HIGHLIGHTS
The tables of "Financial Highlights" below, a part of the Fund's financial
statements, set forth certain information concerning the historic investment
results for Money, Dollar and Plus shares. The financial highlights for the
fiscal years ended July 31, 1995, 1994, 1993, 1992 and 1991 have been audited by
Coopers & Lybrand L.L.P., the Fund's independent accountants, whose report
therein is contained in the Statement of Additional Information along with the
financial statements. This information should be read in conjunction with the
Fund's financial statements and notes for the year ended July 31, 1995, included
in the Statement of Additional Information. More information about the
performance of the Fund is also contained in the Annual Report to Shareholders,
which may be obtained without charge by calling 800-821-7432.
FINANCIAL HIGHLIGHTS
(For a Fund share outstanding throughout each period)
<TABLE>
<CAPTION>
MONEY SHARES
-----------------------------------------------------------------------------------------------------------
YEAR YEAR YEAR YEAR YEAR YEAR YEAR YEAR YEAR YEAR
ENDED ENDED ENDED ENDED ENDED ENDED ENDED ENDED ENDED ENDED
7/31/95 7/31/94 7/31/93 7/31/92 7/31/91 7/31/90 7/31/89 7/31/88 7/31/87 7/31/86
-------- -------- -------- -------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net Asset Value,
Beginning of
Year............... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
Income From
Investment
Operations:
Net Investment
Income......... 0.0338 0.0226 0.0230 0.0321 0.0441 0.0535 0.0548 0.0445 0.0385 0.0446
-------- -------- -------- -------- -------- -------- -------- -------- -------- --------
Total From
Investment
Operations..... 0.0338 0.0226 0.0230 0.0321 0.0441 0.0535 0.0548 0.0445 0.0385 0.0446
-------- -------- -------- -------- -------- -------- -------- -------- -------- --------
Less Distributions:
Dividends From
Net Investment
Income......... (0.0338) (0.0226) (0.0230) (0.0321) (0.0441) (0.0535) (0.0548) (0.0445) (0.0385) (0.0446)
-------- -------- -------- -------- -------- -------- -------- -------- -------- --------
Total
Distributions... (0.0338) (0.0226) (0.0230) (0.0321) (0.0441) (0.0535) (0.0548) (0.0445) (0.0385) (0.0446)
-------- -------- -------- -------- -------- -------- -------- -------- -------- --------
Net Asset Value, End
of Year............ $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
Total Returns....... 3.43% 2.29% 2.33% 3.26% 4.50% 5.48% 5.62% 4.52% 3.92% 4.58%
Ratios/Supplemental
Data:
Net Assets, End of
Year $(000)...... 246,650 279,483 204,670 267,655 284,834 310,289 287,641 315,111 347,173 329,665
Ratios of Expenses
to Average
Net Assets1...... 0.20% 0.20% 0.25%2 0.30% 0.30% 0.30% 0.30% 0.30% 0.31% 0.40%
Ratios of Net
Investment Income
to Average Daily
Net Assets....... 3.36% 2.28% 2.31% 3.20% 4.42% 5.35% 5.45% 4.46% 3.84% 4.45%
</TABLE>
- ---------------
1 Annualized operating expense ratios before waivers of fees by the Investment
Adviser and Administrator for Money shares for the years ended July 31, 1995,
1994, 1993, 1992, 1991, 1990, 1989, 1988, 1987 and 1986 were .49%, .48%, .51%,
.49%, .49%, .49%, .49%, .49%, .50% and .50% respectively.
2 Expense limitation for Money shares was lowered to .20% of the Portfolio's
average daily net assets, effective January 18, 1993.
4
<PAGE> 9
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
DOLLAR SHARES
-----------------------------------------------------------------------------------------------------------
YEAR YEAR YEAR YEAR YEAR YEAR YEAR YEAR YEAR PERIOD
ENDED ENDED ENDED ENDED ENDED ENDED ENDED ENDED ENDED ENDED
7/31/955 7/31/945 7/31/93 7/31/92 7/31/91 7/31/90 7/31/89 7/31/88 7/31/87 7/31/861
-------- -------- -------- -------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net Asset Value,
Beginning of
Year............... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
Income From
Investment
Operations:
Net Investment
Income......... 0.000 0.0127 0.0205 0.0296 0.0416 0.0510 0.0523 0.0420 0.0360 0.0109
-------- -------- -------- -------- -------- -------- -------- -------- -------- --------
Total From
Investment
Operations..... 0.000 0.0127 0.0205 0.0296 0.0416 0.0510 0.0523 0.0420 0.0360 0.0109
-------- -------- -------- -------- -------- -------- -------- -------- -------- --------
Less Distributions:
Dividends From
Net Investment
Income......... 0.00 (0.0127) (0.0205) (0.0296) (0.0416) (0.0510) (0.0523) (0.0420) (0.0360) (0.0109)
-------- -------- -------- -------- -------- -------- -------- -------- -------- --------
Total
Distributions... 0.00 (0.0127) (0.0205) (0.0296) (0.0416) (0.0510) (0.0523) (0.0420) (0.0360) (0.0109)
-------- -------- -------- -------- -------- -------- -------- -------- -------- --------
Net Asset Value, End
of Year............ $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
Total Returns....... -- 1.96% 2.08% 3.01% 4.25% 5.23% 5.37% 4.27% 3.67% 4.33%
Ratios/Supplemental
Data:
Net Assets, End of
Year $(000)...... -- -- 46,509 50,094 54,613 69,705 70,839 82,618 87,715 8,299
Ratios of Expenses
to Average
Net Assets3...... -- 0.45%2 0.50%4 0.55% 0.55% 0.55% 0.55% 0.55% 0.56% 0.65%2
Ratios of Net
Investment Income
to Average Daily
Net Assets....... -- 1.94%2 2.06% 2.95% 4.17% 5.10% 5.20% 4.21% 3.59% 3.63%2
</TABLE>
- ---------------
1 The first public issuance of Dollar Shares occurred on April 14, 1986.
2 Annualized.
3 Annualized operating expense ratios before waivers of fees by the Investment
Adviser and Administrator for Dollar shares for the years ended July 31, 1994,
1993, 1992, 1991, 1990, 1989, 1988, 1987 and for the period ended July 31,
1986 were .73%, .76%, .74%, .74%, .74%, .74%, .74%, .75% and .75%,
respectively.
4 Expense limitation for Dollar shares was lowered to .45% of the Portfolio's
average daily net assets, effective January 18, 1993.
5 There were no shares outstanding during the period from March 28, 1994 to July
31, 1995.
5
<PAGE> 10
<TABLE>
<CAPTION>
PLUS SHARES
-----------------------------------------------------------------------------------------------------------
YEAR YEAR YEAR YEAR YEAR YEAR YEAR YEAR YEAR PERIOD
ENDED ENDED ENDED ENDED ENDED ENDED ENDED ENDED ENDED ENDED
7/31/955 7/31/94 7/31/93 7/31/92 7/31/91 7/31/90 7/31/89 7/31/88 7/31/87 7/31/861
-------- -------- -------- -------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net Asset Value,
Beginning of
Year............... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
Income From
Investment
Operations:
Net Investment
Income......... 0.0090 0.0201 0.0205 0.0296 0.0416 0.0510 0.0523 0.0420 0.0360 0.0303
-------- -------- -------- -------- -------- -------- -------- -------- -------- --------
Total From
Investment
Operations..... 0.0090 0.0201 0.0205 0.0296 0.0416 0.0510 0.0523 0.0420 0.0360 0.0303
-------- -------- -------- -------- -------- -------- -------- -------- -------- --------
Less Distributions:
Dividends From
Net Investment
Income......... (0.0090) (0.0201) (0.0205) (0.0296) (0.0416) (0.0510) (0.0523) (0.0420) (0.0360) (0.0303)
-------- -------- -------- -------- -------- -------- -------- -------- -------- --------
Total
Distributions... (0.0090) (0.0201) (0.0205) (0.0296) (0.0416) (0.0510) (0.0523) (0.0420) (0.0360) (0.0303)
-------- -------- -------- -------- -------- -------- -------- -------- -------- --------
Net Asset Value, End
of Year............ $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
Total Returns....... 2.69%2 2.04% 2.08% 3.01% 4.25% 5.23% 5.37% 4.27% 3.67% 4.33%
Ratios/Supplemental
Data:
Net Assets, End of
Year $(000)...... -- 435 1,481 243 461 404 513 1,381 606 578
Ratios of Expenses
to Average
Net Assets3...... 0.45%2 0.45% 0.50%4 0.55% 0.55% 0.55% 0.55% 0.55% 0.56% 0.65%2
Ratios of Net
Investment Income
to Average Daily
Net Assets....... 2.64%2 2.03% 2.06% 2.95% 4.17% 5.10% 5.20% 4.21% 3.59% 4.05%2
</TABLE>
- ---------------
1 The first public issuance of Plus Shares occurred on November 15, 1985.
2 Annualized.
3 Annualized operating expense ratios before waivers of fees by the Investment
Adviser and Administrator for Plus shares for the years ended July 31, 1995,
1994, 1993, 1992, 1991, 1990, 1989, 1988, 1987 and for the period ended July
31, 1986 were .74%, .73%, .76%, .74%, .74%, .74%, .74%, .74%, .75% and .75%,
respectively.
4 Expense limitation for Plus shares was lowered to .45% of the Portfolio's
average daily net assets, effective January 18, 1993.
5 There were no Plus shares outstanding during the period from December 2, 1994
to July 31, 1995.
6
<PAGE> 11
INVESTMENT OBJECTIVE AND POLICIES
IN GENERAL
The Fund is a no-load, open-end, non-diversified investment company which
has an investment objective to provide investors with as high a level of current
interest income that is exempt from Federal income tax and, to the extent
possible, from New York State and New York City personal income taxes as is
consistent with the preservation of capital and relative stability of principal.
There can be, of course, no assurance that the Fund will achieve its investment
objective.
Substantially all of the Fund's assets are invested in debt obligations
issued by or on behalf of the State of New York and other states, territories,
and possessions of the United States, the District of Columbia, and their
respective authorities, agencies, instrumentalities and political subdivisions,
and tax-exempt derivative securities such as tender option bonds,
participations, beneficial interests in trusts and partnership interests
(collectively, "Municipal Obligations"). Dividends paid by the Fund that are
derived from interest on obligations that is exempt from taxation under the
Constitution or statutes of New York ("New York Municipal Obligations") are
exempt from regular Federal, New York State and New York City personal income
tax. New York Municipal Obligations include municipal securities issued by the
State of New York and its political sub-divisions, as well as certain other
governmental issuers such as the Commonwealth of Puerto Rico. Dividends derived
from interest on Municipal Obligations other than New York Municipal Obligations
are exempt from Federal income tax but may be subject to New York State and New
York City personal income tax. (See, however, "Taxes" below concerning treatment
of exempt-interest dividends paid by the Fund for purposes of the Federal
alternative minimum tax applicable to particular classes of investors.) The Fund
expects that, except during temporary defensive periods or when acceptable
securities are unavailable for investment by the Fund, the Fund's assets will be
invested primarily in New York Municipal Obligations, although the amount of the
Fund's assets invested in such securities will vary from time to time.
The Fund will not knowingly purchase securities the interest on which is
subject to Federal income tax; however, the Fund may hold uninvested cash
reserves pending investment during temporary defensive periods or, if in the
opinion of the Fund's investment adviser, suitable tax-exempt obligations are
unavailable. Uninvested cash reserves will not earn income.
The Fund invests in Municipal Obligations which are determined by the
Fund's investment adviser to present minimal credit risks pursuant to guidelines
approved by the Fund's Board of Directors pursuant to Rule 2a-7 under the
Investment Company Act of 1940, as amended (the "1940 Act"). Pursuant to these
guidelines, the Fund is authorized to purchase instruments that are determined
to have minimum credit risk and which are "Eligible Securities" under the Rule.
"Eligible securities" are (i) instruments which are rated at the time of
purchase in one of the top two rating categories by two unaffiliated nationally
recognized statistical rating organizations ("NRSROs"), (ii) instruments rated
in one of the top two rating categories by one such NRSRO (if only one such
organization rates the instrument), (iii) instruments issued by issuers with
short-term debt having such ratings, and (iv) unrated instruments determined by
the investment adviser, pursuant to procedures approved by the Board of
Directors, to be of comparable quality to such instruments. (See the Appendix to
the Statement of Additional Information for a description of applicable NRSRO
ratings.)
The Fund intends to use its best efforts to maintain its net asset value at
$1.00 per share, and computes its net asset value using the amortized cost
method. In connection with its use of this
7
<PAGE> 12
valuation method, the Fund limits the dollar-weighted average maturity of its
portfolio to not more than 90 days and the remaining maturity of each portfolio
security to not more than 13 months (with certain exceptions).
The Fund's investment objective and the policies described herein may be
changed by its Board of Directors without the affirmative vote of the holders of
a majority of the Fund's outstanding shares, except that the Fund may not change
the following investment limitations without such a vote of shareholders. The
Fund may not:
1. Invest less than 80% of its assets in securities the interest on
which is exempt from Federal income tax, except during defensive periods or
during periods of unusual market conditions.
2. Purchase the securities of any issuer if as a result more than 5%
of the value of the Fund's total assets would be invested in the securities
of such issuer, except that (a) up to 50% of the value of the Fund's total
assets may be invested without regard to this 5% limitation provided that
no more than 25% of the value of the Fund's total assets are invested in
the securities of any one issuer and (b) this 5% limitation does not apply
to securities issued or guaranteed by the U.S. Government, its agencies or
instrumentalities. For purposes of this limitation, a security is
considered to be issued by the governmental entity (or entities) whose
assets and revenues back the security, or, with respect to a private
activity bond that is backed only by the assets and revenues of a
non-governmental user, by such non-governmental user. In certain
circumstances, the guarantor of a guaranteed security may also be
considered to be an issuer in connection with such guarantee, except that a
guarantee of a security shall not be deemed to be a security issued by the
guarantor when the value of all securities issued and guaranteed by the
guarantor, and owned by the Fund, does not exceed 10% of the value of the
Fund's total assets.
3. Borrow money except from banks for temporary purposes and then in
amounts not in excess of 10% of the value of the Fund's assets at the time
of such borrowing; or mortgage, pledge or hypothecate any assets except in
connection with any such borrowing and in amounts not in excess of the
lesser of the dollar amounts borrowed or 10% of the value of the Fund's
assets at the time of such borrowing. (This borrowing provision is not
intended for investment leverage, but solely to facilitate management of
the Fund's portfolio by enabling the Fund to meet redemption requests when
the liquidation of portfolio securities is deemed to be disadvantageous or
inconvenient, and hence the Fund may not purchase any portfolio securities
while its borrowings are outstanding.)
4. Invest more than 10% of the value of the Fund's total assets in
illiquid securities which may be illiquid in light of legal or contractual
restrictions on resale or the absence of readily available market
quotations.
5. Purchase any securities, except securities issued by the United
States, any state, territory or possession of the United States, the
District of Columbia or any of their authorities, agencies,
instrumentalities or political subdivisions, which would cause more than
25% of the value of the Fund's total assets at the time of purchase to be
invested in the securities of issuers conducting their principal business
activities in the same industry.
Opinions relating to validity of Municipal Obligations and to the exemption
of interest thereon from Federal income tax (and, with respect to New York
Municipal Obligations, to the exemption of interest thereon from New York State
and New York City personal income taxes) are rendered by bond counsel to the
respective issuers at the time of issuance, and opinions relating to the
validity of
8
<PAGE> 13
and the tax-exempt status of payments received by the Fund from tax-exempt
derivatives are rendered by counsel to the respective sponsors of such
derivatives. The Fund and its investment adviser will rely on such opinions and
will not review independently the underlying proceedings relating to the
issuance of Municipal Obligations, the creation of any tax-exempt derivative
securities, or the bases for such opinions.
TYPES OF MUNICIPAL OBLIGATIONS
The two principal classifications of Municipal Obligations that may be held
by the Fund are "general obligation" securities and "revenue" securities.
General obligation securities are secured by the issuer's pledge of its full
faith, credit and taxing power for the payment of principal and interest.
Revenue securities are payable only from the revenues derived from a particular
facility or class of facilities or, in some cases, from the proceeds of a
special excise tax or other specific revenue source such as the user of the
facility being financed. Revenue securities may include private activity bonds.
Such bonds may be issued by or on behalf of public authorities to finance
various privately operated facilities and are not payable from the unrestricted
revenues of the issuer. As a result, the credit quality of private activity
bonds is frequently related directly to the credit standing of private
corporations or other entities.
The Fund's portfolio may also include "moral obligation" securities, which
are normally issued by special purpose public authorities. If the issuer of
moral obligation securities is unable to meet its debt service obligations from
current revenues, it may draw on a reserve fund, the restoration of which is a
moral commitment but not a legal obligation of the state or municipality that
created the issuer.
OTHER INVESTMENT PRACTICES
Municipal Obligations purchased by the Fund may include variable and
floating rate demand instruments issued by industrial development authorities
and other governmental entities and which provide for adjustments in the
interest rate on certain reset dates or whenever a specified interest rate index
changes, respectively. Variable and floating rate instruments are subject to the
credit quality standards described above. In some cases the Fund may require
that the obligation to pay the principal of the instrument be backed by a letter
or line of credit or guarantee. Such instruments may carry stated maturities in
excess of 397 days provided that the maturity-shortening provisions stated in
Rule 2a-7 are satisfied. Although a particular variable or floating rate demand
instrument may not be actively traded in a secondary market, in some cases, the
Fund may be entitled to principal on demand and may be able to resell such
instruments in the dealer market.
The Fund may also purchase Municipal Obligations on a "when-issued" basis.
When-issued securities are securities purchased for delivery beyond the normal
settlement date at a stated price and yield. The Fund generally will not pay for
such securities or start earning interest on them until they are received.
Securities purchased on a when-issued basis are recorded as an asset and are
subject to changes in value based upon changes in the general level of interest
rates. The Fund expects that commitments to purchase when-issued securities will
not exceed 25% of the value of its total assets absent unusual market
conditions, and that a commitment by the Fund to purchase when-issued securities
will not exceed 45 days. The Fund does not intend to purchase when-issued
securities for speculative purposes but only in furtherance of its investment
objective.
In addition, the Fund may acquire "stand-by commitments" with respect to
Municipal Obligations held in its portfolio. Under a stand-by commitment, a
dealer agrees to purchase at the Fund's option
9
<PAGE> 14
specified Municipal Obligations at a price equal to their amortized cost value
plus accrued interest. The Fund will acquire stand-by commitments solely to
facilitate portfolio liquidity and does not intend to exercise its rights
thereunder for trading purposes.
RISK FACTORS
The Fund intends to follow the diversification standards set forth in the
1940 Act except to the extent, in the investment adviser's judgment, that
non-diversification is appropriate in order to maximize the percentage of the
Fund's assets that are New York Municipal Obligations. The investment return on
a non-diversified portfolio typically is dependent upon the performance of a
smaller number of issuers relative to the number of issuers held in a
diversified portfolio. In the event of changes in the financial condition of or
in the market's assessment of certain issuers, the Fund's maintenance of large
positions in the obligations of a small number of issuers may affect the value
of the Fund's portfolio to a greater extent than that of a diversified
portfolio.
Although the Fund does not presently intend to do so on a regular basis, it
may invest more than 25% of its assets in Municipal Obligations the interest on
which is paid solely from revenues of similar projects if such investment is
deemed necessary or appropriate by the Fund's investment adviser. To the extent
that the Fund's assets are concentrated in Municipal Obligations payable from
revenues on similar projects, the Fund will be subject to the peculiar risks
presented by such projects to a greater extent than it would be if the Fund's
assets were not so concentrated.
Certain other risks with respect to portfolio securities which may be held
by the Fund from time to time are discussed herein and in the Statement of
Additional Information.
SPECIAL CONSIDERATIONS AFFECTING THE FUND
The Fund's ability to achieve its investment objective is dependent upon
the ability of the issuers of New York Municipal Obligations to meet their
continuing obligations for the payment of principal and interest. New York State
and New York City face long-term economic problems that could seriously affect
their ability and that of other issuers of New York Municipal Obligations to
meet their financial obligations.
Certain substantial issuers of New York Municipal Obligations (including
issuers whose obligations may be acquired by the Fund) have experienced serious
financial difficulties in recent years. These difficulties have at times
jeopardized the credit standing and impaired the borrowing abilities of all New
York issuers and have generally contributed to higher interest costs for their
borrowing and fewer markets for their outstanding debt obligations. In recent
years, several different issues of municipal securities of New York State and
its agencies and instrumentalities and of New York City have been downgraded by
Standard & Poor's Ratings Group ("S&P") and Moody's Investors Service, Inc.
("Moody's"). On the other hand, strong demand for New York Municipal Obligations
has more recently had the effect of permitting New York Municipal Obligations to
be issued with yields relatively lower, and after issuance, to trade in the
market at prices relatively higher, than comparably rated municipal obligations
issued by other jurisdictions. A recurrence of the financial difficulties
previously experienced by certain issuers of New York Municipal Obligations
could result in defaults or declines in the market values of those issuers'
existing obligations and, possibly, in the obligations of other issuers of New
York Municipal Obligations. Although as of the date of this Prospectus, no
issuers of New York Municipal Obligations are in default with respect to the
payment of their municipal obligations, the occurrence of any such default could
affect adversely the market values and
10
<PAGE> 15
marketability of all New York Municipal Obligations and, consequently, the net
asset value of the Fund's portfolio.
Other considerations affecting the Fund's investments in New York Municipal
Obligations are summarized in the Statement of Additional Information.
PURCHASE OF SHARES
The Fund's shares are sold to institutional investors at the net asset
value per share next determined after receipt of a purchase order by PFPC, the
Fund's transfer agent.
Purchase orders for shares will be accepted by the Fund only on a day on
which both the New York Stock Exchange and the Federal Reserve Bank of
Philadelphia are open for business (a "Business Day"), and must be transmitted
to PFPC by telephone at 800-441-7450 (in Delaware: 302-478-6945). Orders
received by PFPC by Noon, Eastern Time, will be executed the same day if PNC
Bank, National Association ("PNC Bank"), the Fund's Custodian, has received
payment by 4:00 P.M., Eastern Time, that day. Orders received after Noon,
Eastern Time, and orders for which payment has not been received by 4:00 P.M.,
Eastern Time, will not be accepted and notice thereof will be given to the
institution placing the order. Payment for shares may be made only in Federal
funds or other funds immediately available to PNC Bank. Payment for orders which
are not received or accepted will be returned after prompt inquiry by PNC Bank
to the sending institution.
The minimum initial investment is $5,000; however, broker-dealers and other
institutional investors may set a higher minimum for their customers. There is
no minimum subsequent investment. The Fund may in its discretion reject any
order for shares.
Conflict of interest restrictions may apply to an institution's receipt of
compensation paid by the Fund in connection with the investment of fiduciary
funds in Dollar or Plus shares. Institutions, including banks regulated by the
Comptroller of the Currency and investment advisers and other money managers
subject to the jurisdiction of the Securities and Exchange Commission, the
Department of Labor or state securities commissions, should consult legal
counsel before investing in Dollar or Plus shares. (See also "Management of the
Fund -- Banking Laws.")
REDEMPTION OF SHARES
REDEMPTION PROCEDURES
Redemption orders must be transmitted to PFPC by telephone in the manner
described under "Purchase of Shares." Shares are redeemed at the net asset value
per share next determined after receipt of the redemption order by PFPC. While
the Fund intends to use its best efforts to maintain the net asset value per
share of each of its series at $1.00, the proceeds paid upon redemption may be
more or less than the amount invested depending upon a share's net asset value
at the time of redemption.
Payment for redeemed shares for which a redemption order is received by
PFPC prior to Noon, Eastern Time, on a Business Day is normally made in Federal
funds wired to the redeeming shareholder on the same business day. Payment for
redeemed shares for which a redemption order is received by PFPC after Noon,
Eastern Time, on such a business day or on a day that PNC Bank is closed is
normally made in Federal funds wired to the redeeming shareholder on the next
day that PNC Bank is open. The Fund reserves the right to wire redemption
proceeds within 7 days after
11
<PAGE> 16
receiving the redemption order if, in the judgment of the Fund's administrator,
an earlier payment could adversely affect the Fund.
The Fund may suspend the right of redemption or postpone the date of
payment upon redemption (as well as suspend or postpone the recordation of the
transfer of its shares) for such periods as are permitted under the 1940 Act.
The Fund reserves the right to redeem the shares of the Fund owned by a
shareholder at their net asset value if the value of such shares is less than
$4,000. Any such shareholder will first be notified in writing that its shares
have a value of less than $4,000 and be allowed 60 days to make an additional
investment before the redemption is processed by the Fund. The Fund may also
redeem shares involuntarily (and restrict the transfer of the shares) under
certain special circumstances described in the Statement of Additional
Information under "Additional Purchase and Redemption Information."
OTHER MATTERS
The Fund's net asset value per share for purposes of pricing purchase and
redemption orders is determined by PNC Institutional Management Corporation
("PIMC") as of Noon and 4:00 P.M., Eastern Time, on each Business Day (excluding
those holidays on which the Federal Reserve Bank of Philadelphia or the New York
Stock Exchange is closed). Currently, one or both of these institutions are
closed on the customary national business holidays. The net asset value per
share of each of the Fund's series is the same and is calculated by adding the
value of all of the Fund's portfolio securities and other assets, subtracting
liabilities (including the liability for the expenses of each series and
dividends declared with respect to each series) and dividing the result by the
number of the Fund's outstanding shares of such series. Portfolio securities are
valued on the basis of amortized cost. Under this method, the Fund values a
portfolio security at cost on the date of purchase and thereafter assumes a
constant amortization of any discount or premium until maturity of the security.
As a result, the value of the security for purposes of determining net asset
value normally does not change in response to fluctuating interest rates. While
the amortized cost method seems to provide certainty in portfolio valuation, it
may result in periods during which values, as determined by amortized cost, are
higher or lower than the amount the Fund would receive if it sold the
securities.
Shares of each of the Fund's series are sold and redeemed without charge by
the Fund, although Service Organizations (see below) and other institutional
investors purchasing or holding Fund shares for their customers' accounts may
charge customers for cash management and other services provided in connection
with their accounts including, for example, account maintenance fees,
compensating balance requirements or fees based upon account transactions,
assets or income. Such charges will reduce the yield of the Fund to such
customers. A customer should therefore read this Prospectus in light of the
terms governing its account with a Service Organization (or other institution)
before purchasing Fund shares. An institution purchasing or redeeming Fund
shares on behalf of its customers is responsible for transmitting orders to the
Fund in accordance with its agreements with the customers.
12
<PAGE> 17
MANAGEMENT OF THE FUND
BOARD OF DIRECTORS
The business and affairs of the Fund are managed under the direction of its
Board of Directors.
The directors of the Fund are as follows:
Francis E. Drake, Jr. is the retired Chairman of the Board and Chief
Executive Officer of Rochester Gas and Electric Corp.
Rodney D. Johnson is President of Fairmount Capital Advisors, Inc.
Thomas A. Melfe is a Partner of the law firm of Donovan Leisure Newton
& Irvine.
Anthony M. Santomero is the Richard K. Mellon Professor of Finance at
The Wharton School, University of Pennsylvania.
INVESTMENT ADVISER AND SUB-ADVISER
PIMC, a wholly-owned subsidiary of PNC Asset Management Group, Inc., which
is in turn a wholly-owned subsidiary of PNC Bank, serves as the Fund's
investment adviser. PIMC was organized in 1977 by PNC Bank to perform advisory
services for investment companies, and has its principal offices at Bellevue
Park Corporate Center, 400 Bellevue Parkway, Wilmington, Delaware 19809. PNC
Asset Management Group, Inc.'s principal business address is 1835 Market Street,
Philadelphia, Pennsylvania 19102. PNC Bank serves as the Fund's sub-adviser. PNC
Bank and its predecessors have been in the business of managing the investments
of fiduciary and other accounts in the Philadelphia area since 1847. PNC Bank is
an indirect, wholly-owned subsidiary of PNC Bank Corp. and its principal
business address is Broad and Chestnut Streets, Philadelphia, Pennsylvania
19102. PNC Bank Corp. is a multi-bank holding company.
PNC Bank Corp., headquartered in Pittsburgh, Pennsylvania, is the eleventh
largest bank holding company in the United States. Categorized as a super
regional bank holding company, PNC Bank Corp. operates over 500 branch offices
in six U.S. states.
PNC Financial Services Group is PNC Bank Corp.'s mutual fund complex,
headquartered in Wilmington, Delaware. This group includes PIMC, PFPC and PNC
Bank. In 1973, Provident National Bank (predecessor to PNC Bank) commenced
advising the first institutional money market mutual fund--a U.S.
dollar-denominated constant net asset value fund--offered in the United States.
The PNC Financial Services Group is one of the largest U.S. bank managers
of mutual funds with assets currently under management in excess of $30 billion.
This group, through PFPC and PFPC International Ltd. is also a leading mutual
fund service provider having contractual relationships with approximately 400
mutual funds with 3.5 million shareholders and in excess of $106 billion in
assets. This group, through its PNC Institutional Investment Service, provides
investment research to some 250 financial institutions located in the United
States and abroad. PNC Bank provides custodial services for approximately $217
billion in assets, including $106 billion in mutual fund assets.
In its advisory agreement with the Fund, PIMC has agreed to manage the
Fund's portfolio and to be responsible for, make decisions with respect to and
place orders for all purchases and sales of the Fund's portfolio securities.
PIMC also computes the Fund's net asset value and net income, and maintains
certain of the Fund's financial accounts and records. For the services provided
and expenses assumed pursuant to the advisory agreement, PIMC is entitled to
receive a fee, computed daily and
13
<PAGE> 18
payable monthly, at the annual rate of .20% of the Fund's average daily net
assets. For the fiscal year ended July 31, 1995, the Fund paid advisory fees to
PIMC (after fee waivers) of .06% of the Fund's average daily net assets. PIMC
and the administrators have voluntarily agreed to reduce the advisory and
administration fees otherwise payable to them and to reimburse the Fund for its
operating expenses to the extent necessary to ensure that its annual operating
expense ratio does not exceed .20% of the Fund's average daily net assets with
respect to Money shares, and does not exceed .45% of such net assets with
respect to each of the Dollar shares and Plus shares.
As sub-adviser, PNC Bank has agreed to: (i) provide investment research and
credit analysis concerning the Fund's investments; (ii) make recommendations
with respect to the Fund's continuous investment program; (iii) supply PIMC with
computer facilities and operating personnel; and (iv) provide PIMC with such
statistical services as PIMC may from time to time reasonably request. As
compensation therefore, PIMC has agreed to pay PNC Bank an amount equal to 75%
of the advisory fee paid by the Fund to PIMC, as adjusted quarterly to ensure
that PIMC has income before taxes from all sources of at least $22,500 during
each quarter.
ADMINISTRATORS
PFPC whose principal business address is 400 Bellevue Parkway, Wilmington,
Delaware 19809 and PDI, whose principal business address is 259 Radnor-Chester
Road, Suite 120, Radnor, Pennsylvania 19087, serve as co-administrators. PFPC is
an indirect wholly-owned subsidiary of PNC Bank Corp. A majority of the
outstanding stock of PDI is owned by its officers.
As co-administrators, PFPC and PDI have agreed to: assist in maintaining
office facilities for the Fund; furnish the Fund with statistical and research
data and clerical and certain other services required by the Fund; perform
administrative services in connection with the Fund's computer access program
maintained to facilitate shareholder access to the Fund; monitor the
arrangements pertaining to the Fund's agreements with Service Organizations;
prepare semi-annual reports to the Securities and Exchange Commission, Federal
and state tax returns and filings with state securities commissions; arrange for
and bear the cost of processing share purchase and redemption orders; and
generally assist in the Fund's operations.
For their administrative services, the administrators are entitled jointly
to receive a fee, computed daily and payable monthly, from the Fund determined
in the same manner as PIMC's advisory fee described above. (For information
regarding the administrators' obligations to waive administrative fees otherwise
payable to them and to reimburse the Fund for operating expenses, see
"Investment Adviser and Sub-Adviser" above.) For the fiscal year ended July 31,
1995, the Fund paid PFPC and PDI administrative fees (after fee waivers)
aggregating .06% of its average daily net assets. The Fund expects to reimburse
the administrators for reasonable out-of-pocket expenses incurred in connection
with the Fund's computer access program.
DISTRIBUTOR
PDI serves as distributor of the Fund's shares. Its principal offices are
located at 259 Radnor-Chester Road, Suite 120, Radnor, Pennsylvania 19087. Fund
shares are sold on a continuous basis by the Distributor as agent. The
Distributor pays the cost of printing and distributing prospectuses to persons
who are not shareholders of the Fund (excluding preparation and printing
expenses necessary for the continued registration of the Fund's shares) and of
printing and distributing all sales literature. No compensation is payable by
the Fund to the distributor for its distribution services.
14
<PAGE> 19
CUSTODIAN AND TRANSFER AGENT
PNC Bank serves as the custodian of the Fund's assets, and PFPC, an
indirect, wholly-owned subsidiary of PNC Bank Corp., serves as the Fund's
transfer and dividend disbursing agent. The Fund compensates PNC Bank and PFPC
for their services, and reimburses PFPC for its out-of-pocket expenses incurred
in connection with its transfer agency and dividend disbursing services.
Communications to PFPC, including any election to reinvest dividends in
additional shares of the Fund, should be directed to PFPC Inc., P.O. Box 8950,
Wilmington, Delaware 19899.
SERVICE ORGANIZATIONS
As stated above, institutional investors ("Service Organizations") may
purchase Dollar or Plus shares offered by the Fund. Dollar shares are sold to
institutions other than broker/dealers, and Plus shares are sold to
broker/dealers, both of which enter into servicing agreements with the Fund
requiring them to provide support services to their customers who are the
beneficial owners of such shares in consideration for .25% (on an annualized
basis) of the average daily net asset value of the Dollar or Plus shares held by
the Service Organizations for the benefit of their customers. Such services,
which are described more fully in the Statement of Additional Information under
"Management of the Fund--Service Organizations," include aggregating and
processing purchase and redemption requests from customers and placing net
purchase and redemption orders with PFPC; processing dividend payments from the
Fund on behalf of customers; providing information periodically to customers
showing their positions in Dollar or Plus shares; and providing sub-accounting
with respect to shares beneficially owned by customers or the information
necessary for sub-accounting. In addition, broker/dealers purchasing Plus shares
may be requested to provide from time to time assistance (such as the forwarding
of sales literature and advertising to their customers) in connection with the
distribution of Plus shares. Under the terms of the agreements, Service
Organizations are required to provide to their customers a schedule of any fees
that they may charge such customers relating to the investment of such
customers' assets in Dollar or Plus shares. Money shares offered by the Fund may
be purchased by any type of institutional investor (including banks and
broker/dealers) which do not wish to enter into such servicing agreements with
the Fund in connection with their investments.
EXPENSES
Except as noted above, the Fund's service contractors bear all expenses in
connection with the performance of their services. The Fund bears the expenses
incurred in its operations. The ratios of the Fund's expenses to its average
annual net assets for the fiscal year ended July 31, 1995 were .20% for the
Fund's Money shares, and would have been .45% for each of the Dollar shares and
Plus shares. (No Dollar shares were outstanding during the year, and no Plus
shares were outstanding after December 1, 1994.) Without the waiver of advisory
and administrative fees described above, such ratios would have been .49%, .74%
(estimated) and .74% (estimated) for the Fund's Money, Dollar and Plus shares,
respectively.
BANKING LAWS
Banking laws and regulations currently prohibit a bank holding company
registered under the Federal Bank Holding Company Act of 1956 or any bank or
non-bank affiliate thereof from sponsoring, organizing, controlling or
distributing the shares of a registered, open-end investment company
continuously engaged in the issuance of its shares, and prohibit banks generally
from issuing,
15
<PAGE> 20
underwriting, selling or distributing securities, but such banking laws and
regulations do not prohibit such a holding company or affiliate or banks
generally from acting as the investment adviser, transfer agent or custodian to
such an investment company, or from purchasing shares of such a company as agent
for and upon the order of customers. PNC Bank, PIMC, PFPC, as well as certain
Service Organizations (i.e., banks), are subject to such banking laws and
regulations.
Should future legislative, judicial or administrative action prohibit or
restrict the activities of bank
Service Organizations in connection with the provision of support services to
their customers, the Fund
might be required to alter or discontinue its arrangements with Service
Organizations generally and
change its method of operations. It is not anticipated, however, that any change
in the Fund's method
of operations would affect its net asset value per share or result in a
financial loss to any customer.
DIVIDENDS
The Fund's net income is declared daily as a dividend to the holders of
record of each of the Fund's series of shares at the close of business on the
day of declaration. Dividends on each share of each Series are determined in the
same manner. Dollar shares bear all the expense of fees paid to Service
Organizations for their services with respect to Dollar shares, and Plus shares
bear all the expense of fees paid to Service Organizations with respect to Plus
shares. (See "Management of the Fund-Service Organizations.") Shares of each
series begin accruing dividends on the day the purchase order for the shares is
executed and continue to accrue dividends through, and including, the day before
the redemption order for the shares is executed. Dividends are paid monthly by
check, or by wire transfer if requested in writing by the shareholder, within 5
business days after the end of the month or within 5 business days of the
redemption of all of a shareholder's shares of a series. The Fund does not
expect to realize net long-term capital gains.
Institutional shareholders may elect to have their dividends reinvested in
additional full and fractional shares of the same series with respect to which
dividends are declared valued at their net asset value on the payment date.
Reinvested dividends receive the same tax treatment as dividends paid in cash.
Such election, or any revocation thereof, must be made in writing to PFPC, and
will become effective with respect to dividends paid after its receipt by PFPC.
TAXES
The Fund qualified in its last taxable year and intends to qualify in
future years as a "regulated investment company" under the Internal Revenue Code
of 1986, as amended (the "Code"). Such qualification generally relieves the Fund
of liability for Federal income taxes to the extent its earnings are distributed
in accordance with the Code. Qualification as a regulated investment company for
a taxable year requires, among other things, that the Fund distribute an amount
equal to at least the sum of 90% of its exempt-interest income net of certain
deductions and 90% of its investment company taxable income for such year, which
the Fund intends to do. Federal exempt-interest dividends may be treated by the
Fund's shareholders as items of interest excludable from their gross income
under Section 103(a) of the Code, unless under the circumstances applicable to
the particular shareholder exclusion would be disallowed. (See Statement of
Additional Information under "Additional Information Concerning Taxes").
If the Fund should hold certain "private activity bonds" issued after
August 7, 1986, the portion of dividends attributable to interest on such bonds
must be included in a shareholder's Federal alternative minimum taxable income,
as an item of tax preference, for the purpose of determining liability (if any)
16
<PAGE> 21
for the 26% to 28% alternative minimum tax for individuals and the 20%
alternative minimum tax and the environmental tax applicable to corporations.
Corporate shareholders also must take all exempt-interest dividends into account
in determining certain adjustments for Federal alternative minimum and
environmental tax purposes. The environmental tax applicable to corporations is
imposed at the rate of .12% on the excess of the corporation's modified Federal
alternative minimum taxable income over $2 million. Shareholders receiving
Social Security benefits should note that all exempt-interest dividends will be
taken into account in determining the taxability of such benefits.
Exempt-interest dividends derived from interest on New York Municipal
Obligations will be exempt from New York State and New York City personal income
taxes (but not corporate franchise taxes), provided the interest on such
obligations is and continues to be excluded or exempt from applicable Federal
income taxation and New York State and New York City income taxation. Dividends
and distributions derived from taxable income and capital gains, if any, are not
exempt from Federal income tax or from New York State and New York City taxes.
Interest on indebtedness incurred or continued by a shareholder to purchase or
carry shares of the Fund is not deductible for Federal, New York State or New
York City personal income tax purposes. Except as noted with respect to New York
State and New York City personal income taxes, dividends and distributions paid
to shareholders that are derived from income on Municipal Obligations may be
taxable income under state or local law even though all or a portion of such
dividends or distributions may be derived from interest on tax-exempt
obligations that, if paid directly to shareholders, would be tax-exempt income.
Shareholders will be advised at least annually as to the Federal income
tax, as well as the New York State and New York City personal income tax, status
and consequences of dividends and distributions made each year.
The foregoing is only a brief summary of some of the important tax
considerations generally affecting the Fund and its shareholders. No attempt is
made to present a detailed explanation of the Federal, state or local income tax
treatment of the Fund or its shareholders, and this discussion is not intended
as a substitute for careful tax planning. Accordingly, potential investors in
the Fund should consult their tax advisers with specific reference to their own
tax situations.
DESCRIPTION OF SHARES AND MISCELLANEOUS
The Fund's Charter authorizes the Board of Directors to issue up to 2
billion full and fractional shares of capital stock, $.001 par value per share,
and to classify or reclassify any unissued shares of the Fund into one or more
classes or series by setting or changing in any one or more respects their
respective preferences, conversion or other rights, voting powers, restrictions,
limitations as to dividends, qualifications and terms and conditions of
redemption. Pursuant to such authority, the Board of Directors has classified
1.4 billion of its shares as Money shares (Class A Common Stock), 300 million of
its shares as Dollar shares (Class A Common Stock-Special Series 1) and 300
million of its shares as Plus shares (Class A Common Stock-Special Series 2).
Each New York Money, Dollar and Plus share represents an equal
proportionate interest in the assets of the Fund. Shareholders of each series
are entitled to participate equally in any dividend or distribution declared by
the Fund's Board of Directors except as provided under "Dividends" and in the
net distributable assets of the Fund on liquidation. Fund shares have no
pre-emptive rights and only such conversion and exchange rights as the Board may
grant in its discretion. When issued for payment as described in this
Prospectus, the Fund's shares will be fully paid and non-assessable. Further,
shareholders of each series are entitled to one vote for each full share held
and proportionate fractional votes for fractional shares held, and will vote in
the aggregate and not by series, except
17
<PAGE> 22
where otherwise required by law and except that only Dollar shares will be
entitled to vote on matters submitted to a vote of shareholders pertaining to
the Fund's arrangements with Service Organizations with respect to Dollar
shares, and Plus shares will enjoy similar voting rights on matters pertaining
to the Fund's arrangements with Service Organizations with respect to Plus
shares. (See "Management of the Fund-Service Organizations.") Shares of the Fund
have non-cumulative voting rights and, accordingly, the holders of more than 50%
of the Fund's outstanding shares (irrespective of series) may elect all of the
directors.
For information concerning the redemption of Fund shares and possible
restrictions on their transferability, see "Redemption of Shares."
YIELD
From time to time the Fund may advertise the "yields," "effective yields"
and "tax-equivalent yields" of its Money, Dollar and Plus shares. Yield figures
are based on historical earnings and are not intended to indicate future
performances. The "yield" for each series of Fund shares refers to the income
generated by an investment in the shares of such series 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
the week is assumed to be generated each week over a 52-week period and is shown
as a percentage of the investment. The "effective yield" is calculated similarly
but, when annualized, the income earned by an investment in a series of Fund
shares is assumed to be reinvested in shares of that series. The "effective
yield" will be slightly higher than the "yield" because of the compounding
effect of this assumed reinvestment. The "tax-equivalent yield" shows the level
of taxable yield necessary to produce an after-tax yield equivalent to the
Fund's tax-free yield. It is calculated by increasing the Fund's yield
(calculated as above) by the amount necessary to reflect the payment of Federal
and New York income taxes at a stated tax rate. The "tax-equivalent yield" will
always be higher than the "yield."
For the seven-day period ended July 31, 1995, the yields on Money and Plus
shares were 3.52% and 3.27%, respectively, the compounded effective yields on
Money and Plus shares were 3.58% and 3.32%, respectively, and the tax-equivalent
yields on Money and Plus shares were 5.58% and 5.18%, respectively. These
tax-equivalent yields assume a Federal income tax rate of 28% and a combined New
York State and New York City income tax rate of 12.332%. During this seven-day
period, the Fund's investment adviser and administrators voluntarily waived
approximately 71% of the advisory and administration fees payable by the Fund.
Without such waivers, such yields on Money and Plus shares would have been 3.32%
and 3.07%, respectively, the compounded effective yields on Money and Plus
shares would have been 3.37% and 3.12%, respectively, and the tax-equivalent
yields on Money and Plus shares would have been 5.26% and 4.86%, respectively.
The yield of any investment is generally a function of portfolio quality and
maturity, type of investment and operating expenses. The yield on Money, as well
as Dollar and Plus shares, will fluctuate and is not necessarily representative
of future results. Any fees charged by broker-dealers, banks or others directly
to their customers in connection with investments in the Fund are not reflected
in the yields on the Fund's shares, and such fees, if charged, will reduce the
actual return received by customers on their investments. There were no Dollar
shares outstanding during the period from March 28, 1994 through July 31, 1995.
Investors may call 800-821-6006 to obtain the current yields on each series of
the Fund's shares.
18
<PAGE> 23
[THIS PAGE INTENTIONALLY LEFT BLANK.]
19
<PAGE> 24
- --------------------------------------------------------------------------------
NO PERSON HAS BEEN AUTHORIZED
TO GIVE ANY INFORMATION OR TO
MAKE ANY REPRESENTATIONS NOT
CONTAINED IN THIS PROSPECTUS,
OR 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 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
THE DISTRIBUTOR IN ANY
JURISDICTION IN WHICH SUCH
OFFERING MAY NOT LAWFULLY BE
MADE.
---------------------------------------------------------------------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
------
<S> <C>
Background and Expense
Information.................. 2
Financial Highlights........... 4
Investment Objective and
Policies..................... 7
Purchase of Shares............. 11
Redemption of Shares........... 11
Management of the Fund......... 13
Dividends...................... 16
Taxes.......................... 16
Description of Shares and
Miscellaneous................ 17
Yield.......................... 18
</TABLE>
PIF-P-012-02
- --------------------------------------------------------------------------------
NEW YORK
MONEY FUND
AN INVESTMENT PORTFOLIO OFFERED BY
MUNICIPAL FUND FOR
NEW YORK INVESTORS, INC.
LOGO
Prospectus
December 1, 1995
<PAGE> 25
MUNICIPAL FUND FOR NEW YORK INVESTORS, INC.
(the "Fund")
Statement of Additional Information
December 1, 1995
Table of Contents
<TABLE>
<CAPTION>
Page
----
<S> <C>
Investment Objective and Policies.................................... 1
Municipal Obligations................................................ 5
Additional Purchase and Redemption Information....................... 22
Management of the Fund............................................... 24
Additional Information Concerning Taxes.............................. 31
Dividends........................................................... 34
Counsel............................................................. 37
Independent Accountants.............................................. 37
Miscellaneous....................................................... 37
Financial Statements................................................. FS-1
Appendix............................................................ A-1
</TABLE>
This Statement of Additional Information is meant to be read
in conjunction with the Fund's Prospectus dated December 1, 1995 and is
incorporated by reference in its entirety into that Prospectus. Because this
Statement of Additional Information is not itself a prospectus, no investment
in shares of the Fund should be made solely upon the information contained
herein. Copies of the Fund's Prospectus may be obtained by calling
800-821-7432. Capitalized terms used but not defined herein have the same
meanings as in the Prospectus.
<PAGE> 26
INVESTMENT OBJECTIVE AND POLICIES
As stated in the Fund's Prospectus, the investment objective
of the Fund is to provide investors with as high a level of current interest
income that is exempt from Federal income tax and, to the extent possible, from
New York State and New York City personal income taxes as is consistent with
the preservation of capital and relative stability of principal. The following
policies supplement the description of the Fund's investment objective and
policies in the Prospectus.
Additional Information on Investment Practices.
Variable and Floating Rate Demand Instruments. Variable and
floating rate demand instruments held by the Fund may have maturities of more
than 13 months provided: (i) the Fund is entitled to the payment of principal
at any time or during specified intervals not exceeding 13 months, subject to
notice of no more than 30 days, and (ii) the rate of interest on such
instruments is adjusted (based upon a pre-selected market sensitive index such
as the prime rate of a major commercial bank) at periodic intervals not
exceeding 13 months. In determining the Fund's average weighted portfolio
maturity and whether a variable or floating rate demand instrument has a
remaining maturity of 13 months or less, the maturity of each instrument will
be computed in accordance with guidelines established by the Securities and
Exchange Commission (the "SEC"). In determining whether an unrated variable or
floating rate demand instrument is of comparable quality at the time of
purchase to instruments with minimal credit risks, the Fund's investment
adviser will consider the earning power, cash flow and other liquidity ratios
of the issuer of the instrument and will continuously monitor its financial
condition. In addition, the Fund will sometimes require that the issuer's
obligation to pay the principal of the instrument be backed by an unconditional
bank letter or line of credit, guarantee or commitment to lend.
Variable and floating rate notes that do not provide for
payment within seven days may be deemed illiquid and subject to the 10%
limitation on such investments.
When-Issued Securities. As stated in the Prospectus, the Fund
may purchase Municipal Obligations on a "when-issued" basis (i.e., for delivery
beyond the normal settlement date at a stated price and yield). When the Fund
agrees to purchase when-issued securities, its custodian will set aside cash or
liquid portfolio securities equal to the amount of the commitment in a separate
account. Normally, the custodian will set aside portfolio securities to
satisfy a purchase commitment, and in such a case the Fund may be required
subsequently to place additional assets in the separate account in order to
ensure that
<PAGE> 27
the value of the account remains equal to the amount of the Fund's commitment.
It may be expected that the Fund's net assets will fluctuate to a greater
degree when it sets aside portfolio securities to cover such purchase
commitments than when it sets aside cash. Because the Fund will set aside cash
or liquid assets to satisfy its purchase commitments in the manner described,
the Fund's liquidity and ability to manage its portfolio might be affected in
the event its commitments to purchase when-issued securities ever exceeded 25%
of the value of its assets.
When the Fund engages in when-issued transactions, it relies
on the seller to consummate the trade. Failure of the seller to do so may
result in the Fund's incurring a loss or missing an opportunity to obtain a
price considered to be advantageous.
Stand-By Commitments. The Fund may acquire "stand-by
commitments" with respect to Municipal Obligations held in its portfolio.
Under a stand-by commitment, a dealer agrees to purchase, at the Fund's option,
specified Municipal Obligations at their amortized cost value to the Fund plus
accrued interest, if any. (Stand-by commitments acquired by the Fund may also
be referred to as "put" options.) Stand-by commitments may be sold, transferred
or assigned only with the underlying instruments.
The Fund expects that stand-by commitments will generally be
available without the payment of any direct or indirect consideration.
However, if necessary or advisable, the Fund may pay for a stand-by commitment
either separately in cash or by paying a higher price for portfolio securities
which are acquired subject to the commitment (thus reducing the yield to
maturity otherwise available for the same securities). The total amount paid
in either manner for outstanding stand-by commitments held in the Fund's
portfolio is not expected to exceed 1/2 of 1% of the value of the Fund's total
assets calculated immediately after each stand-by commitment is acquired.
The Fund intends to enter into stand-by commitments only with
dealers, banks and broker-dealers which, in the investment adviser's opinion,
present minimal credit risks. In evaluating the creditworthiness of the issuer
of a stand-by commitment, the investment adviser will review periodically the
issuer's assets, liabilities, contingent claims and other relevant financial
information.
The Fund would acquire stand-by commitments solely to
facilitate portfolio liquidity and does not intend to exercise its rights
thereunder for trading purposes. Stand-by commitments acquired by the Fund
would be valued at zero in determining net asset value. Where the Fund paid
any consideration directly or indirectly for a stand-by commitment, its cost
would be reflected
-2-
<PAGE> 28
as unrealized depreciation for the period during which the commitment was held
by the Fund.
Portfolio Transactions.
Subject to the general control of the Fund's Board of
Directors, PNC Institutional Management Corporation ("PIMC"), the Fund's
investment adviser, is responsible for, makes decisions with respect to and
places orders for all purchases and sales of portfolio securities. Purchases
and sales of portfolio securities are usually principal transactions without
brokerage commissions. Purchases, if any, from underwriters may include a
commission or concession paid by the issuer to the underwriter and purchases
from dealers serving as market markers may include the spread between the bid
and asked prices. In transactions with dealers, PIMC seeks to obtain the best
net price and the most favorable execution of orders. To the extent that the
execution and price offered by more than one dealer are comparable, PIMC may,
in its discretion, effect transactions in portfolio securities with dealers who
provide the Fund with research advice or other services such as information
relating to the price of portfolio securities.
Investment decisions for the Fund are made independently from
those for other investment company portfolios advised by PIMC. Such other
investment company portfolios may invest in the same securities as the Fund.
When purchases or sales of the same security are made at substantially the same
time on behalf of such other investment company portfolios, transactions are
averaged as to price, and available investments allocated as to amount, in a
manner which PIMC believes to be equitable to each investment company
portfolio, including the Fund. In some instances, this investment procedure
may adversely affect the price paid or received by the Fund or the size of the
position obtained for the Fund. To the extent permitted by law, PIMC may
aggregate the securities to be sold or purchased for the Fund with those to be
sold or purchased for such other investment companies in order to obtain best
execution.
Portfolio securities will not be purchased from or sold to
PIMC, PNC Bank, National Association ("PNC Bank"), PFPC Inc. ("PFPC"),
Provident Distributors, Inc. ("PDI"), or any affiliated person of any of them
(as such term is defined in the 1940 Act except to the extent permitted by the
SEC). In addition, the Fund will not purchase Municipal Obligations during the
existence of any underwriting or selling group relating thereto of which PNC
Bank is a member, except to the extent permitted by the SEC. Under certain
circumstances, the Fund may be at a disadvantage because of these limitations
in comparison with other investment company portfolios which have a similar
investment objective but are not subject to such limitations. Furthermore, with
respect to such transactions, securities and
-3-
<PAGE> 29
deposits, the Fund will not give preference to Service Organizations with whom
the Fund enters into agreements concerning the provision of support services to
customers who beneficially own shares of New York Money Dollar ("Dollar
shares") or New York Money Plus ("Plus shares"). (See the Prospectus,
"Management of the Fund - Service Organizations.")
The Fund may participate, if and when practicable, in bidding
for the purchase of Municipal Obligations directly from an issuer in order to
take advantage of the lower purchase price available to members of such a
group. The Fund will engage in this practice, however, only when PIMC, in its
sole discretion, believes such practice to be otherwise in the Fund's interest.
The Fund does not intend to seek profits through short-term
trading. The Fund's annual portfolio turnover will be relatively high because
of the short-term nature of the instruments in which it invests, but the Fund's
portfolio turnover is not expected to have a material effect on its net income.
The Fund's portfolio turnover is expected to be zero for regulatory reporting
purposes.
Additional Investment Limitations.
In addition to the investment limitations disclosed in the
Prospectus, the Fund is subject to the following investment limitations, which
may only be changed by a vote of the holders of a majority of the Fund's
outstanding shares (as defined below under "Miscellaneous").
The Fund may not:
1. Make loans except that the Fund may purchase or hold
debt obligations in accordance with its investment objective, policies and
limitations.
2. Underwrite any issue of securities except to the
extent that the purchase of debt obligations directly from the issuer thereof
in accordance with the Fund's investment objective, policies and limitations
may be deemed to be underwriting.
3. Purchase or sell real estate except that the Fund may
invest in debt obligations secured by real estate or interests therein.
4. Purchase securities on margin, make short sales of
securities or maintain a short position.
5. Write or sell puts, calls, straddles, spreads or
combinations thereof.
-4-
<PAGE> 30
6. Purchase or sell commodities or commodity contracts,
or invest in oil, gas or mineral exploration or development programs.
7. Purchase securities of other investment companies
except in connection with a merger, consolidation, acquisition or
reorganization.
Portfolio Valuation.
The Fund's portfolio securities are valued on the basis of
amortized cost. In connection with its use of amortized cost valuation, the
Fund limits the dollar-weighted average maturity of its portfolio to not more
than 90 days and does not purchase any instrument with a remaining maturity of
more than 13 months (with certain exceptions). The Fund's Board of Directors
has also established procedures that are intended to stabilize the net asset
value per share of each of the Fund's series of shares for purposes of sales
and redemptions at $1.00. Such procedures include the determination, at such
intervals as the Board deems appropriate, of the extent, if any, to which the
Fund's net asset value per share calculated by using available market
quotations deviates from $1.00 per share. In the event such deviation exceeds
1/2 of 1%, the Board will promptly consider what action, if any, should be
initiated. If the Board believes that the amount of any deviation from the
Fund's $1.00 amortized cost price per share may result in material dilution or
other unfair results to investors or existing shareholders, it will take such
steps as it considers appropriate to eliminate or reduce to the extent
reasonably practicable any such dilution or unfair results. These steps may
include selling portfolio instruments prior to maturity; shortening the Fund's
average portfolio maturity; withholding or reducing dividends; redeeming shares
in kind; reducing the number of the Fund's outstanding shares without monetary
consideration; or utilizing a net asset value per share determined by using
available market quotations.
MUNICIPAL OBLIGATIONS
In General.
Municipal Obligations include debt obligations issued by
governmental entities to obtain funds for various public purposes, including
the construction of a wide range of public facilities, the refunding of
outstanding obligations, the payment of general operating expenses and the
extension of loans to public institutions and facilities. Private activity
bonds that are issued by or on behalf of public authorities to finance various
privately-operated facilities are included within the term Municipal
Obligations if the interest paid thereon is
-5-
<PAGE> 31
(subject to the Federal alternative minimum tax) exempt from regular Federal
income tax.
The Fund may hold tax-exempt derivatives which may be in the
form of tender option bonds, participations, beneficial interests in a trust,
partnership interests or other forms. A number of different structures have
been used. For example, interests in long-term fixed-rate Municipal
Obligations, held by a bank as trustee or custodian, are coupled with tender
option, demand and other features when the tax-exempt derivatives are created.
Together, these features entitle the holder of the interest to tender (or put)
the underlying Municipal Obligation to a third party at periodic intervals and
to receive the principal amount thereof. In some cases, Municipal Obligations
are represented by custodial receipts evidencing rights to receive specific
future interest payments, principal payments, or both, on the underlying
municipal securities held by the custodian. Under such arrangements, the
holder of the custodial receipt has the option to tender the underlying
municipal security at its face value to the sponsor (usually a bank or broker
dealer or other financial institution), which is paid periodic fees equal to
the difference between the bond's fixed coupon rate and the rate that would
cause the bond, coupled with the tender option, to trade at par on the date of
a rate adjustment. The Fund may hold tax-exempt derivatives, such as
participation interests and custodial receipts, for Municipal Obligations which
give the holder the right to receive payment of principal subject to the
conditions described above. The Internal Revenue Service has not ruled on
whether the interest received on tax-exempt derivatives in the form of
participation interests or custodial receipts is tax-exempt, and accordingly,
purchases of any such interests or receipts are based on the opinion of counsel
to the sponsors of such derivative securities. Neither the Fund nor its
investment adviser will independently review the underlying proceedings related
to the creation of any tax-exempt derivatives or the bases for such opinion.
Before purchasing a tax-exempt derivative for the Fund, the Adviser is
required by the Fund's procedures to conclude that the tax-exempt security and
the supporting short-term obligation involve minimal credit risks and are
Eligible Securities under the Fund's Rule 2a-7 procedures. In evaluating the
creditworthiness of the entity obligated to purchase the tax-exempt security,
the investment adviser will review periodically the entity's relevant financial
information. Currently, the Directors have authorized the purchase of
tax-exempt derivatives by the Fund so long as after any purchase not more than
10% of the Fund's assets are invested in such securities.
As described in the Fund's Prospectus, the two principal
classifications of Municipal Obligations consist of
-6-
<PAGE> 32
"general obligation" and "revenue" issues, and the Fund's portfolio may include
"moral obligation" issues, which are normally issued by special purpose
authorities. There are, of course, variations in the quality of Municipal
Obligations, both within a particular classification and between
classifications, and the yields on Municipal Obligations depend upon a variety
of factors, including general money market conditions, the financial condition
of the issuer, general conditions of the municipal bond market, the size of a
particular offering, the maturity of the obligation and the rating of the
issue. The ratings of Moody's and S&P represent their opinions as to the
quality of Municipal Obligations. It should be emphasized, however, that
ratings are general and are not absolute standards of quality, and Municipal
Obligations with the same maturity, interest rate and rating may have different
yields while Municipal Obligations of the same maturity and interest rate with
different ratings may have the same yield. Subsequent to its purchase by the
Fund, an issue of Municipal Obligations may cease to be rated or its rating may
be reduced below the minimum rating required for purchase by the Fund. The
Fund's investment adviser will consider such an event in determining whether
the Fund should continue to hold the obligation.
An issuer's obligations under its Municipal Obligations are
subject to the provisions of bankruptcy, insolvency and other laws affecting
the rights and remedies of creditors, such as the Federal Bankruptcy Code, and
laws, if any, which may be enacted by Federal or state legislatures extending
the time for payment of principal or interest, or both, or imposing other
constraints upon enforcement of such obligations or upon the ability of
municipalities to levy taxes. The power or ability of an issuer to meet its
obligations for the payment of interest on and principal of its Municipal
Obligations may be materially adversely affected by litigation or other
conditions.
Among other types of Municipal Obligations, the Fund may
purchase short-term General Obligation Notes, Tax Anticipation Notes, Bond
Anticipation Notes, Revenue Anticipation Notes, Tax-Exempt Commercial Paper,
Construction Loan Notes and other forms of short-term loans. Such instruments
are issued with a short-term maturity in anticipation of the receipt of tax
funds, the proceeds of bond placements or other revenues. In addition, the
Fund may invest in other types of tax-exempt instruments, including general
obligation and private activity bonds, provided they have remaining maturities
of 13 months or less at the time of purchase.
-7-
<PAGE> 33
Special Considerations Relating to New York Municipal Obligations.
Some of the significant financial considerations relating to
the Fund's investment in New York Municipal Obligations are summarized below.
This summary information is not intended to be a complete description and is
principally derived from official statements relating to issues of New York
Municipal Obligations that were available prior to the date of this Statement
of Additional Information. The accuracy and completeness of the information
contained in those official statements have not been independently verified.
STATE ECONOMY. New York is the third most populous state in the nation and has
a relatively high level of personal wealth. The State's economy is diverse
with a comparatively large share of the nation's finance, insurance,
transportation, communications and services employment, and a very small share
of the nation's farming and mining activity. The State has a declining
proportion of its workforce engaged in manufacturing, and an increasing
proportion engaged in service industries. New York City (the "City"), which is
the most populous city in the State and nation and is the center of the
nation's largest metropolitan area, accounts for a large portion of the State's
population and personal income.
The State has historically been one of the wealthiest states in
the nation. For decades, however, the State has grown more slowly than the
nation as a whole, gradually eroding its relative economic position. The
recession has been more severe in the State, owing to a significant retrenchment
in the financial services industry, cutbacks in defense spending, and an
overbuilt real estate market. There can be no assurance that the State economy
will not experience worse-than-predicted results in the1995-96 fiscal year,
with corresponding material and adverse effects on the State's projections of
receipts and disbursements.
The unemployment rate in the State dipped below the national
rate in the second half of 1981 and remained lower until 1991. It stood at 6.9%
in 1994. The total employment growth rate in the State has been below the
national average since 1984 and is expected to slow to less than 0.5% in 1995.
State per capita personal income remains above the national average. State per
capita income for 1994 was estimated at $25,999, which was 19.2% above the
1994 estimated national average of $21,809. During the past ten years, total
personal income in the State rose slightly faster than the national average only
in 1986 through 1989.
STATE BUDGET. The State Constitution requires the governor (the "Governor")
to submit to the State legislature (the
-8-
<PAGE> 34
"Legislature") a balanced executive budget which contains a complete plan of
expenditures for the ensuing fiscal year and all moneys and revenues estimated
to be available therefor, accompanied by bills containing all proposed
appropriations or reappropriations and any new or modified revenue measures to
be enacted in connection with the executive budget. The entire plan
constitutes the proposed State financial plan for that fiscal year. The
Governor is required to submit to the Legislature quarterly budget updates
which include a revised cash-basis state financial plan, and an explanation of
any changes from the previous state financial plan.
The State's budget for the 1995-96 fiscal year was enacted by
the Legislature on June 7, 1995, more than two months after the start of the
fiscal year. Prior to adoption of the budget, the Legislature enacted
appropriations for disbursements considered to be necessary for State operations
and other purposes, including all necessary appropriations for debt service.
The State financial plan for the 1995-96 fiscal year was formulated on June
20, 1995 and was based upon the State's budget as enacted by the Legislature and
signed into law by the Governor (the "1995-96 State Financial Plan").
The 1995-96 State Financial Plan was the first to be enacted in
the administration of the Governor, who assumed office on January 1. It was the
first budget in over half a century which proposed and, as enacted, projected an
absolute year-over-year decline in disbursements in the General Fund, the
State's principal operating fund. Spending for State operations was projected
to drop even more sharply, by 4.6%. Nominal spending from all State spending
sources (i.e., excluding Federal aid) was proposed to increase by only 2.5% from
the prior fiscal year, in contrast to the prior decade when such spending growth
averaged more than 6.0% annually.
In his executive budget, the Governor indicated that in the
1995-96 fiscal year, the state financial plan, based on then-current law
governing spending and revenues, would be out of balance by almost $4.7 billion,
as a result of the projected structural deficit resulting from the ongoing
disparity between sluggish growth in receipts, the effect of prior-year tax
changes, and the rapid acceleration of spending growth; the impact of unfunded
1994-95 initiatives, primarily for local aid programs; and the use of one-time
solutions, primarily surplus funds from the prior year, to fund recurring
spending in the 1994-95 budget. The Governor proposed additional tax cuts to
spur economic growth and provide relief for low and middle-income tax payers,
which were larger than those ultimately adopted, and which added $240 million to
the then projected imbalance or budget gap, bringing the total to approximately
$5 billion.
-9-
<PAGE> 35
This gap was projected to be closed in the 1995-96 State
Financial Plan through a series of actions, mainly spending reductions and cost
containment measures and certain reestimates that are expected to be recurring,
but also through the use of one-time solutions. The 1995-96 State Financial
Plan projected (i) nearly $1.6 billion in savings from cost containment,
disbursement reestimates, and other savings in social welfare programs,
including Medicaid, income maintenance and various child and family care
programs; (ii) $2.2 billion in savings from State agency actions to reduce
spending on the State workforce, SUNY and CUNY, mental hygiene programs, capital
projects, the prison system and fringe benefits; (iii) $300 million in savings
from local assistance reforms, including actions affecting school aid and
revenue sharing while proposing program legislation to provide relief from
certain mandates that increase local spending; (iv) over $400 million in revenue
measures, primarily through a new Quick Draw Lottery game, changes to tax
payments schedules, and the sale of assets; and (v) $300 million from
reestimates in receipts.
The 1995-96 State Financial Plan included actions that will have
an effect on the budget outlook for State fiscal year 1996-97 and beyond. The
Division of the Budget estimated that the 1995-96 State Financial Plan contained
actions that provide nonrecurring resources or savings totaling approximately
$900 million while the State comptroller (the "Comptroller") believed that such
amount exceeded $1 billion. In addition to this use of nonrecurring resources,
the 1995-96 State Financial Plan reflected actions that will directly affect the
State's 1996-97 fiscal year baseline receipts and disbursements. The three-year
plan to reduce State personal income taxes will decrease State tax receipts by
an estimated $1.7 billion in State fiscal year 1996-97 in addition to the amount
of reduction in State fiscal year 1995-96. Further significant reductions in
the personal income tax are scheduled for the 1997-98 State fiscal year. Other
tax reductions enacted in 1994 and 1995 are estimated to cause an additional
reduction in receipts of over $500 million in 1996-97, as compared to the level
of receipts in 1995-96. Similarly, many actions taken to reduce disbursements
in the State's 1995-96 fiscal year are expected to provide greater reductions in
the State's fiscal year 1996-97. These include actions to reduce the State
workforce, reduce Medicaid and welfare expenditures and slow community mental
hygiene program development.
The State issued the first of the three required quarterly
updates (the "First Quarter Update") to the 1995-96 State Financial Plan on July
28, 1995. The First Quarter Update projected continued balance in the State's
1995-96 State Financial Plan. Actual cash receipts and disbursements during the
first quarter of the fiscal year were impacted by the late adoption of the
budget, and fell somewhat short of original
-10-
<PAGE> 36
monthly cashflow estimates. Receipt variances were mainly related to timing
issues rather than changes in the forecast. Disbursement variances were also
ascribed to timing factors.
On October 2, 1995, the State Comptroller released a report on
the State's financial condition. The report identified several risks to the
1995-96 State Financial Plan and also estimated a potential imbalance in
receipts and disbursements in the 1996-97 fiscal year of at least $2.7 billion
and in the 1997-98 fiscal year of at least $3.9 billion. The Governor is
required to submit a balanced budget to the State Legislature and has indicated
that he will close any potential imbalance primarily through General Fund
expenditure reductions and without increases in taxes or deferrals of scheduled
tax reductions.
The State issued its second quarterly update to the 1995-96
State Financial Plan on October 26, 1995 (the "Mid-Year Update" and together
with the First Quarter Update, the "Financial Plan Updates"). The Mid-Year
Update projected continued balance in the 1995-96 State Financial Plan, with
estimated receipts reduced by a net $71 million and estimated disbursements
reduced by a net $30 million as compared to the First Quarter Update. The
resulting General Fund balance decreased from $213 million in the First Quarter
Update to $172 million in the Mid-Year Update, reflecting the use of $41 million
from the contingency reserve fund for payments of litigation and disallowance
expenses.
The 1995-96 State Financial Plan and the Financial Plan
Updates were based on a number of assumptions and projections. Because it is
not possible to predict accurately the occurrence of all factors that may affect
the 1995-96 State Financial Plan or the Financial Plan Updates, actual results
could differ materially and adversely from projections made at the outset
of a fiscal year. There can be no assurance that the State will not face
substantial potential budget gaps in future years resulting from a significant
disparity between tax revenues projected from a lower recurring receipts base
and the spending required to maintain State programs at current levels. To
address any potential budgetary imbalance, the State may need to take
significant actions to align recurring receipts and disbursements in future
fiscal years.
A significant risk to the 1995-96 State Financial Plan arises
from tax legislation pending in Congress. Changes to federal tax treatment of
capital gains are likely to flow through automatically to the State personal
income tax. Such changes, depending upon their precise character and timing,
and upon taxpayer response, could produce either revenue gains or losses during
the balance of the State's fiscal year.
-11-
<PAGE> 37
RECENT FINANCIAL RESULTS. The General Fund is the principal operating fund
of the State and is used to account for all financial transactions, except
those required to be accounted for in another fund. It is the State's largest
fund and receives almost all State taxes and other resources not dedicated to
particular purposes.
The State reported a General Fund operating deficit of $1.426
billion for the 1994-95 fiscal year, as compared to an operating surplus of $914
million for the prior fiscal year. The 1994-95 fiscal year deficit was
caused by several factors, including the use of $1.026 billion of the 1993-94
cash-based surplus to fund operating expenses in 1994-95 and the adoption of
changes in accounting methodologies by the State Comptroller. These factors
were offset by net proceeds of $315 million in bonds issued by the Local
Government Assistance Corporation. The General Fund is projected to be balanced
on a cash basis for the 1995-96 fiscal year.
Total revenues for 1994-95 were $31.455 billion. Revenues
decreased by $173 million over the prior fiscal year, a decrease of less than
one percent. Total expenditures for 1994-95 totaled $33.079 billion, an increase
of $2.083 billion, or 6.7 percent over the prior fiscal year.
The State's financial position on a GAAP (generally accepted
accounting principles) basis as of March 31, 1995 showed an accumulated
deficit in its combined governmental funds of $1.666 billion, reflecting
liabilities of $14.778 billion and assets of $13.112 billion.
DEBT LIMITS AND OUTSTANDING DEBT. There are a number of methods by which the
State of New York may incur debt. Under the State Constitution, the State may
not, with limited exceptions for emergencies, undertake long-term general
obligation borrowing (i.e., borrowing for more than one year) unless the
borrowing is authorized in a specific amount for a single work or purpose by
the Legislature and approved by the voters. There is no limitation on the
amount of long-term general obligation debt that may be so authorized and
subsequently incurred by the State.
The State may undertake short-term borrowings without voter
approval (i) in anticipation of the receipt of taxes and revenues, by issuing
tax and revenue anticipation notes, and (ii) in anticipation of the receipt of
proceeds from the sale of duly authorized but unissued general obligation bonds,
by issuing bond anticipation notes. The State may also, pursuant to specific
constitutional authorization, directly guarantee certain obligations of the
State of New York's authorities and public benefit corporations
("Authorities"). Payments of debt service on New York State general obligation
and New York
-12-
<PAGE> 38
State-guaranteed bonds and notes are legally enforceable obligations of the
State of New York.
The State employs additional long-term financing mechanisms,
lease-purchase and contractual-obligation financings, which involve
obligations of public authorities or municipalities that are State-supported but
are not general obligations of the State. Under these financing arrangements,
certain public authorities and municipalities have issued obligations to finance
the construction and rehabilitation of facilities or the acquisition and
rehabilitation of equipment, and expect to meet their debt service requirements
through the receipt of rental or other contractual payments made by the State.
Although these financing arrangements involve a contractual agreement by the
State to make payments to a public authority, municipality or other entity, the
State's obligation to make such payments is generally expressly made subject to
appropriation by the Legislature and the actual availability of money to the
State for making the payments. The State has also entered into a
contractual-obligation financing arrangement with the Local Government
Assistance Corporation ("LGAC") in an effort to restructure the way the State
makes certain local aid payments.
In 1990, as part of a State fiscal reform program, legislation
was enacted creating LGAC, a public benefit corporation empowered to issue
long-term obligations to fund certain payments to local governments
traditionally funded through New York State's annual seasonal borrowing. The
legislation empowered LGAC to issue its bonds and notes in an amount not in
excess of $4.7 billion (exclusive of certain refunding bonds) plus certain other
amounts. Over a period of years, the issuance of these long-term obligations,
which are to be amortized over no more than 30 years, was expected to
eliminate the need for continued short-term seasonal borrowing. The
legislation also dedicated revenues equal to one-quarter of the four cent State
sales and use tax to pay debt service on these bonds. The legislation also
imposed a cap on the annual seasonal borrowing of the State at $4.7 billion,
less net proceeds of bonds issued by LGAC and bonds issued to provide for
capitalized interest, except in cases where the Governor and the legislative
leaders have certified the need for additional borrowing and provided a
schedule for reducing it to the cap. If borrowing above the cap is thus
permitted in any fiscal year, it is required by law to be reduced to the cap by
the fourth fiscal year after the limit was first exceeded. As of June 1995,
LGAC had issued bonds to provide net proceeds of $4.7 billion, completing
the program. The impact of LGAC's borrowing is that the State is able to meet
its cash flow needs in the first quarter of the fiscal year without relying on
short-term seasonal borrowings. The 1995-96 State Financial Plan includes no
spring borrowing nor did the 1994-95 State Financial Plan, which was the
-13-
<PAGE> 39
first time in 35 years there was no short-term seasonal borrowing.
In June 1994, the Legislature passed a proposed
constitutional amendment that would significantly change the long-term financing
practices of the State and its public authorities. The proposed amendment would
permit the State, within a formula-based cap, to issue revenue bonds, which
would be debt of the State secured solely by a pledge of certain State tax
receipts (including those allocated to State funds dedicated for transportation
purposes), and not by the full faith and credit of the State. In addition, the
proposed amendment would (i) permit multiple purpose general obligation bond
proposals to be proposed on the same ballot, (ii) require that State debt be
incurred only for capital projects included in a multi-year capital financing
plan, and (iii) prohibit, after its effective date, lease-purchase and
contractual-obligation financing mechanisms for State facilities.
Before the approved constitutional amendment can be
presented to the voters for their consideration, it must be passed by a
separately elected legislature. The amendment must therefore be passed by the
newly elected Legislature in 1995 prior to presentation to the voters in
November 1995. The amendment was passed by the Senate in June 1995, and the
Assembly is expected to pass the amendment shortly. If approved by the voters,
the amendment would become effective January 1, 1996.
On January 13, 1992, Standard & Poor's Corporation
("Standard & Poor's") reduced its ratings on the State's general obligation
bonds from A to A- and, in addition, reduced its ratings on the State's moral
obligation, lease purchase, guaranteed and contractual obligation debt.
Standard & Poor's also continued its negative rating outlook assessment on State
general obligation debt. On April 26, 1993, Standard & Poor's revised the
rating outlook assessment to stable. On February 14, 1994, Standard & Poor's
raised its outlook to positive and, on February 28, 1994, confirmed its A-
rating. On January 6, 1992, Moody's Investors Service, Inc. ("Moody's") reduced
its ratings on outstanding limited-liability State lease purchase and
contractual obligations from A to Baa1. On February 28, 1994, Moody's
reconfirmed its A rating on the State's general obligation long-term
indebtedness.
The State anticipates that its capital programs will be
financed, in part, by State and public authorities borrowings in 1995-96. The
State expects to issue $248 million in general obligation bonds (including
$170 million for purposes of redeeming outstanding bond anticipation notes) and
$186 million in general obligation commercial paper. The Legislature has also
authorized the issuance of up to $33 million in certificates of
-14-
<PAGE> 40
participation during the State's 1995-96 fiscal year for equipment purchases
and $14 million for capital purposes. These projections are subject to change
if circumstances require.
Principal and interest payments on general obligation
bonds and interest payments on bond anticipation notes and on tax and revenue
anticipation notes were $793.3 million for the 1994-95 fiscal year, and are
estimated to be $774.4 million for the 1995-96 fiscal year. These figures
do not include interest payable on State General Obligation Refunding Bonds
issued in July 1992 ("Refunding Bonds") to the extent that such interest was
paid from an escrow fund established with the proceeds of such Refunding Bonds.
Principal and interest payments on fixed rate and variable rate bonds issued by
LGAC were $239.4 million for the 1994-95 fiscal year, and are estimated to be
$328.2 million for 1995-96. State lease-purchase rental and contractual
obligation payments for 1994-95, including State installment payments relating
to certificates of participation, were $1.607 billion and are estimated to be
$1.641 billion in 1995-96.
New York State has never defaulted on any of its general
obligation indebtedness or its obligations under lease-purchase or
contractual-obligation financing arrangements and has never been called upon to
make any direct payments pursuant to its guarantees.
LITIGATION. Certain litigation pending against New York State or its officers
or employees could have a substantial or long-term adverse effect on New York
State finances. Among the more significant of these cases are those that
involve (1) the validity of agreements and treaties by which various Indian
tribes transferred title to New York State of certain land in central and
upstate New York; (2) certain aspects of New York State's Medicaid policies,
including its rates, regulations and procedures; (3) action against New York
State and New York City officials alleging inadequate shelter allowances to
maintain proper housing; (4) challenges to the practice of reimbursing certain
Office of Mental Health patient care expenses from the client's Social Security
benefits; (5) alleged responsibility of New York State officials to assist in
remedying racial segregation in the City of Yonkers; (6) challenges by
commercial insurers, employee welfare benefit plans, and health maintenance
organizations to the imposition of 13%, 11% and 9% surcharges on inpatient
hospital bills; (7) challenges to certain aspects of petroleum business
taxes; (8) action alleging damages resulting from the failure by the State's
Department of Environmental Conservation to timely provide certain data; (9) a
challenge to the constitutionality of the treatment of certain moneys held in
a Supplemental Reserve Fund; and (10) a challenge to the constitutionality of
a State lottery game.
-15-
<PAGE> 41
Several actions challenging the constitutionality of
legislation enacted during the 1990 legislative session which changed actuarial
funding methods for determining state and local contributions to state employee
retirement systems have been decided against the State. As a result, the
Comptroller has developed a plan to restore the State's retirement systems to
prior funding levels. Such funding is expected to exceed prior levels by $30
million in fiscal 1994-95, $63 million in fiscal 1995-96, $116 million in fiscal
1996-97, $193 million in fiscal 1997-98, peaking at $241 million in fiscal
1998-99. Beginning in fiscal 2001-02, State contributions required under the
Comptroller's plan are projected to be less than that required under the prior
funding method. As a result of the United States Supreme Court decision in the
case of State of Delaware v. State of New York, on January 21, 1994, the State
entered into a settlement agreement with various parties. Pursuant to all
agreements executed in connection with the action, the State is required to make
aggregate payments of $351.4 million, of which $90.3 million have been made.
Annual payments to the various parties will continue through the State's 2002-03
fiscal year in amounts which will not exceed $48.4 million in any fiscal year
subsequent to the State's 1994-95 fiscal year.
The legal proceedings noted above involve State
finances, State programs and miscellaneous tort, real property and contract
claims in which the State is a defendant and the monetary damages sought are
substantial. These proceedings could affect adversely the financial condition
of the State. Adverse developments in these proceedings or the initiation of
new proceedings could affect the ability of the State to maintain a balanced
1995-96 State Financial Plan. An adverse decision in any of these proceedings
could exceed the amount of the 1995-96 State Financial Plan reserve for the
payment of judgments and, therefore, could affect the ability of the State to
maintain a balanced 1995-96 State Financial Plan. In its audited financial
statements for the fiscal year ended March 31, 1995, the State reported its
estimated liability for awarded and anticipated unfavorable judgments to be
$676 million.
Although other litigation is pending against New York
State, except as described above, no current litigation involves New York
State's authority, as a matter of law, to contract indebtedness, issue its
obligations, or pay such indebtedness when it matures, or affects New York
State's power or ability, as a matter of law, to impose or collect significant
amounts of taxes and revenues.
AUTHORITIES. The fiscal stability of New York State is related, in part, to
the fiscal stability of its Authorities, which generally have responsibility
for financing, constructing and operating revenue-producing public benefit
facilities. Authorities are not subject to the constitutional restrictions on
-16-
<PAGE> 42
the incurrence of debt which apply to the State itself, and may issue bonds and
notes within the amounts of, and as otherwise restricted by, their legislative
authorization. The State's access to the public credit markets could be
impaired, and the market price of its outstanding debt may be materially and
adversely affected, if any of the Authorities were to default on their
respective obligations, particularly with respect to debt that are
State-supported or State-related. As of September 30, 1994, date of the
latest data available, there were 18 Authorities that had outstanding debt of
$100 million or more. The aggregate outstanding debt, including refunding
bonds, of these 18 Authorities was $70.3 billion. As of March 31, 1995,
aggregate public authority debt outstanding as State-supported debt was $27.9
billion and as State-related debt was $36.1 billion.
Authorities are generally supported by revenues
generated by the projects financed or operated, such as fares, user fees on
bridges, highway tolls and rentals for dormitory rooms and housing. In recent
years, however, New York State has provided financial assistance through
appropriations, in some cases of a recurring nature, to certain of the 18
Authorities for operating and other expenses and, in fulfillment of its
commitments on moral obligation indebtedness or otherwise, for debt service.
This operating assistance is expected to continue to be required in future
years. In addition, certain statutory arrangements provide for State local
assistance payments otherwise payable to localities to be made under certain
circumstances to certain Authorities. The State has no obligation to provide
additional assistance to localities whose local assistance payments have been
paid to Authorities under these arrangements. However, in the event that such
local assistance payments are so diverted, the affected localities could seek
additional State funds.
NEW YORK CITY AND OTHER LOCALITIES. The fiscal health of the State of New York
may also be impacted by the fiscal health of its localities, particularly the
City of New York, which has required and continues to require significant
financial assistance from New York State. The City depends on State aid both
to enable the City to balance its budget and to meet its cash requirements.
The City has achieved balanced operating results for each of its fiscal
years since 1981 as reported in accordance with the then-applicable GAAP.
In 1975, New York City suffered a fiscal crisis that
impaired the borrowing ability of both the City and New York State. In that
year the City lost access to public credit markets. The City was not able to
sell short-term notes to the public again until 1979.
-17-
<PAGE> 43
In 1975, Standard & Poor's suspended its A rating of
City bonds. This suspension remained in effect until March 1981, at which time
the City received an investment grade rating of BBB from Standard & Poor's. On
July 2, 1985, Standard & Poor's revised its rating of City bonds upward to BBB+
and on November 19, 1987, to A-. On July 2, 1993, Standard & Poor's reconfirmed
its A- rating of City bonds, continued its negative rating outlook assessment
and stated that maintenance of such rating depended upon the City's making
further progress towards reducing budget gaps in the outlying years. Moody's
ratings of City bonds were revised in November 1981 from B (in effect since
1977) to Ba1, in November 1983 to Baa, in December 1985 to Baa1, in May 1988 to
A and again in February 1991 to Baa1. On July 10, 1995, Standard & Poor's
downgraded its rating on the City's $23 billion of outstanding general
obligation bonds to "BBB+" from "A-", citing to the City's chronic structural
budget problems and weak economic outlook. Standard & Poor's stated that New
York City's reliance on one-time revenue measures to close annual budget gaps, a
dependence on unrealized labor savings, overly optimistic estimates of revenues
and state and federal aid and the City's continued high debt levels also
contributed to its decision to lower the rating.
New York City is heavily dependent on New York State and
federal assistance to cover insufficiencies in its revenues. There can be no
assurance that in the future federal and State assistance will enable the City
to make up its budget deficits. To help alleviate the City's financial
difficulties, the Legislature created the Municipal Assistance Corporation
("MAC") in 1975. MAC is authorized to issue bonds and notes payable from
certain stock transfer tax revenues, from the City's portion of the State sales
tax derived in the City and, subject to certain prior claims, from State per
capita aid otherwise payable by the State to the City. Failure by the State to
continue the imposition of such taxes, the reduction of the rate of such taxes
to rates less than those in effect on July 2, 1975, failure by the State to pay
such aid revenues and the reduction of such aid revenues below a specified level
are included among the events of default in the resolutions authorizing MAC's
long-term debt. The occurrence of an event of default may result in the
acceleration of the maturity of all or a portion of MAC's debt. MAC bonds and
notes constitute general obligations of MAC and do not constitute an enforceable
obligation or debt of either the State or the City. As of June 30, 1995, MAC
had outstanding an aggregate of approximately $4.882 billion of its bonds. MAC
is authorized to issue bonds and notes to refunds its outstanding bonds and
notes and to fund certain reserves, without limitation as to principal amount,
and to finance certain capital commitments to certain authorities in the event
the City fails to provide such financing.
-18-
<PAGE> 44
Since 1975, the City's financial condition has been
subject to oversight and review by the New York State Financial Control Board
(the "Control Board") and since 1978 the City's financial statements have been
audited by independent accounting firms. To be eligible for guarantees and
assistance, the City is required during a "control period" to submit annually
for Control Board approval, and when a control period is not in effect for
Control Board review, a financial plan for the next four fiscal years covering
the City and certain agencies showing balanced budgets determined in accordance
with GAAP. New York State also established the Office of the State Deputy
Comptroller for New York City ("OSDC") to assist the Control Board in exercising
its powers and responsibilities. On June 30, 1986, the City satisfied the
statutory requirements for termination of the control period. This means that
the Control Board's powers of approval are suspended, but the Board continues to
have oversight responsibilities.
From time to time, the Control Board staff, OSDC, the
City comptroller and others issue reports and make public statements regarding
the City's financial condition, commenting on, among other matters, the City's
financial plans, projected revenues and expenditures and actions by the City to
eliminate projected operating deficits. Some of these reports and statements
have warned that the City may have underestimated certain expenditures and
overestimated certain revenues and have suggested that the City may not have
adequately provided for future contingencies. Certain of these reports have
analyzed the City's future economic and social conditions and have questioned
whether the City has the capacity to generate sufficient revenues in the future
to meet the costs of its expenditure increases and to provide necessary
services.
The City submitted to the Control Board on July 21,
1995 a fourth quarter modification to the City's financial plan for the 1995
fiscal year (the "1995 Modification"), which projects a balanced budget in
accordance with GAAP for the 1995 fiscal year, after taking into account a
discretionary transfer of $75 million. On July 11, 1995, the City submitted to
the Control Board the Financial Plan for the 1996 through 1999 fiscal years (the
"1996-1999 Financial Plan").
The 1996-1999 Financial Plan projected revenues and
expenditures for the 1996 fiscal year balanced in accordance with GAAP. The
projections for the 1996 fiscal year reflected proposed actions to close a
previously projected gap of approximately $3.1 billion for the 1996 fiscal
year. The proposed actions in the 1996-1999 Financial Plan for the 1996 fiscal
year included (i) a reduction in spending of $400 million, primarily affecting
public assistance and Medicaid payment to the City; (ii) expenditure reductions
in agencies, totaling $1.2 billion; (iii) transitional labor savings, totaling
$600 million;
-19-
<PAGE> 45
and (iv) the phase-in of the increased annual pension funding cost due to
revisions resulting from an actuarial audit of the City's pension systems,
which would reduce such costs in the 1996 fiscal year.
The proposed agency spending reductions included the
reduction of City personnel through attrition, government efficiency
initiatives, procurement initiatives and labor productivity initiatives. The
substantial agency expenditure reductions proposed in the 1996-1999 Financial
Plan may be difficult to implement, and the 1996-1999 Financial Plan is subject
to the ability of the City to implement proposed reductions in City personnel
and other cost reduction initiatives. In addition, certain initiatives are
subject to negotiation with the City's municipal unions, and various actions,
including proposed anticipated State aid totaling $50 million are subject to
approval by the Governor and the Legislature.
The 1996-1999 Financial Plan also set forth projections
for the 1997 through 1999 fiscal years and outlined a proposed gap-closing
program to eliminate projected gaps of $888 million, $1.5 billion and $1.4
billion for the 1997, 1998 and 1999 fiscal years, respectively, after successful
implementation of the $3.1 billion gap-closing program for the 1996 fiscal
year. These actions, a substantial number of which were not specified in
detail, include additional agency spending reductions, reduction in
entitlements, government procurement initiatives, revenue initiatives and the
availability of the general reserve.
Contracts with all of the City's municipal unions
either expired in the 1995 fiscal year or will expire in the 1996 fiscal years.
The 1996-1999 Financial Plan provided no additional wage increases for City
employees after the 1995 fiscal year. Each 1% wage increase for all union
contracts commencing in the 1995 or 1996 fiscal year would cost the City an
additional $141 million for the 1996 fiscal year and $161 million each year
thereafter above the amounts provided for in the 1996-1999 Financial Plan.
Although the City has balanced its budget since 1981,
estimates of the City's revenues and expenditures, which are based on numerous
assumptions, are subject to various uncertainties. If expected federal or
State aid is not forthcoming, if unforeseen developments in the economy
significantly reduce revenues derived from economically sensitive taxes or
necessitate increased expenditures for public assistance, if the City should
negotiate wage increases for its employees greater than the amounts provided for
in the City's financial plan or if other uncertainties materialize that reduce
expected revenues or increase projected expenditures, then, to avoid operating
deficits, the City may be required to implement additional
-20-
<PAGE> 46
actions, including increases in taxes and reductions in essential City
services. The City might also seek additional assistance from New York State.
The City requires certain amounts of financing for
seasonal and capital spending purposes. The City's current monthly cash flow
forecast for the 1996 fiscal year shows a need of $2.4 billion of seasonal
financing for the 1996 fiscal year. Seasonal financing requirements for the
1995 fiscal year increased to $2.2 billion from $1.75 billion and $1.4 billion
in the 1994 and 1993 fiscal years, respectively.
Certain localities, in addition to the City, could have
financial problems leading to requests for additional New York State
assistance. The potential impact on the State of such requests by localities
was not included in the projections of the State's receipts and disbursements
in the State's 1995-96 fiscal year.
Fiscal difficulties experienced by the City of Yonkers
("Yonkers") resulted in the creation of the Financial Control Board for the City
of Yonkers (the "Yonkers Board") by New York State in 1984. The Yonkers Board is
charged with oversight of the fiscal affairs of Yonkers. Future actions taken
by the Governor or the Legislature to assist Yonkers could result in allocation
of New York State resources in amounts that cannot yet be determined.
Municipalities and school districts have engaged in
substantial short-term and long-term borrowings. In 1993, the total
indebtedness of all localities in New York State other than New York City was
approximately $17.7 billion. A small portion (approximately $105 million) of
that indebtedness represented borrowing to finance budgetary deficits and was
issued pursuant to enabling New York State legislation. State law requires the
comptroller to review and make recommendations concerning the budgets of those
local government units other than New York City authorized by State law to issue
debt to finance deficits during the period that such deficit financing is
outstanding. Fifteen localities had outstanding indebtedness for deficit
financing at the close of their fiscal year ending in 1993.
From time to time, federal expenditure reductions could
reduce, or in some cases eliminate, federal funding of some local programs and
accordingly might impose substantial increased expenditure requirements on
affected localities. If New York State, New York City or any of the Authorities
were to suffer serious financial difficulties jeopardizing their respective
access to the public credit markets, the marketability of notes and bonds issued
by localities within New York State could be
-21-
<PAGE> 47
adversely affected. Localities also face anticipated and potential problems
resulting from certain pending litigation, judicial decisions and long-range
economic trends. Long-range potential problems of declining urban
population, increasing expenditures and other economic trends could adversely
affect localities and require increasing New York State assistance in the
future.
ADDITIONAL PURCHASE AND REDEMPTION INFORMATION
In General.
Information on how to purchase and redeem Fund shares, and how
such shares are priced, is included in the Prospectus. The issuance of shares
is recorded on the books of the Fund, and share certificates are not issued
unless expressly requested in writing. Certificates are not issued for
fractional shares.
Prior to effecting a redemption of shares represented by
certificates, PFPC must have received such certificates at its principal
office. All such certificates must be endorsed by the redeeming shareholder or
accompanied by a signed stock power, in each instance with the signature
guaranteed by a commercial bank or a member of a major stock exchange, unless
other arrangements satisfactory to the Fund have previously been made. The
Fund may require any additional information reasonably necessary to evidence
that a redemption has been duly authorized.
Under the 1940 Act, the Fund may suspend the right of redemption
or postpone the date of payment upon redemption for any period during which the
New York Stock Exchange is closed, other than customary weekend and holiday
closings, or during which trading on said Exchange is restricted, or during
which (as determined by the SEC by rule or regulation) an emergency exists as a
result of which disposal or valuation of portfolio securities is not reasonably
practicable, or for such other periods as the SEC may permit. (The Fund may
also suspend or postpone the recordation of the transfer of its shares upon the
occurrence of any of the foregoing conditions.)
In addition, if, in the opinion of the directors of the Fund,
ownership of shares has or may become concentrated to an extent which would
cause the Fund to be deemed a personal holding company, the Fund may compel the
redemption of, reject any order for or refuse to give effect on the books of
the Fund to the transfer of the Fund's shares in an effort to prevent that
consequence. The Fund may also redeem shares involuntarily if such redemption
appears appropriate in light of the Fund's responsibilities under the 1940 Act.
If the Fund's Board of Directors determines that conditions exist which make
payment of redemption proceeds wholly in cash unwise or undesirable, the Fund
may make payment wholly or partly in securities or other
-22-
<PAGE> 48
property. In certain instances, the Fund may redeem shares pro rata from each
shareholder of record without payment of monetary consideration. (See
Statement of Additional Information --"Investment Objective and Policies
(Portfolio Valuation)" for an example of when such redemption or form of
payment might be appropriate.)
Any institution purchasing shares on behalf of separate accounts
will be required to hold the shares in a single nominee name (a "Master
Account"). Institutions investing in more than one series of the Fund's shares
must maintain a separate Master Account for each series. Institutions may
arrange with PFPC for certain sub-accounting services (such as purchase,
redemption and dividend recordkeeping) paid for by the Fund, if PFPC is
provided with the information necessary for sub-accounting. Sub-accounts may
be established by name or number.
The customary national business holidays which either the Federal
Reserve Bank of Philadelphia or the New York Stock Exchange observe are New
Year's Day, Martin Luther King, Jr. Day, Presidents' Day, Memorial Day,
Independence Day, Labor Day, Columbus Day, Veterans' Day, Thanksgiving Day and
Christmas Day.
Net Asset Value.
As stated in the Fund's Prospectus, the Fund's net asset value per
share is calculated by adding the value of all of the Fund's portfolio
securities and other assets belonging to the Fund, subtracting the liabilities
charged to the Fund including dividends that have been declared but not paid,
and dividing the result by the number of the Fund's shares outstanding
(irrespective of series). The value of the Fund's assets is calculated using
the amortized cost method pursuant to procedures adopted by the Board of
Directors under Rule 2a-7. "Assets belonging to" the Fund consist of the
consideration received upon the issuance of the Fund's shares together with all
income, earnings, profits and proceeds derived from the investment thereof,
including any proceeds from the sale of such investments and any funds or
payments derived from any re-investment of such proceeds. Assets belonging to
the Fund are charged with the direct liabilities of the Fund.
-23-
<PAGE> 49
MANAGEMENT OF THE FUND
Directors and Officers.
The Fund's directors and officers, their addresses, principal
occupations during the past 5 years and other affiliations are as follows:
<TABLE>
<CAPTION>
Principal Occupations
during past 5 years
Name and Address Position and Other Affiliations
- ---------------- -------- ----------------------
<S> <C> <C>
Thomas A. Melfe Chairman Partner of the law firm of
30 Rockefeller Plaza and Donovan Newton Leisure & Irvine
New York, NY 10112 Director since 1984; Partner of the law firm
Age: 63 of Hale Russell & Gray, 1981 to
1984.
Francis E. Drake, Jr. Director Retired; Chairman of Executive and
90 Knollwood Drive Finance Committee, Rochester Gas and
Rochester, NY 14618 Electric Corp. until December, 1988;
Age: 80 Chairman of the Board and Chief Executive
Officer, Rochester Gas and Electric Corp.
until 1980.
</TABLE>
-24-
<PAGE> 50
<TABLE>
Principal Occupations
during past 5 years
Name and Address Position and Other Affiliations
- ---------------- -------- ----------------------
<S> <C> <C>
Rodney D. Johnson Director President, Fairmount Capital
Fairmount Capital Advisors, Inc. (financial advising)
Advisors, Inc. since 1987.
1435 Walnut Street
Drexel Building,
3rd Floor
Philadelphia, PA
19102
Age: 53
Anthony M. Santomero Director Richard K. Mellon Professor of
310 Keithwood Road Finance, since April 1984 and Dean's
Wynnewood, PA 19096 Advisory Council Member since July
Age: 48 1984, The Wharton School, University
of Pennsylvania; Associate Editor,
Journal of Banking and Finance,
since June 1978; Associate Editor,
Journal of Economics and Business,
since October 1979; Associate
Editor, Journal of Money, Credit and
Banking, since January 1989;
Research Associate, New York
University Center for Japan-US
Business and Economic Studies, since
July 1989; Editorial Advisory Board,
Open Economics Review, since
November 1990; Director, The Zweig
Fund and The Zweig Total Return
Fund.
Edward J. Roach President Certified Public Accountant;
Bellevue Park and Treasurer Partner of the accounting firm
Corporate Center of Main Hurdman until 1981;
Suite 100 Vice Chairman of the Board,
400 Bellevue Parkway Fox Chase Cancer Center;
Wilmington, DE 19809 Trustee Emeritus, Pennsylvania
Age: 71 School for the Deaf; Officer of
various investment companies advised by PNC
Institutional Management Corporation.
Morgan R. Jones Secretary Partner of the law firm of Drinker
1345 Chestnut Street Biddle & Reath.
Suite 1100
Philadelphia, PA 19107-3496
Age: 55
</TABLE>
----------------------------
Messrs. Johnson and Santomero serve as directors of
Temporary Investment Fund, Inc. ("TempFund"), Municipal Fund for California
Investors, Inc. ("California Muni") and Provident Institutional Funds, Inc.
("PIF") and as trustees of Trust for Federal Securities ("FedFund"), Municipal
Fund for Temporary Investment ("MuniFund") and The PNC(R) Fund ("PNC"). Mr.
Johnson also serves as a director of the International Dollar Reserve
-25-
<PAGE> 51
Fund ("IDR"). Each of these funds shares the same investment adviser and/or
sub-adviser as the Fund.
Mr. Roach is Vice President and Treasurer of TempFund,
FedFund, MuniFund, PNC, Independence Square Income Securities ("ISIS"),
California Muni and PIF. In addition, Mr. Roach is Treasurer of Chestnut
Street Exchange Fund ("Chestnut") and President and Treasurer of The RBB Fund,
Inc. ("RBB"); and Mr. Jones is Secretary of Chestnut, California Muni,
MuniFund, PNC and RBB. Each of the investment companies named above receives
various advisory or other services from PIMC or PNC Bank. Of the
above-mentioned funds, PDI and PFPC provide distribution and administration
services to TempFund, FedFund, MuniFund, Diversified, PNC and California Muni.
In addition, PFPC provides administration services to RBB.
Each director is paid $5,000 annually, plus $250 for each
Board meeting attended, and is reimbursed for expenses incurred in connection
with his attendance at Board meetings. The Chairman of the Board receives an
additional $2,500 per annum for his services in such capacity.
The following table sets forth information about the fees
received by the Fund's directors for the fiscal year ended July 31, 1995,
the Fund's most recently completed fiscal year.
-26-
<PAGE> 52
<TABLE>
<CAPTION>
Pension or Total
Retirement Estimated Compensation
Benefits Annual from Fund
Aggregate Accrued as Benefits and Fund
Name of Person Compensation Part of Fund Upon Complex(1) Paid
Position from Fund Expenses Retirement to Directors
- -------------- --------- ------------ ---------- -------------
<S> <C> <C> <C> <C>
Thomas A. Melfe $ 8,500 0.00 N/A (1)(2) $ 8,500
Director and Chairman
Rodney D. Johnson $ 6,000 0.00 N/A (6)(2) $ 58,450
Director
Francis E. Drake, Jr. $ 6,000 0.00 N/A (1)(2) $ 6,000
Director
Anthony M. Santomero, N/A 0.00 N/A (5)(2) $ 51,000
Director
$18,000 0.00 $123,950
</TABLE>
- --------------------------------
(1) A "fund complex" means two or more investment companies that hold
themselves out to investors as related companies for purposes of
investment and investor services, or have a common investment adviser
or have an investment adviser that is an affiliated person of the
investment adviser of any of the other investment companies. The fund
complex consists of the Fund, Muni Fund, FedFund, PNC, TempFund,
CalMuni, PIF, IDR, Chestnut Street Exchange Fund and Independence
Square Income Securities, Inc.
(2) Total number of investment companies each director serves on within
the fund complex.
In addition, the Fund contributed $1,118.62 for its last
fiscal year to its retirement plan for employees (who include Mr. Roach). No
employee of PDI, PIMC, PFPC or PNC Bank receives any compensation from the Fund
for acting as an officer or director of the Fund. The directors and officers
of the Fund own less than 1% of the Fund's shares.
By virtue of the responsibilities assumed by PDI, PIMC, PNC
Bank and PFPC under their respective agreements with the Fund, the Fund itself
requires only one part-time employee in addition to its officers. Drinker
Biddle & Reath, of which Mr. Jones is a partner, receives legal fees as counsel
to the Fund.
Adviser and Administrators.
The advisory and administrative services provided and the
expenses assumed by PIMC and the administrators, as well as the fees payable
to each of them, are described in the Prospectus. For the fiscal years ended
July 31, 1993, 1994
-27-
<PAGE> 53
and 1995 the Fund paid $184,272, $165,619 and $134,630, respectively, in
advisory fees to PIMC (net of waivers). During the fiscal year ended July
31, 1993 the Fund paid $194,546 in administration fees to its former
administrator, The Boston Company Advisors, Inc. ("Boston Advisors"), PFPC and
PDI (net of waivers). For the fiscal years ended July 31, 1994 and 1995, the
Fund paid administration fees to PFPC and PDI (net of waivers) totalling
$165,618 and $134,629, respectively. During the fiscal year ended July 31,
1993, PIMC and PFPC, PDI and Boston Advisors each voluntarily waived advisory
and administration fees in amounts totalling $361,266 and $350,992,
respectively. During the fiscal year ended July 31, 1994, PIMC and PFPC and
PDI each voluntarily waived advisory and administration fees in amounts
totalling $379,276 and $379,277, respectively. During the fiscal year ended
July 31, 1995, PIMC, PFPC and PDI each voluntarily waived advisory and
administration fees in amounts totalling $350,428 and $350,429,
respectively.
PIMC and the administrators have agreed that if, in any fiscal
year, the expenses borne by the Fund exceed the applicable expense limitations
imposed by the securities regulations of any state in which shares of the Fund
are registered or qualified for sale to the public, they will each reimburse
the Fund for one-half of any excess to the extent required by such regulations.
To the Fund's knowledge, as of the date of this Statement of Additional
Information, the most restrictive expense limitation applicable to the Fund
provides that annual expenses (as defined by statute) may not exceed 2-1/2% of
the first $30 million of a Fund's average annual net assets, 2% of the next $70
million of the average annual net assets and 1-1/2% of the remaining average
annual net assets. The Fund's expenses, however, are not expected to exceed
any such limitation.
Banking Laws.
Certain banking laws and regulations with respect to
investment companies are discussed in the Fund's Prospectus. PIMC, PFPC and
PNC Bank believe that they may perform the services for the Fund contemplated
by the respective Advisory, Sub-Advisory, Transfer Agency and Custody
Agreements without violation of the Glass-Steagall Act or other applicable
banking laws or regulations. However, changes in legal requirements relating
to the permissible activities of banks and their affiliates, as well as further
interpretations of present and future requirements, could prevent PIMC, PNC
Bank and PFPC from continuing to perform such services for the Fund. If PIMC,
PFPC or PNC Bank were prohibited from continuing to perform such services, it
is expected that the Board of Directors would recommend that the Fund enter
into new agreements with other qualified firms. Any new advisory agreement
would be subject to shareholder approval.
-28-
<PAGE> 54
Custodian and Transfer Agent.
As custodian of the Fund's assets, PNC Bank (i) maintains a
separate account or accounts in the name of the Fund, (ii) holds and
disburses portfolio securities on account of the Fund, (iii) makes receipts and
disbursements of money on behalf of the Fund, (iv) collects and receives all
income and other payments and distributions on account of the Fund's portfolio
securities, (v) responds to correspondence from security brokers and others
relating to its duties and (vi) makes periodic reports to the Fund's Board of
Directors concerning the Fund's operations. PNC Bank is authorized to select
one or more banks or trust companies to serve as sub-custodian on behalf of the
Fund, provided that PNC Bank remains responsible for the performance of all its
duties under its Custody Agreement with the Fund and holds the Fund harmless
from the acts and omissions of any sub-custodian chosen by PNC Bank. The Fund
pays PNC Bank a fee for its custodial services equal to $.25 per annum for each
$1,000 of the Fund's average gross assets.
As the Fund's transfer and dividend disbursing agent, PFPC (i)
issues and redeems shares of the Fund, (ii) addresses and mails all
communications by the Fund to its shareholders, including reports to
shareholders, dividend and distribution notices and proxy material for its
meetings of shareholders, (iii) responds to correspondence by shareholders and
others relating to its duties, (iv) maintains shareholder accounts and
sub-accounts, (v) provides installation and other services in connection with
the Fund's computer access program maintained to facilitate shareholder access
to the Fund, and (vi) makes periodic reports to the Fund's Board of Directors
concerning the Fund's operations. PFPC may, on 30 days' notice to the Fund,
assign its duties thereunder to any other affiliate of PNC Bank Corp. For its
transfer agency, dividend disbursing and sub-accounting services, the Fund pays
PFPC $12.00 per account and sub-account per annum plus $1.00 for each purchase
or redemption transaction by an account (other than a purchase transaction made
in connection with the automatic reinvestment of dividends).
PFPC sends each shareholder of record a monthly statement
showing the total number of shares owned as of the last business day of the
month (as well as the dividends paid during the current month and year), and
provides each shareholder of record with a daily transaction report for each
day on which a transaction occurs in the shareholder's Master Account with the
Fund. Further, an institution establishing sub-accounts with PFPC is provided
with a daily transaction report for each day on which a transaction occurs in a
sub-account and, as of the last calendar day of each month, a report which sets
forth the share balance for the sub-account at the beginning and end of the
month and income paid or reinvested during the month.
-29-
<PAGE> 55
Service Organizations.
As stated in the Fund's Prospectus, the Fund enters into
agreements with institutional investors ("Service Organizations") requiring
them to provide support services to their customers who beneficially own Dollar
or Plus shares in consideration of .25% (on an annualized basis) of the average
daily net asset value of the Dollar or Plus shares held by the Service
Organizations for the benefit of their customers. Such services include: (i)
aggregating and processing purchase and redemption requests from customers and
placing net purchase and redemption orders with the transfer agent; (ii)
providing customers with a service that invests the assets of their accounts in
Dollar or Plus shares; (iii) processing dividend payments from the Fund on
behalf of customers; (iv) providing information periodically to customers
showing their positions in Dollar and Plus shares; (v) arranging for bank
wires; (vi) responding to customer inquiries relating to the services performed
by the Service Organizations; (vii) providing sub-accounting with respect to
Dollar and Plus shares beneficially owned by customers or the information
necessary for sub-accounting; (viii) forwarding shareholder communications from
the Fund (such as proxies, shareholder reports, annual and semi-annual
financial statements and dividend, distribution and tax notices) to customers,
if required by law; and (ix) other similar services if requested by the Fund.
In addition, broker/dealers purchasing Plus shares may be requested to provide
from time to time assistance (such as the forwarding of sales literature and
advertising to customers) in connection with the distribution of Plus shares.
For the period from August 1, 1994 through December 1, 1994, the Fund paid a
total of $302 to Service Organizations with respect to Plus shares (no Plus
Shares were outstanding from December 2, 1994 through July 31, 1995). For the
fiscal year ended July 31, 1995, no fees were paid with respect to Dollar
shares and no such shares were outstanding.
The Fund's agreements with Service Organizations are governed
by Plans (called "non-12b-1 Shareholder Services Plan" and "12b-1 Services
Plan" for the Dollar shares and Plus shares, respectively), which have been
adopted by the Fund's Board of Directors pursuant to applicable rules and
regulations of the SEC and an exemptive order granted by the SEC in connection
with the creation of the Dollar and Plus shares. Pursuant to the Plans, the
Board of Directors reviews, at least quarterly, a written report of the amounts
expended under the Fund's agreements with Service Organizations and the
purposes for which the expenditures were made. In addition, the Fund's
arrangements with Service Organizations must be approved annually by a majority
of the Fund's directors, including a majority of the directors who are not
"interested persons" of the Fund as defined in the 1940 Act
-30-
<PAGE> 56
and have no direct or indirect financial interest in such arrangements (the
"Disinterested Directors").
The Board of Directors has approved the Fund's arrangements
with Service Organizations based on information provided to the Board that
there is a reasonable likelihood that the arrangements will benefit the Fund
and its shareholders by affording the Fund greater flexibility in connection
with the servicing of the accounts of the beneficial owners of its shares in an
efficient manner. Any material amendment to the Fund's arrangements with
Service Organizations must be approved by a majority of the Fund's Board of
Directors (including a majority of the Disinterested Directors), and any
amendment to increase materially the costs under the 12b-1 Services Plan
adopted by the Board with respect to Plus shares must be approved by the
holders of a majority of the outstanding Plus shares. (It should be noted that
while the annual service fee with respect to Plus shares is currently set at
.25%, the Plan adopted by the Board of Directors permits the Board to increase
this fee to .40% without shareholder approval.) So long as the Fund's
arrangements with Service Organizations are in effect, the selection and
nomination of the members of the Fund's Board of Directors who are not
"interested persons" (as defined in the 1940 Act) of the Fund will be committed
to the discretion of such non-interested directors.
Expenses.
Except as noted in the Prospectus, the Fund's service
contractors bear all expenses in connection with performance of their
services. The Fund bears the expenses incurred in its operations. Fund
expenses include taxes, interest, fees and salaries of its directors and
officers, SEC fees, state securities qualification fees, costs of preparing and
printing prospectuses for regulatory purposes and for distribution to
shareholders, advisory and administration fees, charges of the custodian,
transfer agent and dividend disbursing agent, Service Organization fees,
certain insurance premiums, outside auditing and legal expenses, costs of
independent pricing service, costs of shareholder reports and shareholder
meetings and any extraordinary expenses. The Fund also pays for brokerage fees
and commissions (if any) in connection with the purchase of portfolio
securities.
ADDITIONAL INFORMATION CONCERNING TAXES
The following summarizes certain additional Federal tax
considerations generally affecting the Fund and its shareholders that are not
described in the Fund's Prospectus. No attempt is made to present a detailed
explanation of the tax treatment of the Fund or its shareholders, and the
discussion here and in the
-31-
<PAGE> 57
Fund's Prospectus is not intended as a substitute for careful tax planning.
Investors should consult their tax advisers with specific reference to their
own tax situations.
As described above and in the Fund's Prospectus, the Fund is
designed to provide New York institutional investors and their customers with
current tax-exempt interest income. The Fund is not intended to constitute a
balanced investment program and is not designed for investors seeking capital
appreciation or maximum tax-exempt income irrespective of fluctuations in
principal. Shares of the Fund would not be suitable for tax-exempt
institutions and may not be suitable for retirement plans qualified under
Section 401 of the Internal Revenue Code of 1986, as amended (the "Code"), H.R.
10 plans and individual retirement accounts because such plans and accounts are
generally tax-exempt and, therefore, not only would not gain any additional
benefit from the Fund's dividends being tax-exempt, but such dividends would be
ultimately taxable to the beneficiaries when distributed to them. In addition,
the Fund may not be an appropriate investment for persons that are either
"substantial users" of facilities financed by private activity bonds or
"related persons" thereof. "Substantial user" is defined under U.S. Treasury
Regulations to include a non-exempt person who (i) regularly uses a part of
such facilities in his trade or business and (ii) whose gross revenues derived
with respect to the facilities financed by the issuance of bonds are more than
5% of the total revenues derived by all users of such facilities, who
occupies more than 5% of the usable area of such facilities or for whom such
facilities or a part thereof were specifically constructed, reconstructed or
acquired. "Related persons" include certain related natural persons,
affiliated corporations, a partnership and its partners and an S corporation
and its shareholders.
The percentage of total dividends paid by the Fund with
respect to any taxable year which qualifies as Federal exempt-interest
dividends will be the same for all shareholders receiving dividends during such
year. In order for the Fund to pay exempt-interest dividends during any
taxable year, at the close of each fiscal quarter at least 50% of the aggregate
value of the Fund's portfolio must consist of Federal tax-exempt interest
obligations. In addition, the Fund must distribute an amount that is equal to
at least the sum of 90% of its net exempt-interest income and 90% of its
investment company taxable income with respect to each taxable year. After the
close of its taxable year, the Fund will notify each shareholder of the portion
of the dividends paid by the Fund to the shareholder with respect to such
taxable year which constitutes an exempt-interest dividend. However, the
aggregate amount of dividends so designated cannot exceed the excess of the
amount of interest exempt from tax under Section 103 of the Code received by
the
-32-
<PAGE> 58
Fund during the taxable year over any amounts disallowed as deductions under
Sections 265 and 171(a)(2) of the Code.
Interest on indebtedness incurred by a shareholder to purchase
or carry Fund shares generally is not deductible for Federal and New York State
and New York City personal income tax purposes if the Fund distributes
exempt-interest dividends during the shareholder's taxable year.
While the Fund does not expect to earn any investment company
taxable income, any such income earned by the Fund will be distributed. In
general, the Fund's investment company taxable income will be its taxable
income (including, for example, its short-term capital gains) subject to
certain adjustments and excluding the excess of any net long-term capital gain
for the taxable year over the net short-term capital loss, if any, for such
year. To the extent such income is distributed, it will be taxable to
shareholders as ordinary income, whether paid in cash or additional shares.
The Fund does not expect to realize long-term capital gains
and therefore does not expect to distribute any capital gain dividends.
Dividends declared in October, November or December of any
year payable to shareholders of record on a specified date in such months will
be deemed for Federal income tax purposes to have been received by the
shareholders and paid by the Fund on December 31 of such year in the event such
dividends are actually paid during January of the following year.
A 4% non-deductible excise tax is imposed on regulated
investment companies that fail currently to distribute an amount equal to
specified percentages of their ordinary taxable income and capital gain net
income (excess of capital gains over capital losses). The Fund intends to make
sufficient distributions or deemed distributions of its ordinary taxable income
and any capital gain net income prior to the end of each calendar year to avoid
liability for this excise tax.
Although the Fund expects to qualify as a "regulated
investment company" and to be relieved of all or substantially all Federal
income taxes, the Fund may be subject to the tax laws of states or localities
depending upon the extent of its activities in such states and localities in
which its offices are maintained, in which its agents or independent
contractors are located or in which it is otherwise deemed to be conducting
business.
If for any taxable year the Fund does not qualify for the
special Federal income tax treatment afforded regulated investment companies,
all of its taxable income will be subject
-33-
<PAGE> 59
to Federal income tax at regular corporate rates (without any deduction for
distributions to its shareholders). In such event, dividend distributions,
including amounts derived from interest on tax-exempt obligations, would be
taxable to shareholders to the extent of current and accumulated earnings and
profits, and would be eligible for the dividends received deduction for
corporations.
The Fund will be required in certain cases to withhold and
remit to the United States Treasury 31% of taxable dividends or 31% of gross
sale proceeds paid to shareholders who have failed to provide a correct tax
identification number in the manner required, who are subject to withholding by
the Internal Revenue Service for failure properly to include on their return
payments of taxable interest or dividends, or who have failed to certify to the
Fund that they are not subject to backup withholding when required to do so or
that they are "exempt recipients."
The foregoing discussion is based on Federal tax laws and
regulations which are in effect on the date of this Statement of Additional
Information; such laws and regulations may be changed by legislative or
administrative action. Shareholders are advised to consult their tax advisers
concerning the application of state and local taxes.
DIVIDENDS
General.
Net income for dividend purposes consists of interest accrued
and original discount earned on the Fund's assets for the applicable
dividend period, less amortization of market premium on such assets and accrued
expenses for such period. Net income for each of the Fund's three series of
shares is determined in the same manner, except that Dollar and Plus shares
bear the fees payable to Service Organizations for the services to the
beneficial owners of such shares. (See the Fund's Prospectus under
"Dividends.") Realized and unrealized gains and losses on portfolio securities
are reflected in net asset value.
Should the Fund incur or anticipate any unusual or unexpected
significant expense or loss which would affect disproportionately the income of
the Fund for a particular period, the Board of Directors would at that time
consider whether to adhere to the present dividend policy with respect to the
Fund or to revise it in order to mitigate to the extent possible the
disproportionate effect of such expense or loss on the income of the Fund.
Such expense or loss may result in the shareholder's receiving no dividends for
the period during which
-34-
<PAGE> 60
it held shares of the Fund and in it receiving upon redemption a price per
share lower than that which it paid.
Yield Information.
The "yields," "effective yields" and "tax-equivalent yields"
of the Fund's series of shares as described and shown in the Prospectus are
calculated according to formulas prescribed by the SEC. The standardized
seven-day yield for each of the Fund's three series of shares is computed
separately for each series by determining the net change in the value of a
hypothetical pre-existing account in the Fund having a balance of one share of
the series involved at the beginning of the period, dividing the net change by
the value of the account at the beginning of the period to obtain the base
period return, and multiplying the base period return by 365/7. The net change
in the value of an account in the Fund includes the value of additional shares
purchased with dividends from the original share and dividends declared on the
original share and any such additional shares, net of all fees charged to all
shareholder accounts in proportion to the length of the base period and the
Fund's average account size, but does not include gains and losses or
unrealized appreciation and depreciation. The Fund's "effective yield" is
calculated by compounding the unannualized base period return for each series
of shares (calculated as above), by adding one to the base period return for
the series involved, raising that sum to a power equal to 365/7, and
subtracting one from the result. The Fund's "tax-equivalent" yield is computed
by: (a) dividing the portion of the Fund's yield (calculated as above) that is
exempt from both Federal and New York State income taxes by one minus a stated
combined Federal and New York State income tax rate; (b) dividing the portion
of the Fund's yield (calculated as above) that is exempt from Federal income
tax only by one minus a stated Federal income tax rate; and (c) adding the
figures resulting from (a) and (b) above to that portion, if any, of the Fund's
yield that is not exempt from Federal income tax.
From time to time, in advertisements or in reports to
shareholders, the yields of the Fund may be quoted and compared to those of
other mutual funds with similar investment objectives and to stock or other
relevant indices. For example, the yield of the Fund may be compared to
Donoghue's Money Fund Average, which is an average compiled by Donoghue's MONEY
FUND REPORT(R) of Holliston, MA 01746, a widely recognized independent
publication that monitors the performance of money market funds, or to the data
prepared by Lipper Analytical Services, Inc. ("Lipper"), a widely-recognized
independent service that monitors the performance of mutual funds.
The Fund may also from time to time include in advertisements, sales
literature, communications to shareholders
-35-
<PAGE> 61
and other materials ("Materials"), discussions or illustrations of the effects
of compounding. "Compounding" refers to the fact that, if dividends or other
distributions on an investment are reinvested by being paid in additional Fund
shares, any future income or capital appreciation of the Fund would increase
the value, not only of the original Fund investment, but also of the additional
Fund shares received through reinvestment. As a result, the value of the Fund
investment would increase more quickly than if dividends or other distributions
had been paid in cash.
In addition, the Fund may also include in Materials discussions and/or
illustrations of the potential investment goals of a prospective investor,
investment management strategies, techniques, policies or investment
suitability of the Fund, economic conditions, the relationship between sectors
of the economy and the economy as a whole, various securities markets, the
effects of inflation and historical performance of various asset classes,
including but not limited to, stocks, bonds and Treasury securities. From time
to time, Materials may summarize the substance of information contained in
shareholder reports (including the investment composition of the Fund), as well
as the views of the adviser and/or sub-adviser as to current market, economic,
trade and interest rate trends, legislative, regulatory and monetary
developments, investment strategies and related matters believed to be of
relevance to the Fund. The Fund may also include in Materials charts, graphs
or drawings which compare the investment objective, return potential, relative
stability and/or growth possibilities of the Fund and/or other mutual funds, or
illustrate the potential risks and rewards of investment in various investment
vehicles, including but not limited to, stocks, bonds, Treasury securities and
shares of the Fund and/or other mutual funds. Materials may include a
discussion of certain attributes or benefits to be derived by an investment in
the Fund and/or other mutual funds (such as value investing, market timing,
dollar cost averaging, asset allocation, constant ratio transfer, automatic
accounting rebalancing, the advantages and disadvantages of investing in
tax-deferred and taxable investments), shareholder profiles and hypothetical
investor scenarios, timely information on financial management, tax and
retirement planning and investment alternatives to certificates of deposit and
other financial instruments. Such Materials may include symbols, headlines or
other material which highlight or summarize the information discussed in more
detail therein.
The Fund's yields will fluctuate and any quotation of the Fund's yield
should not be considered as representative of the future performance of the
Fund. Since yields fluctuate, yield data cannot necessarily be used to compare
an investment in the Fund's shares with bank deposits, savings accounts, and
similar investment alternatives which often provide an agreed or
-36-
<PAGE> 62
guaranteed fixed yield for a stated period of time. Shareholders should
remember that yield is generally a function of kind and quality of the
investments held in a portfolio, portfolio maturity, operating expenses, and
market conditions. Any fees charged by banks or other financial institutions
to customer accounts investing in shares of the Fund will not be included in
calculations of yield; such fees would reduce the actual yield from that
quoted.
COUNSEL
Drinker Biddle & Reath, 1345 Chestnut Street, Suite 1100,
Philadelphia, Pennsylvania 19107, of which Mr. Jones, Secretary of the Fund, is
a partner, will pass upon certain legal matters for the Fund as its counsel.
Willkie Farr & Gallagher, One Citicorp Center, 153 East 53rd Street, New York,
New York 10022, acts as special New York counsel for the Fund and has reviewed
the portions of this Statement of Additional Information and the Fund's
Prospectus concerning New York taxes and the description of special
considerations relating to New York Municipal Obligations.
INDEPENDENT ACCOUNTANTS
The financial statements of the Fund which appear in this
Statement of Additional Information and the Financial Highlights which appear
in the Fund's Prospectus have been audited by Coopers & Lybrand L.L.P.,
independent accountants, whose report thereon is contained in this Statement of
Additional Information, and have been included herein and in the Fund's
Prospectus in reliance upon the report of said firm of independent accountants
given upon their authority as experts in accounting and auditing. Coopers &
Lybrand L.L.P. has offices at 2400 Eleven Penn Center, Philadelphia,
Pennsylvania 19103.
MISCELLANEOUS
The Fund was organized as a Maryland corporation on March 4,
1983 under the name of New York Municipal Fund for Temporary Investment,
Inc. On July 18, 1983, the Fund changed its name to Municipal Fund for New
York Investors, Inc.
As used in this Statement of Additional Information and the
Fund's Prospectus, a "majority of the outstanding shares of the Fund" means,
with respect to the approval of an investment advisory agreement, distribution
plan or a change in an investment objective or fundamental investment policy,
the lesser of (1) 67% of the Fund's shares, irrespective of series, represented
at a meeting at which the holders of more than 50% of
-37-
<PAGE> 63
the outstanding shares are present in person or by proxy, or (2) more than 50%
of the Fund's outstanding shares, irrespective of series.
As stated in the Prospectus, holders of the Fund's Money,
Dollar and Plus shares will vote in the aggregate and not by series on all
matters, except where otherwise required by law, except that only Dollar shares
will be entitled to vote on matters submitted to a vote of shareholders
pertaining to the Fund's arrangements with Service Organizations with respect
to Dollar shares and only Plus shares will be entitled to vote on matters
submitted to a vote of shareholders pertaining to the Fund's arrangements with
Service Organizations with respect to Plus shares.
Rule 18f-2 under the 1940 Act provides that any matter
required to be submitted by the provisions of such Act or applicable state law,
or otherwise, to the holders of the outstanding securities of an investment
company such as the Fund shall not be deemed to have been effectively acted
upon unless approved by the holders of a majority of the outstanding shares of
each series affected by the matter. Rule 18f-2 further provides that a series
shall be deemed to be affected by a matter unless it is clear that the
interests of each series in the matter are identical or that the matter does
not affect any interest of the series. Under the Rule, the approval of an
investment advisory agreement or any change in a fundamental investment policy
would be effectively acted upon with respect to a series only if approved by
the holders of a majority of the outstanding voting securities of such series.
However, the Rule also provides that the ratification of the selection of
independent accountants, the approval of principal underwriting contracts and
the election of directors are not subject to the separate voting requirements
and may be effectively acted upon by shareholders of the investment company
voting without regard to series.
As of November 20, 1995, the name, address and percentage of
ownership of each institutional investor that owned of record 5% or more of the
outstanding shares of the Fund were as follows: Chemical Bank,
Administrative Services, AIS Section 31-270, 270 Park Avenue, New York, New
York 10017, 25.43%; Chase Manhattan Bank, N.A., 1211 Avenue of the
Americas, 35th Floor, New York, New York 10036, 23.63%; Trulin & Co., c/o Chase
Manhattan Bank, N.A., P.O. Box 1412, Rochester, New York 14603, 18.49%;
Fleet New York, Fleet Investment Services, One East Avenue NY/RO/3090,
Rochester, New York 14638, 11.42%; GSS as Agent, The Chase Manhattan Bank,
N.A., 2 Chase Plaza, 4th Floor, New York, New York 10081, 5.20%. The Fund
does not know whether the entities named above are the beneficial owners of the
shares held by them.
-38-
<PAGE> 64
The Fund does not currently intend to hold annual meetings of
shareholders (except as required by the 1940 Act or other applicable law). The
law under certain circumstances provides shareholders with the right to call
for a meeting of shareholders to consider the removal of one or more directors.
To the extent required by law, the Fund will assist in shareholder
communication in such matters.
Notwithstanding any provision of Maryland law requiring a
greater vote of the Fund's shares in connection with any corporate action,
unless otherwise provided by law or by the Fund's Charter, the Fund may take or
authorize such action upon the favorable vote of the holders of more than 50%
of the Fund's outstanding shares voting without regard to class or series.
(See, however, the Fund's Prospectus under "Description of Shares" regarding
certain special voting rights of Dollar and Plus shares on matters pertaining
to the Fund's arrangements with Service Organizations.)
-39-
<PAGE> 65
NEW YORK MONEY FUND
MUNICIPAL FUND FOR NEW YORK INVESTORS, INC.
Statement of Net Assets
July 31, 1995
<TABLE>
<CAPTION>
INVESTMENTS IN MATURITY PAR
SECURITIES DATE (000) VALUE
- --------------------------------- ------- ------------
<S> <C> <C> <C>
NEW YORK -- 94.3%
City of New York G.O. DN /
(Mitsubishi Bank LOC)
(A-1+, VMIG-1)**
3.80%.................08/01/95 $ 3,500 $ 3,500,000
City of New York G.O. Series
B-10 DN / (Union Bank of
Switzerland LOC) (A-1+,
VMIG-1)**
3.75%.................08/07/95 2,200 2,200,000
City of New York G.O. TECP /
(Banque Paribas LOC)
(A-1, VMIG-1)
3.60%.................08/25/95 4,800 4,800,000
4.25%.................10/13/95 1,000 1,000,000
City of New York Housing
Development Corporation
(Columbus Gardens Project) DN
/ (Citibank LOC) (A-1)**
3.75%.................08/07/95 1,400 1,400,000
City of New York Housing
Development Corporation
(East 96th St. Project) DN /
(Mitsubishi Bank LOC)
(A-1+, VMIG-1)**
3.45%.................08/07/95 2,000 2,000,000
City of New York Housing
Development Corporation
(Parkgate Tower) Resolution
One Series 1985 DN /
(Citibank LOC)
(A-1, VMIG-1)**
3.75%.................08/07/95 4,945 4,945,000
City of New York Housing
Development Corporation
(Queenswood Apartment Project)
DN / (Sumitomo Bank LOC)
(VMIG-1)**
3.75%.................08/07/95 2,700 2,700,000
City of New York IDA (Columbia
Grammar School and Preparatory
School) Civic Facility RB
Series 1994 DN / (Chemical
Bank LOC) (A-1)**
3.60%.................08/07/95 300 300,000
City of New York IDA Refunding
Revenue Adjustable Tender
Notes (La Guardia Associates)
Series 1985 DN / (Banque
Indosuez LOC) (A1, VMIG-1)**
3.70%.................08/02/95 5,700 5,700,000
City of New York IDA Refunding
Revenue Adjustable Tender
Notes, Field Hotel Association
(JFK Project) DN / (Banque
Indosuez LOC) (A1, VMIG-1)**
3.70%.................08/07/95 3,750 3,750,000
NEW YORK (CONTINUED)
City of New York Tender Option
Bond DN / (MBIA Insurance)
(VMIG-1)**
3.96%.................08/07/95 $ 7,000 $ 7,000,000
City of New York Trust For
Cultural Resources (American
Museum of Natural History) DN
/ (MBIA Insurance) (A-1+,
VMIG-1)**
3.55%.................08/07/95 400 400,000
City of New York Trust For
Cultural Resources (Carnegie
Hall) Series 1985 DN / (Dai-Ichi
Kangyo LOC) (A-1, VMIG-1)**
3.75%.................08/07/95 3,250 3,250,000
City of New York Trust For
Cultural Resources (Carnegie
Hall) Series 1990 DN / (Dai-Ichi
Kangyo LOC) (A-1, VMIG-1)**
3.75%.................08/07/95 2,700 2,700,000
City of New York Trust For
Cultural Resources (The Jewish
Museum) Series 1992 DN /
(Sumitomo Bank LOC) (A1+,
VMIG-1)**
3.75%.................08/07/95 1,900 1,900,000
City of New York Trust For
Cultural Resources (The Museum
of Broadcasting) Series 1989
DN / (Sumitomo Bank LOC)
(A-1+, VMIG-1)**
3.75%.................08/07/95 2,300 2,300,000
County of Albany BAN
6.00%.................02/21/96 5,440 5,475,968
County of Erie Water Authority
DN / (AMBAC Insurance) (A-1+,
VMIG-1)**
3.60%.................08/07/95 600 600,000
County of Erie Water Authority
Water Works System RB DN /
(AMBAC Insurance)
(A-1+, VMIG-1)**
3.60%.................08/07/95 800 800,000
County of Monroe IDA Adjustable
Rate IDRB (Emerson Electric)
MB (Aa1)
3.80%.................07/01/96 2,290 2,290,000
County of Monroe IDA 1985 IDRB
(Rochester District Heating
Cooperative, Inc. Facility) DN
/ (Chemical Bank LOC)**
3.70%.................08/07/95 3,800 3,800,000
County of Montgomery IDRB
(Service Merchandise Company)
DN / (Barclays Bank LOC) (A1+,
VMIG-1)**
3.35%.................08/15/95 4,700 4,700,000
</TABLE>
-40-
<PAGE> 66
NEW YORK MONEY FUND
Statement of Net Assets (Continued)
July 31, 1995
<TABLE>
<CAPTION>
INVESTMENTS IN MATURITY PAR
SECURITIES DATE (000) VALUE
- --------------------------------- ------- ------------
<S> <C> <C> <C>
NEW YORK (CONTINUED)
County of Suffolk TAN 1995
(RA Series I) / (Westdeutsche
Landesbank Girozentrale LOC)
(SP-1+, MIG-1)
5.25%.................08/15/95 $ 3,900 $ 3,900,808
County of Suffolk Water
Authority Series 1994
(VMIG-1)**
3.75%.................08/01/95 4,100 4,100,000
Dormitory Authority of The
State of New York (Columbia
University) MGT 14-C DN /
(Morgan Guaranty LOC)
(VMIG-1)**
3.75%.................08/07/95 5,500 5,500,000
Dormitory Authority of The
State of New York
(Metropolitan Museum of Art)
Series 1993 A DN (A-1+,
VMIG-1)**
3.60%.................08/07/95 385 385,000
Dormitory Authority of The
State of New York (United
Cerebral Palsy of New York
City, Inc.) RB DN / (Chemical
Bank LOC)
(A-1, VMIG-1)**
3.60%.................08/07/95 8,600 8,600,000
Dormitory Authority of The
State of New York Pooled Short
Term TECP / (Dai-Ichi Kangyo
LOC) (A-1, P-1)
2.90%.................08/16/95 303 303,000
4.10%.................09/08/95 1,010 1,010,000
East Islip Union Free School
District TAN 1995
4.25%.................06/28/96 2,500 2,509,830
Hempstead BAN (MIG-1)
4.50%.................08/17/95 4,000 4,000,877
Massapequa Union Free School
District TAN (MIG-1)
4.25%.................06/28/96 3,000 3,013,101
Metropolitan Transportation
Authority Commuter Facilities
Series 1991 DN /
(Morgan Guaranty LOC)
(A-1+, VMIG-1)**
3.65%.................08/07/95 9,200 9,200,000
New York State Energy Research
and Development Authority PCR
(Central-Hudson Gas and
Electric Corporation) Series A
DN / (Bankers Trust LOC)
(A1+, VMIG-1)**
3.40%.................08/03/95 600 600,000
NEW YORK (CONTINUED)
New York State Energy Research
and Development Authority PCR
(Rochester Gas and Electric)
DN / (Bank of New York LOC)
(A-1, VMIG-1)**
3.55%.................08/01/95 $14,600 $ 14,600,000
New York State Energy Research
and Development Authority PCRB
(Orange and Rockland
Utilities, Inc. Projects)
Series 1994 A DN / (FGIC
Insurance)
(A-1+, VMIG-1)**
3.55%.................08/07/95 400 400,000
New York State Energy Research
and Development Authority (New
York State Electric and Gas)
Series 1985-A MB / (Morgan
Guaranty LOC) (A-1+)
4.65%.................03/15/96 1,000 1,000,000
New York State Energy Research
and Development Authority
Adjustable Rate PCRB (Long
Island Lighting Project) MB /
(Deutsche Bank LOC) (VMIG-1)
4.70%.................03/01/96 4,000 4,000,000
New York State Energy Research
and Development Authority
Annual Tender PCRB MB/(Union
Bank of Switzerland LOC) (P-1)
4.10%.................10/15/95 2,000 2,000,000
4.60%.................12/01/95 2,065 2,065,000
New York State Housing Finance
Agency (Memorial Sloan-
Kettering Cancer Center) DN
(A-1+)**
3.75%.................08/07/95 400 400,000
New York State Housing Finance
Agency (Mount Sinai School of
Medicine) Series A DN / (Sanwa
Bank LOC) (A1+, VMIG-1)**
3.60%.................08/07/95 5,500 5,500,000
New York State Housing Finance
Agency, (Multi-Family Housing)
RB Series 1988 A DN / (AMBAC
Insurance)
(A-1+, VMIG-1)**
3.65%.................08/07/95 700 700,000
New York State Housing Finance
Authority (Normandie Court I)
Series 1991A DN / (Societe
Generale LOC)
(A-1+, VMIG-1)**
3.60%.................08/07/95 2,300 2,300,000
</TABLE>
-41-
<PAGE> 67
NEW YORK MONEY FUND
Statement of Net Assets (Continued)
July 31, 1995
<TABLE>
<CAPTION>
INVESTMENTS IN MATURITY PAR
SECURITIES DATE (000) VALUE
- --------------------------------- ------- ------------
<S> <C> <C> <C>
NEW YORK (CONTINUED)
New York State IDA Civic
Facilities (National Audubon
Society) Series 1989 DN /
(Swiss Bank LOC) (VMIG-1)**
4.10%.................08/01/95 $ 1,600 $ 1,600,000
New York State Job Development
Authority DN / (Sumitomo Bank
LOC) (A-1, VMIG-1)**
3.50%.................08/01/95 935 935,000
New York State Job Development
Authority Special Purpose
Bonds Series 1984 C DN /
(Sumitomo Bank LOC) (A-1,
VMIG-1)**
3.70%.................08/01/95 7,235 7,235,000
New York State Job Development
Authority Special Purpose
Bonds Series 1984 D DN /
(Sumitomo Bank LOC) (A-1,
VMIG-1)**
3.70%.................08/01/95 375 375,000
New York State Job Development
Authority Special Purpose
Bonds Series 1984 E DN /
(Sumitomo Bank LOC) (A-1,
VMIG-1)**
3.70%.................08/01/95 1,725 1,725,000
New York State Job Development
Authority Special Purpose
Bonds Series 1984 F DN /
(Sumitomo Bank LOC) (A-1,
VMIG-1)**
3.70%.................08/01/95 1,930 1,930,000
New York State Job Development
Authority Special Purpose
Bonds Series 1984 G DN /
(Sumitomo Bank LOC) (A-1,
VMIG-1)**
3.70%.................08/01/95 3,175 3,175,000
New York State Job Development
Authority Special Purpose
Bonds Series 1984 H DN /
(Sumitomo Bank LOC) (A-1,
VMIG-1)**
3.70%.................08/01/95 1,755 1,755,000
New York State Local Government
Assistance Corp. Series 1995-D
MB / (Societe Generale LOC)
(A-1+, VMIG-1)
3.20%.................08/01/95 12,100 12,100,000
New York State Local Government
Assistance Corp. Series 1995-G
MB / (National Westminster
LOC) (A-1+, VMIG-1)
3.20%.................08/01/95 10,000 10,000,000
NEW YORK (CONTINUED)
New York State Medical Care
Facilities Finance Agency
Revenue Pooled Equipment Loan
Program, Series 1985 Issue One
DN / (Chemical Bank LOC) (A-1,
VMIG-1)**
3.60%.................08/07/95 $ 2,000 $ 2,000,000
New York State Power Authority
Adjustable Tender Notes MB
(A-1, VMIG-1)
4.40%.................09/01/95 15,300 15,300,000
New York State Solid Waste
Management Authority (North
Hempstead) DN / (National
Westminster LOC)
(A-1+, VMIG-1)**
3.55%.................08/07/95 150 150,000
New York State TECP Series Q
(A-1, P-1)
3.75%.................10/25/95 5,000 5,000,000
New York State TECP Series R
(A-1, P-1)
3.75%.................08/09/95 8,000 8,000,000
3.20%.................08/24/95 5,500 5,500,000
Niagara Falls Toll Bridge
Series 1993 A DN (FGIC
Insurance) (A-1+, VMIG-1)**
3.60%.................08/07/95 200 200,000
Triborough Bridge and Tunnel
Authority Beneficial Interest
Certificates DN / (MBIA
Insurance) (VMIG-1)**
3.45%.................08/15/95 4,475 4,475,000
Triborough Bridge and Tunnel
Authority DN / (FGIC
Insurance) (A-1+, VMIG-1)**
3.50%.................08/07/95 6,600 6,600,000
Yonkers IDA Series 1994 Civic
Facility RB (Consumers Union
Facility) DN / (AMBAC
Insurance) (A-1+, VMIG-1)**
3.50%.................08/07/95 1,000 1,000,000
------------
232,653,584
------------
PUERTO RICO -- 5.1%
Government Development Bank for
Puerto Rico Adjustable RB
Series 1985 DN / (Credit
Suisse LOC) (A1+, VMIG-1)**
3.45%.................08/07/95 3,850 3,850,000
Puerto Rico Industrial,
Medical, and Environmental
Control Facility Finance
Authority IDRB MB / (Morgan
Guaranty LOC)
4.35%.................12/01/9 2,700 2,700,000
</TABLE>
-42-
<PAGE> 68
NEW YORK MONEY FUND
Statement of Net Assets (Concluded)
July 31, 1995
<TABLE>
<CAPTION>
INVESTMENTS IN MATURITY PAR
SECURITIES DATE (000) VALUE
- --------------------------------- ------- ------------
<S> <C> <C> <C>
PUERTO RICO (CONTINUED)
Puerto Rico Industrial,
Medical, and Higher Education
Authority Revenue Bonds MB /
(Bank of Tokyo LOC) (VMIG-1)
3.85%.................08/10/95 $ 2,300 $ 2,300,000
Puerto Rico Industrial,
Medical, Higher Education, and
Pollution Control Facility
Finance Authority
Inter-American University of
Puerto Rico Project Series
1988 MB / (Bank of Tokyo LOC)
(VMIG-1)
3.45%.................08/07/95 1,400 1,400,000
Puerto Rico Medical, Higher
Education, and Environmental
PCR (Ana G. Mendez Educational
Foundation Project) DN /
(Bank of Tokyo LOC)
(A-1+, VMIG-1)**
3.90%.................08/07/95 2,300 2,300,000
------------
12,550,000
------------
TOTAL INVESTMENTS IN SECURITIES
(Cost $245,203,584*)............... 99.4% 245,203,584
OTHER ASSETS IN EXCESS OF
LIABILITIES..........................0.6% 1,446,698
----- ------------
NET ASSETS (Equivalent to $1.00
per share based on 246,681,714
Money shares of capital stock
outstanding).......................100.0% $246,650,282
====== ============
NET ASSET VALUE, OFFERING AND
REDEMPTION PRICE PER SHARE
($246,650,282 / 246,681,714).......................$1.00
=====
- -------------
* Aggregate cost for federal income tax purposes is
substantially the same.
** Variable rate demand notes -- the interest rate shown
is as of July 31, 1995, and the maturity date shown is
the longer of (i) the next interest readjustment date
or (ii) the date on which the principal amount owed can
be recovered through demand.
The Moody's Investors Service, Inc. and Standard &
Poor's Ratings Group ratings are believed to be the most
recent ratings available at July 31, 1995. The ratings
have not been verified by the Independent Accountants
and, therefore, are not covered by the Report of the
Independent Accountants.
</TABLE>
- ---------------------------------------------------------
NEW YORK MONEY FUND
MUNICIPAL FUND FOR NEW YORK
INVESTORS, INC.
Maturity Schedule of Portfolio
July 31, 1995
<TABLE>
<CAPTION>
MATURITY
PERIOD PAR PERCENTAGE
------------- ------------ ----------
<S> <C> <C>
1-30 days $197,838,000 80.7%
31-60 days 16,310,000 6.7%
61-90 days 8,000,000 3.3%
91-120 days 0 0.0%
Over 120 days 22,995,000 9.3%
Average Weighted Maturity -- 33 days
</TABLE>
- ---------------------------------------------------------
INVESTMENT ABBREVIATIONS:
BAN Bond Anticipation Note
DN Demand Note
GO General Obligation
IDA Industrial Development Authority
IDRB Industrial Development Revenue Bond
LOC Letter of Credit
MB Municipal Bond
PCR Pollution Control Revenue
RAN Revenue Anticipation Note
RB Revenue Bond
TAN Tax Anticipation Note
TECP Tax-Exempt Commercial Paper
TRAN Tax and Revenue Anticipation Note
See Notes to Financial Statements.
-43-
<PAGE> 69
NEW YORK MONEY FUND
MUNICIPAL FUND FOR NEW YORK INVESTORS, INC.
Statement of Operations
For the Year Ended July 31, 1995
<TABLE>
<S> <C>
Investment income:
Interest income......................................................... $8,631,699
----------
Expenses:
Investment advisory fees................................................ 485,058
Administration fees..................................................... 485,058
Service Organization fees:
Plus shares.......................................................... 302
Legal and audit fees.................................................... 69,567
Directors' and officers' fees and expenses.............................. 27,000
Custodian fees.......................................................... 60,755
Transfer agent fees..................................................... 21,957
Miscellaneous........................................................... 36,496
----------
1,186,193
Fees waived by Investment Adviser and Administrator..................... (700,857)
----------
Total expenses....................................................... 485,336
----------
Net investment income................................................ 8,146,363
Realized gain on investments:
Net realized gain on investments sold................................... 3,631
----------
Net increase in net assets resulting from operations...................... $8,149,994
==========
</TABLE>
See Notes to Financial Statements.
-44-
<PAGE> 70
NEW YORK MONEY FUND
MUNICIPAL FUND FOR NEW YORK INVESTORS, INC.
Statement of Changes in Net Assets
<TABLE>
<CAPTION>
YEAR ENDED YEAR ENDED
JULY 31, 1995 JULY 31, 1994
------------- -------------
<S> <C> <C>
Increase (decrease) in net assets:
Operations:
Net investment income................................... $ 8,146,363 $ 6,086,824
Net gain (loss) on investments.......................... 3,631 (3,432)
------------- -------------
Net increase in net assets resulting from operations.... 8,149,994 6,083,392
------------- -------------
Dividends to shareholders from net investment income:
Money shares............................................ (8,143,179) (5,431,630)
Dollar shares........................................... -- (636,261)
Plus shares............................................. (3,184) (18,933)
------------- -------------
Total dividends to shareholders......................... (8,146,363) (6,086,824)
------------- -------------
Increase (decrease) in net assets from Fund share
transactions............................................ (33,270,815) 27,260,410
------------- -------------
Net increase (decrease) in net assets................... (33,267,184) 27,256,978
Net assets:
Beginning of year.......................................... 279,917,466 252,660,488
------------- -------------
End of year................................................ $ 246,650,282 $ 279,917,466
============= =============
</TABLE>
See Notes to Financial Statements.
-45-
<PAGE> 71
NEW YORK MONEY FUND
MUNICIPAL FUND FOR NEW YORK INVESTORS, INC.
Financial Highlights
(FOR A FUND SHARE OUTSTANDING THROUGHOUT EACH YEAR)
<TABLE>
<CAPTION>
MONEY SHARES
-----------------------------------------------------------------------------
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
JULY 31, 1995 JULY 31, 1994 JULY 31, 1993 JULY 31, 1992 JULY 31, 1991
------------- ------------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Year................ $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
------------- ------------- ------------- ------------- -------------
Income From Investment Operations:
Net Investment Income........................ 0.0338 0.0226 0.0230 0.0321 0.0441
------------- ------------- ------------- ------------- -------------
Total From Investment Operations........... 0.0338 0.0226 0.0230 0.0321 0.0441
------------- ------------- ------------- ------------- -------------
Less Distributions:
Dividends From Net Investment Income......... (0.0338) (0.0226) (0.0230) (0.0321) (0.0441)
------------- ------------- ------------- ------------- -------------
Total Distributions........................ (0.0338) (0.0226) (0.0230) (0.0321) (0.0441)
------------- ------------- ------------- ------------- -------------
Net Asset Value, End of Year...................... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
========== ========== ========== ========== ==========
Total Returns..................................... 3.43% 2.29% 2.33% 3.26% 4.50%
Ratios/Supplemental Data:
Net Assets, End of Year $(000)............... 246,650 279,483 204,670 267,655 284,834
Ratios of Expenses to Average Net Assets(1).. 0.20% 0.20% 0.25%(2) 0.30% 0.30%
Ratios of Net Investment Income to Average
Daily Net Assets........................... 3.36% 2.28% 2.31% 3.20% 4.42%
</TABLE>
- ---------------
(1) Annualized operating expense ratios before waivers of fees by the Investment
Adviser and Administrator for Money shares for the years ended July 31,
1995, 1994, 1993, 1992 and 1991 were .49%, .48%, .51%, .49% and .49%,
respectively.
(2) Expense limitation for Money shares was lowered to .20% of the Portfolio's
average daily net assets, effective January 18, 1993.
See Notes to Financial Statements.
-46-
<PAGE> 72
NEW YORK MONEY FUND
MUNICIPAL FUND FOR NEW YORK INVESTORS, INC.
Financial Highlights
(FOR A FUND SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
DOLLAR SHARES
-------------------------------------------------------------------------------
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
JULY 31, 1995(4) JULY 31, 1994(4) JULY 31, 1993 JULY 31, 1992 JULY 31, 1991
-------------- -------------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period............ $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
------- -------------- ------------- ------------- -------------
Income From Investment Operations:
Net Investment Income...................... 0.00 0.0127 0.0205 0.0296 0.0416
------- -------------- ------------- ------------- -------------
Total From Investment Operations......... 0.00 0.0127 0.0205 0.0296 0.0416
------- -------------- ------------- ------------- -------------
Less Distributions:
Dividends From Net Investment Income....... 0.00 (0.0127) (0.0205) (0.0296) (0.0416)
------- -------------- ------------- ------------- -------------
Total Distributions...................... 0.00 (0.0127) (0.0205) (0.0296) (0.0416)
------- -------------- ------------- ------------- -------------
Net Asset Value, End of Period.................. $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
======== ============== ============= ============= ============
Total Returns................................... -- 1.96%(3) 2.08% 3.01% 4.25%
Ratios/Supplemental Data:
Net Assets, End of Period $(000)........... -- -- 46,509 50,094 54,613
Ratios of Expenses to Average Net
Assets(1)................................. -- 0.45%(3) 0.50%(2) 0.55% 0.55%
Ratios of Net Investment Income to Average
Daily Net Assets......................... -- 1.94%(3) 2.06% 2.95% 4.17%
</TABLE>
- ---------------
(1) Annualized operating expense ratios before waivers of fees by the Investment
Adviser and Administrator for Dollar shares for the years ended July 31,
1994, 1993, 1992 and 1991 were .73%, .76%, .74% and .74%, respectively.
(2) Expense limitation for Dollar shares was lowered to .45% of the Portfolio's
average daily net assets, effective January 18, 1993.
(3) Annualized.
(4) There were no Dollar shares outstanding during the period from March 28,
1994 to July 31, 1995.
See Notes to Financial Statements.
-47-
<PAGE> 73
NEW YORK MONEY FUND
MUNICIPAL FUND FOR NEW YORK INVESTORS, INC.
Financial Highlights
(FOR A FUND SHARE OUTSTANDING THROUGHOUT EACH YEAR)
<TABLE>
<CAPTION>
PLUS SHARES
------------------------------------------------------------------------------
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
JULY 31, 1995(4) JULY 31, 1994 JULY 31, 1993 JULY 31, 1992 JULY 31, 1991
-------------- ------------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Year................ $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
-------------- ------------- ------------- ------------- -------------
Income From Investment Operations:
Net Investment Income........................ 0.0090 0.0201 0.0205 0.0296 0.0416
-------------- ------------- ------------- ------------- -------------
Total From Investment Operations........... 0.0090 0.0201 0.0205 0.0296 0.0416
-------------- ------------- ------------- ------------- -------------
Less Distributions:
Dividends From Net Investment Income......... (0.0090) (0.0201) (0.0205) (0.0296) (0.0416)
-------------- ------------- ------------- ------------- -------------
Total Distributions........................ (0.0090) (0.0201) (0.0205) (0.0296) (0.0416)
-------------- ------------- ------------- ------------- -------------
Net Asset Value, End of Year...................... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
============== ============= ============= ============= =============
Total Returns..................................... 2.69%(3) 2.04% 2.08% 3.01% 4.25%
Ratios/Supplemental Data:
Net Assets, End of Year $(000)............... -- 435 1,481 243 461
Ratios of Expenses to Average Net Assets(1).. 0.45%(3) 0.45% 0.50%(2) 0.55% 0.55%
Ratios of Net Investment Income to Average
Daily Net Assets........................... 2.64%93) 2.03% 2.06% 2.95% 4.17%
</TABLE>
- ---------------
(1) Annualized operating expense ratios before waivers of fees by the Investment
Adviser and Administrator for Plus shares for the years ended July 31, 1995,
1994, 1993, 1992 and 1991 were .73%, .73%, .76%, .74% and .74%,
respectively.
(2) Expense limitation for Plus shares was lowered to .45% of the Portfolio's
average daily net assets, effective January 18, 1993.
(3) Annualized.
(4) There were no Plus shares outstanding during the period from December 2,
1994 to July 31, 1995.
See Notes to Financial Statements.
-48-
<PAGE> 74
NOTES TO FINANCIAL STATEMENTS
1. Municipal Fund for New York Investors, Inc. (the "Company") is a no-load,
non-diversified, open-end management investment company registered under the
Investment Company Act of 1940, as amended. The Company offers three series of
shares--New York Money ("Money"), New York Money Dollar ("Dollar"), and New York
Money Plus ("Plus"). Shares of each series represent equal pro rata interests in
a single investment portfolio of the Company and are identical in all respects
except that the Dollar and Plus shares bear the service fees described below and
are entitled to vote separately on matters relating to these fees.
Dollar shares are sold pursuant to a non-12b-1 Shareholder Services Plan to
institutions other than broker/dealers, and Plus shares are sold pursuant to a
12b-1 Services Plan only to broker/dealers which enter into agreements with the
Company requiring them to provide certain support services to their customers in
consideration of the Company's payment of .25% (on an annualized basis) of the
average daily net asset value of such shares held by the institutions on behalf
of their customers. Dividends paid to Dollar and Plus shareholders are reduced
by such fees. In addition, broker/dealers purchasing Plus shares may be
requested to provide assistance in connection with the distribution of such
shares. Money shares are sold to institutional investors who choose not to enter
into such servicing agreements with the Company.
Certain New York municipal obligations in the Company's portfolio may be
obligations of issuers which rely in whole or in part on New York State
revenues, real property taxes, revenues from health care institutions, or
obligations secured by mortgages on real property. Consequently, the possible
effect of economic conditions in New York State or of New York law on these
obligations must be considered.
2. Significant Accounting Policies
Portfolio valuation--Portfolio securities of the Company are valued at
amortized cost which approximates market value. Amortized cost valuation
involves valuing an instrument at its cost initially and, thereafter, assuming a
constant amortization to maturity of any discount or premium.
Securities transactions and investment income--Securities transactions are
recorded on the trade date. Realized gains and losses on investments sold are
recorded on the identified cost basis. Interest income is recorded on the
accrual basis.
Dividends and distributions to shareholders--It is the policy of the Company
to declare dividends from net investment income daily and to pay such dividends
within five business days of the end of each month. Net realized capital gains,
if any, are distributed at least annually.
Federal taxes--No provision is made for federal income or excise taxes since
the Company intends to continue to qualify as a regulated investment company by
complying with the applicable requirements of the Internal Revenue Code of 1986,
as amended, and by distributing all of its earnings to its shareholders.
3. Investment Advisory Fee, Administration Fee and Other Related Party
Transactions
The Company has entered into an Investment Advisory Agreement with PNC
Institutional Management Corporation (the "Investment Adviser"), an indirect
wholly-owned subsidiary of PNC Bank, National Association ("PNC Bank"). PNC Bank
serves as the Company's sub-investment adviser pursuant to a Sub-Advisory
Agreement. Under the Investment Advisory Agreement, the Investment Adviser is
entitled to receive a fee from the Company, computed daily and payable monthly,
at an annual rate of .20% of the Company's average daily net assets.
Provident Distributors, Inc. ("PDI") is the Company's distributor. No
compensation is pay-
-49-
<PAGE> 75
able by the Company to PDI for its distribution services.
The Company has entered into an Administration Agreement with PFPC Inc.
("PFPC"), an indirect wholly-owned subsidiary of PNC Bank, and PDI (the
"Administrators"), for certain administrative services. Pursuant to their
administrative agreement with the Company, PFPC and PDI jointly are entitled to
receive a fee at an annual rate of .20% of the Company's average daily net
assets.
The Investment Adviser and Administrators have agreed to reduce the advisory
and administration fees otherwise payable to them and to reimburse the Company
for its operating expenses to the extent necessary to ensure that its annual
operating expense ratio (excluding fees paid to Service Organizations pursuant
to Servicing Agreements) does not exceed .20% of the Company's average daily net
assets.
For the year ended July 31, 1995, the Investment Advisor and the
Administrators voluntarily waived fees totaling $350,428 and $350,429,
respectively.
Expenses include legal fees paid to counsel to the Company, a partner of which
is secretary of the Company.
PNC Bank is the Company's custodian and PFPC is transfer agent.
4. Fund Shares
Since the Company has sold, issued as reinvestments of dividends and redeemed
shares only at a constant net asset value of $1.00 per share, the number of
shares is the same as the following amounts for such transactions.
<TABLE>
<CAPTION>
YEAR YEAR
ENDED ENDED
7/31/95 7/31/94
--------------- ---------------
Sold
<S> <C> <C>
Money shares........... $ 1,040,239,729 $ 1,176,497,722
Dollar shares.......... -- 41,213,523
Plus shares............ 9,800 242,100
Issued as reinvestments
of dividends
Money shares........... 361,349 233,959
Dollar shares.......... -- --
Plus shares............ -- --
Redeemed
Money shares........... (1,073,436,993) (1,101,910,204)
Dollar shares.......... -- (87,727,990)
Plus shares............ (444,700) (1,288,700)
--------------- ---------------
Net increase
(decrease)............. $ (33,270,815) $ 27,260,410
=============== ===============
</TABLE>
The authorized capital of the Company consists of 1.4 billion Money shares,
300 million Dollar shares and 300 million Plus shares, each with a par value of
$.001 per share.
5. Capital Loss Carryover
At July 31, 1995, a capital loss carryover of $31,432 was available to offset
possible future capital gains. The carryover expires as follows: $7,769 in 1997,
$3,125 in 1998, $17,106 in 2001, and $3,432 in 2002.
6. Net Assets
At July 31, 1995, net assets consisted of the following:
<TABLE>
<S> <C>
Paid-in capital............... $246,681,714
Accumulated net realized
losses on investments....... (31,432)
------------
$246,650,282
============
</TABLE>
-50-
<PAGE> 76
REPORT OF INDEPENDENT ACCOUNTANTS
To the Shareholders and Directors
of Municipal Fund for New York Investors, Inc.:
We have audited the accompanying statement of net assets of Municipal Fund for
New York Investors, Inc. as of July 31, 1995 and the related statement of
operations for the year then ended, the statement of changes in net assets for
each of the two years in the period then ended, and the financial highlights for
each of the five years in the period then ended. These financial statements and
financial highlights are the responsibility of the Fund's management. Our
responsibility is to express an opinion on these financial statements and
financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities held by the
custodian as of July 31, 1995. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of
Municipal Fund for New York Investors, Inc. as of July 31, 1995, the results of
its operations for the year then ended, the changes in net assets for each of
the two years in the period then ended, and the financial highlights for each of
the five years in the period then ended, in conformity with generally accepted
accounting principles.
COOPERS & LYBRAND L.L.P.
2400 Eleven Penn Center
Philadelphia, Pennsylvania
September 8, 1995
-51-
<PAGE> 77
APPENDIX
DESCRIPTION OF MUNICIPAL OBLIGATIONS RATINGS
The following summarizes the two highest ratings used by
Standard & Poor's Corporation for municipal debt:
AAA - This designation represents the highest rating assigned
by Standard & Poor's to a debt obligation and indicates an extremely strong
capacity to pay interest and repay principal.
AA - Debt is considered to have a very strong capacity to pay
interest and repay principal and differs from AAA issues only in small degree.
PLUS (+) OR MINUS (-) - To provide more detailed indications
of credit quality, the "AA" rating may be modified by the addition of a plus or
minus sign to show relative standing within this major rating category.
The following summarizes the two highest ratings used by
Moody's Investors Service, Inc. for municipal debt:
Aaa - Bonds are judged to be of the best quality. They carry
the smallest degree of investment risk and are generally referred to as "gilt
edged." Interest payments are protected by a large or by an exceptionally
stable margin and principal is secure. While the various protective elements
are likely to change, such changes as can be visualized are most unlikely to
impair the fundamentally strong position of such issues.
Aa - Bonds are judged to be of high quality by all standards.
Together with the Aaa group they comprise what are generally known as high
grade bonds. They are rated lower than the best bonds because margins of
protection may not be as large as in Aaa securities or fluctuation of
protective elements may be of greater amplitude or there may be other elements
present which make the long-term risks appear somewhat larger than in Aaa
securities.
Moody's applies numerical modifiers (1, 2 and 3) with respect
to bonds rated Aa. The modifier 1 indicates that the issuer ranks in the
higher end of its generic rating category; the modifier 2 indicates a mid-range
ranking; and the modifier 3 indicates that the issuer ranks in the lower end of
its generic rating category.
A Standard and Poor's rating reflects the liquidity concerns
and market access risks unique to notes due in three years or less.
A-1
<PAGE> 78
SP-1 - The issuers of these municipal notes exhibit very
strong or strong capacity to pay principal and interest. Those issues
determined to possess overwhelming safety characteristics are given a plus (+)
designation.
Moody's ratings for state and municipal notes and other
short-term loans are designated Moody's Investment Grade ("MIG") and variable
rate demand obligations are designated Variable Moody's Investment Grade
("VMIG"). Such ratings recognize the differences between short-term credit
risk and long-term credit risk. The following summarizes the two highest
ratings used by Moody's for short-term notes and variable rate demand
obligations:
MIG-1/VMIG-1-Loans bearing these designations are of the best
quality, enjoying strong protection by established cash flows, superior
liquidity support or demonstrated broad-based access to the market for
refinancing.
MIG-2/VMIG-2-Loans bearing these designations are of high
quality, with margins of protection ample although not so large as in the
preceding group.
Commercial paper rated A-1 by Standard & Poor's indicates that
the issuer's degree of safety for timely payment is strong. Those issues
determined to possess extremely strong safety characteristics are denoted A-1+.
Issuer's capacity for timely payment on commercial paper rated A-2 is
satisfactory, but the relative degree of safety is not as high as for issues
designated A-1.
The rating Prime-1 is the highest commercial paper rating
assigned by Moody's. Issuers rated Prime-1 (or related supporting
institutions) are considered to have a superior capacity for repayment of
short-term promissory obligations. Prime-1 repayment capacity will normally be
evidenced by the following characteristics: leading market positions in well
established industries; high rates of return on funds employed; conservative
capitalization structures with moderate reliance on debt and ample asset
protection; broad margins in earning coverage of fixed financial charges and
high internal cash generation; and well established access to a range of
financial markets and assured sources of alternate liquidity.
Issuers rated Prime-2 (or related supporting institutions) are
considered to have a strong capacity for repayment of short-term promissory
obligations. This will normally be evidenced by many of the characteristics
cited above but to a lesser degree. Earnings trends and coverage ratios, while
sound, will be more subject to variation. Capitalization characteristics,
while still appropriate, may be more affected by external conditions. Ample
alternate liquidity is maintained.
A-2
<PAGE> 79
PART C
OTHER INFORMATION
Item 24. Financial Statements and Exhibits
(a) Financial Statements:
(1) Included in Part A of the Registration
Statement:
Financial Highlights for New York
Money Fund (Money Shares) for the fiscal
years ended July 31, 1995, 1994, 1993, 1992,
1991, 1990, 1989, 1988, 1987 and 1986; for
New York Money Fund (Dollar Shares) for the
fiscal years ended July 31, 1995, 1994, 1993,
1992, 1991, 1990, 1989, 1988 and 1987 and for
the period ended July 31, 1986; and for New
York Money Fund (Plus Shares) for the fiscal
years ended July 31, 1995, 1994, 1993, 1992,
1991, 1990, 1989, 1988 and 1987 and for the
period ended July 31, 1986.
(2) Included in Part B of the Registration
Statement:
Statement of Net Assets - July 31, 1995.
Statement of Operations for the fiscal year
ended July 31, 1995.
Statement of Changes in Net Assets for the
fiscal years ended July 31, 1995 and
1994.
Financial Highlights for New York Money Fund
(Money Shares) for the fiscal years ended
July 31, 1995, 1994, 1993, 1992 and 1991;
for New York Money Fund (Dollar Shares) for
the fiscal years ended July 31, 1995, 1994,
1993, 1992 and 1991; and for New York
Money Fund (Plus Shares) for the fiscal years
ended July 31, 1995, 1994, 1993, 1992 and
1991. Notes to Financial Statements - July
31, 1995.
Report of Independent Accountants -
September 8, 1995.
(3) All required financial statements are
included in Parts A and B hereof. All other
financial statements and schedules are
inapplicable.
C-1
<PAGE> 80
(b) Exhibits:
(1) (a) Articles of Incorporation dated
February 23, 1983 are incorporated
herein by reference to Exhibit (1) of
Registrant's Registration Statement
filed on March 8, 1983.
(b) Articles Supplementary to
Registrant's Articles of
Incorporation dated July 11, 1983 are
incorporated herein by reference to
Exhibit (1)(b) of Pre-Effective
Amendment No. 1 to Registrant's
Registration Statement filed on July
27, 1983.
(c) Articles of Amendment to Registrant's
Articles of Incorporation dated July
15, 1983 are incorporated herein by
reference to Exhibit (1)(c) of
Pre-Effective Amendment No. 1 to
Registrant's Registration Statement
filed on July 27, 1983.
(d) Articles Supplementary to
Registrant's Articles of
Incorporation dated August 31, 1985
are incorporated herein by reference
to Exhibit (1)(d) of Post-Effective
Amendment No. 4 to Registrant's
Registration Statement filed on
October 7, 1985.
(2) (a) By-Laws as approved and adopted by
Registrant's Board of Directors are
incorporated herein by reference to
Exhibit (2) of Registrant's
Registration Statement filed on March
8, 1983.
(b) Amendment No. 1 to By-Laws as
approved and adopted by Registrant's
Board of Directors on July 26, 1984
is incorporated herein by reference
to Exhibit (2)(b) of Post-Effective
Amendment No. 3 to Registrant's
Registration Statement filed on
August 9, 1985.
(c) Amendment No. 2 to By-Laws as
approved and adopted by Registrant's
Board of Directors on October 28,
1987 is incorporated herein by
reference to Exhibit (2)(c) of
Post-Effective
C-2
<PAGE> 81
Amendment No. 9 to Registrant's
Registration Statement filed on
November 29, 1990.
(d) Amendment No. 3 to By-Laws as
approved and adopted by Registrant's
Board of Directors on July 13, 1988
is incorporated herein by reference
to Exhibit (2)(c) of Post-Effective
Amendment No. 7 to the Registrant's
Registration Statement filed on
November 30, 1988.
(3) None.
(4) (a) Specimen copy of share certificate
for Class A Common Stock is
incorporated herein by reference to
Exhibit (4) of Pre-Effective
Amendment No. 1 to Registrant's
Registration Statement filed on July
27, 1983.
(b) Specimen copy of share certificate
for Class A Common Stock - Special
Series 1 is incorporated herein by
reference to Exhibit (4)(b) of
Post-Effective Amendment No. 5 to
Registrant's Registration Statement
filed on September 30, 1986.
(c) Specimen copy of share certificate
for Class A Common Stock - Special
Series 2 is incorporated herein by
reference to Exhibit (4)(c) of
Post-Effective Amendment No. 5 to
Registrant's Registration Statement
filed on September 30, 1986.
(5) (a) Amended Investment Advisory Agreement
between Registrant and Provident
Institutional Management Corporation
dated as of February 9, 1987 is
incorporated herein by reference to
Exhibit (5)(a) of Post-Effective
Amendment No. 6 to Registrant's
Registration Statement filed on
September 29, 1987.
(b) Sub-Advisory Agreement between
Provident Institutional Management
Corporation and Provident National
Bank dated as of August 8, 1983 is
incorporated herein by
C-3
<PAGE> 82
reference to Exhibit (5)(b) of
Post-Effective Amendment No. 1 to
Registrant's Registration Statement
filed on March 1, 1984.
(6) Distribution Agreement between Registrant and
Provident Distributors, Inc. dated January
31, 1994 is incorporated herein by reference
to Exhibit (6) of Post-Effective Amendment
No. 13 to Registrant's Registration Statement
filed on November 30, 1994.
(7) Fund Office Retirement Profit-Sharing Plan
and Trust Agreement dated as of December 1,
1989 is incorporated herein by reference to
Exhibit (7) of Post-Effective Amendment No. 9
to Registrant's Registration Statement filed
on November 29, 1990.
(8) (a) Custody Agreement between Registrant
and Provident National Bank dated as
of July 20, 1983 is incorporated
herein by reference to Exhibit (8) of
Post-Effective Amendment No. 1 to
Registrant's Registration Statement
filed on March 1, 1984.
(b) Amendment No. 1 dated as of July 31,
1985 to Custody Agreement between
Registrant and Provident National
Bank is incorporated herein by
reference to Exhibit (8)(b) of
Post-Effective Amendment No. 4 to
Registrant's Registration Statement
filed on October 7, 1985.
(c) Amendment No. 2 dated as of October
30, 1985 to Custody Agreement between
Registrant and Provident National
Bank is incorporated herein by
reference to Exhibit (8)(c) of
Post-Effective Amendment No. 5 to
Registrant's Registration Statement
filed on September 30, 1986.
(9) (a) Administration Agreement between
Registrant, Provident Distributors,
Inc. (formerly MFD Group, Inc.) and
PFPC Inc. dated January 18, 1993 is
incorporated herein by reference to
Exhibit (9)(a) of Post-Effective
Amendment No. 12 to
C-4
<PAGE> 83
Registrant's Registration Statement
filed on November 30, 1993.
(b) Transfer Agency Agreement between
Registrant and Provident Financial
Processing Corporation dated as of
August 8, 1983 is incorporated herein
by reference to Exhibit (9)(b) of
Registrant's Registration Statement
filed on March 1, 1984.
(c) Amendment No. 1 dated as of July 31,
1985 to Transfer Agency Agreement
between Registrant and Provident
Financial Processing Corporation is
incorporated herein by reference to
Exhibit (9)(d) of Post-Effective
Amendment No. 4 to Registrant's
Registration Statement filed on
October 7, 1985.
(10) Opinion of Counsel.
(11) (a) Consent of Coopers & Lybrand L.L.P.
(b) Consent of Drinker Biddle & Reath.
(c) Consent of Willkie Farr & Gallagher.
(12) None.
(13) None.
(14) None.
(15) 12b-1 Services Plan is incorporated herein by
reference to Exhibit (15) of Post-Effective
Amendment No. 3 to Registrant's Registration
Statement filed on August 9, 1985.
(16) Schedule for Computation of Performance
Quotations is incorporated herein by
reference to Exhibit (16) of Post-Effective
Amendment No. 11 to Registrant's Registration
Statement filed on November 25, 1992.
C-5
<PAGE> 84
Item 25. Persons Controlled by or under Common Control with
Registrant
Registrant is controlled by its Board of Directors.
Item 26. Number of Holders of Securities
The following information is as of November 20, 1995:
<TABLE>
<CAPTION>
Title of Class Number of
-------------- ---------
Record Holders
--------------
<S> <C>
Class A Common Stock (Money) 29
Class A Common Stock-Special Series 1 (Dollar) 0
Class A Common Stock-Special Series 2 (Plus) 0
</TABLE>
Item 27. Indemnification
Article VII, Section 3, of Registrant's Articles of
Incorporation, incorporated herein by reference as Exhibit (1)(a), and Article
VI, Section 2, of Registrant's By-Laws, incorporated herein by reference as
Exhibit (2)(a), require the indemnification of Registrant's directors and
officers to the full extent permissible under the General Laws of the State of
Maryland and the Investment Company Act of 1940. Indemnification of
Registrant's principal underwriter, custodian and transfer agent against
certain losses is provided for, respectively, in Section 6.b. of the
Distribution Agreement, filed as Exhibit (6) hereto, Section 22 of the Custody
Agreement, incorporated herein by reference as Exhibit (8)(a) hereto, and
Section 15 of the Transfer Agency Agreement, incorporated herein by reference
as Exhibit (9)(b) hereto. The Fund has obtained from a major insurance carrier
a directors' and officers' liability policy covering certain types of errors
and omissions.
Insofar as indemnification for liability arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of Registrant pursuant to the foregoing provisions, or otherwise,
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 Registrant
of expenses incurred or paid by a director, officer or controlling person of
Registrant in the successful defense of any action, suit or proceeding) is
asserted by such director, officer or controlling person in connection with the
securities being registered, 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
C-6
<PAGE> 85
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 Advisers
PIMC performs investment advisory services for Registrant and
certain other investment companies. PNC Bank and its predecessors have been
in the business of managing the investments of fiduciary and other accounts in
the Philadelphia area since 1847. In addition to its trust business, PNC Bank
provides commercial banking services.
To Registrant's knowledge, none of the directors or officers
of PIMC or PNC Bank, except those set forth below, is, or has been at any time
during Registrant's past two fiscal years, engaged in any other business,
profession, vocation or employment of a substantial nature, except that certain
directors and officers and certain executives of PNC Bank and PIMC also hold
various positions with, and engage in business for, PNC Bank Corp., which
indirectly owns all the outstanding stock of PNC Bank, or other subsidiaries of
PNC Bank Corp. Set forth below are the names and principal businesses of the
directors and certain executives of PNC Bank and the directors and certain of
the senior executive officers of PIMC who are engaged in any other business,
profession, vocation or employment of a substantial nature.
PNC INSTITUTIONAL MANAGEMENT CORPORATION
DIRECTORS AND OFFICERS
<TABLE>
<CAPTION>
POSITION WITH OTHER BUSINESS TYPE OF
PIMC NAME CONNECTIONS BUSINESS
- ------------- ------------------ -------------- --------
<S> <C> <C> <C>
Chairman and J. Richard Carnall Executive Vice President Banking
Director PNC Bank, National
Association (1)
Director Banking
PNC National Bank (2)
Chairman and Director Financial
PFPC Inc. (3) Related
Services
Director Fiduciary
PNC Trust Company Activities
of New York (11)
Director Equipment
Hayden Bolts, Inc.*
Director Real
Parkway Real Estate Company* Estate
</TABLE>
C-7
<PAGE> 86
<TABLE>
<CAPTION>
POSITION WITH OTHER BUSINESS TYPE OF
PIMC NAME CONNECTIONS BUSINESS
- ------------- ------------------ -------------- --------
<S> <C> <C> <C>
Director Investment
Provident Capital Management Advisory
Inc. (5)
Director Richard C. Caldwell Executive Vice President Banking
PNC Bank, National
Association (1)
Director Banking
PNC National Bank (2)
Director Fiduciary
PNC Trust Company Activities
of New York
Director Investment
Provident Capital Management Advisory
Inc. (5)
Executive Vice President Bank
PNC Bank Corp. (14) Holding
Company
Director Banking
PNC Bank, New Jersey,
National Association (16)
Director Financial
PFPC Inc. (3) Related
Services
Director Laurence D. Fink Chairman and Chief Executive
Officer
BlackRock Financial Management,
Inc.
Director
PNC Asset Management Group, Inc.
Director Richard L. Smoot President and Chief Banking
Executive Officer
PNC Bank, National
Association (1)
Senior Vice President Bank
PNC Bank Corp. (14) Holding
Company
Director Financial-
PFPC Inc. (3) Related
Services
</TABLE>
C-8
<PAGE> 87
<TABLE>
<CAPTION>
POSITION WITH OTHER BUSINESS TYPE OF
PIMC NAME CONNECTIONS BUSINESS
- ------------- ------------------ -------------- --------
<S> <C> <C> <C>
Director Fiduciary
PNC Trust Company of NY (11) Activities
Director, Chairman and President Banking
PNC Bank, New Jersey, National
Association (16)
Director, Chairman, and CEO Banking
PNC National Bank (2)
Chairman & Director Leasing
PNC Credit Corp (13)
Vice President Michelle L. Petrilli Chief Counsel Banking
and Secretary PNC Bank, DE (20)
Secretary, PFPC Inc. (3) Financial
Related
Services
President and Thomas H. Nevin None.
Chief Investment
Officer
Director and Nicholas M. Marsini, Senior Vice President Banking
Chief Jr. PNC Bank, National
Financial Association (1)
Officer
Director Financial
PFPC Inc. (3) Related
Services
Senior Vice President Banking
and Chief Financial Officer
PNC Bank, Delaware (20)
Director, Vice President and Banking
Treasurer
PNC National Bank (2)
Director Banking
PNC Bank, New Jersey, National
Association (16)
Director Fiduciary
PNC Trust Company of Activities
New York (11)
Director and Treasurer Holding
PNC Bancorp, Inc. (9) Company
Director and Treasurer Investment
PNC Capital Corp. (17) Activities
Director and Treasurer Banking
PNC Holding Corp. (18)
</TABLE>
C-9
<PAGE> 88
<TABLE>
<CAPTION>
POSITION WITH OTHER BUSINESS TYPE OF
PIMC NAME CONNECTIONS BUSINESS
- ------------- ------------------ -------------- --------
<S> <C> <C> <C>
Director and Treasurer Investment
PNC Venture Corp. (19) Activities
Executive Charles B. Landreth Vice President, PNC Bank, Banking
Vice President National Association (1)
Senior Vice Vincent J. Ciavardini President and Chief Financial
President Financial Officer Related
PFPC Inc. (3) Services
Senior Vice Scott Moss None.
President
Senior Vice John N. Parthemore None.
President
Senior Vice Dushyant Pandit None.
President
Senior Vice James R. Smith None.
President
Vice President, Stephen M. Wynne Executive Vice President Financial
Chief Accounting and Chief Accounting Related
Officer and Officer, PFPC Inc. (3) Services
Assistant
Secretary
Controller Pauline M. Heintz Vice President Financial
PFPC Inc. (3) Related
Services
Vice President John R. Antczak None.
Vice President Jeffrey W. Carson None.
Vice President Katherine A. Chuppe None.
Vice President Mary J. Coldren None.
Vice President Michele C. Dillon None.
Vice President Patrick J. Ford None.
Vice President Richard Hoerner None.
Vice President Michael S. Hutchinson None.
Vice President Michael J. Milligan None.
Vice President Wendy Powell None.
Vice President Allyn Plambeck None.
Vice President G. Keith Robertshaw None.
Vice President W. Don Simmons None.
</TABLE>
C-10
<PAGE> 89
<TABLE>
<CAPTION>
POSITION WITH OTHER BUSINESS TYPE OF
PIMC NAME CONNECTIONS BUSINESS
- ------------- ------------------ -------------- --------
<S> <C> <C>
Vice President Charles Allen None.
Stiteler
Vice President William F. Walsh None.
Vice President Karen J. Walters None.
</TABLE>
- -------
*INFORMATION REGARDING THIS CORPORATION CAN BE OBTAINED FROM THE OFFICE OF THE
SECRETARY.
C-11
<PAGE> 90
PNC BANK, NATIONAL ASSOCIATION
<TABLE>
<CAPTION>
POSITION WITH OTHER BUSINESS TYPE OF
PNC BANK NAME CONNECTIONS BUSINESS
- ------------- ------------------ -------------- ---------
<S> <C> <C> <C>
Director B. R. Brown President and CEO of Consol, Coal
Inc. Consol Plaza
Pittsburgh, PA 15241
Director Constance E. Clayton Chief, Div. of Community Medical
Health Care, Medical College
of Pennsylvania, 3300 Henry
Avenue, Office 4338,
Philadelphia, PA 19129
Director Eberhard Faber, IV Chairman and C.E.O. E.F.L., Manufac-
Inc., 450 Hedge Road, turing
P.O. Box 49
Bearcreek, PA 18602
Director Dr. Stuart Heydt President and CEO Medical
Geisinger Foundation
100 N. Academy Avenue
Danville, PA 17822
Director Edward P. Junker, III Vice Chairman Banking
PNC Bank, National Association
Ninth and State Streets
Erie, PA 16553
Director Thomas A. McConomy President, CEO and Chairman Manufac-
Calgon Caron Corporation turing
P.O. Box 717
Pittsburgh, PA 15230-0717
Director Robert C. Milsom Retired
PNC Bank, National Association
One PNC Plaza, Suite 2310,
Pittsburgh, PA 15265
Director Thomas H. O'Brien Chairman Banking
PNC Bank, National Association
One PNC Plaza, 30th Floor
Pittsburgh, PA 15265
Director Dr. J. Dennis Chancellor Educa-
O'Connor University of Pittsburgh tion
107 Cathedral of Learning
Pittsburgh, PA 15260
Director Rocco A. Ortenzio Chairman and CEO Medical
Continental Medical Systems, Inc.
P.O. Box 715
Mechanicsburg, PA 17055
Director Jane G. Pepper President, Pennsylvania Horti-
Horticulture Society, culture
</TABLE>
C-12
<PAGE> 91
<TABLE>
<S> <C> <C> <C>
325 Walnut Street
Philadelphia, PA 19106
Director Robert C. Robb, Jr. President Finanac-
Lewis, Eckert, Robb ial and
& Company Management Manage-
425 One Plymouth Meeting ment
Plymouth Meeting, PA 19462 Consult-
ants
Director James E. Rohr President and C.E.O. Bank
PNC Bank, National Associa- Holding
tion Company
One PNC Plaza, 30th Floor
Pittsburgh
Director Daniel M. Rooney President Football
Pittsburgh Steelers Football
Club of the National Football
League
300 Stadium Circle
Pittsburgh, PA 15212
Director Seth E. Schofield Chairman, President and CEO Airline
USAir Group, Inc.
and USAir, Inc.
2345 Crystal Drive
Arlington, VA 22227
Director Robert M. Valentini President and CEO, Communi-
Bell Atlantic 0f Pennsylvania cations
Inc., One Parkway, 18th Floor,
Philadelphia, PA 19102
</TABLE>
C-13
<PAGE> 92
PNC BANK, NATIONAL ASSOCIATION
OFFICERS
<TABLE>
<CAPTION>
POSITION WITH
PNC BANK NAME OTHER BUSINESS CONNECTIONS
- -------------- -------------------- --------------------------
<S> <C> <C>
Executive John W. Atkinson None.
Vice President
Executive Richard C. Caldwell Director, D.R. Corp.*
Vice President
Investment Officer, J.L.
Caldwell Company*
Council Member, Pennsylvania
Horticultural Society (32)
Director, PFPC Inc. (3)
Executive Vice President,
Investment Management and
Trust, PNC Bank Corp. (14)
Executive J. Richard Carnall Director, Franklin Institute
Vice President (The)*
Director, Hayden Bolts, Inc.*
Director, Parkway Real Estate
Company*
Director, PNC Trust Company
of New York (11)
Director, Provident Capital
Management, Inc. (5)
Chairman and Director, PFPC
Inc. (3)
Chairman and Director, PIMC (29)
Executive Frederick C. Frank, Director, PNC National Bank (2)
Vice President III
Director, PNC National Bank of
New Jersey (16)
Executive William J. Friel Director, Cedarbrook Country Club*
Vice President
Advisory Board Member, Chicago Title
and Abstract*
Director, National Adoption Agency*
Executive G. Robert Hoffman Director, J.W. Pepper & Sons, Inc.*
Vice President
Director, Land Holding Corp. of PA*
Chairman, President and Director,
</TABLE>
C-14
<PAGE> 93
<TABLE>
<CAPTION>
POSITION WITH OTHER BUSINESS TYPE OF
PNC BANK NAME CONNECTIONS BUSINESS
- ------------- -------------------------- -------------- --------
<S> <C> <C>
Provident Realty Management, Inc. (7)
Chairman, President and Director,
Provident Realty, Inc. (8)
Executive Joe R. Irwin Member of the Executive Committee Vice President
and Director; Blue Cross of Western
Pennsylvania*
Director
Civic Light Opera
(Non-Profit Enterprise)*
Chairman of the Board Dinamo
(Non-Profit Enterprise)
Treasurer and Director
Girls' Hope
(Non-Profit Organization)*
Member of the Executive
Committee and Director
Greater Pittsburgh Chamber of
Commerce*
Member of the Governing
Council
Pennsylvania Bankers
Association
Chairman
Pennsylvania Economy League,
Inc.*
Chairman, Annual Sustaining
Fund Campaign
Pittsburgh Opera*
Executive Vice President and
Chief Investment Officer
PNC Bank Corp. (14)
Chairman, Chief Executive
Officer and Director
PNC Funding Corp.*
Chairman and Director
PNC International Bank*
Chairman and Director
PNC International Bank
(New York)*
Chairman and Director
PNC International Investment
Corporation*
Director
</TABLE>
C-15
<PAGE> 94
<TABLE>
<CAPTION>
POSITION WITH OTHER BUSINESS TYPE OF
PNC BANK NAME CONNECTIONS BUSINESS
- ------------- -------------------------- -------------- --------
<S> <C> <C>
PNC Mortgage Bank, N.A.*
Director
PNC Mortgage Corp. of America*
Director
Ruffed Grouse Society, The
(Non-Profit Enterprise)*
Vice Chairman Edward P. Junker, III Vice Chairman, PNC Bank Corp. (14)
and Director
Director, PNC Mortgage Bank,
N.A.*
Director, PNC Mortgage Corp.
of America*
President and Louis J. Myers None.
CEO, PNC Bank
Northeast, PA
Chairman and Thomas H. O'Brien Director, Allegheny Club
Director (Non-Profit Corporation)*
Chairman and Director,
Allegheny Conference on
Community Development (Non-
Profit Organization)*
Director, Alpine Indemnity
Limited*
Director, Bell Atlantic
Corporation (31)
Trustee, Carnegie (The)*
Director, Central
Bancorporation, Inc. (The)*
Director, Children's Hospital
(Non-Profit Corporation)*
Director, Governor Casey's
Pennsylvania Economic
Development Partnership*
Director, Hila, Rogal and
Hamilton Co.*
Chairman - Board of Visitors,
Katz Graduate School of
Business*
Director, Laurel Valley Golf
Club*
Director, Pittsburgh
</TABLE>
C-16
<PAGE> 95
<TABLE>
<CAPTION>
POSITION WITH OTHER BUSINESS TYPE OF
PNC BANK NAME CONNECTIONS BUSINESS
- ------------- -------------------------- -------------- --------
<S> <C> <C>
Baseball, Inc.*
Co-Chairman of the Board of
Directors, Pittsburgh Opera
(The)*
President, PNC Bancorp,
Inc. (9)
Chairman, CEO & Director, PNC
Bank Corp. (14)
Director, PNC Investment
Corp. (6)
Chairman and Director, PNC
Trust Company of Florida,
N.A. (27)
Director, United Way of S.W.
President and Charles C. Pearson, Director and Chairman,
CEO, PNC Bank, Jr. Chamber of Business and
Central, PA Industry of Centre County*
Partner, Charrob
Investments*
Trustee, Juniata College*
Partner, LPNS c/o Cir
Realty*
Director, Second Mile*
Director, Uni-Marts, Inc.*
Partner, University Drive
Associates*
President and John V. Petrycki Director, Allied Arts Fund,
CEO, PNC Bank, Inc. (of Harrisburg)*
Southcentral, PA
Director, Capital Region
Economic Development
Corporation*
Director, Channels*
Director, Keystone Sports
Foundation*
Director, West Short YMCA*
President, Edward V. Randall, Board of Trustees, Carlow
CEO and Jr. College
</TABLE>
C-17
<PAGE> 96
<TABLE>
<CAPTION>
POSITION WITH OTHER BUSINESS TYPE OF
PNC BANK NAME CONNECTIONS BUSINESS
- ------------- -------------------------- -------------- --------
<S> <C> <C>
Director
Board Member, Cities in
Schools*
Board of Trustees, Landmarks
Financial Corporation*
Board of Trustees, Landmarks
Real Estate Corporation*
Board Member, Pittsburgh
Downtown Partnership*
Board Member, Pittsburgh
History & Landmarks
Foundation*
Director Emeritus, Pittsburgh
Partnership for Neighborhood
Development*
Member, Advisory Committee
Transportation & Technology
Museum*
Member, Board of Visitors
University of Pittsburgh
School of Social Work (Non-
Profit Organization)*
President and James E. Rohr Director, Allegheny Ludlum
Chief Executive Corporation*
Officer
Director, Alpine Indemnity
Limited
Committee Member, American
Bankers Association
Commercial Lending Div. Exec.
Com.*
Director, American Cancer
Society*
Director, Boy Scouts of
America*
Business Advisory Council,
Graduate School of Industrial
Adm. Carnegie Mellon
University*
Trustee, Penn's Southwest
Association*
President and Director,
</TABLE>
C-18
<PAGE> 97
<TABLE>
<CAPTION>
POSITION WITH OTHER BUSINESS TYPE OF
PNC BANK NAME CONNECTIONS BUSINESS
- ------------- -------------------------- -------------- --------
<S> <C> <C>
Pittsburgh National Bank
Foundation*
Chairman and Director, PNB
Holdings, Inc.*
President and Director, PNC
Bank Corp. (14)
Director, PNC International
Bank (New York)*
Chairman, President, CEO and
Director, PNC Mortgage Bank,
N.A.*
Director, PNC Mortgage Corp.
of America*
Director, River City Brass
Bank (Non-Profit
Corporation)*
Chairman - Advisory Board,
Salvation Army (Non-Profit
Organization)*
Director, Shady Side Health,
Education and Research
Center*
Vice A. William Schenck, Board of Directors, Allegheny
Chairman III General Hospital (Non-Profit
Organization)*
Director, Consumer Bankers
Association*
Board of Directors, Forward
Products, Inc.*
Board of Directors, Health &
Welfare Planning Association
(Non-Profit Organization)*
Chairman, Leadership
Pittsburgh Steering Committee*
Director, Massachusetts
Company, (The)*
Board of Directors,
Metropolitan Pittsburgh
Public Broadcasting, Inc.
(Non-Profit Organization)*
Joint Ownership with wife
Mikell Schenck, Mikell
</TABLE>
C-19
<PAGE> 98
<TABLE>
<CAPTION>
POSITION WITH OTHER BUSINESS TYPE OF
PNC BANK NAME CONNECTIONS BUSINESS
- ------------- -------------------------- -------------- --------
<S> <C> <C>
Schenck Associates*
1989 PBA Convention Committee
Member, Pennsylvania Bankers
Association Group 8 (Non-
Profit Organization)*
Chairman and Director,
Pinaco, Inc.*
Board of Trustees, Pittsburgh
Ballet Theater (Non-Profit
Organization)*
Regional Advisory Council
Member, Pittsburgh Cancer
Institute (Non-Profit
Organization)*
Board of Trustees, Pittsburgh
Center for the Arts (Non-
Profit Organization)*
Vice President and Director,
Pittsburgh National Bank
Foundation*
Chairman and Director,
Pittsburgh National Life
Director, Pittsburgh
Theological Seminary*
Committee Member, Pittsburgh
Trust for Cultural Resources
(Non-Profit Organization)*
Executive Vice President -
PNC Retail Banking, PNC Bank
Corp. (14)
Director, PNC Mortgage Bank,
N.A.*
Director, PNC Mortgage Corp.
of America*
Board of Trustee, Three
Rivers Shakespeare Festival
(Non-Profit Organization)*
Board of Directors, Urban
League of Pittsburgh, Inc.
(Non-Profit Organization)*
Director, Visa U.S.A., Inc.*
Director, Wiser Oil Company*
</TABLE>
C-20
<PAGE> 99
<TABLE>
<CAPTION>
POSITION WITH OTHER BUSINESS TYPE OF
PNC BANK NAME CONNECTIONS BUSINESS
- ------------- -------------------------- -------------- --------
<S> <C> <C>
Board of Trustee, YMCA of
Pittsburgh (Non-Profit
Organization)*
President and Richard L. Smoot Trustee, Agnes Irwin School (32)
CEO of PNC Bank,
N.A. Philadelphia
Board of Council, Episcopal
Community Services (33)
Director, Greater
Philadelphia Chamber of
Commerce (34)
Director, Greater
Philadelphia First
Corporation (The) (35)
Director, Greater
Philadelphia Urban
Affairs Coalition
(The) (42)
Director, Pennsylvania
Ballet (36)
Director, Philadelphia
Orchestra (The) (37)
Chairman and Director, PNC
Credit Corp. (13)
Chairman, CEO and Director,
PNC National Bank (1)
Chairman, President and
Director, PNC National Bank
of New Jersey (16)
Director, PNC Service
Corp. (4)
Director, PNC Trust Company
of New York (11)
Director, Police Athletic
League of Philadelphia (38)
Director, PFPC Inc. (3)
Director, PIMC (29)
Director, Settlement Music
School (39)
Director, St. John's
College*
</TABLE>
C-21
<PAGE> 100
<TABLE>
<CAPTION>
POSITION WITH OTHER BUSINESS TYPE OF
PNC BANK NAME CONNECTIONS BUSINESS
- ------------- -------------------------- -------------- --------
<S> <C> <C>
Director, United Negro
College Fund, Inc. (41)
Director, Widener Univ. (40)
Executive Vice Herbert G. Director, CBM-Old York
President Summerfield, Jr. Associates, Inc.*
Director, CBM-Walnut Hill,
Inc.*
Director, Pennsylvania
Mountain, Inc.*
Executive Vice President -
PNC Real Estate, PNC Bank
Corp. (14)
Chairman and Director, PNC
Realty Holding Corp.*
Director, PNC Realty Holding
Corp. of Georgia*
Director, PNC Realty Holding
Corp. of Florida*
Director, PNC Realty Holding
Corp. of Kentucky*
Director, PNC Realty Holding
Corp. of Mississippi*
Director, PNC Realty Holding
Corp. of New Jersey*
Director, PNC Realty Holding
Corp. of Ohio*
Director, PNC Realty Holding
Corp. of Pennsylvania*
Director, PNC Realty Holding
Corp. of Texas*
Director, PNC Realty Mortgage
Company*
Director, Regional Industrial
Development Corporation of
Southwestern, PA*
Director, Special Asset
Holdings of Michigan, Inc.*
</TABLE>
C-22
<PAGE> 101
<TABLE>
<CAPTION>
POSITION WITH OTHER BUSINESS TYPE OF
PNC BANK NAME CONNECTIONS BUSINESS
- ------------- -------------------------- -------------- --------
<S> <C> <C>
Executive Malcolm C. Wilson Board of Trustees, People's
Vice Light & Theatre Company*
President
Senior Vice President and
Director, PNC National Bank
of New Jersey (16)
</TABLE>
(1) PNC Bank, National Association, 120 S. 17th Street, Philadelphia, PA
19103, Broad and Chestnut Streets, Philadelphia, PA 19101, 17th and
Chestnut Streets, Philadelphia, PA 19103.
(2) PNC National Bank, 400 Bellevue Parkway, Wilmington, DE 19809.
(3) PFPC Inc., 400 Bellevue Parkway, Wilmington, DE 19809.
(4) PNC Service Corp, 103 Bellevue Parkway, Wilmington, DE 19809.
(5) Provident Capital Management, Inc., 30 S. 17th Street, Suite 1500,
Philadelphia, PA 19103.
(6) PNC Investment Corp., Broad and Chestnut Streets, Philadelphia, PA
19101.
(7) Provident Realty Management, Inc., Broad and Chestnut Streets,
Philadelphia, PA 19101.
(8) Provident Realty, Inc., Broad and Chestnut Streets, Philadelphia, PA
19101.
(9) PNC Bancorp, Inc., 3411 Silverside Road, Wilmington, DE 19810.
(10) PNC New Jersey Credit Corp., 1415 Route 70 East, Suite 604, Cherry
Hill, NJ 08034.
(11) PNC Trust Company of New York, 40 Broad Street, New York, NY 10084.
(12) Provcor Properties, Inc., Broad and Chestnut Streets, Philadelphia, PA
19101.
(13) PNC Credit Corp, 103 Bellevue Parkway, Wilmington, DE 19809.
(14) PNC Bank Corp., 5th Avenue and Woods Streets, Pittsburgh, PA 15265.
(15) Advanced Investment Management, Inc., 27th Floor, One Oliver Plaza,
Pittsburgh, PA 15265.
(16) PNC Bank, New Jersey, National Association, Woodland Falls Corporate
Park, 210 Lake Drive East, Cherry Hill, NJ 08002.
(17) PNC Capital Corp, 5th Avenue and Woods Streets, Pittsburgh, PA 15265.
(18) PNC Holding Corp, 222 Delaware Avenue, P.O. Box 791, Wilmington, DE
19899.
(19) PNC Venture Corp, 5th Avenue and Woods Streets, Pittsburgh, PA 15265.
(20) PNC Bank, Delaware, 300 Delaware Avenue, Wilmington, DE 19801.
(21) Bank of Delaware Corp., 300 Delaware Avenue, Wilmington, DE 19801.
(22) Del-Vest, Inc., 300 Delaware Avenue, Wilmington, DE 19801.
(23) Marand Corp., 222 Delaware Avenue, Wilmington, DE 19801.
(24) Millsboro Insurance Agency, 300 Delaware Avenue, Wilmington, DE 19801.
(25) Roney-Richards, Inc., 300 Delaware Avenue, Wilmington, DE 19801.
C-23
<PAGE> 102
Item 29. Principal Underwriter
(a) Provident Distributors, Inc. ("PDI") currently acts as
distributor for, in addition to the Fund, Temporary Investment Fund, Inc.,
Trust for Federal Securities, Municipal Fund for Temporary Investment,
Municipal Fund for California Investors, Inc. and The PNC(R) Fund.
(b) The information required by this Item 29 with respect to
each director, officer or partner of PDI is incorporated by reference to
Schedule A of Form BD filed by PDI with the Securities and Exchange Commission
pursuant to the Securities and Exchange Act of 1934 (see File No. 8-46564).
Item 30. Location of Accounts and Records
(1) PNC Bank, National Association, 200 Stevens Drive,
Suite 440-A, Lester, Pennsylvania 19113 (records
relating to its functions as sub-investment adviser
and custodian).
(2) Provident Distributors Inc., 259 Radnor-Chester Road,
Suite 120, Radnor, Pennsylvania 19087 (records
relating to its functions as distributor).
(3) PNC Institutional Management Corporation, 400
Bellevue Parkway, 4th Floor, Wilmington, Delaware
19809 (records relating to its functions as investment
adviser).
(4) PFPC Inc., P.O. Box 8950, Wilmington, Delaware
19885-9628 and Provident Distributors, Inc., 289
Radnor- Chester Road, Suite 120, Radnor, Pennsylvania
19087 (records relating to their functions as
administrators).
(5) PFPC Inc., 400 Bellevue Parkway, Wilmington,
Delaware 19809 (records relating to its functions as
transfer agent and dividend disbursing agent).
(6) Drinker Biddle & Reath, 1100 Philadelphia National
Bank Building, 1345 Chestnut Street, Philadelphia,
Pennsylvania 19107-3996 (Registrant's Articles of
Incorporation, By-Laws and Minute Books).
Item 31. Management Services
None.
C-24
<PAGE> 103
Item 32. Undertakings
Registrant undertakes to furnish each person to whom a
prospectus is delivered with a copy of Registrant's latest Annual Report to
Shareholders upon request and without charge.
C-25
<PAGE> 104
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and
the Investment Company Act of 1940, the Registrant certifies that it meets all
the requirements for effectiveness of this Post-Effective Amendment No. 14 to
its Registration Statement pursuant to Rule 485(b) under the Securities Act of
1933 and has duly caused this Post-Effective Amendment No. 14 to its
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Wilmington and State of Delaware on November
30, 1995.
MUNICIPAL FUND FOR
NEW YORK INVESTORS, Inc.
/s/ Edward J. Roach
-------------------------
Edward J. Roach
President
Pursuant to the requirements of the Securities Act of 1933,
this Post-Effective Amendment No. 14 to Registrant's Registration Statement
has been signed below by the following persons in the capacities and on the
dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
* Francis E. Drake, Jr. Director November 30, 1995
- ------------------------
Francis E. Drake, Jr.
* Rodney D. Johnson Director November 30, 1995
- --------------------
Rodney D. Johnson
* Thomas A. Melfe Chairman of the November 30, 1995
- ------------------------ Board and Director
Thomas A. Melfe
* Anthony M. Santomero Director November 30, 1995
- ------------------------
Anthony M. Santomero
/s/ Edward J. Roach President and November 30, 1995
- ------------------------ Treasurer
Edward J. Roach
(Principal Financial and
Accounting Officer)
*By:/s/ Edward J. Roach
--------------------
Edward J. Roach
Attorney-in-Fact
</TABLE>
C-26
<PAGE> 105
POWER OF ATTORNEY
Anthony M. Santomero, whose signature appears below, does
hereby constitute and appoint Thomas A. Melfe. and Edward J. Roach, and either
of them, his true and lawful attorneys and agents, with power of substitution
or resubstitution, to do any and all acts and things and to execute any and all
instruments which said attorneys and agents, or either of them, may deem
necessary or advisable or which may be required to enable Municipal Fund for
New York Investors, Inc. (the "Fund") to comply with the Investment Company Act
of 1940, as amended, and the Securities Act of 1933, as amended ("Acts"), and
any rules, regulations or requirements of the Securities and Exchange
Commission in respect thereof, in connection with the filing and effectiveness
of any and all amendments (including post-effective amendments) to the Fund's
Registration Statement pursuant to said Acts, including specifically, but
without limiting the generality of the foregoing, the power and authority to
sign in the name and on behalf of the undersigned as a director and/or officer
of the Fund any and all such amendments filed with the Securities and Exchange
Commission under said Acts, and any other instruments or documents related
thereto, and the undersigned does hereby ratify and confirm all that said
attorneys and agents, or either of them, shall do or cause to be done by virtue
hereof.
Date: November 20, 1995 /s/ Anthony M. Santomero
-------------------------------
Anthony M. Santomero
<PAGE> 106
POWER OF ATTORNEY
Francis E. Drake, Jr., whose signature appears below, does
hereby constitute and appoint Thomas A. Melfe and Edward J. Roach, and either
of them, his true and lawful attorneys and agents, with power of substitution
or resubstitution, to do any and all acts and things and to execute any and all
instruments which said attorneys and agents, or either of them, may deem
necessary or advisable or which may be required to enable Municipal Fund for
New York Investors, Inc. (the "Fund") to comply with the Investment Company Act
of 1940, as amended, and the Securities Act of 1933, as amended ("Acts"), and
any rules, regulations or requirements of the Securities and Exchange
Commission in respect thereof, in connection with the filing and effectiveness
of any and all amendments (including post-effective amendments) to the Fund's
Registration Statement pursuant to said Acts, including specifically, but
without limiting the generality of the foregoing, the power and authority to
sign in the name and on behalf of the undersigned as a director and/or officer
of the Fund any and all such amendments filed with the Securities and Exchange
Commission under said Acts, and any other instruments or documents related
thereto, and the undersigned does hereby ratify and confirm all that said
attorneys and agents, or either of them, shall do or cause to be done by virtue
hereof.
Date: November 18, 1995 /s/ Francis E. Drake, Jr.
----------------------------
Francis E. Drake, Jr.
<PAGE> 107
POWER OF ATTORNEY
Thomas A. Melfe, whose signature appears below, does hereby
constitute and appoint Thomas A. Melfe and Edward J. Roach, and either of them,
his true and lawful attorneys and agents, with power of substitution or
resubstitution, to do any and all acts and things and to execute any and all
instruments which said attorneys and agents, or either of them, may deem
necessary or advisable or which may be required to enable Municipal Fund for
New York Investors, Inc. (the "Fund") to comply with the Investment Company Act
of 1940, as amended, and the Securities Act of 1933, as amended ("Acts"), and
any rules, regulations or requirements of the Securities and Exchange
Commission in respect thereof, in connection with the filing and effectiveness
of any and all amendments (including post-effective amendments) to the Fund's
Registration Statement pursuant to said Acts, including specifically, but
without limiting the generality of the foregoing, the power and authority to
sign in the name and on behalf of the undersigned as a director and/or officer
of the Fund any and all such amendments filed with the Securities and Exchange
Commission under said Acts, and any other instruments or documents related
thereto, and the undersigned does hereby ratify and confirm all that said
attorneys and agents, or either of them, shall do or cause to be done by virtue
hereof.
Date: November 16, 1995 /s/ Thomas A. Melfe
----------------------
Thomas A. Melfe
<PAGE> 108
POWER OF ATTORNEY
Rodney D. Johnson, whose signature appears below, does hereby
constitute and appoint Thomas A. Melfe. and Edward J. Roach, and either of
them, his true and lawful attorneys and agents, with power of substitution or
resubstitution, to do any and all acts and things and to execute any and all
instruments which said attorneys and agents, or either of them, may deem
necessary or advisable or which may be required to enable Municipal Fund for
New York Investors, Inc. (the "Fund") to comply with the Investment Company Act
of 1940, as amended, and the Securities Act of 1933, as amended ("Acts"), and
any rules, regulations or requirements of the Securities and Exchange
Commission in respect thereof, in connection with the filing and effectiveness
of any and all amendments (including post-effective amendments) to the Fund's
Registration Statement pursuant to said Acts, including specifically, but
without limiting the generality of the foregoing, the power and authority to
sign in the name and on behalf of the undersigned as a director and/or officer
of the Fund any and all such amendments filed with the Securities and Exchange
Commission under said Acts, and any other instruments or documents related
thereto, and the undersigned does hereby ratify and confirm all that said
attorneys and agents, or either of them, shall do or cause to be done by virtue
hereof.
Date: November 20, 1995 /s/ Rodney D. Johnson
---------------------------
Rodney D. Johnson
<PAGE> 109
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION PAGE NO.
----------- ----------- --------
<S> <C>
(5)(a) Amended Investment Advisory Agreement between
Registrant and Provident Institutional Management
Corporation dated as of February 8, 1987.
(b) Sub-Advisory Agreement between Provident
Institutional Management Corporation and Provident
National Bank dated as of August 8, 1983.
(6) Distribution Agreement between Registrant and
Provident Distributors, Inc. dated January 31, 1994.
(8)(a) Custody Agreement between Registrant and Provident
National Bank dated as of July 20, 1983.
(b) Amendment No. 1 dated as of July 31, 1985 to Custody
Agreement between Registrant and Provident National
Bank.
Amendment No. 2 dated as of October 30, 1985 to
(c) Custody Agreement between Registrant and Provident
National Bank.
</TABLE>
<PAGE> 110
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION PAGE NO.
----------- ----------- --------
<S> <C>
(9)(a) Administration Agreement between Registrant,
Provident Distributors, Inc. (formerly MFD Group,
Inc.) and PFPC Inc. dated January 18, 1993.
(b) Transfer Agency Agreement between Registrant and
Provident Financial Processing Corporation dated as
of August 8, 1983.
(c) Amendment No. 1 dated as of July 31, 1985 to
Transfer Agency Agreement between Registrant and
Provident Financial Processing Corporation.
(10) Opinion of Counsel.
(11)(a) Consent of Coopers & Lybrand L.L.P.
(b) Consent of Drinker Biddle & Reath.
(c) Consent of Willkie Farr & Gallagher.
(16) Schedule for Computation of Performance Quotations.
(27) Financial Data Schedule.
</TABLE>
-2-
<PAGE> 1
EXHIBIT 5(a)
AMENDED ADVISORY AGREEMENT
AGREEMENT made as of February 9, 1987 between MUNICIPAL FUND
FOR NEW YORK INVESTORS, INC., a Maryland corporation (herein called the
"Fund"), and PROVIDENT INSTITUTIONAL MANAGEMENT CORPORATION, a Delaware
corporation (herein called the "Investment Adviser"), registered as an
investment adviser under the Investment Advisers Act of 1940 and wholly-owned
by Provident National Bank ("Provident").
WHEREAS, the Fund is registered as an open-end, management
investment company under the Investment Company Act of 1940;
WHEREAS, the Fund desires to retain the Investment Adviser to
render investment advisory and other services to the Fund, and the Investment
Adviser is willing to so render such services;
NOW, THEREFORE, this Agreement
WITNESSETH:
In consideration of the premises and mutual covenants herein
contained, it is agreed between the parties hereto as follows:
1. Appointment. The Fund hereby appoints the Investment
Adviser to act as investment adviser to the Fund for the period and on the
terms set forth in this Agreement. The Investment Adviser accepts such
appointment and agrees to render the services herein set forth for the
compensation herein provided.
2. Delivery of Documents. The Fund has furnished the
Investment Adviser with copies properly certified or authenticated of each of
the following:
(a) Articles of Incorporation of the Fund (such
Articles of Incorporation, as presently in effect and as they shall from time
to time be amended or supplemented, herein called the "Articles of
Incorporation");
(b) Articles Supplementary as filed with the
Maryland State Department of Assessments and Taxation on July 13, 1983;
(c) Articles of Amendment as filed with the
Maryland State Department of Assessments and Taxation on July 18, 1983;
<PAGE> 2
(d) By-Laws of the Fund (such By-Laws, as
presently in effect and as they shall from time to time be amended, herein
called the "By-Laws");
(e) Resolutions of the Board of Directors of the
Fund authorizing the appointment of the Investment Adviser and the execution
and delivery of this Agreement;
(f) Registration Statement under the Securities
Act of 1933, as amended, and the Investment Company Act of 1940, as amended, on
Form N-1 (No. 2-82278) relating to the common stock of the Fund ("Shares"), and
all amendments thereto;
(g) Notification of Registration of the Fund
under the Investment Company Act of 1940, as amended, on Form N-8A as filed
with the Securities and Exchange Commission on March 8, 1983, and all
amendments thereto; and
(h) Prospectus of the Fund in effect under the
Securities Act of 1933 (such prospectus and supplements thereto, as presently
in effect and as from time to time amended and supplemented, herein called the
"Prospectus").
The Fund will furnish the Investment Adviser from time to time
with copies of all amendments of or supplements to the foregoing, if any.
3. Management. Subject to the supervision of the Board
of Directors of the Fund, the Investment Adviser will provide a continuous
investment program for the Fund, including investment research and management
with respect to all securities, investments, cash and cash equivalents in its
portfolio. The Investment Adviser will determine from time to time what
securities and other investments will be purchased, retained or sold by the
Fund. The Investment Adviser will provide the services rendered by it
hereunder in accordance with the Fund's investment objective and policies as
stated in the Prospectus. The Investment Adviser further agrees that it:
(a) will conform with all applicable Rules and
Regulations of the Securities and Exchange Commission (herein called the
"Rules"), and will in addition conduct its activities under this Agreement in
accordance with regulations of the Board of Governors of the Federal Reserve
System pertaining to the investment advisory activities of bank holding
companies to the same extent as if such regulations were by their terms
applicable to the activities of the Investment Adviser;
(b) will not invest its assets or the assets of
any accounts advised by it or by Provident in Shares, make loans for the
purpose of purchasing or carrying Shares, or make loans to the Fund;
-2-
<PAGE> 3
(c) will place orders pursuant to its investment
determinations for the Fund either directly with the issuer or with any broker
or dealer. In placing orders with brokers and dealers, the Investment Adviser
will attempt to obtain the best net price and the most favorable execution of
its orders. Consistent with this obligation, when the execution and price
offered by two or more brokers or dealers are comparable, the Investment
Adviser may, in its discretion, purchase and sell portfolio securities to and
from brokers and dealers who provide the Fund with research advice and other
services. In no instance will portfolio securities be purchased from or sold
to the Fund's principal underwriter, the Investment Adviser or any affiliated
person thereof, except to the extent permitted by the Securities and Exchange
Commission;
(d) will, together with Provident, maintain books
and records with respect to the Fund's securities transactions, keep its books
of account and will render to the Fund's Board of Directors such periodic and
special reports as the Board may request;
(e) will compute the net asset value and the net
income for the Fund on each business day as described in the Prospectus or as
more frequently requested by the Fund; and
(f) will treat confidentially and as proprietary
information of the Fund all records and other information relative to the Fund
and prior, present or potential shareholders, and will not use such records and
information for any purpose other than performance of its responsibilities and
duties hereunder, except after prior notification to and approval in writing by
the Fund, which approval shall not be unreasonably withheld and may not be
withheld where the Investment Adviser may be exposed to civil or criminal
contempt proceedings for failure to comply, when requested to divulge such
information by duly constituted authorities, or when so requested by the Fund.
4. Services Not Exclusive. The investment management
services rendered Dy the Investment Adviser hereunder are not to be deemed
exclusive, and the Investment Adviser shall be free to render similar services
to others so long as its services under this Agreement are not impaired
thereby.
5. Sub-Advisory Agreement. Notwithstanding anything
herein to the contrary, this Agreement shall not be effective until the
Investment Adviser and Provident deliver to the Fund a duly executed copy of
the Sub-Advisory Agreement in substantially the form attached as Exhibit A
hereto (the "Sub-Advisory Agreement") pursuant to which Provident will provide
the Investment Adviser with certain investment advisory services on behalf of
the Fund. The Investment Adviser agrees to give the Fund prompt written notice
of any termination of or notice to
-3-
<PAGE> 4
terminate the Sub-Advisory Agreement by any person other than the Fund.
6. Books and Records. In compliance with the
requirements of Rule 31a-3 of the Rules, the Investment Adviser hereby agrees
that all records which it maintains for the Fund are the property of the Fund
and further agrees to surrender promptly to the Fund any of such records upon
the Fund's request. The Investment Adviser further agrees to preserve for the
periods prescribed by Rule 31a-2 the records required to be maintained by Rule
31a-1 of the Rules.
7. Expenses. During the term of this Agreement, the
Investment Adviser will pay all expenses incurred by it in connection with its
activities under this Agreement other than the cost of (including brokerage
commissions, if any) securities purchased for the Fund.
In addition, if the expenses borne by the Fund in any fiscal
year exceed the applicable expense limitations imposed by the securities
regulations of any state in which the Shares are registered or qualified for
sale to the public, the Investment Adviser shall reimburse the Fund for
one-half of any excess up to the amount of the fees payable to it during such
fiscal year pursuant to paragraph 8 hereof; provided, however, that
notwithstanding the foregoing, the Investment Adviser shall reimburse the Fund
for one-half of such excess expenses regardless of the amount of fees paid to
it during such fiscal year to the extent that the securities regulations of any
state in which the Shares are registered or qualified for sale so require.
8. Compensation. For the services provided and the
expenses assume pursuant to this Agreement, the Fund will pay the Investment
Adviser and the Investment Adviser will accept as full compensation therefor a
fee, computed daily and payable monthly, at an annual rate of .20% of the
Fund's average net assets.
9. Limitation of Liability of the Investment Adviser.
Neither Provident nor the Investment Adviser shall 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 this Agreement relates, except a loss resulting from
a breach of fiduciary duty with respect to the receipt of compensation for
services or a loss resulting from willful misfeasance, bad faith or gross
negligence on the part of the Investment Adviser in the performance of its
duties or from reckless disregard by it of its obligations and duties under
this Agreement. Notwithstanding the foregoing, the Investment Adviser shall be
liable to the Fund for the acts and omissions of Provident to the extent that
Provident is liable to the Investment Adviser for such acts or omissions
-4-
<PAGE> 5
under the Sub-Advisory Agreement between the Investment Adviser and Provident.
10. Duration and Termination. This Agreement, unless
sooner terminated as provided herein, shall continue until July 31, 1987.
Thereafter, if not terminated, this Agreement shall continue for successive
periods of 12 months each, provided such continuance is specifically approved
at least annually (a) by the vote of a majority of these members of the Board
of Directors of the Fund who are not parties to this Agreement or interested
persons of any such party, cast in person at a meeting called for the purpose
of voting on such approval, and (b) by the Board of Directors of the Fund or by
vote of a majority of the outstanding voting securities of the Fund; provided,
however, that this Agreement may be terminated by the Fund at any time, without
the payment of any penalty, by the Board of Directors of the Fund or by vote of
a majority of the outstanding voting securities of the Fund on 60 days' written
notice to the Investment Adviser, or by the Investment Adviser at any time,
without payment of any penalty, on 90 days' written notice to the Fund. This
Agreement will immediately terminate in the event of its assignment and upon
any termination of the Sub-Advisory Agreement. (As used in this Agreement, the
terms "majority of the outstanding voting securities," "interested person" and
"assignment" shall have the same meanings as such terms have in the Investment
Company Act of 1940.)
11. Amendment of this Agreement. No provision of this
Agreement may be changed, waived, discharged or terminated orally, but only by
an instrument in writing signed by the party against which enforcement of the
change, waiver, discharge or termination is sought, and no amendment of this
Agreement shall be effective until approved by vote of a majority of the Fund's
outstanding voting securities.
12. Miscellaneous. The captions in this Agreement are
included for convenience of reference only and in no way define or delimit any
of the provisions hereof or otherwise affect their construction or effect. If
any provision of this Agreement shall be held or made invalid by a court
decision, statute, rule or otherwise, the remainder of this Agreement shall not
be affected thereby. This Agreement shall be binding upon and shall inure to
-5-
<PAGE> 6
the benefit of the parties hereto and their respective successors and shall be
governed by Delaware law.
IN WITNESS WHEREOF, the parties hereto have caused this
instrument to be executed by their officers designated below as of the day and
year first above written.
MUNICIPAL FUND FOR NEW YORK
INVESTORS, INC.
[Seal] (a Maryland corporation)
Attest: By:/s/ Edward J. Roach
------------------------ --------------------------
Vice President & Treasurer
PROVIDENT INSTITUTIONAL
[Corporate Seal] MANAGEMENT CORPORATION
Attest:/s/ John D. Silcox, Jr. By:/s/ Thomas H. Nevin
-------------------------- --------------------------
Vice President & Secretary
-6-
<PAGE> 1
EXHIBIT 5(b)
SUB-ADVISORY AGREEMENT
AGREEMENT dated August 8, 1983, between PROVIDENT NATIONAL
BANK, a national banking association (herein called "Provident"), and PROVIDENT
INSTITUTIONAL MANAGEMENT CORPORATION, a Delaware corporation registered as an
investment adviser under the Investment Advisers Act of 1940 and wholly-owned
by Provident (herein called "PIMC").
WHEREAS, PIMC is the investment adviser to Municipal Fund for
New York Investors, Inc. (the "Fund"), an open-end, diversified, management
investment company registered under the Investment Company Act of 1940; and
WHEREAS, PIMC wishes to retain Provident to provide it with
investment research, administrative, and statistical services in connection
with PIMC's advisory activities on behalf of the Fund; and
WHEREAS, Provident is willing to provide such services to PIMC
upon the conditions and for the compensation set forth below;
NOW, THEREFORE, in consideration of the premises and mutual
covenants herein contained, it is agreed between the parties hereto as follows:
1. Appointment. PIMC hereby appoints Provident its
sub-adviser as required by the Advisory Agreement between PIMC and the Fund
dated August 8, 1983 (such Agreement or the most recent successor advisory
agreement between such parties is referred to herein as the "Advisory
Agreement"). Provident accepts such appointment and agrees to render the
services herein set forth for the compensation herein provided.
2. Sub-Advisory Services. Subject to the supervision of
the Board of Directors of the Fund, Provident, through its Trust Division and
on behalf of the Fund, will provide the Find investment research and credit
analysis concerning prospective and existing Fund investments, make
recommendations with respect to the Fund's continuous investment program,
supply PIMC computer facilities and operating personnel, and provide such
statistical services as PIMC may from time to time reasonably request.
Provident will provide the services rendered by it hereunder in accordance with
the Fund's investment objective, policies and restrictions as stated in the
Fund's prospectus, as presently in effect and as it may be amended or
supplemented from time to time. Provident further agrees that it:
<PAGE> 2
(a) will use the same skill and care in
providing such services as it uses in providing services to fiduciary
accounts for which it has investment responsibilities;
(b) will conform with all applicable Rules and
Regulations of the Securities and Exchange Commission (hereinafter
called the "Rules"), and will in addition conduct its activities under
this Agreement in accordance with the regulations of the Board of
Governors of the Federal Reserve System pertaining to the investment
advisory activities of bank holding companies to the same extent as if
such regulations were by their terms applicable to its activities
hereunder;
(c) will not invest its assets or assets of any
fiduciary account managed by it in shares of the Fund, make loans for
purposes of purchasing or carrying such shares, or make loans to the
Fund;
(d) will maintain or cause PIMC to maintain books
and records with respect to the Fund's securities transactions;
(e) will render to the Fund's Board of Directors
such periodic and special reports as the Board may request; and
(f) will maintain its policy and practice of
conducting its Trust Division independently of its Commercial
Division. In making investment recommendations for the Fund, Trust
Division personnel will not inquire or take into consideration whether
the issuer of securities proposed for purchase or sale for the Fund's
account are customers of the Commercial Division. In dealing with
commercial customers, the Commercial Division will not inquire or take
into consideration whether securities of those customers are held by
the Fund.
3. Services Not Exclusive. Provident's services
hereunder are not deemed to be exclusive, and Provident shall be free to render
similar services to others so long as its services under this Agreement are not
impaired thereby.
4. Books and Records. In compliance with the
requirements of Rule 31a-3 of the Rules, Provident hereby agrees that all
records which it maintains for the Fund are the property of the Fund and
further agrees to surrender promptly to the Fund any of such records upon the
Fund's request. Provident further agrees to preserve, or cause PIMC to
preserve, for the periods prescribed by Rule 31a-2, the records required to be
maintained by Rule 31a-1 of the Rules.
-2-
<PAGE> 3
5. Expenses. During the term of this Agreement,
Provident will pay all expenses incurred by it in connection with its
activities under this Agreement.
6. Compensation. For the services which Provident will
render to PIMC under this Agreement, PIMC will pay to Provident a monthly fee
equal to 75% of each month's advisory fee received by PIMC from the Fund
pursuant to the Advisory Agreement between PIMC and the Fund. Notwithstanding
the foregoing, the fee payable to Provident shall be adjusted each quarter as
necessary to assure that PIMC has income from all sources before application of
Federal, State, or other income taxes of at least $22,500 during each quarter.
The sub-advisory fee shall be paid by PIMC to Provident at least quarterly.
7. Limitation on Liability. Provident will not be
liable for any error of judgment or mistake of law or for any loss suffered by
PIMC or by the Fund in connection with the matters to which this Agreement
relates, except a loss resulting from a breach of fiduciary duty with respect
to the receipt of compensation for services or a loss resulting from willful
misfeasance, bad faith or gross negligence on its part in the performance of
its duties or from reckless disregard by it of its obligations or duties under
this Agreement.
8. Duration and Termination. This Agreement, unless
sooner terminated as provided herein, shall continue until July 31, 1985.
Thereafter, if not terminated, this Agreement shall continue for successive
periods of 12 months each, provided, such continuance is specifically approved
at least annually (a) by the vote of a majority of those members of the Board
of Directors of the Fund who are not parties to this Agreement or interested
persons of the Fund or any such party, cast in person at a meeting called for
the purpose of voting on such approval, and (b) by the Board of Directors of
the Fund or by a vote of a majority of the outstanding voting securities of the
Fund, provided, however, that this Agreement may be terminated by the Fund at
any time, without the payment of any penalty, by the Board of Directors of the
Fund or by a vote of a majority of the outstanding voting securities of the
Fund, on 60 days' written notice to PIMC, and will be terminated upon any
termination of the Advisory Agreement between the Fund and PIMC. This
Agreement will also immediately terminate in the event of its assignment. (As
used in this Agreement, the terms "majority of the outstanding voting
securities," "interested person" and "assignment" shall have the same meanings
as such terms have in the Investment Company Act of 1940.)
9. Amendment of this Agreement. No provision of this
Agreement may be changed, waived, discharged or terminated orally, but only by
an instrument in writing signed by the party against which enforcement of the
change, waiver, discharge or
-3-
<PAGE> 4
termination is sought, and no amendment of this Agreement shall be effective
until approved by vote of the holders of a majority of the Fund's outstanding
voting securities.
10. Miscellaneous. The captions in this Agreement are
included for convenience of reference only and in no way define or delimit any
of the provisions hereof or otherwise affect their construction or effect. If
any provision of this Agreement shall be held or make invalid by a court
decision, statute, rule or otherwise, the remainder of this Agreement shall not
be affected thereby. This Agreement shall be binding upon and shall inure to
the benefit of the parties hereto and their respective successors and shall be
governed by Delaware law.
IN WITNESS WHEREOF, the parties have caused this instrument to
be executed by their officers designated below as of the day and year first
above written.
PROVIDENT NATIONAL BANK
Attest:
/s/ John D. Silcox, Jr. By:
- ---------------------------- --------------------------
Vice President & Secretary
PROVIDENT INSTITUTIONAL
[Corporate Seal] MANAGEMENT CORPORATION
Attest:
/s/ John D. Silcox, Jr. By:
- ---------------------------- -------------------------
Vice President & Secretary
[Corporate Seal]
-4-
<PAGE> 1
EXHIBIT 6
MUNICIPAL FUND FOR NEW YORK INVESTORS, INC.
DISTRIBUTION AGREEMENT
Agreement dated as of January 31, 1994 between Municipal Fund
for New York Investors, Inc., a Maryland corporation, (the "Fund"), and
Provident Distributors, Inc., a Delaware corporation (the "Distributor").
WHEREAS, the Fund is an open-end, diversified management
investment company and is so registered under the Investment Company Act of
1940, as amended (the "1940 Act"); and
WHEREAS, the Fund desires to retain the Distributor as its
distributor to provide for the sale and distribution of each class and subclass
of shares of the Fund as listed on Appendix A (as such Appendix may, from time
to time, be supplemented (or amended)), and the Distributor is willing to
render such services;
NOW, THEREFORE, in consideration of the premises and mutual
covenants set forth and intending to be legally bound, the parties hereto agree
as follows:
1. APPOINTMENT OF DISTRIBUTOR. The Fund hereby appoints
the Distributor as distributor of each class and subclass of shares in the Fund
on the terms and for the period set forth in this Agreement. The Distributor
hereby accepts such appointment and agrees to render the services and duties
set forth in Section 3 below. In the event that the Fund establishes
additional classes or investment portfolios other than those listed on Appendix
A with respect to which it desires to retain the Distributor to act as
distributor hereunder, the Fund shall notify the Distributor, whereupon such
Appendix A shall be supplemented (or amended) and such portfolio shall become a
fund hereunder and shall be subject to the provisions of this Agreement to the
same extent as the Fund (except to the extent that said provisions may be
modified in writing by the Fund and Distributor at the time).
2. DELIVERY OF DOCUMENTS. The Fund has furnished the
Distributor with copies, properly certified or authenticated, of each of the
following documents and will deliver to it all future amendments and
supplements, if any:
a. The Fund's Articles of Incorporation, filed
with the Secretary of State of Maryland on March 4, 1983, as amended (the
"Charter"),
<PAGE> 2
b. The Fund's By-Laws, as amended and
supplemented ("By-Laws");
c. Resolutions of the Fund's Board of Directors
authorizing the execution and delivery of this Agreement;
d. The Fund's most recent amendment to its
Registration Statement under the Securities Act of 1933, as amended (the "1933
Act"), and the 1940 Act on Form N-1A as filed with the Securities and Exchange
Commission (the "Commission") on November 30, 1993, relating to the Fund (the
Registration Statement, as presently in effect and as amended or supplemented
from time to time, is herein called the "Registration Statement");
e. The Fund's most recent Prospectus and
Statement of Additional Information and all amendments and supplements thereto
(such Prospectus and Statement of Additional Information and supplements
thereto, as presently in effect and as from time to time amended and
supplemented, are herein called the "Prospectus"); and
f. The Fund's 12b-1 Services Plan and Form of
Broker/Dealer Servicing Agreement.
3. SERVICES AND DUTIES. The Distributor enters into the
following covenants with respect to its services and duties:
a. The Distributor agrees to sell, as agent,
from time to time during the term of this Agreement, shares upon the terms and
at the current offering price as described in the Prospectus. The Distributor
will act only in its own behalf as principal in making agreements with selected
dealers. No broker-dealer or other person which enters into a selling or
servicing agreement with the Distributor shall be authorized to act as agent
for the Fund in connection with the offering or sale of shares to the public or
otherwise. The Distributor shall use its best efforts to sell shares of each
class or subclass of the Fund but shall not be obligated to sell any certain
number of shares.
b. The Distributor shall prepare or review,
provide advice with respect to, and file with the federal and state agencies or
other organization as required by federal, state, or other applicable laws and
regulations, all sales literature (advertisements, brochures and shareholder
communications) for the Fund and any class or subclass thereof.
c. In performing all of its services and duties
as Distributor, the Distributor will act in conformity with the Charter,
By-Laws, Prospectus and resolutions and other instructions of the Fund's Board
of Directors and will comply
-2-
<PAGE> 3
with the requirements of the 1933 Act, the Securities Exchange Act of 1934, the
1940 Act and all other applicable federal or state law.
d. The Distributor will bear the cost of (i)
printing and distributing any Prospectus (including any supplement thereto) to
persons who are not shareholders, and (ii) preparing, printing and distributing
any literature, advertisement or material which is primarily intended to result
in the sale of shares; provided, however, that the Distributor shall not be
obligated to bear the expenses incurred by the Fund in connection with the
preparation and printing of any amendment to any Registration Statement or
Prospectus necessary for the continued effective registration of the shares
under the 1933 Act and state securities laws and the distribution of any such
document to existing shareholders of the Fund.
e. The Fund shall have the right to suspend the
sale of shares at any time in response to conditions in the securities markets
or otherwise, and to suspend the redemption of shares of the Fund at any time
permitted by the 1940 Act or the rules and regulations of the Commission
("Rules").
f. The Fund reserves the right to reject any
order for shares but will not do so arbitrarily or without reasonable cause.
4. LIMITATIONS OF LIABILITY. The Distributor 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 this Agreement
relates, except a loss resulting from willful misfeasance, bad faith or gross
negligence on its part in the performance of its duties or from reckless
disregard by it of its obligations and duties under this Agreement.
5. PROPRIETARY AND CONFIDENTIAL INFORMATION. The
Distributor agrees on behalf of itself and its employees to treat
confidentially and as proprietary information of the Fund all records and other
information relative to the Fund and prior, present or potential shareholders,
and not to use such records and information for any purpose other than
performance of its responsibilities and duties hereunder, except after prior
notification to and approval in writing by the Fund, which approval shall not
be unreasonably withheld and may not be withheld where the Distributor may be
exposed to civil or criminal contempt proceedings for failure to comply, when
requested to divulge such information by duly constituted authorities, or when
so requested by the Fund.
-3-
<PAGE> 4
6. INDEMNIFICATION.
a. The Fund represents and warrants to the
Distributor that the Registration Statement contains, and that the Prospectuses
at all times will contain, all statements required by the 1933 Act and the
Rules of the Commission, will in all material respects conform to the
applicable requirements of the 1933 Act and the Rules and will not include any
untrue statement of a material fact or omit to state any material fact required
to be stated therein or necessary to make the statements therein, in light of
the circumstances under which they were made, not misleading, except that no
representation or warranty in this Section 6 shall apply to statements or
omissions made in reliance upon and in conformity with written information
furnished to the Fund by or on behalf of the Distributor or either of the
Fund's co-administrators expressly for use in the Registration Statement or
Prospectus.
b. The Fund agrees that it will indemnify,
defend and hold harmless the Distributor, its several officers, and directors,
and any person who controls the Distributor within the meaning of Section 15 of
the 1933 Act, from and against any losses, claims, damages or liabilities,
joint or several, to which the Distributor, its several officers, and
directors, and any person who controls the Distributor within the meaning of
Section 15 of the 1933 Act, may become subject under the 1933 Act or otherwise,
insofar as such losses, claims, damages or liabilities (or actions or
proceedings in respect thereof) arise out of, or are based upon any untrue
statement or alleged untrue statement of a material fact contained in the
Registration Statement, the Prospectus or in any application or other document
executed by or on behalf of the Fund or are based upon information furnished by
or on behalf of the Fund filed in any state in order to qualify the shares
under the securities or blue sky laws thereof ("Blue Sky application") or arise
out of, or are based upon, the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, and will reimburse the Distributor, its several
officers, and directors, and any person who controls the Distributor within the
meaning of Section 15 of the 1933 Act, for any legal or other expenses
reasonably incurred by the Distributor, its several officers, and directors,
and any person who controls the Distributor within the meaning of Section 15 of
the 1933 Act, in investigating, defending or preparing to defend any such
action, proceeding or claim; provided, however, that the Fund shall not be
liable in any case to the extent that such loss, claim, damage or liability
arises out of, or is based upon, any untrue statement, alleged untrue
statement, or omission or alleged omission made in the Registration Statement,
the Prospectus or any Blue Sky application with respect to the Fund
-4-
<PAGE> 5
in reliance upon and in conformity with written information furnished to the
Fund by or on behalf of the Distributor or either of the Fund's
co-administrators specifically for inclusion therein or arising out of the
failure of the Distributor to deliver a current Prospectus.
c. The Fund shall not indemnify any person
pursuant to this Section 6 unless the court or other body before which the
proceeding was brought has rendered a final decision on the merits that such
person was not liable by reason of his or her willful misfeasance, bad faith or
gross negligence in the performance of his or her duties, or his or her
reckless disregard of any obligations and duties, under this Agreement
("disabling conduct") or, in the absence of such a decision, a reasonable
determination (based upon a review of the facts) that such person was not
liable by reason of disabling conduct has been made by the vote of a majority
of a quorum of the directors of the Fund who are neither "interested parties"
(as defined in the 1940 Act) nor parties to the proceeding, or by an
independent legal counsel in a written opinion.
d. The Distributor will indemnify and hold
harmless the Fund and its several officers and directors, and any person who
controls the Fund within the meaning of Section 15 of the 1933 Act, from and
against any losses, claims, damages or liabilities, joint or several, to which
any of them may become subject under the 1933 Act or otherwise, insofar as such
losses, claims, damages or liabilities (or actions or proceedings in respect
thereof) arise out of, or are based upon, any untrue statement or alleged
untrue statement of a material fact contained in the Registration Statement,
the Prospectus or any Blue Sky application, or arise out of, or are based upon,
the omission or alleged omission to state therein a material fact required to
be stated therein or necessary to make the statements therein not misleading,
which statement or omission was made in reliance upon and in conformity with
information furnished in writing to the Fund or any of its several officers and
directors by or on behalf of the Distributor or either of the Fund's
co-administrators specifically for inclusion therein, and will reimburse the
Fund and its several officers, directors and such controlling persons for any
legal or other expenses reasonably incurred by any of them in investigating,
defending or preparing to defend any such action, proceeding or claim.
e. The obligations of the Fund under this
Section 6 shall be the several (and not the joint or joint and several)
obligation of the Fund.
7. DURATION AND TERMINATION. This Agreement shall
become effective upon its execution as of the date first written
-5-
<PAGE> 6
above and, unless sooner terminated as provided herein, shall continue until
July 31, 1995. Thereafter, if not terminated, this Agreement shall continue
automatically for successive terms of one year, provided that such continuance
is specifically approved at least annually (a) by a vote of a majority of those
members of the Fund's Board of Directors who are not parties to this Agreement
or "interested persons" of any such party, cast in person at a meeting called
for the purpose of voting on such approval, and (b) by the Fund's Board of
Directors or by vote of a "majority of the outstanding voting securities" of
the Fund; provided, however, that this Agreement may be terminated by the Fund
at any time, without the payment of any penalty, by vote of a majority of the
entire Board of Directors or by a vote of a "majority of the outstanding voting
securities" of the Fund on 60-days' written notice to the Distributor, or by
the Distributor at any time, without the payment of any penalty, on 90-days'
written notice to the Fund. This Agreement will automatically and immediately
terminate in the event of its "assignment." (As used in this Agreement, the
terms "majority of the outstanding voting securities," "interested person" and
"assignment" shall have the same meanings as such terms have in the 1940 Act.)
8. AMENDMENT OF THIS AGREEMENT. No provision of this
Agreement may be changed, waived, discharged or terminated orally, but only by
an instrument in writing signed by the party against which an enforcement of
the change, waiver, discharge or termination is sought.
9. NOTICES. Notices of any kind to be given to the
Fund hereunder by the Distributor shall be in writing and shall be duly given
if mailed or delivered to the Fund at Bellevue Park Corporate Center, Suite
152, 103 Bellevue Parkway, Wilmington, Delaware 19809, Attention: Mr. Edward
J. Roach, Treasurer, with a copy to Philadelphia National Bank Building, 1345
Chestnut Street, Philadelphia Pennsylvania 19107-3496, Attention: Morgan R.
Jones, Secretary, or at such other address or to such individual as shall be so
specified by the Fund to the Distributor. Notices of any kind to be given to
the Distributor hereunder by the Fund shall be in writing and shall be duly
given if mailed or delivered to Provident Distributors, Inc., 259
Radnor-Chester Road, Suite 120, Radnor, Pennsylvania 19087, Attention: Monroe
J. Haegele or at such other address or to such other individual as shall be so
specified by the Distributor to the Fund.
10. MISCELLANEOUS. The captions in this Agreement are
included for convenience of reference only and in no way define
-6-
<PAGE> 7
or delimit any of the provisions hereof or otherwise affect their construction
or effect. If any provision of this Agreement shall be held or made invalid by
a court decision, statute, rule or otherwise, the remainder of this Agreement
shall not be affected thereby. This Agreement shall be binding upon and shall
inure to the benefit of the parties hereto and their respective successors.
11. COUNTERPARTS. This Agreement may be executed in
counterparts, all of which together shall constitute one and the same
instrument.
IN WITNESS WHEREOF, the parties hereto have caused this
instrument to be executed by their officers designated below as of the day and
year first above written.
MUNICIPAL FUND FOR NEW YORK
INVESTORS, INC.
By /s/ Edward J. Roach
-----------------------------
Vice President
PROVIDENT DISTRIBUTORS, INC.
By /s/ Monroe Haegele
----------------------------
CEO
-7-
<PAGE> 8
APPENDIX A
to the
DISTRIBUTION AGREEMENT
between
Municipal Fund for New York Investors, Inc.
and
Provident Distributors, Inc.
--------------------------------------------------------------------
New York Money Fund (Class A Common Stock, Class A Common Stock -
Special Series 1, Class A Common Stock - Special Series 2).
A-1
<PAGE> 1
EXHIBIT 8(a)
CUSTODY AGREEMENT
THIS AGREEMENT is made this 20th day of July, 1983 by and
between MUNICIPAL FUND FOR NEW YORK INVESTORS, INC., a Maryland corporation
(the "Fund"), and PROVIDENT NATIONAL BANK, a national banking association
("Provident").
W I T N E S S E T H :
WHEREAS, the Fund is registered as an open-end, diversified,
management investment company under the Investment Company Act of 1940, as
amended ("the 1940 Act"), offering Class A Common Stock, $.001 par value per
share (such shares herein called "Shares" and such class of Shares herein
called "Class"); and
WHEREAS, the Fund desires to retain Provident to serve as the
Fund's custodian and Provident is willing to furnish such services;
NOW, THEREFORE, in consideration of the premises and mutual
covenants herein contained, it is agreed between the parties hereto as follows:
1. Appointment. The Fund hereby appoints Provident to
act as custodian of the portfolio securities, cash and other property of the
Fund for the period and on the terms set forth in this Agreement. Provident
accepts such appointment and agrees to furnish the services herein set forth in
return for the compensation as provided in Paragraph 21 of this Agreement.
<PAGE> 2
Provident agrees to comply with all relevant provisions of the 1940 Act and
applicable rules and regulations thereunder.
2. Delivery of Documents. The Fund has furnished
Provident with copies properly certified or authenticated of each of the
following:
(a) Resolutions of the Fund's Board of Directors
authorizing the appointment of Provident as custodian of the portfolio
securities, cash and other property of the Fund and approving this Agreement;
(b) Incumbency and signature certificates
identifying and containing the signatures of the Fund's officers and/or other
persons authorized to sign Written Instructions, as hereinafter defined, on
behalf of the Fund;
(c) The Fund's Articles of Incorporation filed
with the Department of Assessments and Taxation of the State of Maryland on
March 4, 1983 and all amendments thereto (such Articles of Incorporation, as
currently in effect and as they shall from time to time be amended, are herein
called the "Charter");
(d) The Fund's By-Laws and all amendments thereto
(such By-Laws, as currently in effect and as they shall from time to time be
amended, are herein called the "By-Laws");
(e) Resolutions of the Fund's Board of Directors
appointing Provident Institutional Management Corporation ("PIMC") as the
Fund's investment adviser and resolutions of the Fund's Board of Directors and
Shareholders approving a proposed
-2-
<PAGE> 3
Advisory Agreement between PIMC and the Fund (the "Advisory Agreement");
(f) Resolutions of the Fund's Board of Directors
appointing Provident National Bank ("Provident") as the Fund's sub-investment
adviser and resolutions of the Fund's Board of Directors and Shareholders
approving a proposed Sub-Advisory Agreement between PIMC and Provident (the
"Sub-Advisory Agreement");
(g) Resolutions of the Fund's Board of Directors
appointing Shearson/American Express Inc. ("Shearson") as the Fund's
distributor and approving a proposed Distribution Agreement between Shearson
and the Fund (the "Distribution Agreement");
(h) Resolutions of the Fund's Board of Directors
appointing The Boston Company Advisors, Inc. ("Boston Advisors") as the Fund's
administrator and approving a proposed Administration Agreement between Boston
Advisors and the Fund (the "Administration Agreement");
(i) Resolutions of the Fund's Board of Directors
appointing Provident Financial Processing Corporation ("PFPC") as the Fund's
transfer agent and approving a proposed Transfer Agency Agreement between the
Fund and PFPC (the "Transfer Agency Agreement");
(j) The Advisory Agreement, the Sub-Advisory
Agreement, the Distribution Agreement, the Administration Agreement, and the
Transfer Agency Agreement;
-3-
<PAGE> 4
(k) The Fund's Notification of Registration filed
pursuant to Section 8(a) of the 1940 Act on Form N-8A with the Securities and
Exchange Commission ("SEC") on March 8, 1983;
(l) The Fund's Registration Statement on Form N-1
under the 1940 Act and the Securities Act of 1933, as amended ("the 1933 Act"),
as filed with the SEC March 8, 1983 (File No. 2-82278) relating to the Shares,
and all amendments thereto; and
(m) The Fund's most recent prospectus (such
prospectus as presently in effect and all amendments and supplements thereto
are herein called the "Prospectus").
The Fund will furnish Provident from time to time with copies
of all amendments of or supplements to the foregoing, if any.
3. Definitions.
(a) "Authorized Persons." As used in this
Agreement, the term "Authorized Person" means the Fund's President, Treasurer,
and any other person, whether or not any such person is an officer or employee
of the Fund, duly authorized by the Board of Directors of the Fund to give Oral
and Written Instructions on behalf of the Fund and listed on the Certificate
annexed hereto as Appendix A or such other Certificate listing persons duly
authorized to give Oral and Written Instructions on behalf of the Fund as may
be received by Provident from time to time.
(b) "Oral Instructions." As used in this
Agreement, the term "Oral Instructions" means verbal instructions
-4-
<PAGE> 5
actually received by Provident from an Authorized Person or from a person
reasonably believed by Provident to be an Authorized Person. The Fund agrees
to deliver to Provident, at the time and in the manner specified in Paragraph
7(b) of this Agreement, Written Instructions confirming Oral Instructions.
(c) "Property." The term "Property," as used in
this Agreement, means:
(i) any and all securities and other
property which the Fund may from time to time deposit, or cause to be
deposited, with Provident or which Provident may from time to time
hold for the Fund;
(ii) all income in respect of any of such
securities or other property;
(iii) all proceeds of the sale of any of
such securities or other property; and
(iv) all proceeds of the sale of
securities issued by the Fund, which are received by Provident from
time to time from or on behalf of the Fund.
(d) "Written Instructions." As used in this
Agreement, the term "Written Instructions" means written instructions delivered
by mail, tested telegram, cable, telex or facsimile sending device and received
by Provident, signed by two Authorized Persons.
4. Delivery and Registration of the Property. The Fund
will deliver or cause to be delivered to Provident all securities and all
moneys owned by it, including cash received
-5-
<PAGE> 6
for the issuance of its Shares, at any time during the period of this
Agreement. Provident will not be responsible for such securities and such
moneys until actually received by it. All securities delivered to Provident
(other than in bearer form) shall be registered in the name of the Fund or in
the name of a nominee of the Fund or in the name of Provident or any nominee of
Provident, which nominee shall be assigned exclusively to the Fund (with or
without indication of fiduciary status), or in the name of any subcustodian or
any nominee of any such subcustodian appointed pursuant to Paragraph 6 hereof,
or shall be properly endorsed and in form for transfer satisfactory to
Provident.
5. Receipt and Disbursement of Money.
(a) Provident shall open and maintain a separate
custodial account or accounts in the name of the Fund, subject only to draft or
order by Provident acting pursuant to the terms of this Agreement, and shall
hold in such account or accounts, subject to the provisions hereof, all cash
received by it from or for the account of the Fund. Provident shall make
payments of cash to, or for the account of, the Fund from such cash only (i)
for the purchase of securities as provided in Paragraph 11 hereof; (ii) for the
redemption of Shares as provided in subparagraph (b) of Paragraph 8 hereof;
(iii) upon receipt of Written Instructions, for the payment of interest,
dividends, taxes, or custodial, transfer agency, administration, distribution
or advisory fees or expenses which are to be borne by the Fund under the terms
of this Agreement, the Transfer
-6-
<PAGE> 7
Agency Agreement, the Advisory Agreement, the Sub-Advisory Agreement, the
Administration Agreement and the Distribution Agreement; (iv) upon receipt of
Written Instructions, for payments in connection with the conversion, exchange
or surrender of securities owned or subscribed to by the Fund and held by or to
be delivered to Provident; (v) to a subcustodian pursuant to Paragraph 6
hereof; or (vi) upon receipt of Written Instructions, for other proper Fund
purposes.
(b) Provident is hereby authorized to endorse and
collect all checks, drafts or other orders for the payment of money received as
custodian for the account of the Fund.
6. Receipt of Securities. (a) Provident shall hold and
physically segregate in a separate account identifiable at all times from those
of any other persons, firms, or corporations, all securities and non-cash
property received by it for the account of the Fund. All such securities and
non-cash property are to be held or disposed of by Provident for the Fund
pursuant to the terms of this Agreement. In the absence of Written
Instructions accompanied by a certified resolution of the Fund's Board of
Directors authorizing the specific transaction, Provident shall have no power
or authority to withdraw, deliver, assign, hypothecate, pledge or otherwise
dispose of any such securities and investments except in accordance with the
express terms provided for in this Agreement. In no case may any director,
officer, employee or agent of the Fund withdraw any securities. In connection
with its duties under this Paragraph
-7-
<PAGE> 8
6, Provident may, at its own expense, enter into subcustodian agreements with
other banks or trust companies for the receipt of certain securities and cash
to be held by Provident for the account of the Fund pursuant to this Agreement;
provided that each such bank or trust company has an aggregate capital, surplus
and undivided profits, as shown by its last published report, of not less than
twenty million dollars ($20,000,000) and that such bank or trust company agrees
with Provident to comply with all relevant provisions of the 1940 Act and
applicable rules and regulations thereunder. Provident shall remain
responsible for the performance of all of its duties under this Agreement and
shall hold the Fund harmless from the acts and omissions of any bank or trust
company that it might choose pursuant to this Paragraph 6.
(b) Promptly after the close of business each
day, Provident shall furnish the Fund with confirmation and a summary of all
transfers to or from the account of the Fund during said day. At least monthly
and from time to time, Provident shall furnish the Fund with a detailed
statement of the Property held for the Fund under this Agreement.
7. Instructions Consistent with Charter, etc.
(a) Unless otherwise provided in this Agreement,
Provident shall act only upon Oral and Written Instructions. Although
Provident may take cognizance of the provisions of the Charter and By-Laws of
the Fund, Provident may assume that any Oral or Written Instructions received
hereunder are not in any
-8-
<PAGE> 9
way inconsistent with any provisions of such Charter or By-Laws or any vote,
resolution or proceeding of the Shareholders, or of the Board of Directors, or
of any committee thereof.
(b) Provident shall be entitled to rely upon any
Oral Instructions and any Written Instructions actually received by Provident
pursuant to this Agreement. The Fund agrees to forward to Provident Written
Instructions confirming Oral Instructions in such manner that the Written
Instructions are received by Provident, whether by hand delivery, telex,
facsimile sending device or otherwise, by the close of business of the same day
that such Oral Instructions are given to Provident. The Fund agrees that the
fact that such confirming Written Instructions are not received by Provident
shall in no way affect the validity of the transactions or enforceability of
the transactions authorized by the Fund by giving Oral Instructions. The Fund
agrees that Provident shall incur no liability to the Fund in acting upon Oral
Instructions given to Provident hereunder concerning such transactions provided
such instructions reasonably appear to have been received from an Authorized
Person.
8. Transactions Not Requiring Instructions. Provident
is authorized to take the following action without Oral or Written
Instructions:
-9-
<PAGE> 10
(a) Deposits of Proceeds of Issuance of Shares.
Provident shall collect and receive for the
account of the Fund all payments received in payment for Shares issued by the
Fund.
(b) Redemptions.
Upon receipt of notice by the Fund's transfer
agent stating that such transfer agent is required to redeem Shares and
specifying the number and Class of Shares which such transfer agent is required
to redeem and the date and time the request or requests for redemption were
received by the Fund's distributor, Provident shall either (i) pay to such
transfer agent, for distribution to the redeeming Shareholder, the amount
payable to such Shareholder upon the redemption of such Shares as determined in
the manner described in the then current Prospectus, or (ii) arrange for the
direct payment of such redemption proceeds by Provident to the redeeming
Shareholder in accordance with such procedures and controls as are mutually
agreed upon from time to time by and among Provident, the Fund and the Fund's
transfer agent.
(c) Collection of Income and Other Payments.
Provident shall:
(i) collect and receive for the account
of the Fund, all income and other payments and distributions,
including (without limitation) stock dividends, rights, warrants and
similar items, included or to be included in the Property, and shall
promptly advise the Fund of such
-10-
<PAGE> 11
receipt and shall credit such income, as collected, to the Fund's
custodian account;
(ii) endorse and deposit for collection,
in the name of the Fund, checks, drafts, or other orders for the
payment of money on the same day as received;
(iii) receive and hold for the account of
the Fund all securities received as a distribution on the portfolio
securities of the Fund as a result of a stock dividend, share split-up
or reorganization, recapitalization, readjustment or other
rearrangement or distribution of rights or similar securities issued
with respect to any portfolio securities of the Fund held by Provident
hereunder;
(iv) present for payment and collect the
amount payable upon all securities which may mature or be called,
redeemed, or retired, or otherwise become payable on the date such
securities become payable; and
(v) take any action which may be
necessary and proper in connection with the collection and receipt of
such income, payments and other Property and the endorsement for
collection of checks, drafts, and other negotiable instruments.
(d) Miscellaneous Transactions. Provident is
authorized to deliver or cause to be delivered Property against payment or
other consideration or written receipt therefor in the following cases:
-11-
<PAGE> 12
(i) for examination by a broker selling
for the account of the Fund in accordance with street delivery custom;
(ii) for the exchange of interim receipts
or temporary securities for definitive securities; and
(iii) for transfer of securities into the
name of the Fund or Provident or a nominee of either, or for exchange
of securities for a different number of bonds, certificates, or other
evidence, representing the same aggregate face amount or number of
units bearing the same interest rate, maturity date and call
provisions, if any; provided that, in any such case, the new
securities are to be delivered to Provident.
9. Transactions Requiring Instructions. Upon receipt of
Oral or Written Instructions and not otherwise, Provident shall:
(a) execute and deliver to such persons as may be
designated in such Oral or Written Instructions, proxies, consents,
authorizations, and other instruments whereby the authority of the
Fund as owner of any securities may be exercised;
(b) deliver any securities held for the Fund in
exchange for other securities or cash issued or paid in connection
with the liquidation, reorganization, refinancing, merger,
consolidation, recapitalization or sale
-12-
<PAGE> 13
of assets of any corporation, or the exercise of any conversion
privilege;
(c) deliver any securities held for the Fund to
any protective committee, reorganization committee or other person in
connection with the liquidation, reorganization, refinancing, merger,
consolidation, recapitalization or sale of assets of any corporation,
and receive and hold under the terms of this Agreement such
certificates of deposit, interim receipts or other instruments or
documents as may be issued to it to evidence such delivery;
(d) make such transfers or exchanges of the
assets of the Fund and take such other steps as shall be stated in
said Oral or Written Instructions to be for the purpose of
effectuating any duly authorized plan of liquidation, reorganization,
merger, consolidation, recapitalization or sale of assets of the Fund;
and
(e) release securities belonging to the Fund to
any bank or trust company for the purpose of pledge or hypothecation
to secure any loan incurred by the Fund; provided, however, that
securities shall be released only upon payment to Provident of the
monies borrowed, except that in cases where additional collateral is
required to secure a borrowing already made, subject to proper prior
authorization, further securities may be released for that purpose;
and pay such loan upon redelivery to it of the
-13-
<PAGE> 14
securities pledged or hypothecated therefor and upon surrender of the
note or notes evidencing the loan.
10. Dividends and Distributions. The Fund shall furnish
Provident with appropriate evidence of action by the Fund's Board of Directors
declaring and authorizing the payment of any dividends and distributions to the
Fund's Shareholders. Upon receipt by Provident of Written Instructions with
respect to dividends and distributions declared by the Fund's Board of
Directors and payable to the Fund's Shareholders, and in conformance with
procedures mutually agreed upon by Provident, the Fund, and the Fund's transfer
agent, Provident shall pay to the Fund's transfer agent, as agent for the
Shareholders, an amount equal to the amount indicated in said Written
Instructions as payable by the Fund to the Shareholders for distribution in
cash by the transfer agent to the Shareholders or for reinvestment by the
transfer agent, with respect to those Shareholders who have elected in proper
manner to reinvest their dividends, in additional Shares. In lieu of paying
the Fund's transfer agent cash dividends and distributions, Provident may
arrange for the direct payment of cash dividends and distributions to
Shareholders by Provident in accordance with such procedures and controls as
are mutually agreed upon from time to time by and among the Fund, Provident and
the Fund's transfer agent.
11. Purchases of Securities. Promptly after each
decision to purchase securities for the Fund, the Fund, through
-14-
<PAGE> 15
PIMC, shall deliver to Provident Oral Instructions specifying with respect to
each such purchase: (a) the name of the issuer and the title of the
securities; (b) the number of shares or the principal amount purchased and
accrued interest, if any, (c) the date of purchase and settlement, (d) the
purchase price per unit, (e) the total amount payable upon such purchase, and
(f) the name of the person from whom or the broker through whom the purchase
was made. Provident shall, upon receipt of securities purchased by or for the
Fund, pay out of the moneys held for the account of the Fund the total amount
payable to the person from whom or the broker through whom the purchase was
made, provided that the same conforms to the total amount payable as set forth
in such Oral Instructions.
12. Sales of Securities. Promptly after each decision by
PIMC to sell securities for the Fund, the Fund, through PIMC, shall deliver to
Provident Oral Instructions, specifying with respect to each such sale: (a)
the name of the issuer and the title of the security, (b) the number of shares
or principal amount sold, and accrued interest, if any, (c) the date of sale,
(d) the sale price per unit, (e) the total amount payable to the Fund upon such
sale, and (f) the name of the broker through whom or the person to whom the
sale was made. Provident shall deliver the securities upon receipt of the
total amount payable to the Fund upon such sale, provided that the same
conforms to the total amount payable as set forth in such Oral Instructions.
Subject to the foregoing, Provident may accept payment in such form as
-15-
<PAGE> 16
shall be satisfactory to it, and may deliver securities and arrange for payment
in accordance with the customs prevailing among dealers in securities.
13. Correspondence. Provident shall answer
correspondence from securities brokers and others relating to its duties
hereunder and such other correspondence as may from time to time be mutually
agreed upon between Provident and the Fund.
14. Records. Provident shall keep and maintain
appropriate financial books and records with respect to its duties hereunder
for the Fund. The books and records pertaining to the Fund which are in the
possession of Provident shall be the property of the Fund. Such books and
records shall be prepared and maintained as required by the 1940 Act and other
applicable securities laws and rules and regulations. The Fund, or the Fund's
authorized representatives, shall have access to such books and records at all
times during Provident's normal business hours. Upon the reasonable request of
the Fund, copies of any such books and records shall be provided by Provident
to the Fund or the Fund's authorized representative at the Fund's expense.
15. Reports. Provident shall furnish the Fund the
following reports:
(a) such periodic and special reports as the Fund
may reasonably request;
(b) a monthly statement summarizing all
transactions and entries for the account of the Fund;
-16-
<PAGE> 17
(c) a monthly report of portfolio securities
belonging to the Fund showing the adjusted average cost of each issue and the
market value at the end of such month;
(d) a monthly report of the cash account of the
Fund showing disbursements; and
(e) such other information as may be agreed upon
from time to time between the Fund and Provident.
16. Cooperation with Accountants. Provident shall
cooperate with the Fund's independent certified public accountants and shall
take all reasonable action in the performance of its obligations under this
Agreement to assure that the necessary information is made available to such
accountants for the expression of their unqualified opinion, including but not
limited to the opinion included in the Fund's annual report on Form N-1R.
17. Confidentiality. Provident agrees on behalf of
itself and its employees to treat confidentially and as the proprietary
information of the Fund all records and other information relative to the Fund
and its prior, present or potential Shareholders and relative to Shearson and
its prior, present or potential customers, and not to use such records and
information for any purpose other than performance of its responsibilities and
duties hereunder, except after prior notification to and approval in writing by
the Fund, which approval shall not unreasonably be withheld and may not be
withheld where Provident may be exposed to civil or criminal
-17-
<PAGE> 18
contempt proceedings for failure to comply, when requested to divulge this
information by duly constituted authorities, or when so requested by the Fund.
18. Equipment Failures. In the event of equipment
failures beyond Provident's control, Provident shall, at no additional expense
to the Fund, take reasonable steps to minimize service interruptions but shall
have no liability with respect thereto. Provident shall enter into and shall
maintain in effect with appropriate parties one or more agreements making
reasonable provision for emergency use of electronic data processing equipment
to the extent appropriate equipment is available.
19. Right to Receive Advice.
(a) Advice of Fund. If Provident shall be in
doubt as to any action to be taken or omitted by it, it may request, and shall
receive, from the Fund directions or advice, including Oral or Written
Instructions where appropriate.
(b) Advice of Counsel. If Provident shall be in
doubt as to any question of law involved in any action to be taken or omitted
by Provident, it may request advice at its own cost from counsel of its own
choosing (who may be counsel for PIMC, PFPC, Shearson, Boston Advisors, the
Fund, or Provident, at the option of Provident).
(c) Conflicting Advice. In case of conflict
between directions or advice (including Oral or Written Instructions) received
by Provident pursuant to subparagraph (a) of this paragraph and advice received
by Provident pursuant to
-18-
<PAGE> 19
subparagraph (b) of this paragraph, Provident shall be entitled to rely on and
follow the advice received pursuant to the latter provision alone.
(d) Protection of Provident. Provident shall be
protected in any action or inaction which it takes in reliance on any
directions or advice (including Oral or Written Instructions) received pursuant
to subparagraphs (a) or (b) of this paragraph which Provident, after receipt of
such directions or advice, reasonably and in good faith believes to be
consistent with such directions or advice, as the case may be. However,
nothing in this paragraph shall be construed as imposing upon Provident any
obligation (i) to seek such directions or advice (including Oral or Written
Instructions), or (ii) to act in accordance with such directions or advice when
received, unless, under the terms of another provision of this Agreement, the
same is a condition to Provident's properly taking or omitting to take such
action. Nothing in this subsection shall excuse Provident when an action or
omission on the part of Provident constitutes willful misfeasance, bad faith,
gross negligence or reckless disregard by Provident of its duties under this
Agreement.
20. Compliance with Governmental Rules and Regulations.
The Fund assumes full responsibility for insuring that the contents of each
prospectus of the Fund complies with all applicable requirements of the 1933
Act, the 1940 Act, and any laws, rules and regulations of governmental
authorities having jurisdiction.
-19-
<PAGE> 20
21. Compensation. As compensation for the services
rendered by Provident during the term of this Agreement, the Fund will pay to
Provident monthly fees equal to $.25 per year for each $1,000 of the Fund's
average gross assets for such year (based on the average of the assets included
in the net asset value of the Fund on each day in such month that such value is
calculated).
22. Indemnification. The Fund, as sole owner of the
Property, agrees to indemnify and hold harmless Provident and its nominees from
all taxes, charges, expenses, assessments, claims and liabilities (including,
without limitation, liabilities arising under the 1933 Act, the Securities
Exchange Act of 1934, the 1940 Act, and any state and foreign securities and
blue sky laws, all as or to be amended from time to time) and expenses,
including (without limitation) attorneys' fees and disbursements, arising
directly or indirectly (a) from the fact that securities included in the
Property are registered in the name of any such nominee or (b) without limiting
the generality of the foregoing clause (a) from any action or thing which
Provident takes or does or omits to take or do (i) at the request or on the
direction of or in reliance on the advice of the Fund or (ii) upon Oral or
Written Instructions, provided, that neither Provident nor any of its nominees
shall be indemnified against any liability to the Fund or to its Shareholders
(or any expenses incident to such liability) arising out of (x) Provident's or
such nominee's own willful misfeasance, bad faith, gross negligence or reckless
-20-
<PAGE> 21
disregard of its duties under this Agreement or (y) Provident's own negligent
failure to perform its duties under this Agreement. In the event of any
advance of cash for any purpose made by Provident resulting from orders or Oral
or Written Instructions of the Fund, or in the event that Provident or its
nominee shall incur or be assessed any taxes, charges, expenses, assessments,
claims or liabilities in connection with the performance of this Agreement,
except such as may arise from its or its nominee's own negligent action,
negligent failure to act or willful misconduct, any Property at any time held
for the account of the Fund shall be security therefor.
23. Responsibility of Provident. Provident shall be
under no duty to take any action on behalf of the Fund except as specifically
set forth herein or as may be specifically agreed to by Provident in writing.
In the performance of its duties hereunder, Provident shall be obligated to
exercise care and diligence and to act in good faith and to use its best
efforts within reasonable limits to insure the accuracy of all services
performed under this Agreement, but Provident shall not be liable for any act
or omission which does not constitute willful misfeasance, bad faith or gross
negligence on the part of Provident or reckless disregard by Provident of its
duties under this Agreement, provided that Provident shall be responsible for
its own negligent failure to perform its duties under this Agreement. Without
limiting the generality of the foregoing or of any other provision of this
Agreement, Provident in connection
-21-
<PAGE> 22
with its duties under this Agreement shall not be under any duty or obligation
to inquire into and shall not be liable for or in respect of (a) the validity
or invalidity or authority or lack thereof of any Oral or Written Instruction,
notice or other instrument which conforms to the applicable requirements of
this Agreement, if any, and which Provident reasonably believes to be genuine;
(b) the validity or invalidity of the issuance of any securities included or to
be included in the Property, the legality or illegality of the purchase of such
securities, or the propriety or impropriety of the amount paid therefor; (c)
the legality or illegality of the sale (or exchange) of any Property or the
propriety or impropriety of the amount for which such Property is sold (or
exchanged); or (d) delays or errors or loss of data occurring by reason of
circumstances beyond Provident's control, including acts of civil or military
authority, national emergencies, labor difficulties, fire, mechanical breakdown
except as provided in paragraph 18 hereof, flood or catastrophe, acts of God,
insurrection, war, riots or failure of the mails, transportation, communication
or power supply, nor shall Provident be under any duty or obligation to
ascertain whether any Property at any time delivered to or held by Provident
may properly be held by or for the Fund.
24. Collections. All collections of monies or other
property in respect, or which are to become part, of the Property (but not the
safekeeping thereof upon receipt by Provident) shall be at the sole risk of the
Fund. In any case in which Provident
-22-
<PAGE> 23
does not receive any payment due the Fund within a reasonable time after
Provident has made proper demands for the same, it shall so notify the Fund in
writing, including copies of all demand letters, any written responses thereto,
and memoranda of all oral responses thereto and to telephonic demands, and
await instructions from the Fund. Provident shall not be obliged to take legal
action for collection unless and until reasonably indemnified to its
satisfaction. Provident shall also notify the Fund as soon as reasonably
practicable whenever income due on securities is not collected in due course.
25. Duration and Termination. This Agreement shall
continue until termination by the Fund or Provident on sixty (60) days' written
notice. Upon any termination of this Agreement, pending appointment of a
successor to Provident or vote of the Shareholders of the Fund to dissolve or
to function without a custodian of its cash, securities or other property,
Provident shall not deliver cash, securities or other property of the Fund to
the Fund, but may deliver them to a bank or trust company of its own selection,
having an aggregate capital, surplus and undivided profits, as shown by its
last published report of not less than twenty million dollars ($20,000,000) as
a custodian for the Fund to be held under terms similar to those of this
Agreement; provided, however, that Provident shall not be required to make any
such delivery or payment until full payment shall have been made by the Fund of
all liabilities constituting a charge on or against the properties of the Fund
then held by
-23-
<PAGE> 24
Provident or on or against Provident and until full payment shall have been
made to Provident of all of its fees, compensation, costs and expenses, subject
to the provisions of Paragraph 21 of this Agreement.
26. Notices. All notices and other communications,
including Written Instructions (collectively referred to as "Notice" or
"Notices" in this paragraph), hereunder shall be in writing or by confirming
telegram, cable, telex or facsimile sending device. Notices shall be addressed
(a) if to Provident at Provident's address, 17th and Chestnut Streets,
Philadelphia, Pennsylvania 19103, marked for the attention of the Custodian
Services Department (or its successor); (b) if to the Fund, at the address of
the Fund; or (c) if to neither of the foregoing, at such other address as shall
have been notified to the sender of any such Notice or other communication. If
the location of the sender of a Notice and the address of the addressee thereof
are, at the time of sending, more than 100 miles apart, the Notice may be sent
by first-class mail, in which case it shall be deemed to have been given three
days after it is sent, or if sent by confirming telegram, cable, telex or
facsimile sending device, it shall be deemed to have been given immediately,
and, if the location of the sender of a Notice and the address of the addressee
thereof are, at the time of sending, not more than 100 miles apart, the Notice
may be sent by first-class mail, in which case it shall be deemed to have been
given two days after it is sent, or if sent by messenger, it shall be deemed to
have been
-24-
<PAGE> 25
given on the day it is delivered, or if sent by confirming telegram, cable,
telex or facsimile sending device, it shall be deemed to have been given
immediately. All postage, cable, telegram, telex and facsimile sending device
charges arising from the sending of a Notice hereunder shall be paid by the
sender.
27. Further Actions. Each party agrees to perform such
further acts and execute such further documents as are necessary to effectuate
the purposes hereof.
28. Amendments. This Agreement or any part hereof may be
changed or waived only by an instrument in writing signed by the party against
which enforcement of such change or waiver is sought.
29. Delegation. On thirty (30) days' prior written
notice to the Fund, Provident may assign its rights and delegate its duties
hereunder to any wholly-owned subsidiary of it or PNC Financial Corp., provided
that Provident may delegate its duties only to a bank having the qualifications
provided in section 17(f) of the 1940 Act, and further provided that Provident
and its delegate shall promptly provide such information as the Fund may
request and respond to such questions as the Fund may ask relative to the
delegation, including (without limitation) the capabilities of the delegate.
30. Miscellaneous. This Agreement embodies the entire
agreement and understanding between the parties hereto, and supersedes all
prior agreements and understandings relating to the subject matter hereof,
provided that the parties hereto may
-25-
<PAGE> 26
embody in one or more separate documents their agreement, if any, with respect
to delegated and/or Oral or Written Instructions. The captions in this
Agreement are included for convenience of reference only and in no way define
or delimit any of the provisions hereof or otherwise affect their construction
or effect. This Agreement shall be deemed to be a contract made in
Pennsylvania and governed by Pennsylvania law. If any provision of this
Agreement shall be held or made invalid by a court decision, statute, rule or
otherwise, the remainder of this Agreement shall not be affected thereby. This
Agreement shall be binding and shall inure to the benefit of the parties hereto
and their respective successors.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed by their officers designated below on the day and year
first above written.
[SEAL] MUNICIPAL FUND FOR NEW YORK
INVESTORS, INC.
Attest:/s/ Morgan R. Jones By:/s/ William J. Nutt
----------------------- ----------------------------
[SEAL] PROVIDENT NATIONAL BANK
Attest:/s/ John D. Silcox, Jr. By:
----------------------- ----------------------------
Vice President and
Secretary
-26-
<PAGE> 27
APPENDIX A
Certificate
The following resolutions adopted by the Board of Directors of
Municipal Fund for New York Investors, Inc. (the "Fund") on July 15, 1983
identify the persons authorized to give Oral and Written Instructions on behalf
of the Fund under the Fund's Custody Agreement with Provident National Bank:
RESOLVED, that, in addition to the Fund's President and
Treasurer, any one of the following individuals be, and each of them
hereby is, authorized to give "Oral Instructions" on behalf of the
Fund to the Custodian under the proposed Custody Agreement between the
Fund and Provident National Bank, provided that no person shall be
authorized or permitted to withdraw Fund investments or assets upon
his mere receipt:
Peter Meenan
Vincent Nave
Charles R. Whittemore, Jr.
Ruth W. MacArthur
Richard T. Frederics
Jeanne B. Govoni
Stephen P. Wigmore
Jo-Ann T. Louis;
FURTHER RESOLVED, that, in addition to the Fund's President
and Treasurer, any two of the individuals named above be, and hereby
are, authorized to give "Written Instructions" to the Custodian under
such Custody Agreement; provided, however, that Written Instructions
given in connection with the issuance of checks and other drafts in
payment of the Fund's operating expenses as provided therein must not
be given except upon prior written authorization of the Fund's
President or Treasurer; and provided further that no one or more
persons shall be authorized or permitted to withdraw Fund investments
or assets upon his or their mere receipt; and
FURTHER RESOLVED, that notwithstanding anything to the
contrary in the foregoing resolutions, only any one of the following
individuals be, and hereby is, authorized to give "Oral Instructions,"
and only any two of the following individuals be, and hereby are,
authorized to give "Written Instructions," to the Custodian under
such Custody Agreement in connection with the purchase and sale of
portfolio
<PAGE> 28
securities, provided that no one or more persons shall be authorized
or permitted to withdraw Fund investments or assets upon his or their
mere receipt:
Ernest E. Cecilia
Joanne C. Cleary
Thomas H. Nevin
Ording T. Nilsen
George P. Stasen
Walker C. Tompkins.
MUNICIPAL FUND FOR NEW YORK
INVESTORS, INC.
By:
-------------------------------
Morgan R. Jones
Secretary
DATED: July 20, 1983
<PAGE> 1
EXHIBIT 8(b)
AMENDMENT NO. 1 TO
CUSTODY AGREEMENT
WHEREAS, MUNICIPAL FUND FOR NEW YORK INVESTORS, INC., a
Maryland corporation (the "Fund"), and PROVIDENT NATIONAL BANK, a national
banking association ("Provident"), are parties to a Custody Agreement dated
July 20, 1983 (the "Agreement"); and
WHEREAS, the Fund's authorized capital currently consists of
Two Billion (2,000,000,000) shares of Class A Common Stock; and
WHEREAS, the Board of Directors of the Fund is contemplating
the reclassification of a portion of its authorized capital into shares of
separate series of Class A Common Stock; and
WHEREAS, the parties wish to amend the Agreement to provide
for the provision of custodial services to these additional series upon the
terms and conditions stated in the Agreement;
NOW, THEREFORE, the undersigned hereby agree, intending to be
legally bound, that effective immediately the Agreement shall be amended to
provide as follows:
As used herein (a) the term "Shares" shall mean all
shares of the Fund's capital stock, $.001 par value per share,
of every class or series heretofore or hereafter created by
the Fund; and (b) the term "Class" shall mean any class or
series of Shares so created by the Fund.
Except as expressly amended and modified hereby, all provisions of the
Agreement shall remain in full force and effect.
IN WITNESS WHEREOF, the parties have executed this Amendment
No. 1 as of the 31st day of July, 1985.
[SEAL] MUNICIPAL FUND FOR NEW YORK
INVESTORS, INC.
Attest:/s/ Morgan R. Jones By:/s/ Edward J. Roach
--------------------------
Title: Vice President
[SEAL] PROVIDENT NATIONAL BANK
Attest:/s/ John D. Silcox, Jr. By:/s/ John W. McLaughlin
----------------------- --------------------------
Vice President & Title: Senior Vice
Secretary President
<PAGE> 1
EXHIBIT 8(c)
AMENDMENT NO. 2 TO
CUSTODY AGREEMENT
WHEREAS, MUNICIPAL FUND FOR NEW YORK INVESTORS, INC., a
Maryland corporation (the "Fund"), and PROVIDENT NATIONAL BANK, a national
banking association ("Provident"), are parties to a Custody Agreement dated
July 20, 1983 (the "Agreement"); and
WHEREAS, the parties wish to amend the Agreement to authorize
the Fund's custodian to use central securities depositories and to permit the
custodian to utilize book-entry systems in holding the Fund's assets;
NOW, THEREFORE, the undersigned hereby agree, intending to be
legally bound, that effective immediately the Agreement shall be amended to
provide as follows:
A. The following paragraph is hereby added to the
Agreement as Paragraph 3(e):
"Book-Entry System". As used in this Agreement, the term
"Book-Entry System" means the Federal Reserve/Treasury
book-entry system for United States and federal agency
securities, its successor or successors and its nominee or
nominees and any book-entry system maintained by a clearing
agency registered with the Securities and Exchange Commission
under Section 17A of the Securities Exchange Act of 1934.
B. Paragraph 6. of the Agreement should be amended and
restated in its entirety as follows:
6. Receipt of Securities. (a) Except as
provided in sub-Paragraph (c) below, Provident shall hold and
physically segregate in a separate account identifiable at all
times from those of any other persons, firms, or corporations,
all securities and non-cash property received by it for the
account of the Fund. All such securities and non-cash
property are to be held or disposed of by Provident for the
Fund pursuant to the terms of this Agreement. In the absence
of Written Instructions accompanied by a certified resolution
of the Fund's Board of Directors authorizing the specific
transaction, Provident shall have no power or authority to
withdraw, deliver, assign, hypothecate, pledge or otherwise
dispose of any such securities and investments except in
accordance with the express terms provided for in this
Agreement. In no case may any director, officer, employee or
agent of the Fund withdraw any securities. In connection with
its duties under this Paragraph 6, Provident may
<PAGE> 2
at its own expense, enter into subcustodian agreements with
other banks or trust companies for the receipt of certain
securities and cash to be held by Provident for the account of
the Fund pursuant to this Agreement; provided that each such
bank or trust company has an aggregate capital, surplus and
undivided profits, as shown by its last published report, of
not less than five hundred thousand dollars ($500,000) and
that such bank or trust company agrees with Provident to
comply with all relevant provisions of the 1940 Act and
applicable rules and regulations thereunder. Provident shall
remain responsible for the performance of all of its duties
under this Agreement and shall hold the Fund harmless from the
acts and omissions of any bank or trust company that it might
choose pursuant to this Paragraph 6.
(b) Promptly after the close of business each
day, Provident shall furnish the Fund with confirmation and a
summary of all transfers to or from the account of the Fund
during said day. Where securities are transferred to an
account of the Fund established pursuant to sub-Paragraph (c)
hereof, Provident shall also by book-entry or otherwise
identify as belonging to the Fund the quantity of securities
in a fungible bulk of securities registered in the name of
Provident (or its nominee) or shown in Provident's account on
the books of the Book-Entry System. At least monthly and from
time to time, Provident shall furnish the Fund with a detailed
statement of the Property held for the Fund under this
Agreement.
(c) The Fund shall deliver to Provident a
certified resolution of the Board of Directors of the Fund
approving, authorizing and instructing Provident on a
continuous and on-going basis, until instructed to the
contrary by Oral or Written Instructions actually received by
Provident, to deposit in the Book-Entry System all securities
of the Fund eligible for deposit therein and to utilize the
Book-Entry System to the extent possible in connection with
settlements of purchases and sales of securities by the Fund,
and deliveries and returns of securities collateral in
connection with borrowings. Without limiting the generality
of such use, it is agreed that the following provisions shall
apply thereto:
(i) Securities and any cash of the Fund deposited
in the Book-Entry System will at all times be segregated from
any assets and cash controlled by Provident in other than a
fiduciary or custodian capacity but may be commingled with
other assets held
-2-
<PAGE> 3
in such capacities. Provident will pay out money only upon
receipt of securities and will deliver securities only upon
the receipt of money.
(ii) All books and records maintained by Provident
which relate to the Fund's participation in the Book- Entry
System will at all times during Provident's regular business
hours be open to the inspection of the Fund's duly authorized
employees or agents, and the Fund will be furnished with all
information in respect of the services rendered to it as it
may require.
(iii) Provident will provide the Fund with copies of
any report obtained by Provident on the system of internal
accounting control of the Book-Entry System promptly after
receipt of such a report by Provident. Provident will also
provide the Fund with such reports on its own system of
internal control as the Fund may reasonably request from time
to time.
Except as expressly amended and modified hereby, all
provisions of the Agreement shall remain in full force and effect.
IN WITNESS WHEREOF, the parties have executed this Amendment
No. 2 as of the 30th day of October, 1985.
[SEAL] MUNICIPAL FUND FOR NEW YORK
INVESTORS, INC.
Attest:/s/ Morgan R. Jones By:/s/ Edward J. Roach
---------------------- ---------------------------
Title: Vice President
[SEAL] PROVIDENT NATIONAL BANK
Attest: By: John W. McLaughlin
--------------------- ---------------------------
Title:
-3-
<PAGE> 1
EXHIBIT 9(a)
MUNICIPAL FUND FOR NEW YORK INVESTORS, INC.
ADMINISTRATION AGREEMENT
AGREEMENT dated as of January 18, 1993 between MUNICIPAL FUND
FOR NEW YORK INVESTORS, INC., a Maryland corporation (the "Fund"), PROVIDENT
FINANCIAL PROCESSING CORPORATION, a Delaware corporation, and MFD Group, Inc.
("MFD"), a Delaware corporation (collectively, the "Administrators").
WHEREAS, the Fund is registered as an open-end, diversified
management investment company under the Investment Company Act of 1940, as
amended (the "1940 Act"); and
WHEREAS, the Fund desires to retain the Administrators to
provide, as co-administrators, certain administration services for each class
and subclass of the Fund as listed on Appendix A (as such Appendix may, from
time to time, be supplemented (or amended)) and the Administrators are willing
to furnish such services;
NOW, THEREFORE, in consideration of the premises and mutual
covenants herein contained and intending to be legally bound, it is agreed
between the parties hereto as follows:
1. APPOINTMENT OF ADMINISTRATORS. The Fund hereby
appoints each of the Administrators jointly to provide administration services
to each class and subclass of shares of the Fund on the terms and for the
period set forth in this Agreement. The Administrators accept such appointment
and agree to perform the services and duties set forth in Section 3 below in
return for the compensation provided in Section 5 below. In the event that the
Fund establishes additional classes or investment portfolios other than those
listed on Appendix A with respect to which it desires to retain the
Administrators to act as co-administrators hereunder, the Fund shall notify the
Administrators, whereupon such Appendix A shall be supplemented (or amended)
and such portfolio shall become a fund hereunder and shall be subject to the
provisions of this Agreement to the same extent as the Fund (except to the
extent that said provisions, including the compensation payable on behalf of
such new fund, may be modified in writing by the Fund and Administrators at the
time).
<PAGE> 2
2. DELIVERY OF DOCUMENTS. The Fund has furnished each
of the Administrators with copies, properly certified or authenticated,
of each of the following documents and will deliver to it all future amendments
and supplements, if any:
a. The Fund's Articles of Incorporation, filed
with the Secretary of State of Maryland on March 4, 1983, as amended (the
"Charter");
b. The Fund's By-Laws, as amended and
supplemented ("By-Laws");
c. Resolutions of the Fund's Board of Directors
authorizing the execution and delivery of this Agreement;
d. The Fund's most recent amendment to its
Registration Statement under the Securities Act of 1933, as amended, and under
the 1940 Act on Form N-1A as filed with the Securities and Exchange Commission
(the "Commission") on November 24, 1992 relating to the Fund (the Registration
Statement, as presently in effect and as amended or supplemented from time to
time, is herein called the Fund "Registration Statement");
e. The Fund's most recent Prospectus and
Statement of Additional Information and all amendments and supplements thereto
(such Prospectus and Statement of Additional Information and supplements
thereto, as presently in effect and as from time to time amended and
supplemented, are herein called the "Prospectuses"); and
f. The Fund's Shareholder Services Plan, adopted
July 18, 1985 and related form of Servicing Agreement, and the 12b-1 Services
Plan, adopted July 18, 1985 and related form of Broker/Dealer Servicing
Agreement.
3. SERVICES AND DUTIES. The Administrators enter into
the following covenants jointly and severally with respect to their services
and duties:
a. Subject to the supervision and control of the
Fund's Board of Directors, the Administrators shall assist in supervising all
aspects of the Fund's operations, other than those investment advisory and
accounting functions which are to be performed by the Fund's investment adviser
pursuant to the Advisory Agreement and those advisory and other services to be
performed by any sub-adviser or the custodian pursuant to the Fund's
Sub-Advisory Agreement and Custodian Agreement, as amended from time to time,
services to be performed by the distributor pursuant to the Fund's Distribution
Agreement and the transfer agent pursuant to the Fund's Transfer Agency
Agreement, as
-2-
<PAGE> 3
amended from time to time. In this regard, the Administrators'
responsibilities include:
(1) Providing personnel and supervising
a facility in Wilmington, Delaware (or in such other location as the
Fund shall reasonably request) to receive purchase and redemption
orders via the Fund's toll-free in-WATS telephone lines and
transmitting such requests to the Fund's transfer agent as promptly as
practicable;
(2) Providing for the preparing,
supervising and mailing of confirmations for all purchase and
redemption orders to shareholders of record;
(3) Providing and supervising the
operation of an automated data processing system to process purchase
and redemption orders (the Administrators assume responsibility for
the accuracy of the data transmitted for processing or storage);
(4) Maintaining a procedure external to
the transfer agent's system to reconstruct lost purchase and
redemption data;
(5) Providing daily information and
distributing written communications concerning the Fund to its
shareholders of record; handling shareholder problems and calls;
distributing weekly dividend letters and monthly listings of the
Fund's portfolio securities to all its shareholders of record;
(6) Supervising the services of
individuals ("shareholder representatives") provided by MFD whose
principal responsibility and function shall be to preserve and
strengthen the Fund's relationships with its shareholders;
(7) Administering all activities
concerning the installation, maintenance, monitoring and inventory
control of micro-computer equipment that may be leased (on lease terms
authorized by the Fund) by the Administrators and placed in the
offices of certain shareholders of the Fund to facilitate shareholder
access to the Fund and related shareholder services (herein called the
"Computer Access Program"). The Administrators shall provide the
directors of the Fund with such reports, statistics and other
information as they may from time to time reasonably request in order
to evaluate the Computer Access Program administered by the
Administrators pursuant to this Section 3(a)(7) and the
Administrators' determination as to the costs which are reimbursable
by the Fund under Section 4. If this Agreement is not renewed or is
terminated, or if the
-3-
<PAGE> 4
Computer Access Program is discontinued, for any reason, the Fund
shall have the option to assume lessee's rights and obligations under
its leases for the micro-computer equipment and under any related
maintenance, insurance or other agreements; and
(8) Monitoring the Fund's arrangements
with respect to services provided by certain institutional
shareholders ("Service Organizations") under its Shareholder Services
Plan, including monitoring and reviewing the services rendered by
Service Organizations to their customers who beneficially own shares,
pursuant to agreements between the Company and such Service
Organizations ("Servicing Agreements"); reviewing the qualifications
of Service Organizations wishing to enter into Servicing Agreements
with the Fund; assisting in the execution and delivery of Servicing
Agreements; reporting to the Fund's Board of Directors with respect to
the amounts paid or payable by the Fund from time to time under the
Servicing Agreements and the nature of the services provided by
Service Organizations; and maintaining appropriate records in
connection with such duties.
b. The Administrators shall prepare or review,
and provide advice with respect to, all sales literature (advertisements,
brochures and shareholder communications) for the Fund and any class or
subclass thereof;
c. The Administrators shall participate to the
extent requested by the Fund and its counsel in the periodic updating of the
Fund's Registration Statement; compile data and accumulate information for and
coordinate with the Fund's Treasurer the preparation of reports to shareholders
of record and the Commission (e.g., Annual and Semi-Annual Reports on Form
N-SAR), it being understood that the preparation and filing of timely Notices
pursuant to Rule 24f-2 shall be performed by the Fund's Treasurer with the
assistance and advice of the Fund's counsel; and file with the Commission and
other federal and state agency, subject to the approval of the Fund's
Treasurer, reports and documents including, without limitation, Annual and
Semi-Annual Reports on Form N-SAR and federal and state tax returns and
required tax filings other than those required to be filed by the Fund's
custodian or transfer agent.
d. For so long as the Fund maintains an office
in Wilmington, Delaware, the Administrators shall pay the Fund on the first day
of each month during such period an amount not to exceed $1,500 (or such lesser
amount as is appropriate in the event that the combined annual expenses of the
Fund, Trust for Federal Securities, Municipal Fund for California Investors,
Inc., Portfolios for Diversified Investments, Temporary Investment Fund, Inc.,
Municipal Fund for Temporary Investment
-4-
<PAGE> 5
and The PNC(R) Fund (collectively, herein called the "Companies") in
maintaining their offices in Wilmington, Delaware total less than $18,000
divided by the number of Companies which have maintained an office in
Wilmington, Delaware during the previous month).
e. The Administrators, after consultation with
the distributor and counsel for the Fund, shall determine the jurisdictions in
which the Fund's shares shall be registered or qualified for sale. The
Administrators shall be responsible for maintaining the registration or
qualification of shares for sale under the securities laws of any state and for
preparing compliance filings pursuant to state securities laws with the advice
of the Fund's counsel. Payment of share registration fees and any fees for
qualifying or continuing the qualification of the Fund as a dealer or broker
shall be made by the Fund.
f. Monitor, and assist in developing compliance
procedures for each of the classes of the Fund, which will include without
limitation, procedures to monitor compliance with the Fund's investment
objective, policies and limitations, tax matters, and applicable laws and
regulations.
g. The Administrators shall assist in monitoring
of regulatory and legislative developments which may affect the Fund; assist in
counseling the Fund with respect to regulatory examinations or investigations
of the Fund; and work with the Fund's counsel in connection with regulatory
matters or litigation.
h. In compliance with the requirements of Rule
31a-3 under the 1940 Act, the Administrators agree that all records which they
maintain for the Fund are the property of the Fund and further agree to
surrender promptly to the Fund any of such records upon the Fund's request.
The Administrators further agree to preserve for the periods prescribed by Rule
31a-2 under the 1940 Act the records required to be maintained by Rule 31a-1
under said Act.
i. If the expenses borne by the Fund in any
fiscal year exceed the applicable expense limitations imposed by the securities
regulations of any state in which the Fund's shares are registered or qualified
for sale to the public, the Administrators jointly and severally agree to
reimburse the Fund for a portion of any such excess expense in an amount equal
to the portion that the administration fees otherwise payable by the Fund to
the Administrators bear to the total amount of the investment advisory and
administration fees otherwise payable by the Fund. The expense reimbursement
obligation of the Administrators is limited to the amount of their fees
hereunder for such fiscal year, provided, however, that notwithstanding the
foregoing, the Administrators shall reimburse the Fund for a
-5-
<PAGE> 6
portion of any such excess expenses in an amount equal to the proportion that
the fees otherwise payable to the Administrators bear to the total amount of
investment advisory and administration fees otherwise payable by the Fund
regardless of the amount of fees paid to the Administrators during such fiscal
year to the extent that the securities regulations of any state having
jurisdiction over the Fund so require. Such expense reimbursement, if any,
will be estimated, reconciled and paid on a monthly basis.
j. In performing all of their services and
duties as co-administrators, the Administrators will act in conformity with the
Charter, By-Laws, Prospectus and resolutions and other instructions of the
Fund's Board of Directors and will comply with the requirements of the 1940 Act
and other applicable federal or state law.
4. EXPENSES ASSUMED AS ADMINISTRATORS. The
Administrators will bear all expenses incurred by them in performing their
services and duties as co-administrators, except as otherwise expressly
provided herein. Other expenses to be incurred in the operation of the Fund,
including taxes, interest, brokerage fees and commissions, if any, salaries and
fees of officers and directors who are not officers, directors, shareholders or
employees of the Administrators, or the Fund's investment adviser or
distributor for the Fund, Commission fees and state Blue Sky qualification
fees, advisory and administration fees, charges of custodians, transfer and
dividend disbursing agents' fees, certain insurance premiums, outside auditing
and legal expenses, costs of maintaining corporate existence, typesetting and
printing of prospectuses for regulatory purposes and for distribution to
current shareholders of the Funds, costs of shareholders' reports and corporate
meetings and any extraordinary expenses, will be borne by the Fund, provided,
however, that the Fund will not bear, directly or indirectly, the cost of any
activity which is primarily intended to result in the sale of shares of the
Fund. Notwithstanding the above, the Fund shall assume the Administrators'
rights and liabilities and obligations, as lessee, under the leases for the
micro-computer equipment referred to in Section 3(a)(7) from the date of the
termination (or any expiration without renewal) of this Agreement, or the
discontinuance of the Computer Access Program, until the conclusion of the
first year of each lease.
5. COMPENSATION. For the services provided and the
expenses assumed as Administrators pursuant to Section 4 above, the Fund will:
a. pay the Administrators jointly on the first
business day of each month a fee at an annual rate of .20 of 1%
-6-
<PAGE> 7
of the Fund's average daily net assets. Net asset value shall be computed at
least once a day. The fee for the period from the day of the month this
Agreement is entered into until the end of that month shall be pro-rated
according to the proportion that such period bears to the full monthly period.
Upon any termination of this Agreement before the end of any month, the fee for
such part of a month shall be pro-rated according to the proportion that such
period bears to the full monthly period and shall be payable upon the date of
termination of this Agreement.
b. The Fund will also reimburse the
Administrators monthly for their reasonable out-of-pocket expenses incurred in
leasing, installing, maintaining and monitoring the micro-computer equipment
and administering the Computer Access Program pursuant to the provisions of
Section 3(a)(7) above, provided that the Administrators will not be reimbursed
for any costs: (i) which exceed the current budget for the Computer Access
Program approved by the Fund's Board of Directors; (ii) which directly or
indirectly finance any activity primarily intended to result in the sale of
shares; or (iii) which the Administrators have not reasonably determined are in
the best interests of the Fund and its shareholders.
c. For the purpose of determining fees payable
to the Administrators, the value of the Fund's net assets shall be computed as
required by its Prospectus, generally accepted accounting principles and
resolutions of the Fund's Board of Directors. The fee attributable to the Fund
shall be the several (and not joint or joint and several) obligation of the
Fund.
d. The Administrators will from time to time
employ or associate with themselves such person or persons as they may believe
to be fitted to assist them in the performance of this Agreement. Such person
or persons may be officers and employees who are employed by both the Fund and
either of the Administrators. The compensation of such person or persons shall
be paid by the Administrators, and no obligation shall be incurred on behalf of
the Fund in such respect.
6. PROPRIETARY AND CONFIDENTIAL INFORMATION. The
Administrators agree on behalf of themselves and their employees to treat
confidentially and as proprietary information of the Fund all records and other
information relative to the Fund and prior, present or potential shareholders,
and not to use such records and information for any purpose other than
performance of their responsibilities and duties hereunder, except after prior
notification to and approval in writing by the Fund, which approval shall not
be unreasonably withheld and may not be withheld where the Administrators may
be exposed to civil or criminal contempt proceedings for failure to comply,
when
-7-
<PAGE> 8
requested to divulge such information by duly constituted authorities, or when
so requested by the Fund.
7. LIMITATIONS OF LIABILITY. Neither Administrator
shall 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 this Agreement
relates, except a loss resulting from willful misfeasance, bad faith or gross
negligence on its part in the performance of its duties or from reckless
disregard by it of its obligations and duties under this Agreement. Any
person, even though also an officer, director, employee or agent of either of
the Administrators, who may be or become an officer, employee or agent of the
Fund, shall be deemed, when rendering services to the Fund or acting on any
business of the Fund (other than services or business in connection with the
Administrators' duties as co-administrator hereunder) to be rendering such
services to or acting solely for the Fund and not as an officer, director,
employee or agent or one under the control or direction of the Administrators
even though paid by either of them. The Administrators agree that their
liability under this Agreement, as set forth herein, shall be joint and
several.
8. DURATION AND TERMINATION. This Agreement shall
become effective upon its execution as of the date first written above and,
unless sooner terminated as provided herein, shall continue until July 31,
1994. Thereafter, if not terminated, this Agreement shall continue
automatically for successive terms of one year, provided that such continuance
is specifically approved at least annually (a) by a vote of a majority of those
members of the Fund's Board of Directors who are not parties to this Agreement
or "interested persons" of any such party, cast in person at a meeting called
for the purpose of voting on such approval, and (b) by the Fund's Board of
Directors or by vote of a "majority of the outstanding voting securities" of
the Fund; provided, however, that this Agreement may be terminated by the Fund
at any time, without the payment of any penalty, by vote of a majority of the
entire Board of Directors or a vote of a "majority of the outstanding voting
securities" of the Fund, on 60-days' written notice to the Administrators, or
by the Administrators at any time, without the payment of any penalty, on
90-days' written notice to the Fund. This Agreement will automatically and
immediately terminate in the event of its assignment. (As used in this
Agreement, the terms "majority of the outstanding voting securities,"
"interested person" and "assignment" shall have the same meaning as such terms
have in the 1940 Act.)
-8-
<PAGE> 9
9. AMENDMENT OF THIS AGREEMENT. No provision of this
Agreement may be changed, discharged or terminated orally, but only by an
instrument in writing signed by the party against which enforcement of the
change, discharge or termination is sought.
10. NOTICES. Notices of any kind to be given to the
Company hereunder by the Administrators shall be in writing and shall be duly
given if mailed or delivered to the Company at Bellevue Park Corporate Center,
Suite 152, 103 Bellevue Parkway, Wilmington, Delaware 19809, Attention: Mr.
Edward J. Roach, Treasurer, with a copy to Philadelphia National Bank Building,
1345 Chestnut Street, Philadelphia Pennsylvania 19107-3496, Attention: Morgan
R. Jones, Secretary, or at such other address or to such individual as shall be
so specified by the Fund to the Administrators. Notices of any kind to be
given to the Administrators hereunder by the Fund shall be in writing and shall
be duly given if mailed or delivered to MFD Group, Inc., 259 Radnor-Chester
Road, Suite 135, Radnor, Pennsylvania 19087, Attention: Monroe J. Haegele and
to Provident Financial Processing Corporation, Bellevue Park Corporate Center,
103 Bellevue Parkway, Wilmington, Delaware 19087, Attention: Vincent J.
Ciavardini, or at such other address or to such other individual as shall be so
specified by an Administrator to the Fund.
11. MISCELLANEOUS. The captions in this Agreement are
included for convenience of reference only and in no way define or delimit any
of the provisions hereof or otherwise affect their construction or effect. If
any provision of this Agreement shall be held or made invalid by a court
decision, statute, rule or otherwise, the remainder of this Agreement shall not
be affected thereby. This Agreement shall be binding upon and shall inure to
the benefit of the parties hereto and their respective successors.
12. COUNTERPARTS. This Agreement may be executed in
counterparts, all of which together shall constitute one and the same
instrument.
-9-
<PAGE> 10
IN WITNESS WHEREOF, the parties hereto have caused this
instrument to be executed by their officers designated below as of the day and
year first above written.
MUNICIPAL FUND FOR NEW YORK
INVESTORS, INC.
By:
--------------------------------
PROVIDENT FINANCIAL PROCESSING
CORPORATION
By: /s/ J. Richard Carnall
--------------------------------
MFD GROUP, INC.
By: /s/ Richard Clement
--------------------------------
-10-
<PAGE> 11
APPENDIX A
to the
ADMINISTRATION AGREEMENT
between
Municipal Fund for New York Investors, Inc.
and
Provident Financial Processing Corporation and
MFD Group, Inc.
--------------------------------------------------------------
New York Money Fund (Class A Common Stock, Class A Common Stock - Special
Series 1, Class A Common Stock - Special Series 2)
A-1
<PAGE> 1
EXHIBIT 9(b)
TRANSFER AGENCY AGREEMENT
THIS AGREEMENT is made this 8th day of August, 1983 by and between
MUNICIPAL FUND FOR NEW YORK INVESTORS, INC., a Maryland corporation (the
"Fund"), and PROVIDENT FINANCIAL PROCESSING CORPORATION, a Delaware corporation
("PFPC"), which is an indirect, wholly-owned subsidiary of PNC Financial Corp.
R E C I T A L
WHEREAS, the Fund is registered as an open-end, diversified,
management investment company under the Investment Company Act of 1940, as
amended ("the 1940 Act"); and
WHEREAS, the Fund desires to retain PFPC to serve as the Fund's
transfer agent, registrar and dividend disbursing agent, and PFPC is willing to
furnish such services;
NOW, THEREFORE, in consideration of the premises and mutual covenants
herein contained, it is agreed between the parties hereto as follows:
1. Appointment. The Fund hereby appoints PFPC to serve
as transfer agent, registrar and dividend disbursing agent for the Fund for the
period and on the terms set forth in this Agreement. PFPC accepts such
appointment and agrees to furnish the services herein set forth in return for
the compensation as provided in Paragraph 14 of this Agreement.
2. Delivery of Documents. The Fund has furnished PFPC
with copies properly certified or authenticated of each of the following:
<PAGE> 2
(a) Resolutions of the Fund's Board of Directors
authorizing the appointment of PFPC as transfer agent, registrar and dividend
disbursing agent for the Fund and approving this Agreement;
(b) The Fund's Articles of Incorporation filed
with the Department of Assessments and Taxation of the State of Maryland on
March 4, 1983 and all amendments thereto (such Articles of Incorporation, as
currently in effect and as they shall from time to time be amended, are herein
called the "Charter");
(c) The Fund's By-Laws and all amendments thereto
(such By-Laws, as currently in effect and as they shall from time to time be
amended, are herein called the "By-Laws");
(d) Resolutions of the Fund's Board of Directors
appointing Provident Institutional Management Corporation ("PIMC") as the
Fund's investment adviser and resolutions of the Fund's Board of Directors and
Shareholders approving a proposed Advisory Agreement between PIMC and the Fund
(the "Advisory Agreement");
(e) Resolutions of the Fund's Board of Directors
appointing Provident National Bank ("Provident") as the Fund's sub-investment
adviser and resolutions of the Fund's Board of Directors and Shareholders
approving a proposed Sub-Advisory Agreement between Provident and PIMC (the
"Sub-Advisory Agreement");
-2-
<PAGE> 3
(f) Resolutions of the Fund's Board of Directors
appointing Shearson/American Express Inc. ("Shearson") as the Fund's
distributor and approving a proposed Distribution Agreement between Shearson
and the Fund (the "Distribution Agreement");
(g) Resolutions of the Fund's Board of Directors
appointing The Boston Company Advisors, Inc. ("Boston Advisors") as the Fund's
administrator and approving a proposed Administration Agreement between Boston
Advisors and the Fund (the "Administration Agreement");
(h) The Advisory Agreement, the Sub-Advisory
Agreement, the Distribution Agreement and the Administration Agreement;
(i) The Fund's Notification of Registration filed
pursuant to Section 8(a) of the 1940 Act on Form N-8A with the Securities and
Exchange Commission ("SEC") on March 8, 1983;
(j) The Fund's Registration Statement on Form N-1
under the 1940 Act and the Securities Act of 1933, as amended ("the 1933 Act"),
as filed with the SEC on March 8, 1983 (File No. 2-82278) relating to shares of
the Fund's Class A Common Stock, $.001 par value per share (such shares
hereinafter known as "Shares"), and all amendments thereto; and
(k) The Fund's most recent prospectus (such
prospectus, as currently in effect, and all amendments and supplements thereto
are herein called the "Prospectus").
-3-
<PAGE> 4
The Fund will furnish PFPC from time to time with copies of
all amendments of or supplements to the foregoing, if any.
3. Issuance and Redemption of Shares.
(a) Issuance of Shares. Upon receipt of a
purchase order for the purchase of Shares and sufficient information to enable
PFPC to establish a Shareholder account, and after confirmation of receipt or
crediting of Federal funds for the order from the Fund's Custodian, PFPC shall
issue and credit the account of the Shareholder with Shares in the manner
described in the Prospectus.
(b) Redemption of Shares. Upon receipt of a
redemption order from Shearson, PFPC shall redeem the number and class of
Shares indicated thereon from the redeeming Shareholder's account and receive
from the Fund's Custodian and disburse to the redeeming Shareholder the
redemption proceeds therefor, or arrange for direct payment of redemption
proceeds to such Shareholder by the Fund's Custodian, in accordance with such
procedures and controls as are mutually agreed upon from time to time by and
among the Fund, PFPC, and the Fund's Custodian.
4. Authorized Shares. The Fund's authorized capital
stock consists of Two Billion (2,000,000,000) shares of Class A Common Stock.
The Fund certifies that by virtue of its Charter and the provisions of the law
of the state of its incorporation, Shares which are redeemed by the Fund from
their holders are restored to the status of authorized and unissued Shares.
PFPC
-4-
<PAGE> 5
shall record issues of all Shares and shall notify the Fund in case any
proposed issue of Shares by the Fund shall result in an over-issue as defined
by Section 8-104(2) of Article 8 of the Maryland Uniform Commercial Code. In
case any issue of Shares would result in such an over-issue, PFPC shall refuse
to issue said Shares and shall not countersign and issue certificates for such
Shares. The Fund agrees to notify PFPC promptly of any change in the number of
authorized Shares and of any change in the number of Shares registered under
the 1933 Act.
5. Dividends and Distributions. The Fund shall furnish
PFPC with appropriate evidence of action taken by the Fund's Board of Directors
authorizing the declaration and payment of dividends and distributions to the
Fund's Shareholders. After deducting any amount required to be withheld by any
applicable laws, rules and regulations, PFPC shall, as the agent for each
Shareholder and in accordance with the provisions of the Fund's Charter and
Prospectus, receive from the Fund's Custodian and pay to the Shareholders such
dividends and distributions in cash, or, with respect to any Shareholder who
has elected in proper manner to reinvest its dividends, invest such dividends
for such Shareholder in additional full and fractional Shares of the same class
as the Shares upon which such dividends were declared and paid. In lieu of
receiving from the Fund's Custodian and paying to the Shareholders cash
dividends and distributions, PFPC may arrange for the direct payment of cash
dividends and distributions to the Shareholders by the Fund's Custodian, in
-5-
<PAGE> 6
accordance with such procedures and controls as are mutually agreed upon from
time to time by and among the Fund, PFPC, and the Fund's Custodian.
PFPC shall prepare and file with the Internal Revenue Service
and/or other appropriate taxing authorities, and address and mail to
Shareholders, such returns and information relating to dividends and
distributions paid by the Fund as are required to be so prepared, filed and
mailed by applicable laws, rules and regulations, or such substitute form of
notice as may from time to time be permitted or required by the Internal
Revenue Service and/or other appropriate taxing authorities. On behalf of the
Fund, PFPC shall pay on a timely basis to the appropriate Federal authorities
any taxes required by applicable Federal tax laws to be withheld by the Fund on
dividends and distributions paid by the Fund.
6. Communications with Shareholders.
(a) Communications to Shareholders. PFPC will
address and mail all communications by the Fund to its Shareholders, including
reports to Shareholders, dividend and distribution notices and proxy material
for its meetings of Shareholders. PFPC will receive and tabulate the proxy
cards for the meetings of the Fund's Shareholders.
(b) Correspondence. PFPC will answer such
correspondence from Shareholders, securities brokers and others relating to its
duties hereunder and such other correspondence as
-6-
<PAGE> 7
may from time to time be mutually agreed upon between PFPC and the Fund.
7. Records. PFPC shall keep the following records:
(a) accounts for each Shareholder showing the
following information:
(i) name, address and United States Tax
Identification or Social Security number;
(ii) number and class of Shares held and
number of Shares for which certificates, if any, have been issued, including
certificate numbers and denominations;
(iii) historical information regarding the
account of each Shareholder, including dividends and distributions paid and the
date and price for all transactions on a Shareholder's account;
(iv) any stop or restraining order placed
against a Shareholder's account;
(v) any correspondence relating to the
current maintenance of a Shareholder's account;
(vi) information with respect to
withholdings; and
(vii) any information required in order
for PFPC to perform any calculations contemplated or required by this
Agreement;
(b) subaccounts for each Shareholder requesting
such services in connection with Shares held by such Shareholder
-7-
<PAGE> 8
for separate accounts containing the same information for each subaccount as
required by subparagraph (a) above.
The books and records pertaining to the Fund which are in the
possession of PFPC shall be the property of the Fund. Such books and records
shall be prepared and maintained as required by the 1940 Act, as amended, and
other applicable securities laws and rules and regulations. The Fund, or the
Fund's authorized representatives, shall have access to such books and records
at all times during PFPC's normal business hours, and such books and records
shall be surrendered to the Fund promptly upon request. Upon the reasonable
request of the Fund, copies of any such books and records shall be provided by
PFPC to the Fund or the Fund's authorized representative at the Fund's expense.
8. Reports. PFPC shall furnish the Fund state by state
registration reports, such periodic and special reports as the Fund may
reasonably request, and such other information, including Shareholder lists and
statistical information concerning accounts, as may be agreed upon from time to
time between the Fund and PFPC.
9. Cooperation With Accountants. PFPC shall cooperate
with the Fund's independent certified public accountants and shall take all
reasonable action in the performance of its obligations under this Agreement to
assure that the necessary information is made available to such accountants for
the expression of their unqualified opinion,
-8-
<PAGE> 9
including but not limited to the opinion included in the Fund's annual report
on Form N-1R.
10. Confidentiality. PFPC agrees on behalf of itself and
its employees to treat confidentially and as the proprietary information of the
Fund all records and other information relative to the Fund and its prior,
present or potential Shareholders and relative to Shearson and its prior,
present or potential customers, and not to use such records and information for
any purpose other than performance of its responsibilities and duties
hereunder, except after prior notification to and approval in writing by the
Fund, which approval shall not be unreasonably withheld and may not be withheld
where PFPC may be exposed to civil or criminal contempt proceedings for failure
to comply, when requested to divulge such information by duly constituted
authorities, or when so requested by the Fund.
11. Equipment Failures. In the event of equipment
failures beyond PFPC's control, PFPC shall, at no additional expense to the
Fund, take reasonable steps to minimize service interruptions but shall have no
liability with respect thereto. PFPC shall enter into and shall maintain in
effect with appropriate parties one or more agreements making reasonable
provision for emergency use of electronic data processing equipment to the
extent appropriate equipment is available.
-9-
<PAGE> 10
12. Right to Receive Advice.
(a) Advice of Fund. If PFPC shall be in doubt as
to any action to be taken or omitted by it, it may request, and shall receive,
from the Fund directions or advice.
(b) Advice of Counsel. If PFPC shall be in doubt
as to any question of law involved in any action to be taken or omitted by
PFPC, it may request advice at its own cost from counsel of its own choosing
(who may be counsel for PIMC, Provident National Bank, Shearson, Boston
Advisors, the Fund or PFPC, at the option of PFPC).
(c) Conflicting Advice. In case of conflict
between directions or advice received by PFPC pursuant to subparagraph (a) of
this paragraph and advice received by PFPC pursuant to subparagraph (b) of this
paragraph, PFPC shall be entitled to rely on and follow the advice received
pursuant to the latter provision alone.
(d) Protection of PFPC. PFPC shall be protected
in any action or inaction which it takes in reliance on any directions or
advice received pursuant to subparagraphs (a) or (b) of this paragraph which
PFPC, after receipt of any such directions or advice, reasonably and in good
faith believes to be consistent with such directions or advice. However,
nothing in this paragraph shall be construed as imposing upon PFPC any
obligation (i) to seek such directions or advice, or (ii) to act in accordance
with such directions or advice when received, unless, under the terms of
another provision of this Agreement,
-10-
<PAGE> 11
the same is a condition to PFPC's properly taking or omitting to take such
action. Nothing in this subparagraph shall excuse PFPC when an action or
omission on the part of PFPC constitutes willful misfeasance, bad faith, gross
negligence or reckless disregard by PFPC of its duties under this Agreement.
13. Compliance with Governmental Rules and Regulations.
The Fund assumes full responsibility for insuring that the contents of each
prospectus of the Fund complies with all applicable requirements of the 1933
Act, the 1940 Act, and any laws, rules and regulations of governmental
authorities having jurisdiction.
14. Compensation. As compensation for the services
rendered by PFPC during the term of this Agreement, the Fund will pay to PFPC
monthly fees equal to $12.00 per account and subaccount of the Fund per year,
prorated in the case of accounts and subaccounts maintained for only a portion
of a full year, plus $1.00 for each purchase or redemption transaction made by
an account during the month (other than a purchase transaction made in
connection with PFPC's reinvestment of dividends on behalf of a Shareholder
pursuant to paragraph 5 hereof). In addition, the Fund will reimburse PFPC for
its out-of-pocket expenses relating to its services hereunder, including, but
not limited to, expenses of postage, telephone, TWX rental and line charges,
wire transfer costs, communications forms, and checks and check processing. In
addition to the other services to be rendered by PFPC under this Agreement, and
the other expenses to be borne by
-11-
<PAGE> 12
it hereunder, PFPC shall, if so instructed by duly authorized officers of the
Fund, install, or cause to be installed, micro-computer systems in the offices
of Shareholders, and shall provide, or cause to be provided, communication
networks in connection with the use of such systems by Shareholders pursuant to
directives given by Boston Advisors with respect to the Computer Access Program
in accordance with the Fund's Administration Agreement. In such event, the
Fund shall reimburse PFPC on a monthly basis for its reasonable out-of-pocket
expenses relating to such services, including, but not limited to, travel,
lodging and meal expenses of its personnel who perform such services and
expenses connected with the printing and production of operations manuals,
provided that PFPC shall in no case be reimbursed for any expenses: (i) which
exceed the Fund's then current budget for the Computer Access Program approved
by its Board of Directors; or (ii) which PFPC has not reasonably determined are
in the best interests of the Fund and its Shareholders.
15. Indemnification. The Fund agrees to indemnify and
hold PFPC harmless from all taxes, charges, expenses, assessments, claims and
liabilities (including, without limitation, liabilities arising under the 1933
Act, the Securities Exchange Act of 1934, the 1940 Act, and any state and
foreign securities and blue sky laws, all as or to be amended from time to
time) and expenses, including (without limitation) attorneys' fees and
disbursements, arising directly or indirectly
-12-
<PAGE> 13
from any action or thing which PFPC takes or does or omits to take or do at the
request or on the direction of or in reliance on the advice of the Fund,
provided that PFPC shall not be indemnified against any liability to the Fund
or to its Shareholders (or any expenses incident to such liability) arising out
of PFPC's negligent failure to perform its duties under this Agreement.
16. Responsibility of PFPC. PFPC shall be under no duty
to take any action on behalf of the Fund except as specifically set forth
herein or as may be specifically agreed to by PFPC in writing. In the
performance of its duties hereunder, PFPC shall be obligated to exercise care
and diligence and to act in good faith and to use its best efforts within
reasonable limits to insure the accuracy of all services performed under this
Agreement. PFPC shall be responsible for its own negligent failure to perform
its duties under this Agreement, but to the extent that duties, obligations and
responsibilities are not expressly set forth in this Agreement, PFPC shall not
be liable for any act or omission which does not constitute willful
misfeasance, bad faith or gross negligence on the part of PFPC or reckless
disregard of such duties, obligations and responsibilities. Without limiting
the generality of the foregoing or of any other provision of this Agreement,
PFPC in connection with its duties under this Agreement shall not be under any
duty or obligation to inquire into and shall not be liable for or in respect of
(a) the validity or invalidity or
-13-
<PAGE> 14
authority or lack thereof of any advice, direction, notice or other instrument
which conforms to the applicable requirements of this Agreement; if any, and
which PFPC reasonably believes to be genuine, or (b) delays or errors or loss
of data occurring by reason of circumstances beyond PFPC's control, including
acts of civil or military authority, national emergencies, labor difficulties,
fire, mechanical breakdown (except as provided in paragraph 11), flood or
catastrophe, acts of God, insurrection, war, riots or failure of the mails,
transportation, communication or power supply.
17. Registration as Transfer Agent. PFPC represents that
it has and is currently registered as a transfer agent with the SEC and has
complied with the SEC's regulations for registered transfer agents. PFPC
agrees that it will continue to be registered as a transfer agent with the SEC
for the duration of this Agreement. Should PFPC fail to be registered with the
SEC as a transfer agent at any time during this Agreement, the Fund may, on
written notice to PFPC, immediately terminate this Agreement.
18. Duration and Termination. This Agreement shall
continue until termination by PFPC or the Fund on sixty (60) days' written
notice.
19. Notices. All notices and other communications
(collectively referred to as "Notice" or "Notices" in this paragraph) hereunder
shall be in writing or by confirming telegram, cable, telex or facsimile
sending device. Notices
-14-
<PAGE> 15
shall be addressed (a) if to PFPC at PFPC's address, P.O. Box 8950, Wilmington,
Delaware 19899; (b) if to the Fund, at the address of the Fund; or (c) if to
neither of the foregoing, at such other address as shall have been notified to
the sender of any such Notice or other communication. If the location of the
sender of a Notice and the address of the addressee thereof are, at the time of
sending, more than 100 miles apart, the Notice may be sent by first-class mail,
in which case it shall be deemed to have been given three days after it is
sent, or if sent by confirming telegram, cable, telex or facsimile sending
device, it shall be deemed to have been given immediately, and, if the location
of the sender of a Notice and the address of the addressee thereof are, at the
time of sending, not more than 100 miles apart, the Notice may be sent by
first-class mail, in which case it shall be deemed to have been given two days
after it is sent, or if sent by messenger, it shall be deemed to have been
given on the day it is delivered, or if sent by confirming telegram, cable,
telex or facsimile sending device, it shall be deemed to have been given
immediately. All postage, cable, telegram, telex and facsimile sending device
charges arising from the sending of a Notice hereunder shall be paid by the
sender.
20. Further Actions. Each party agrees to perform such
further acts and execute such further documents as are necessary to effectuate
the purposes hereof.
21. Amendments. This Agreement or any part hereof may be
changed or waived only by an instrument in writing signed by
-15-
<PAGE> 16
the party against which enforcement of such change or waiver is sought.
22. Delegation. On thirty (30) days' prior written
notice to the Fund, PFPC may assign its rights and delegate its duties
hereunder to any wholly-owned direct or indirect subsidiary of Provident
National Bank or PNC Financial Corp., provided that PFPC may delegate its
duties only to a transfer agent registered and qualified under the Securities
and Exchange Act of 1934 and other applicable law, and further provided that
PFPC and such delegate shall promptly provide such information as the Fund may
request, and respond to such questions as the Fund may ask, relative to the
delegation, including (without limitation) the capabilities of the delegate.
23. Miscellaneous. This Agreement embodies the entire
agreement and understanding between the parties hereto, and supersedes all
prior agreements and understandings relating to the subject matter hereof. The
captions in this Agreement are included for convenience of reference only and
in no way define or delimit any of the provisions hereof or otherwise affect
their construction or effect. This Agreement shall be deemed to be a contract
made in Delaware and governed by Delaware law. If any provision of this
Agreement shall be held or made invalid by a court decision, statute, rule or
otherwise, the remainder of this Agreement shall not be affected thereby. This
Agreement shall be
-16-
<PAGE> 17
binding and shall inure to the benefit of the parties hereto and their
respective successors.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed by their officers designated below on the day and year
first above written.
[SEAL] MUNICIPAL FUND FOR NEW YORK
INVESTORS, INC.
Attest:/s/ Morgan R. Jones By:/s/ William J. Nutt
- ------------------------------ ----------------------------
[SEAL] PROVIDENT FINANCIAL PROCESSING
CORPORATION
Attest:/s/ John D. Silcox, Jr. By:/s/ Clayton H. Bond III
----------------------- ----------------------------
Vice President and
Secretary
-17-
<PAGE> 1
EXHIBIT 9(c)
AMENDMENT NO. 1 TO
TRANSFER AGENCY AGREEMENT
WHEREAS, MUNICIPAL FUND FOR NEW YORK INVESTORS, INC., a Maryland
corporation (the "Fund"), and PROVIDENT FINANCIAL PROCESSING CORPORATION, a
Delaware corporation ("PFPC"), are parties to a Transfer Agency Agreement dated
August 8, 1983 (the "Agreement"); and
WHEREAS, the Fund's authorized capital currently consists of Two
Billion (2,000,000,000) shares of Class A Common Stock; and
WHEREAS, the Board of Directors of the Fund is contemplating the
reclassification of a portion of its authorized capital into shares of separate
series of Class A Common Stock; and
WHEREAS, the parties wish to amend the Agreement to provide for the
provision of transfer agency and dividend disbursing services to these
additional series upon the terms and conditions stated in the Agreement;
NOW, THEREFORE, the undersigned hereby agree, intending to be legally
bound, that effective immediately the Agreement shall be amended to provide as
follows:
As used herein: (a) the term "Shares" shall mean all shares of
the Fund's capital stock, $.001 par value per share, of every class
or series heretofore or hereafter created by the Fund; and (b) the
phrase "class of Shares" shall mean "class and series of Shares"
wherever said phrase may appear.
Except as expressly amended and modified hereby, all provisions of the
Agreement shall remain in full force and effect.
IN WITNESS WHEREOF, the parties have executed this Amendment No. 1 as
of the 31st day of July, 1985.
[SEAL] MUNICIPAL FUND FOR NEW
YORK INVESTORS, INC.
Attest:/s/ Morgan R.Jones By:/s/ Edward J. Roach
----------------------- ----------------------
Title: Vice President
[CORPORATE SEAL] PROVIDENT FINANCIAL
PROCESSING CORPORATION
Attest:/s/ John D. Silcox, Jr. By:/s/ John W. McLaughlin
----------------------- ----------------------
Secretary Title: President
<PAGE> 1
Exhibit 10
November 30, 1995
Municipal Fund for New York Investors, Inc.
Bellevue Park Corporate Center
400 Bellevue Parkway, Suite 100
Wilmington, Delaware 19809
RE: POST-EFFECTIVE AMENDMENT NO. 14 TO REGISTRATION STATEMENT ON
FORM N-1A FOR MUNICIPAL FUND FOR NEW YORK INVESTORS, INC.
(REGISTRATION NO. 2-82278)
Gentlemen:
We have acted as counsel for Municipal Fund for New York
Investors, Inc., a Maryland corporation (the "Fund"), in connection with the
registration of 193,692,033 shares of Class A Common Stock ("Shares"), pursuant
to Post-Effective Amendment No. 14 to the Fund's Registration Statement under
the Securities Act of 1933. The registration of such Shares has been made in
reliance upon Rule 24e-2 under the Investment Company Act of 1940. The Fund is
an open-end investment company authorized to issue a total of two billion
shares of Common Stock, par value $.001 per share, of which one billion, four
hundred million shares were classified as Class A Common Stock, three hundred
million shares were classified as Class A Common Stock - Special Series 1 and
three hundred million shares were classified as Class A Common Stock - Special
Series 2 at all times during the fiscal year ended July 31, 1995 and remain so
classified as of the date of this opinion. We have reviewed the Fund's
Charter, its By-Laws, resolutions adopted by its Board of Directors and
shareholders and such other legal and factual matters as we have deemed
appropriate and relied upon a certificate of the Fund's transfer agent as to
certain matters including whether at any time during the fiscal year ended July
31, 1995 the number of issued and outstanding shares of any class or series of
the Fund's Common Stock exceeded the number of such Shares that the Fund was
then authorized to issue.
On the basis of the foregoing, we are of the opinion that the
foregoing 193,692,033 shares of Class A Common Stock, when issued for payment
as described in the Fund's Prospectus, will be validly issued, fully paid and
non-assessable by the Fund.
We hereby consent to the filing of this opinion with the
Securities and Exchange Commission as an exhibit to Post-Effective Amendment
No. 14 to the Fund's Registration Statement.
Very truly yours,
DRINKER BIDDLE & REATH
<PAGE> 1
Exhibit 11(a)
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the following with respect to Post-Effective Amendment No.
14 to the Registration Statement (No. 2-82278) on Form N-1A under the
Securities Act of 1933, as amended, of Municipal Fund for New York Investors,
Inc.:
1. The inclusion of our report dated September 8, 1995
accompanying the financial statements in the Statement of
Additional Information.
2. The reference to our Firm under the heading "Financial
Highlights" in the Prospectus and under the heading
"Independent Accountants" in the Statement of Additional
Information."
/s/ Coopers & Lybrand
COOPERS & LYBRAND, L.L.P.
2400 Eleven Penn Center
Philadelphia, Pennsylvania
November 30, 1995
<PAGE> 1
Exhibit 11(b)
CONSENT OF COUNSEL
We hereby consent to the use of our name and to the references
to our firm under the captions "Management of the Fund - Directors and
Officers" and "Counsel" in the Statement of Additional Information that is
included in Post-Effective Amendment No. 14 to the Registration Statement (No.
2-82278) of Municipal Fund for New York Investors, Inc. under the Securities
Act of 1933. This consent does not constitute a consent under Section 7 of the
Securities Act of 1933, and in consenting to the use of our name and the
references to our firm under such captions we have not certified any part of
the Registration Statement and do not otherwise come within the categories of
persons whose consent is required under Section 7 or the rules and regulations
of the Securities and Exchange Commission thereunder.
/s/ Drinker Biddle & Reath
--------------------------
Drinker Biddle & Reath
Philadelphia, Pennsylvania
November 30, 1995
<PAGE> 1
Exhibit 11(c)
CONSENT OF COUNSEL
We hereby consent to the use of our name and to the references
to our firm under the caption "Counsel" included in the Statement of Additional
Information that is included in Post-Effective Amendment No. 14 to the
Registration Statement on Form N-1A under the Securities Act of 1933, as
amended, and Amendment No. 15 to the Registration Statement on Form N-1A under
the Investment Company Act of 1940, as amended (No. 2-82278) of Municipal Fund
for New York Investors, Inc.
/s/ Willkie Farr & Gallagher
-------------------------------
Willkie Farr & Gallagher
November 21, 1995
New York, New York
<PAGE> 1
Exhibit 16
MUNICIPAL FUND FOR NEW YORK INVESTORS, INC.
SCHEDULE FOR COMPUTATION OF PERFORMANCE
QUOTATIONS
YIELD
For the seven-day period ended July 31, 1992:
Last 7 Daily Dividend Factors:
MONEY
SHARES
<TABLE>
<S> <C>
Day 1: .000065647
----------
Day 2: .000065647
----------
Day 3: .000065593
----------
Day 4: .000065703
----------
Day 5: .000065157
----------
Day 6: .000064967
----------
Day 7: .000065854
----------
.000458568 = Base Period Return
========== (BPR)
</TABLE>
Annualized Yield = (BPR/1) X 365/7 2.39%
----
Effective Yield = (BPR + 1) to the
365/7 Power - 1 2.42%
----
Tax-Equivalent
Yield = Annualized Yield 2.73%
-------------------- ----
1 - (Combined Federal,
New York State and
New York City Tax Rate)
<PAGE> 2
MUNICIPAL FUND FOR NEW YORK INVESTORS, INC.
SCHEDULE FOR COMPUTATION OF PERFORMANCE
QUOTATIONS
YIELD
For the seven-day period ended July 31, 1992:
Last 7 Daily Dividend Factors:
DOLLAR
SHARES
<TABLE>
<S> <C>
Day 1: .000058816
----------
Day 2: .000058817
----------
Day 3: .000058762
----------
Day 4: .000058873
----------
Day 5: .000058326
----------
Day 6: .000058137
----------
Day 7: .000059023
----------
.000410754 = Base Period Return
==========
(BPR)
</TABLE>
Annualized Yield = (BPR/1) X 365/7 2.14%
----
Effective Yield = (BPR + 1) to the
365/7 Power - 1 2.16%
----
Tax-Equivalent
Yield = Annualized Yield 2.44%
-------------------- ----
1 - (Combined Federal,
New York State and
New York City Tax Rate)
<PAGE> 3
MUNICIPAL FUND FOR NEW YORK INVESTORS, INC.
SCHEDULE FOR COMPUTATION OF PERFORMANCE
QUOTATIONS
YIELD
For the seven-day period ended July 31, 1992
Last 7 Daily Dividend Factors:
PLUS
SHARES
<TABLE>
<S> <C>
Day 1: .000058816
----------
Day 2: .000058817
----------
Day 3: .000058762
----------
Day 4: .000058873
----------
Day 5: .000058326
----------
Day 6: .000058137
----------
Day 7: .000059023
----------
.000410754 = Base Period Return
========== (BPR)
</TABLE>
Annualized Yield = (BPR/1) X 365/7 2.14%
----
Effective Yield = (BPR + 1) to the
365/7 Power - 1 2.16%
----
Tax-Equivalent
Yield = Annualized Yield 2.44%
-------------------- ----
1 - (Combined Federal,
New York State and
New York City Tax Rate)
<TABLE> <S> <C>
<ARTICLE> 6
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> JUL-31-1995
<PERIOD-END> JUL-31-1995
<INVESTMENTS-AT-COST> 245,203,584
<INVESTMENTS-AT-VALUE> 245,203,584
<RECEIVABLES> 1,481,002
<ASSETS-OTHER> 764,619
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 247,449,205
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 798,923
<TOTAL-LIABILITIES> 798,923
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 0
<SHARES-COMMON-STOCK> 0
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 8,146,363
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 246,650,282
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 8,631,699
<OTHER-INCOME> 0
<EXPENSES-NET> 485,336
<NET-INVESTMENT-INCOME> 8,146,363
<REALIZED-GAINS-CURRENT> 3,631
<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> 8,149,994
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 8,146,363
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 1,040,249,529
<NUMBER-OF-SHARES-REDEEMED> 1,073,881,693
<SHARES-REINVESTED> 361,349
<NET-CHANGE-IN-ASSETS> (33,270,815)
<ACCUMULATED-NII-PRIOR> 6,086,8240
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 485,058
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 1,186,093
<AVERAGE-NET-ASSETS> 242,408,089
<PER-SHARE-NAV-BEGIN> 1.00
<PER-SHARE-NII> .043
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> .043
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 1.00
<EXPENSE-RATIO> .20
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
