<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JUNE 27, 1995
SECURITIES ACT FILE NO. 2-82766
INVESTMENT COMPANY ACT FILE NO. 811-3703
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 [X]
PRE-EFFECTIVE AMENDMENT NO. [_]
POST-EFFECTIVE AMENDMENT NO. 13 [X]
AND/OR
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 [X]
AMENDMENT NO. 16 [X]
(CHECK APPROPRIATE BOX OR BOXES)
----------------
CBA(R) MONEY FUND
(EXACT NAME OF REGISTRANT AS SPECIFIED IN CHARTER)
800 SCUDDERS MILL ROAD
PLAINSBORO, NEW JERSEY 08536
(ADDRESS OF PRINCIPAL EXECUTIVE (ZIP CODE)
OFFICES)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE (609) 282-2800
ARTHUR ZEIKEL
CBA(R) MONEY FUND
800 SCUDDERS MILL ROAD, PLAINSBORO, NEW JERSEY
MAILING ADDRESS: P.O. BOX 9011, PRINCETON, NEW JERSEY 08543-9011
(NAME AND ADDRESS OF AGENT FOR SERVICE)
COPIES TO:
COUNSEL FOR THE FUND: PHILIP L. KIRSTEIN, ESQ.
BROWN & WOOD FUND ASSET MANAGEMENT, L.P.
ONE WORLD TRADE CENTER
NEW YORK, NEW YORK 10048-0557 P.O. BOX 9011
ATTENTION: THOMAS R. SMITH, JR. PRINCETON, NEW JERSEY 08543-9011
KEVIN J. MOYNIHAN, ESQ.
MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED
WORLD FINANCIAL CENTER, NEW YORK, NEW YORK 10281
IT IS PROPOSED THAT THIS FILING WILL BECOME EFFECTIVE (CHECK APPROPRIATE
BOX)
[X] immediately upon filing pursuant to paragraph (b), or
[_] on (date) pursuant to paragraph (b), or
[_] 60 days after filing pursuant to paragraph (a) (1),
or
[_] on (date) pursuant to paragraph (a) (1), or
[_] 75 days after filing pursuant to paragraph (a) (2),
or
[_] on (date) pursuant to paragraph (a) (2) 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 its shares of
beneficial interest under the Securities Act of 1933 pursuant to Rule 24f-2
under the Investment Company Act of 1940. The notice required by such rule for
the Registrant's most recent fiscal year was filed on April 25, 1995.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
CBA(R) MONEY FUND
REGISTRATION STATEMENT ON FORM N-1A
CROSS REFERENCE SHEET
<TABLE>
<CAPTION>
N-1A ITEM NO. LOCATION
------------- --------
Part A
<C> <S> <C>
Item 1. Cover Page............................ Cover Page
Item 2. Synopsis.............................. Fee Table
Item 3. Condensed Financial Information....... Supplementary Financial Information;
Yield Information
Item 4. General Description of Registrant..... Investment Objectives and Policies;
Additional Information--
Organization of the Money Fund
Item 5. Management of the Fund................ Fee Table; Management of the Money
Fund; Portfolio Transactions;
Inside Back Cover Page
Item 5A. Management's Discussion of Fund
Performance.......................... Not Applicable
Item 6. Capital Stock and Other Securities.... Cover Page; Additional Information
Item 7. Purchase of Securities Being Offered.. Cover Page; Fee Table; Purchase of
Shares; Redemption of Shares; Addi-
tional Information; Inside Back
Cover Page
Item 8. Redemption or Repurchase.............. Purchase of Shares; Redemption of
Shares
Item 9. Pending Legal Proceedings............. Not Applicable
Part B
Item 10. Cover Page............................ Cover Page
Item 11. Table of Contents..................... Cover Page
Item 12. General Information and History....... Not Applicable
Item 13. Investment Objectives and Policies.... Investment Objectives and Policies
Item 14. Management of the Fund................ Management of the Money Fund
Item 15. Control Persons and Principal Holders
of Securities........................ Management of the Money Fund
Item 16. Investment Advisory and Other Management of the Money Fund;
Services............................. Purchase and Redemption of Shares;
General Information
Item 17. Brokerage Allocation.................. Portfolio Transactions
Item 18. Capital Stock and Other Securities.... General Information--Description of
Shares
Item 19. Purchase, Redemption and Pricing of Purchase and Redemption of Shares;
Securities Being Offered............. Determination of Net Asset Value
Item 20. Tax Status............................ Taxes
Item 21. Underwriters.......................... Purchase and Redemption of Shares
Item 22. Calculation of Performance Data....... Yield Information
Item 23. Financial Statements.................. Financial Statements
</TABLE>
Part C
Information required to be included in Part C is set forth under the
appropriate Item, so numbered, in Part C to this Registration Statement.
i
<PAGE>
PROSPECTUS
June 27, 1995
CBA(R) MONEY FUND
P.O. BOX 9011, PRINCETON, NEW JERSEY 08543-9011 . PHONE NO. (609)
282-2800
----------------
CBA(R) Money Fund (the "Money Fund") is a no-load money market fund whose
shares are offered to subscribers to the Capital Builder SM Account service of
Merrill Lynch, Pierce, Fenner & Smith Incorporated ("Merrill Lynch"), to
subscribers to the Broadcort Capital Account service of Broadcort Capital
Corp. ("Broadcort") and to investors maintaining accounts directly with the
Money Fund's transfer agent. A Capital Builder SM Account and a Broadcort
Capital Account each consist of a conventional securities cash or margin
account ("Securities Account") maintained at Merrill Lynch or Broadcort,
respectively, which is presently linked to the Money Fund and to a Visa (R)
card/check account ("Visa (R) Account"). THE MONEY FUND SEEKS TO MAINTAIN A
CONSISTENT $1.00 NET ASSET VALUE PER SHARE, ALTHOUGH THIS CANNOT BE ASSURED.
AN INVESTMENT IN THE MONEY FUND IS NEITHER INSURED NOR GUARANTEED BY THE U.S.
GOVERNMENT.
A customer of Merrill Lynch and a customer of a securities firm which has
entered into a selected dealer agreement with Broadcort may subscribe to the
Capital Builder SM Account or Broadcort Capital Account program, respectively,
as set forth in the description of the respective programs discussed below.
Subject to the conditions described in this Prospectus, free credit balances
in the Securities Account of Capital Builder SM Account or Broadcort Capital
Account participants may be periodically invested in shares of the Money Fund.
Subscribers to the Capital Builder SM Account and the Broadcort Capital
Account also are able to have free credit balances deposited in money market
deposit accounts maintained with depository institutions. Investment in the
Money Fund or utilization of such deposit accounts permits the subscriber to
earn a return on such funds pending further investment through other aspects
of the respective Capital Builder SM Account or Broadcort Capital Account
programs or utilization through the Visa (R) Account. The shares of the Money
Fund also may be purchased by investors maintaining accounts directly with the
Money Fund's Transfer Agent. The minimum initial purchase for investors who do
not subscribe to the Capital Builder SM Account or Broadcort Capital Account
programs is $5,000 and subsequent purchases must be $1,000 or more. Such
investors will not receive any of the additional services available to Capital
Builder SM Account or Broadcort Capital Account subscribers, such as the
Visa (R) Account or the automatic investment of free credit balances. See
"Purchase of Shares".
----------------
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.
----------------
This Prospectus is a concise statement of information about the Money Fund
that is relevant to making an investment in the Money Fund. This Prospectus
should be retained for future reference. A statement containing additional
information about the Money Fund, dated June 27, 1995 (the "Statement of
Additional Information"), has been filed with the Securities and Exchange
Commission and can be obtained, without charge, by calling or writing to the
Money Fund at the above telephone number or address. The Statement of
Additional Information is hereby incorporated by reference into this
Prospectus.
The information in this Prospectus should be read in conjunction with the
description of the Merrill Lynch Capital Builder SM Account program or the
description of the Broadcort Capital Account program which are furnished to
all subscribers prior to the time an Account is opened. Reference is made to
such descriptions and accompanying materials for information with respect to
the Capital Builder SM Account or Broadcort Capital Account, including the
fees related to such Accounts. Information concerning the money market deposit
accounts in which free credit balances may be deposited is described in a
separate brochure. For more information about the Capital Builder SM Account
or Broadcort Capital Account, call toll-free from anywhere in the U.S., 1-800-
247-6400 or 1-800-247-6450, respectively.
----------------
Investors are advised to read this Prospectus and retain it for future
reference.
<PAGE>
FEE TABLE
<TABLE>
<CAPTION>
MONEY FUND ANNUAL OPERATING EXPENSES
(AS A PERCENTAGE OF AVERAGE NET ASSETS)
FOR THE FISCAL YEAR ENDED FEBRUARY 28, 1995:
- --------------------------------------------
<S> <C>
Management Fees(a)................................................... 0.44%
Rule 12b-1 Fees(b)................................................... 0.13%
Other Expenses:
Transfer Agency Fees(c)...................................... 0.19%
Other Fees................................................... 0.05%
-----
Total Other Expenses................................................. 0.24%
-----
Total Money Fund Operating Expenses.................................. 0.81%
=====
</TABLE>
- --------
(a) See "Management of the Money Fund--Management and Advisory Arrangements"--
page 9.
(b) See "Purchase of Shares"--page 10.
(c) See "Management of the Money Fund--Transfer Agency Services"--page 10.
EXAMPLE:
<TABLE>
<CAPTION>
CUMULATIVE EXPENSES PAID FOR THE PERIOD OF:
-----------------------------------------
1 YEAR 3 YEARS 5 YEARS 10 YEARS
------ ------- ------- --------
<S> <C> <C> <C> <C>
An investor would pay the following
expenses on a $1,000 investment,
assuming an operating expense ra-
tio of 0.81% and a 5% annual re-
turn throughout the periods....... $8 $26 $45 $100
</TABLE>
MERRILL LYNCH CHARGES AN ANNUAL PROGRAM PARTICIPATION FEE (PRESENTLY $65) FOR
THE CAPITAL BUILDER SM ACCOUNT SERVICE. BROADCORT CHARGES AN ANNUAL PROGRAM
PARTICIPATION FEE (PRESENTLY $75) FOR THE BROADCORT CAPITAL ACCOUNT SERVICE.
SHAREHOLDERS OF THE MONEY FUND WHOSE ACCOUNTS ARE MAINTAINED DIRECTLY WITH THE
MONEY FUND'S TRANSFER AGENT AND WHO ARE NOT SUBSCRIBERS TO EITHER OF THESE
SERVICES WILL NOT BE CHARGED EITHER PROGRAM FEE BUT WILL NOT RECEIVE ANY OF THE
ADDITIONAL SERVICES AVAILABLE TO SUBSCRIBERS.
The manager of the Money Fund, Fund Asset Management, L.P. (the "Manager"),
has agreed voluntarily to waive a portion of its management fee. The Fee Table
has been restated to assume the absence of any waiver because the Manager may
discontinue or reduce such waiver at any time without notice. For the fiscal
year ended February 28, 1995, the Manager waived management fees totalling
0.04% after which the total Money Fund operating expenses were 0.77%.
2
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Fee Table........................ 2
Financial Highlights............. 3
Yield Information................ 4
Investment Objectives and Poli-
cies............................ 4
Management of the Money Fund..... 8
Trustees....................... 8
Management and Advisory
Arrangements.................. 9
Transfer Agency Services....... 10
Purchase of Shares............... 10
</TABLE>
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Redemption of Shares............. 13
Portfolio Transactions........... 15
Additional Information........... 15
Dividends...................... 15
Determination of Net Asset Val-
ue............................ 15
Taxes ......................... 16
Organization of the Money Fund. 17
Shareholder Inquiries.......... 18
Reports to Shareholders........ 18
</TABLE>
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS, OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS, IN
CONNECTION WITH THE OFFER CONTAINED HEREIN, AND, IF GIVEN OR MADE, SUCH
OTHER INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING
BEEN AUTHORIZED BY THE MONEY FUND, THE MANAGER, MERRILL LYNCH OR
BROADCORT. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFERING IN ANY STATE IN
WHICH SUCH OFFERING MAY NOT LAWFULLY BE MADE.
FINANCIAL HIGHLIGHTS
Financial statements for the fiscal year ended February 28, 1995 and the
independent auditors' report thereon are included in the Statement of
Additional Information. The following per share data and ratios have been
derived from information provided in financial statements of the Money Fund
audited by Deloitte & Touche LLP, independent auditors.
<TABLE>
<CAPTION>
FOR THE YEAR ENDED FOR THE FOR THE YEAR ENDED FOR THE
FEBRUARY 28, YEAR ENDED FEBRUARY 28, YEAR ENDED
------------------------------------ FEBRUARY 29, -------------------------------- FEBRUARY 29,
1995 1994 1993 1992 1991 1990 1989 1988
---------- ---------- ---------- ------------ ---------- -------- -------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Increase
(Decrease) in
Net Asset Value:
PER SHARE
OPERATING
PERFORMANCE:
Net asset value,
beginning of
year............ $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
---------- ---------- ---------- ---------- ---------- -------- -------- --------
Investment
income--net..... .0396 .0260 .0304 .0511 .0736 .0846 .0720 .0619
Realized and
unrealized gain
(loss) on
investments--
net............. .0005 (.0004) .0017 .0008 .0006 .0004 .0001 .0008
---------- ---------- ---------- ---------- ---------- -------- -------- --------
Total from
investment
operations...... .0401 .0256 .0321 .0519 .0742 .0850 .0721 .0627
---------- ---------- ---------- ---------- ---------- -------- -------- --------
Less dividends
and
distributions:
Investment
income--net.... (.0396) (.0260) (.0304) (.0511) (.0736) (.0846) (.0720) (.0619)
Realized gain on
investments--
net............ (.0000)** (.0004) (.0014) (.0008)* (.0006)* (.0004)* (.0001)* (.0008)*
---------- ---------- ---------- ---------- ---------- -------- -------- --------
Total dividends
and
distributions... (.0396) (.0264) (.0318) (.0519) (.0742) (.0850) (.0721) (.0627)
---------- ---------- ---------- ---------- ---------- -------- -------- --------
Net asset value,
end of year..... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
========== ========== ========== ========== ========== ======== ======== ========
TOTAL INVESTMENT
RETURN.......... 4.03% 2.66% 3.24% 5.32% 7.69% 8.82% 7.47% 6.47%
========== ========== ========== ========== ========== ======== ======== ========
RATIOS TO AVERAGE
NET ASSETS:
Expenses, net of
reimbursement
and excluding
distribution
fees............ .65% .59% .59% .56% .57% .56% .53% .52%
========== ========== ========== ========== ========== ======== ======== ========
Expenses, net of
reimbursement... .77% .71% .71% .69% .70% .68% .65% .65%
========== ========== ========== ========== ========== ======== ======== ========
Expenses......... .81% .75% .75% .74% .75% .81% .89% .96%
========== ========== ========== ========== ========== ======== ======== ========
Investment income
and realized
gain on
investments--
net............. 3.98% 2.62% 3.19% 5.18%* 7.40%* 8.40%* 7.30%* 6.29%*
========== ========== ========== ========== ========== ======== ======== ========
SUPPLEMENTAL
DATA:
Net assets, end
of year (in
thousands)...... $1,406,315 $1,287,456 $1,242,686 $1,211,833 $1,063,827 $864,835 $459,658 $267,201
========== ========== ========== ========== ========== ======== ======== ========
<CAPTION>
FOR THE YEAR ENDED
FEBRUARY 28,
----------------------
1987 1986
----------- ----------
<S> <C> <C>
Increase
(Decrease) in
Net Asset Value:
PER SHARE
OPERATING
PERFORMANCE:
Net asset value,
beginning of
year............ $ 1.00 $ 1.00
----------- ----------
Investment
income--net..... .0591 .0754
Realized and
unrealized gain
(loss) on
investments--
net............. .0022 .0026
----------- ----------
Total from
investment
operations...... .0613 .0780
----------- ----------
Less dividends
and
distributions:
Investment
income--net.... (.0591) (.0754)
Realized gain on
investments--
net............ (.0022)* (.0026)*
----------- ----------
Total dividends
and
distributions... (.0613) (.0780)
----------- ----------
Net asset value,
end of year..... $ 1.00 $ 1.00
=========== ==========
TOTAL INVESTMENT
RETURN.......... 6.36% 8.11%
=========== ==========
RATIOS TO AVERAGE
NET ASSETS:
Expenses, net of
reimbursement
and excluding
distribution
fees............ .41% .38%
=========== ==========
Expenses, net of
reimbursement... .53% .50%
=========== ==========
Expenses......... 1.05% 1.96%
=========== ==========
Investment income
and realized
gain on
investments--
net............. 6.03%* 7.67%*
=========== ==========
SUPPLEMENTAL
DATA:
Net assets, end
of year (in
thousands)...... $191,436 $60,167
=========== ==========
</TABLE>
- --------
* Includes unrealized gain (loss).
** Amount is less than $.0001 per share.
3
<PAGE>
YIELD INFORMATION
Set forth below is yield information as to the annualized and compounded
annualized yield for the indicated seven-day period.
<TABLE>
<CAPTION>
SEVEN-DAY PERIOD ENDED
------------------------------
FEBRUARY 28, 1995 MAY 31, 1995
----------------- ------------
<S> <C> <C>
Annualized Yield:
Including gains and
losses................. 5.20% 5.50%
Excluding gains and
losses................. 5.19% 5.48%
Compounded Annualized
Yield................... 5.33% 5.63%
Average maturity of port-
folio at end of period.. 50 days 73 days
</TABLE>
The yield of the Money Fund refers to the income generated by an investment
in the Money Fund over a stated seven-day period. This income is then
annualized; that is, the amount of income generated by the investment during
that week is assumed to be generated each week over a 52-week period and is
shown as a percentage of the investment. The compounded annualized yield is
calculated similarly but, when annualized, the income earned by an investment
in the Money Fund is assumed to be reinvested. The compounded annualized yield
will be somewhat higher than the yield because of the effect of the assumed
reinvestment.
The yield on Money Fund shares normally will fluctuate on a daily basis.
Therefore, the yield for any given past period is not an indication or
representation by the Money Fund of future yields or rates of return on its
shares. The Money Fund's yield is affected by changes in interest rates on
money market securities, average portfolio maturity, the types and quality of
portfolio securities held and operating expenses. Current yield information may
not provide a basis for comparison with bank deposits or other investments
which pay a fixed yield over a stated period of time.
On occasion, the Money Fund may compare its yield to (i) the Donoghue's
Domestic Prime and Euro-dollar and Yankeedollar Funds Average, an average
compiled by Donoghue's Money Fund Report, a widely recognized independent
publication that monitors the performance of money market mutual funds, (ii)
the average yield reported by the Bank Rate Monitor National Index(TM) for
money market deposit accounts offered by the 100 leading banks and thrift
institutions in the ten largest standard metropolitan statistical areas, (iii)
yield data published by Lipper Analytical Services, Inc., (iv) the yield on an
investment in 90-day Treasury bills on a rolling basis, assuming quarterly
compounding or (v) performance data published by Morningstar Publications,
Inc., Money Magazine, U.S. News & World Report, Business Week, CDA Investment
Technology, Inc., Forbes Magazine and Fortune Magazine. As with yield
quotations, yield comparisons should not be considered indicative of the Money
Fund's yield or relative performance for any future period.
INVESTMENT OBJECTIVES AND POLICIES
The investment objectives of the Money Fund are to seek current income,
preservation of capital and liquidity available from investing in a diversified
portfolio of short-term money market securities. The investment objectives are
fundamental policies of the Money Fund which may not be changed without a vote
of the majority of the outstanding shares of the Money Fund.
4
<PAGE>
Investment in the Money Fund offers several benefits. The Money Fund seeks to
provide as high a yield potential as is available, consistent with the
preservation of capital, from short-term money market securities utilizing
professional money market management, block purchases of securities and yield
improvement techniques. It provides high liquidity because of its redemption
features and seeks reduced risk resulting from diversification of assets. There
can be no assurance that the investment objectives of the Money Fund will be
realized. Certain expenses are borne by investors, including management fees,
distribution fees, administrative costs and operational costs.
In managing the Money Fund, the Manager employs a number of professional
money management techniques, including varying the composition of investments
and the average maturity of the portfolio based on its assessment of the
relative values of the various money market securities and future interest rate
patterns. These assessments will respond to changing economic and money market
conditions and to shifts in fiscal and monetary policy. The Manager will also
seek to improve yield by taking advantage of yield disparities that regularly
occur in the money market. For example, market conditions frequently result in
similar securities trading at different prices. Also, there are frequently
differences in the yield between the various types of money market securities.
The Money Fund seeks to enhance yield by purchasing and selling securities
based upon these yield differences.
The following is a description of the types of money market securities in
which the Money Fund may invest:
United States Government Securities. Marketable securities issued by or
guaranteed as to principal and interest by the U.S. Government and
supported by the full faith and credit of the United States.
United States Government Agency Securities. Debt securities issued by
U.S. Government-sponsored enterprises, Federal agencies and certain
international institutions which are not direct obligations of the United
States but involve U.S. Government sponsorship or guarantees by U.S.
Government agencies or enterprises. The U.S. Government is not obligated to
provide financial support to these instrumentalities.
Bank Money Instruments. Obligations of commercial banks, savings banks or
savings and loan associations such as certificates of deposit, including
variable rate certificates of deposit, time deposits, deposit notes, bank
notes, and bankers' acceptances. The savings banks and savings and loan
associations must be organized and operating in the United States. The
obligations of commercial banks may be issued by U.S. banks, foreign
branches of U.S. banks ("Eurodollar" obligations) or U.S. branches of
foreign banks ("Yankeedollar" obligations). Eurodollar and Yankeedollar
obligations may be general obligations of the parent bank or may be limited
to the issuing branch by the terms of the specific obligations or by
government regulation.
Commercial Paper and Other Short-Term Obligations. Commercial paper
(including variable amount master demand notes), which refers to short-term
unsecured promissory notes issued by
5
<PAGE>
corporations, partnerships, trusts or other entities to finance short-term
credit needs and non-convertible debt securities (e.g., bonds and
debentures) with no more than 397 days (13 months) remaining to maturity at
the date of purchase. Short-term obligations issued by trusts include
mortgage-related or asset-backed debt instruments, including pass-through
certificates such as participations in, or bonds and notes backed by, pools
of mortgage, credit card, automobile or other types of receivables. These
structured financings will be supported by sufficient collateral and other
credit enhancements, including letters of credit, insurance, reserve funds
and guarantees by third parties, to enable such instruments to obtain the
requisite quality rating by a nationally recognized statistical rating
organization, as described below.
Foreign Bank Money Instruments. U.S. dollar-denominated obligations of
foreign depository institutions and their foreign branches and
subsidiaries, such as certificates of deposit, bankers' acceptances, time
deposits and deposit notes. The obligations of such foreign branches and
subsidiaries may be the general obligation of the parent bank or may be
limited to the issuing branch or subsidiary by the terms of the specific
obligation or by government regulation. Such investments will only be made
if determined to be of comparable quality to other investments permissible
for the Money Fund. The Money Fund will not invest more than 25% of its
total assets (taken at market value at the time of each investment) in
these obligations.
Foreign Short-Term Debt Instruments. U.S. dollar-denominated commercial
paper and other short-term obligations issued by foreign entities. Such
investments are subject to quality standards similar to those applicable to
investments in comparable obligations of domestic issuers.
The following is a description of other types of investments or investment
practices in which the Money Fund may invest or engage:
Repurchase Agreements. The Money Fund may invest in the money market
securities described above pursuant to repurchase agreements. Repurchase
agreements may be entered into only with a member bank of the Federal
Reserve System or a primary dealer in U.S. Government securities or an
affiliate thereof. Under such agreements, the bank or primary dealer
agrees, upon entering into the contract, to repurchase the security at a
mutually agreed upon time and price, thereby determining the yield during
the term of the agreement. This results in a fixed rate of return insulated
from market fluctuations during such period.
Reverse Repurchase Agreements. The Money Fund may enter into reverse
repurchase agreements which involve the sale of money market securities
held by the Money Fund, with an agreement to repurchase the securities at
an agreed upon price, date and interest payment. During the time a reverse
repurchase agreement is outstanding, the Money Fund will maintain a
segregated custodial account containing U.S. Government or other
appropriate high-grade debt securities having a value equal to the
repurchase price.
6
<PAGE>
Lending of Portfolio Securities. The Money Fund may lend portfolio
securities (with a value not in excess of 33 1/3% of its total assets,
taken at market value) to brokers, dealers and financial institutions and
receive collateral in cash or securities issued or guaranteed by the U.S.
Government which will be maintained at all times in an amount equal to at
least 100% of the current market value of the loaned securities. During the
period of the loan, the Money Fund receives income on both the loaned
securities and the collateral and thereby increases its yield.
The Money Fund may invest in U.S. Government and U.S. Government agency
securities with remaining maturities of up to 762 days (twenty-five months).
All other investments of the Money Fund will be in securities with remaining
maturities of no more than 397 days (13 months). The dollar weighted average
maturity of the Money Fund's portfolio will be 90 days or less. During the year
ended February 28, 1995, the average maturity of its portfolio ranged from 37
days to 65 days.
Preservation of capital is a prime investment objective of the Money Fund,
and while the types of money market securities in which the Money Fund invests
are not completely risk free, such securities are generally considered to have
low principal risk. There is the risk of the failure of issuers to meet their
principal and interest obligations. Repurchase agreements may be construed to
be collateralized loans by the purchaser to the seller secured by the
securities transferred to the purchaser. In the event of default by the seller
under a repurchase agreement construed to be a collateralized loan, the
underlying securities are not owned by the Money Fund but only constitute
collateral for the seller's obligation to pay the repurchase price. With
respect to repurchase agreements, reverse repurchase agreements and the lending
of portfolio securities by the Money Fund, there is also the risk of the
failure of parties involved to repurchase at the agreed upon price or to return
the securities involved in such transactions, in which event the Money Fund may
suffer time delays and incur costs or possible losses in connection with such
transactions.
Bank money instruments in which the Money Fund invests must be issued by
depository institutions with total assets of at least $1 billion, except that
up to 10% of total assets (taken at market value) may be invested in
certificates of deposit of smaller institutions if such certificates of deposit
are Federally insured. Investments in Eurodollar and Yankeedollar obligations
may not exceed 25% of total assets. For purposes of this requirement, the Money
Fund treats bank money instruments issued by U.S. branches or subsidiaries of
foreign banks as obligations issued by domestic banks (not subject to the 25%
limitation) if the branch or subsidiary is subject to the same banking
regulation as U.S. banks.
The Money Fund's investments in short-term corporate, partnership and trust
debt and bank money instruments will be rated, or will be issued by issuers who
have been rated, in one of the two highest rating categories for short-term
debt obligations by a nationally recognized statistical rating organization (an
"NRSRO") or, if not rated, will be of comparable quality as determined by the
Trustees of the Money Fund. The Money Fund's investments in corporate,
partnership and trust bonds and debentures (which must have maturities at the
date of purchase of 397 days (13 months) or less) will be in issuers who have
received from an NRSRO a rating, with respect to a class of short-term debt
obligations that is comparable in priority and security with the investment, in
one of the two highest rating categories for short-term obligations or, if not
rated, will be of comparable quality as determined by the Trustees of the Money
Fund. Currently, there are
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<PAGE>
six NRSROs: Duff & Phelps Corporation, Fitch Investors Service, Inc., IBCA
Limited and its affiliate IBCA Inc., Thompson BankWatch, Inc., Moody's
Investors Service, Inc. and Standard & Poor's Ratings Group.
Securities and Exchange Commission regulations limit investments by the Money
Fund in securities issued by any one issuer (other than the U.S. Government,
its agencies or instrumentalities) ordinarily to not more than 5% of its total
assets, or in the event that such securities do not have the highest rating,
not more than 1% of its total assets. In addition, such regulations require
that not more than 5% of the Money Fund's total assets be invested in
securities that do not have the highest rating, or are not of comparable
quality to securities with the highest rating, as determined by the Trustees of
the Money Fund.
The Money Fund may purchase money market securities on a forward commitment
basis at fixed purchase terms. The purchase of money market securities on a
forward commitment basis involves the risk that the yields available in the
market when the delivery takes place may actually be higher than those obtained
in the transaction itself; if yields increase, the value of the securities
purchased on a forward commitment basis will generally decrease. A separate
account of the Money Fund will be established with the Money Fund's custodian
consisting of cash or liquid money market securities having a market value at
all times at least equal to the amount of the forward commitment.
Investment Restrictions. The Money Fund has adopted a number of restrictions
and policies relating to the investment of its assets and its activities, which
are fundamental policies and may not be changed without the approval of the
holders of a majority of the Money Fund's outstanding voting securities as
defined in the Investment Company Act of 1940. Among the more significant
restrictions, the Money Fund may not: (1) purchase any securities other than
(i) money market securities and (ii) the other investments described under
"Investment Objectives and Policies"; (2) invest more than 25% of its total
assets (taken at market value at the time of each investment) in the securities
of issuers in any particular industry (other than U.S. Government securities,
U.S Government agency securities, or domestic bank money instruments); (3)
purchase the securities of any one issuer, other than the U.S. Government, its
agencies or instrumentalities, if immediately after the purchase, more than 5%
of the value of its total assets (taken at market value) would be invested in
that issuer, except that, with respect to 25% of the value of the Money Fund's
total assets, the Money Fund may invest up to 10% of its total assets in bank
money instruments or repurchase agreements with any one bank; (4) purchase more
than 10% of the outstanding securities of an issuer except that this
restriction shall not apply to U.S. Government or Government agency securities,
bank money instruments and repurchase agreements; or (5) enter into repurchase
agreements if, as a result, more than 10% of its total assets (taken at market
value at the time of each investment) would be subject to repurchase agreements
maturing in more than seven days.
MANAGEMENT OF THE MONEY FUND
TRUSTEES
The Trustees of the Money Fund consist of six individuals, five of whom are
not "interested persons" of the Money Fund as defined in the Investment Company
Act of 1940, as amended (the "Investment Company
8
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Act"). The Trustees of the Money Fund are responsible for the overall
supervision of the operations of the Money Fund and perform the various duties
imposed on the directors of investment companies by the Investment Company Act.
The Trustees of the Money Fund are:
Arthur Zeikel*--President of the Manager; Executive Vice President of
Merrill Lynch & Co., Inc. ("ML&Co."); Executive Vice President of Merrill
Lynch; President and Director of Princeton Services, Inc. ("Princeton
Services"); and Director of Merrill Lynch Funds Distributor, Inc. (the
"Distributor").
Ronald W. Forbes--Professor of Finance, School of Business, State
University of New York at Albany.
Cynthia A. Montgomery--Professor of Finance, Harvard Business School.
Charles C. Reilly--Self-employed financial consultant; former President and
Chief Investment Officer of Verus Capital Inc.; Senior Vice President of
Arnhold and S. Bleichroeder, Inc.; Adjunct Professor, Columbia University
Graduate School of Business, 1990.
Kevin A. Ryan--Professor of Education, Boston University; founder and
current Director of the Boston University Center for the Advancement of
Ethics and Character.
Richard R. West--Professor of Finance and former Dean, New York University
Leonard N. Stern School of Business Administration.
- --------
* Interested person, as defined in the Investment Company Act, of the Money
Fund.
MANAGEMENT AND ADVISORY ARRANGEMENTS
The Manager is owned and controlled by ML&Co., a financial services holding
company and the parent of Merrill Lynch. The Manager or an affiliate of the
Manager, Merrill Lynch Asset Management, L.P. ("MLAM") acts as the investment
adviser for more than 130 registered investment companies and provides
investment advisory services to individual and institutional accounts. As of
May 31, 1995, the Manager and MLAM had a total of approximately $178.0 billion
in investment company and other portfolio assets under management, including
accounts of certain affiliates of MLAM.
The management agreement with the Manager (the "Management Agreement")
provides that, subject to the direction of the Trustees, the Manager is
responsible for the actual management of the Money Fund's portfolio and
constantly reviews the Money Fund's holdings in light of its own research
analysis and that from other relevant sources. The responsibility for making
decisions to buy, sell or hold a particular security rests with the Manager
subject to the review of the Board of Directors. The Manager performs certain
of the other administrative services and provides all the office space,
facilities, equipment and necessary personnel for portfolio management of the
Money Fund.
Pursuant to the Management Agreement, the Manager receives a fee from the
Money Fund at the end of each month at the annual rate of 0.50% of the first
$500 million of average daily net assets of the Money Fund, 0.425% of average
daily net assets in excess of $500 million but not exceeding $1 billion, and
0.375% of average daily net assets in excess of $1 billion. During the fiscal
year ended February 28, 1995, the total
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<PAGE>
management fee paid, prior to any reimbursement, by the Money Fund to the
Manager aggregated $5,722,106 (based on average net assets of approximately
$1.3 billion) and the effective fee rate was 0.44%. During the same period, the
Manager reimbursed $517,025 to the Money Fund pursuant to arrangements to limit
the Money Fund's operating expenses, and the effective fee rate after such
reimbursement was 0.40%. At May 31, 1995, the net assets of the Money Fund
aggregated approximately $1.5 billion. At this asset level, the annual
effective fee rate would be approximately 0.43% of average net assets and the
annual management fee would aggregate approximately $6.7 million.
The Management Agreement obligates the Money Fund to pay certain expenses
incurred in its operations, including, among other things, the management fee,
legal and audit fees, unaffiliated Trustees' fees and expenses, registration
fees, custodian and transfer agency fees, accounting and pricing costs, and
certain of the costs of printing proxies, shareholder reports, prospectuses and
statements of additional information. Accounting services are provided to the
Money Fund by the Manager, and the Money Fund reimburses the Manager for its
costs in connection with such services. For the fiscal year ended February 28,
1995, the amount of such reimbursement was $107,165. During the fiscal year
ended February 28, 1995, the ratio of operating expenses, net of reimbursement,
to average net assets was 0.77%.
For information as to the distribution fee to be paid by the Money Fund to
Merrill Lynch and Broadcort pursuant to a Distribution Agreement, see "Purchase
of Shares".
TRANSFER AGENCY SERVICES
Pursuant to a transfer agency, shareholder servicing agency and proxy agency
agreement (the "Transfer Agency Agreement") between the Money Fund and Merrill
Lynch Financial Data Services, Inc. (the "Transfer Agent"), a wholly-owned
subsidiary of ML&Co., the Transfer Agent is responsible for the issuance,
transfer and redemption of shares and the opening and maintenance of
shareholder accounts. The Money Fund pays the Transfer Agent a fee of $10.00
per account plus out-of-pocket expenses. During the fiscal year ended February
28, 1995 (during a portion of which a lower fee schedule was in effect), the
Money Fund's payments to the Transfer Agent pursuant to the Transfer Agency
Agreement, including reimbursement of out-of-pocket expenses, aggregated
$2,484,681. At May 31, 1995, the Money Fund had 252,976 shareholder accounts.
At this level of accounts, the annual fee payable to the Transfer Agent would
aggregate approximately $1.3 million.
PURCHASE OF SHARES
The Money Fund is offering its shares without sales charge at a public
offering price equal to the net asset value (normally $1.00 per share) next
determined after receipt by the Money Fund of the purchase order. Shares
purchased will receive the next dividend declared after the shares are issued,
which will be immediately prior to the 12 noon, New York time, pricing on the
following business day. A purchase order will not become effective until cash
in the form of Federal funds becomes available to the Money Fund (see below for
information as to when the Money Fund receives such funds). Purchases of shares
will be made pursuant to the procedures described below.
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<PAGE>
PURCHASE OF SHARES BY CAPITAL BUILDER SM ACCOUNT AND BROADCORT CAPITAL ACCOUNT
SUBSCRIBERS
Automatic Purchases. Cash balances arising in the Securities Account of a
Capital Builder SM Account or Broadcort Capital Account subscriber are
automatically invested in shares of the Money Fund not later than the first
business day of each week on which both the New York Stock Exchange and New
York banks are open, which normally will be Monday. Subscribers to the Capital
Builder SM Account and the Broadcort Capital Account also are able to have free
credit balances deposited in money market deposit accounts maintained with
depository institutions. This Prospectus does not purport to describe such
programs and prospective participants in such programs are referred to the
brochure which is available with respect thereto. Cash balances may arise from
securities activity in the Securities Account, dividend and interest payments
or cash deposits made by the subscriber. Cash balances arising from the
following transactions will be automatically invested prior to the automatic
weekly sweeps. Cash balances arising from the sale of securities which do not
settle on the day of the transactions (such as most common and preferred stock
transactions) and from principal repayment on debt securities become available
to the Money Fund and will be invested in shares on the business day following
receipt of the proceeds with respect thereto in the Capital Builder SM Account
or Broadcort Capital Account. Proceeds from the sale of shares of Merrill Lynch
Ready Assets Trust and Merrill Lynch U.S.A. Government Reserves, and from the
sale of securities settling on a same day basis also become available to the
Money Fund and will be invested in shares on the next business day following
receipt. A Capital Builder SM Account or Broadcort Capital Account subscriber
desiring to effect a purchase order for Money Fund shares by making a cash
deposit in his Securities Account should make such deposit on the business day
preceding the day of the weekly sweep before the cashiering deadline of the
brokerage office in which the deposit is to be made in order for such cash
deposit to be invested in Money Fund shares through the weekly sweep. A
subscriber desiring to make a cash deposit should contact his financial
consultant or registered representative for information concerning the
cashiering deadline of his local brokerage office.
Manual Purchases. Subscribers to the Capital Builder SM Account or Broadcort
Capital Account may make manual investments of $1,000 or more at any time in
shares of the Money Fund. Manual investments may be made from cash balances in
the subscriber's Securities Account which arise from cash deposits or other
activity. Manual purchases shall be effective on the day following the day the
order is placed from Merrill Lynch or the selected dealer except that orders
involving cash deposits become effective on the second business day thereafter
if they are placed after the cashiering deadline referred to in the preceding
paragraph. In addition, manual purchases of $500,000 or more can be made
effective on the same day the order is placed with Merrill Lynch provided that
requirements as to timely notification and transfer of a Federal funds wire in
the proper amount are met. Money Fund customers desiring further information on
this method of purchasing shares should contact their Financial Consultants.
Merrill Lynch, Broadcort and the selected dealers reserve the right to
terminate a subscriber's participation in the respective Capital Builder SM
Account or Broadcort Capital Account programs for any reason.
All purchases of Money Fund shares and dividend reinvestments will be
confirmed to Capital Builder SM Account and Broadcort Capital Account
subscribers (rounded to the nearest share) in the transaction statement which
is sent to all participants in such Accounts monthly.
Individuals who purchase shares of the Money Fund through a Securities
Account will be subject to the annual program participation fee. In order to
receive all the services available to Capital Builder SM Account
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<PAGE>
or Broadcort Capital Account subscribers, such individuals must complete the
account opening process, including completing or supplying requested
documentation.
Merrill Lynch (or Broadcort if applicable) will transmit payment to the
Money Fund on behalf of the investor and will supply the Money Fund with the
required account information. If the investor can provide Merrill Lynch (or
Broadcort if applicable) with immediately available funds, Merrill Lynch (or
Broadcort if applicable) will be able to transmit such funds to the Money Fund
in an expeditious manner. Since there is a three-day settlement period
applicable to the sale of most securities, delays may occur when an investor
is liquidating other investments for investment in the Money Fund.
PURCHASE OF SHARES BY NON-CAPITAL BUILDER SM ACCOUNT AND NON-BROADCORT CAPITAL
ACCOUNT SUBSCRIBERS
Shares of the Money Fund may be purchased by investors maintaining accounts
directly with the Transfer Agent. Shareholders of the Money Fund not
subscribing to the Capital Builder SM Account or the Broadcort Capital Account
programs will not be charged the applicable program fee but will not receive
any of the additional services available to Capital Builder SM Account or
Broadcort Capital Account subscribers, such as the Visa (R) Account or the
automatic investment of free credit balances. The minimum initial purchase for
non-program subscribers is $5,000 and the minimum subsequent purchase is
$1,000. Investors desiring to purchase shares directly through the Transfer
Agent as described below should contact Merrill Lynch Financial Data Services,
Inc., Transfer Agency Money Market Operations, P.O. Box 45290, Jacksonville,
Florida 32239-5290.
Payment to the Transfer Agent. Investors who are not subscribers to the
Capital Builder SM Account program or the Broadcort Capital Account program
may submit purchase orders directly by mail or otherwise to the Transfer
Agent. Purchase orders by mail should be sent to Merrill Lynch Financial Data
Services, Inc., Transfer Agency Money Market Operations, P.O. Box 45290,
Jacksonville, Florida 32232-5290. Purchase orders which are sent by hand
should be delivered to Merrill Lynch Financial Data Services, Inc., Transfer
Agency Money Market Operations, 4800 Deer Lake Drive East, Jacksonville,
Florida 32246-6484. Investors opening a new account must enclose a completed
Purchase Application which is available from Merrill Lynch Financial Data
Services, Inc. Existing shareholders should enclose the detachable stub from a
monthly account statement which they have received. Checks should be made
payable to Merrill Lynch, Pierce, Fenner & Smith Incorporated. Certified
checks are not necessary, but checks are accepted subject to collection at
full face value in U.S. funds and must be drawn in U.S. dollars on a U.S.
bank. Payments for the accounts of corporations, foundations and other
organizations may not be made by third party checks.
The Money Fund has entered into a distribution agreement with Merrill Lynch,
a wholly-owned subsidiary of ML&Co., and Broadcort (the "Distribution
Agreement"). Broadcort, a wholly-owned subsidiary of Merrill Lynch, conducts a
securities clearing business. Pursuant to the Distribution Agreement, the
shares of the Money Fund are offered exclusively (i) by Merrill Lynch to
subscribers to the Capital Builder SM Account program of Merrill Lynch, (ii)
by Broadcort to selected dealers for resale to subscribers to the Broadcort
Capital Account program and (iii) to investors maintaining accounts directly
with the Transfer Agent.
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<PAGE>
The Money Fund also has adopted a distribution and shareholder servicing
plan in compliance with Rule 12b-1 under the Investment Company Act (the
"Distribution Plan"). The Distribution Plan authorizes the Money Fund to pay
Merrill Lynch and Broadcort a distribution fee at the end of each month at the
annual rate of 0.125% of average daily net assets of the Money Fund
attributable to subscribers to the respective Capital Builder SM Account and
Broadcort Capital Account programs and to pay Merrill Lynch or Broadcort a fee
at the same rate with regard to net assets of the Money Fund attributable to
investors maintaining securities accounts at Merrill Lynch (or Broadcort if
applicable) and to investors maintaining accounts directly with the Transfer
Agent who are not subscribers to such programs, except that the value of Money
Fund shares in accounts maintained directly with the Transfer Agent which are
not serviced by Merrill Lynch financial consultants will be excluded. The
Distribution Plan reimburses Merrill Lynch and Broadcort only for actual
expenses incurred in the fiscal year in which the fee is paid. The Merrill
Lynch distribution fee is to compensate Merrill Lynch financial consultants
and other directly involved Merrill Lynch personnel for selling shares of the
Money Fund and for providing direct personal services to shareholders. The
Broadcort distribution fee is to compensate selected dealers for activities
and services related to the sale, promotion and marketing of shares of the
Money Fund. The Distribution Plan authorizes Broadcort to enter into sub-
agreements with selected dealers.
During the fiscal year ended February 28, 1995, $1,581,431 was paid to
Merrill Lynch and Broadcort pursuant to the distribution arrangements (based
on average net assets subject to the Distribution Plan of approximately $1.3
billion). At May 31, 1995, the net assets of the Money Fund subject to the
Distribution Plan aggregated approximately $1.5 billion. At this asset level,
the annual fee pursuant to the Distribution Plan would aggregate approximately
$1.9 million.
REDEMPTION OF SHARES
The Money Fund is required to redeem for cash all full and fractional shares
of the Money Fund. The redemption price is the net asset value per share next
determined after receipt by the Transfer Agent of proper notice of redemption
as described in accordance with either the automatic or manual procedures set
forth below. If notice is received by the Transfer Agent prior to the 12 noon,
New York time, pricing on any business day, the redemption will be effective
on that day. If the notice is received after 12 noon, New York time, the
redemption will be effective on the next business day. Payment of the
redemption proceeds will be made on the same day the redemption becomes
effective.
REDEMPTION OF SHARES BY CAPITAL BUILDER SM ACCOUNT AND BROADCORT CAPITAL
ACCOUNT SUBSCRIBERS
Automatic Redemptions. Redemptions will be automatically effected by Merrill
Lynch or Broadcort to satisfy debit balances in the Securities Account created
by activity therein or to satisfy debit balances created by Visa (R) card
purchases, cash advances or checks written against the Visa (R) Account. Each
Securities Account of a Capital Builder SM Account or Broadcort Capital
Account subscriber will be automatically scanned for debits each business day
prior to 12 noon, New York time. After application of any cash balances in the
account to these debits, shares of the Money Fund will be redeemed at net
asset value at the 12 noon, New York time, pricing to the extent necessary to
satisfy any remaining debits in either the Securities Account
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<PAGE>
or the Visa (R) Account. If the Securities Account is a margin account, margin
loans will be utilized to satisfy debits remaining after the liquidation of
all funds invested in the Money Fund, and shares of the Money Fund may not be
purchased until all debits and margin loans in the Capital Builder SM Account
or Broadcort Capital Account are satisfied.
Manual Redemptions. Shareholders may redeem shares of the Money Fund
directly by submitting a written notice of redemption directly to Merrill
Lynch or the selected dealer, respectively, which will submit the requests to
the Money Fund's Transfer Agent. Cash proceeds from the manual redemption of
the Money Fund shares will be ordinarily mailed to the shareholder at his
address of record, or upon request, mailed or wired (if $10,000 or more) to
his bank account. Redemption requests should not be sent to the Money Fund or
the Transfer Agent. If inadvertently sent to the Money Fund or the Transfer
Agent, they will be forwarded to Merrill Lynch or Broadcort. The notice
requires the signatures of all persons in whose name the shares are
registered, signed exactly as their names appear on their statements.
Shareholders desiring to effect manual redemptions should contact their
financial consultant or registered representative.
All redemptions of Money Fund shares will be confirmed to Capital Builder SM
Account and Broadcort Capital Account subscribers (rounded to the nearest
share) in the transaction statement which is sent to all participants in such
accounts monthly.
REDEMPTION OF SHARES BY NON-CAPITAL BUILDER SM ACCOUNT AND NON-BROADCORT
CAPITAL ACCOUNT SUBSCRIBERS
Shareholders may redeem shares of the Money Fund held in a Merrill Lynch
securities account directly by submitting a written notice of redemption
directly to Merrill Lynch, which will submit the requests to the Money Fund's
Transfer Agent as described above under "Redemption of Shares--Redemption of
Shares by Capital Builder SM Account and Broadcort Capital Account
Subscribers--Manual Redemptions".
Shareholders maintaining an account directly with the Transfer Agent may
redeem shares of the Money Fund directly by submitting a written notice by
mail directly to the Transfer Agent, Merrill Lynch Financial Data Services,
Inc., Transfer Agency Money Market Operations, P.O. Box 45290, Jacksonville,
Florida 32232-5290. Redemption requests which are sent by hand should be
delivered to Merrill Lynch Financial Data Services, Inc., Transfer Agency
Money Market Operations, 4800 Deer Lake Drive East, Jacksonville, Florida
32246-6484. Cash proceeds from the manual redemption of Money Fund shares will
be mailed to the shareholder at his address of record. Redemption requests
should not be sent to the Money Fund or Merrill Lynch. If inadvertently sent
to the Money Fund or Merrill Lynch such redemption requests will be forwarded
to the Transfer Agent. The notice requires the signatures of all persons in
whose name the shares are registered, signed exactly as their names appear on
their monthly statement. The signature(s) on the redemption request must be
guaranteed by an "eligible guarantor institution" as such is defined in Rule
17Ad-15 under the Securities Exchange Act of 1934, the existence and validity
of which may be verified by the Transfer Agent through the use of industry
publications. Notarized signatures are not sufficient. In certain instances,
additional documents such as, but not limited to, trust instruments, death
certificates, appointments as executor or administrator, or certificates of
corporate authority may be required.
----------------
At various times the Money Fund may be requested to redeem shares in manual
or automatic redemptions with respect to which good payment for shares
purchased has not yet been received by Merrill Lynch or the selected dealer.
The Money Fund may delay, or cause to be delayed, the payment of the
redemption proceeds until such time as good payment has been collected for the
purchase of such shares. Normally, this delay will not exceed 10 days.
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<PAGE>
PORTFOLIO TRANSACTIONS
The money market securities in which the Money Fund invests are traded
primarily in the over-the-counter market. Where possible, the Money Fund will
deal directly with the dealers who make a market in the securities involved
except in those circumstances where better prices and execution are available
elsewhere. Such dealers usually are acting as principal for their own account.
On occasion, securities may be purchased directly from the issuer. Money market
securities are generally traded on a net basis and do not normally involve
either brokerage commissions or transfer taxes. The cost of executing portfolio
transactions will primarily consist of dealer spreads and underwriting
commissions. Under the Investment Company Act, persons affiliated with the
Money Fund are prohibited from dealing with the Money Fund as a principal in
the purchase and sale of securities unless an exemptive order allowing such
transactions is obtained from the Securities and Exchange Commission.
Affiliated persons of the Money Fund may serve as its broker in over-the-
counter transactions conducted on an agency basis. The Securities and Exchange
Commission has issued an exemptive order permitting the Money Fund to conduct
certain principal transactions with Merrill Lynch Government Securities Inc.,
its subsidiary Merrill Lynch Money Markets Inc. and Merrill Lynch, subject to
certain terms and conditions. During the fiscal year ended February 28, 1995,
the Money Fund engaged in 33 transactions pursuant to such order aggregating
approximately $467.1 million.
ADDITIONAL INFORMATION
DIVIDENDS
Dividends are declared and reinvested daily in the form of additional shares
at net asset value. Shareholders will receive statements monthly as to such
reinvestments. Shareholders liquidating their holdings will receive upon
redemption all dividends declared and reinvested through the date of
redemption. Since the net income (including realized gains and losses on the
portfolio assets) is declared as a dividend in shares each time the net income
of the Money Fund is determined, the net asset value per share of the Money
Fund normally remains constant at $1.00 per share.
Net income (from the time of the immediate preceding determination thereof)
consists of (i) interest accrued and/or discount earned (including both
original issue and market discount), (ii) plus or minus all realized gains and
losses, if any, on portfolio securities, (iii) less amortization of premiums
and the estimated expenses of the Money Fund applicable to that dividend
period.
DETERMINATION OF NET ASSET VALUE
The net asset value of the Money Fund is determined by the Manager at 12
noon, New York time, on each day the New York Stock Exchange or New York banks
are open for business, immediately after the daily declaration of dividends.
The net asset value is determined pursuant to the "penny rounding" method by
adding the fair value of all securities and other assets in the portfolio,
deducting the portfolio's liabilities and dividing by the number of shares
outstanding. The result of this computation will be rounded to the nearest
whole cent. It is anticipated that the net asset value per share will remain
constant at $1.00 per share, but no assurance can be offered in this regard.
Securities with remaining maturities of greater than 60 days
15
<PAGE>
for which market quotations are readily available will be valued at market
value. Securities with remaining maturities of 60 days or less will be valued
on an amortized cost basis, i.e. by valuing the instrument at its cost and
thereafter assuming a constant amortization to maturity of any discount or
premium, regardless of the impact of fluctuating interest rates on the market
value of the instrument. Other securities held by the Money Fund will be valued
at their fair value as determined in good faith by or under direction of the
Board of Trustees.
TAXES
The Money Fund intends to continue to qualify for the special tax treatment
afforded regulated investment companies ("RICs") under the Internal Revenue
Code of 1986, as amended (the "Code"). If it so qualifies, the Money Fund (but
not its shareholders) will not be subject to Federal income tax on the part of
its net ordinary income and net realized capital gains which it distributes to
shareholders. The Money Fund intends to distribute substantially all of such
income.
Dividends paid by the Money Fund from its ordinary income and distributions
of the Money Fund's net realized short-term capital gains (together referred to
hereafter as "ordinary income dividends") are taxable to shareholders as
ordinary income. Distributions made from the Money Fund's net realized long-
term capital gains ("capital gain dividends") are taxable to shareholders as
long-term capital gains, regardless of the length of time the shareholder has
owned Money Fund shares. Distributions in excess of the Money Fund's earnings
and profits will first reduce the adjusted tax basis of a holder's shares and,
after such adjusted tax basis is reduced to zero, will constitute capital gains
to such holder (assuming the shares are held as a capital asset).
Dividends are taxable to shareholders even though they are reinvested in
additional shares of the Money Fund. Not later than 60 days after the close of
its taxable year, the Money Fund will provide its shareholders with a written
notice designating the amounts of any ordinary income dividends or capital gain
dividends. Distributions by the Fund, whether from ordinary income or capital
gains, will not be eligible for the dividends received deduction allowed to
corporations under the Code. If the Money Fund pays a dividend in January which
was declared in the previous October, November or December to shareholders of
record on a specified date in one of such months, then such dividend will be
treated for tax purposes as being paid by the Money Fund and received by its
shareholders on December 31 of the year in which such dividend was declared.
If the value of assets held by the Money Fund declines, the Trustees may
authorize a reduction in the number of outstanding shares in shareholders'
accounts so as to preserve a net asset value of $1.00 per share. After such a
reduction, the basis of eliminated shares would be added to the basis of
shareholders' remaining Money Fund shares, and any shareholders disposing of
shares at that time may recognize a capital loss. Distributions, including
distributions reinvested in additional shares of the Money Fund, will
nonetheless be fully taxable, even if the number of shares in shareholders'
accounts has been reduced as described above.
Ordinary income dividends paid by the Money Fund to shareholders who are
nonresident aliens or foreign entities will be subject to a 30% United States
withholding tax under existing provisions of the Code applicable to foreign
individuals and entities unless a reduced rate of withholding or a withholding
exemption is provided under applicable treaty law. Nonresident shareholders are
urged to consult their own tax advisers concerning the applicability of the
United States withholding tax.
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<PAGE>
Dividends and interest received by the Money Fund may give rise to
withholding and other taxes imposed by foreign countries. Tax conventions
between certain countries and the United States may reduce or eliminate such
taxes.
Under certain provisions of the Code, some taxpayers may be subject to a 31%
withholding tax on ordinary income dividends, capital gain dividends and
redemption payments ("backup withholding"). Generally, shareholders subject to
backup withholding will be those for whom no certified taxpayer identification
number is on file with the Money Fund or who, to the Money Fund's knowledge,
have furnished an incorrect number. When establishing an account, an investor
must certify under penalty of perjury that such number is correct and that such
investor is not otherwise subject to backup withholding.
A loss realized on a sale or exchange of shares of the Money Fund will be
disallowed if other Money Fund shares are acquired (whether through the
automatic reinvestment of dividends or otherwise) within a 61-day period
beginning 30 days before and ending 30 days after the date that the shares are
disposed of. In such a case, the basis of the shares acquired will be adjusted
to reflect the disallowed loss.
The foregoing is a general and abbreviated summary of the applicable
provisions of the Code and Treasury regulations presently in effect. For the
complete provisions, reference should be made to the pertinent Code sections
and the Treasury regulations promulgated thereunder. The Code and these
Treasury regulations are subject to change by legislative or administrative
action either prospectively or retroactively.
Ordinary income and capital gain dividends may also be subject to state and
local taxes. Certain states exempt from state income taxation dividends paid by
RICs which are derived from interest on U.S. Government obligations. State law
varies as to whether dividend income attributable to U.S. Government
obligations is exempt from state income tax.
Shareholders are urged to consult their own tax advisers regarding specific
questions as to Federal, foreign, state or local taxes. Foreign investors also
should consider applicable foreign taxes in their evaluation of an investment
in the Money Fund.
ORGANIZATION OF THE MONEY FUND
The Money Fund is an unincorporated business trust organized on March 29,
1983 under the laws of Massachusetts. It is a no-load, diversified, open-end
investment company. The Declaration of Trust permits the Trustees to issue an
unlimited number of full and fractional shares of a single class. Upon
liquidation of the Money Fund, shareholders are entitled to share pro rata in
the net assets of the Money Fund available for distribution to shareholders.
Shares are fully paid and non-assessable by the Money Fund.
Shareholders are entitled to one vote for each full share held and fractional
votes for fractional shares held in the election of Trustees (to the extent
hereafter provided) and on other matters submitted to the vote of shareholders.
There will normally be no meetings of shareholders for the purpose of electing
Trustees unless and until such time as less than a majority of the Trustees
holding office have been elected by shareholders, at which time the Trustees
then in office will call a shareholders' meeting for the election of Trustees.
Shareholders may, in accordance with the terms of the Declaration of Trust,
cause a meeting of
17
<PAGE>
shareholders to be held for the purpose of voting on the removal of Trustees.
Except as set forth above, the Trustees shall continue to hold office and may
appoint successor Trustees.
SHAREHOLDER INQUIRIES
Shareholder inquiries may be addressed to the Money Fund at the address or
telephone number set forth on the cover page of this Prospectus.
REPORTS TO SHAREHOLDERS
The fiscal year of the Money Fund ends on the last day of February of each
year. The Money Fund will send to its shareholders at least semi-annually
reports showing its portfolio securities and other information. An annual
report containing financial statements audited by independent auditors is sent
to shareholders each year.
Only one copy of each shareholder report and certain shareholder
communications will be mailed to each identified shareholder regardless of the
number of accounts such shareholder has. If a shareholder wishes to receive
separate copies of each report and communication for each of the shareholder's
related accounts the shareholder should notify in writing:
Merrill Lynch Financial Data Services, Inc.
Attn: TAMMO
P.O. Box 45290
Jacksonville, FL 32232-5290
The written notification should include the shareholder's name, address, tax
identification number and Merrill Lynch and/or mutual fund account numbers. If
you have any questions regarding this please call your Merrill Lynch Financial
Consultant or Merrill Lynch Financial Data Services, Inc. at (800) 221-7210.
----------------
The Capital Builder SM Account is also marketed by Merrill Lynch under the
registered trademark "CBA".
The Declaration of Trust establishing the Money Fund, as amended (the
"Declaration"), is on file in the office of the Secretary of the Commonwealth
of Massachusetts. The Declaration provides that the name "CBA Money Fund"
refers to the Trustees under the Declaration collectively as Trustees, but not
as individuals or personally; and no Trustee, shareholder, officer, employee
or agent of the Money Fund shall be held to any personal liability, nor shall
resort be had to their private property for the satisfaction of any obligation
or claim or otherwise in connection with the affairs of said Money Fund but
the Trust Property only shall be liable.
18
<PAGE>
Manager
Fund Asset Management, L.P.
Administrative Offices:
800 Scudders Mill Road
Plainsboro, New Jersey
Mailing Address:
P.O. Box 9011
Princeton, New Jersey 08543-9011
Distributors
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
North Tower
World Financial Center
250 Vesey Street
New York, New York 10281
Broadcort Capital Corp.
100 Church Street
New York, New York 10007
Custodian
State Street Bank and Trust Company
P.O. Box 1713
Boston, Massachusetts 02101
Transfer Agent
Merrill Lynch Financial Data Services, Inc.
Administrative Offices:
Transfer Agency Money Market Operations
4800 Deer Lake Drive East
Jacksonville, Florida 32246-6484
Mailing Address:
P.O. Box 45290 Jacksonville, Florida 32232-5290
Independent Auditors
Deloitte & Touche LLP
117 Campus Drive
Princeton, New Jersey 08540
Counsel
Brown & Wood
One World Trade Center
New York, New York 10048-0557
<PAGE>
LOGO MERRILL LYNCH
CBA(R)
MONEY FUND
CBA(R) PROSPECTUS
- --------------------------------------------------------------------------------
Shares of the
Money Fund are CBA(R)
offered to
participants
in the Capital
BuilderSM
Account
service of
Merrill Lynch,
Pierce, Fenner
& Smith
Incorporated,
to
participants
in the
Broadcort
Capital
Account
service of
Broadcort
Capital Corp.
and to
investors
maintaining
accounts
directly with
the Transfer
Agent.
Investors
should be
aware that the
Accounts are
not bank
accounts and
that a
shareholder's
investment in
the Money Fund
is not insured
by any
governmental
agency. As
with any
investment in
securities,
the value of a
shareholder's
investment in
the Money Fund
may fluctuate.
Principal Office of the
Money Fund
800 Scudders Mill Road
Plainsboro, New Jersey
Mailing Address:
P.O. Box 9011
Princeton, New Jersey
08543-9011
Code #10126-0695 June 27, 1995
<PAGE>
STATEMENT OF ADDITIONAL INFORMATION
CBA(R) MONEY FUND
P.O. BOX 9011, PRINCETON, NEW JERSEY 08543-9011 . PHONE NO. (609) 282-
2800
----------------
CBA(R) Money Fund (the "Money Fund") is a no-load money market fund whose
shares are offered to subscribers to the Capital Builder SM Account service of
Merrill Lynch, Pierce, Fenner & Smith Incorporated ("Merrill Lynch"), to
subscribers to the Broadcort Capital Account service of Broadcort Capital Corp.
("Broadcort") and to investors maintaining accounts directly with the Money
Fund's Transfer Agent. A Capital Builder SM Account and a Broadcort Capital
Account each consist of a conventional securities cash or margin account
("Securities Account") maintained at Merrill Lynch or Broadcort, respectively,
which is presently linked to the Money Fund and to a Visa (R) card/check
account ("Visa (R) Account").
A customer of Merrill Lynch and a customer of a securities firm which has
entered into a selected dealer agreement with Broadcort may subscribe to the
Capital Builder SM Account or Broadcort Capital Account program, respectively,
as set forth in the description of the respective programs discussed below.
Subject to the conditions described in the Prospectus, free credit balances in
the Securities Account of Capital Builder SM Account or Broadcort Capital
Account participants will be periodically invested in shares of the Money Fund.
This permits the subscriber to earn a return on such funds pending further
investment through other aspects of the respective Capital Builder SM Account
or Broadcort Capital Account programs or utilization through the Visa (R)
Account. The shares of the Money Fund also may be purchased by investors
maintaining accounts directly with the Money Fund's Transfer Agent. Such
investors will not receive any of the additional services available to Capital
Builder SM Account or Broadcort Capital Account subscribers, such as the
Visa (R) Account or the automatic investment of free credit balances.
Merrill Lynch charges an annual program participation fee (presently $65) for
the Capital Builder SM Account service. Broadcort charges an annual fee
(presently $75) for the Broadcort Capital Account service. Information with
respect to the respective programs is set forth in the description of such
programs or accompanying material furnished to all Account subscribers. Merrill
Lynch and Broadcort reserve the right to change the respective fees at any
time.
----------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Investment Objectives and Policies.. 2
Management of the Money Fund........ 5
Trustees and Officers.............. 5
Compensation of Trustees........... 6
Management and Advisory Arrange-
ments............................. 7
Purchase and Redemption of Shares... 9
Portfolio Transactions.............. 10
Determination of Net Asset Value.... 12
Yield Information................... 13
Taxes............................... 13
Federal............................ 13
</TABLE>
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
General Information........... 15
Description of Shares........ 15
Custodian.................... 15
Transfer Agent............... 16
Independent Auditors......... 16
Legal Counsel................ 16
Reports to Shareholders...... 16
Additional Information....... 16
Appendix...................... 17
Independent Auditors' Report.. 19
Financial Statements.......... 20
</TABLE>
----------------
This Statement of Additional Information of the Money Fund is not a
prospectus and should be read in conjunction with the Prospectus of the Money
Fund, dated June 27, 1995 (the "Prospectus"), which has been filed with the
Securities and Exchange Commission and can be obtained without charge by
calling or by writing to the Money Fund at the above telephone number or
address. This Statement of Additional Information has been incorporated by
reference into the Prospectus.
The date of this Statement of Additional Information is June 27, 1995.
<PAGE>
INVESTMENT OBJECTIVES AND POLICIES
The Money Fund is a no-load money market fund whose shares are offered to
subscribers to the Capital Builder SM Account service of Merrill Lynch, to
subscribers to the Broadcort Capital Account service of Broadcort and to
investors maintaining accounts directly with the Money Fund's Transfer Agent.
Reference is made to "Investment Objectives and Policies" in the Prospectus
for a discussion of the investment objectives and policies of the Money Fund.
As discussed in the Prospectus, the Money Fund may invest in money market
securities pursuant to repurchase agreements. Repurchase agreements may be
entered into only with a member bank of the Federal Reserve System or a
primary dealer in U.S. Government securities or an affiliate thereof. Under
such agreements, the bank or primary dealer agrees, on entering into the
contract, to repurchase the security at a mutually agreed upon time and price,
thereby determining the yield during the term of the agreement. This results
in a fixed rate of return insulated from market fluctuations during such
period. Such agreements usually cover short periods, such as under a week. The
Money Fund will require the seller to provide additional collateral if the
market value of the securities falls below the repurchase price at any time
during the term of the repurchase agreement. In the event of a default by the
seller, the Money Fund ordinarily will retain ownership of the securities
underlying the repurchase agreement, and instead of a contractually fixed rate
of return, the rate of return to the Money Fund shall be dependent upon
intervening fluctuations of the market value of such securities and the
accrued interest on the securities. In such event, the Money Fund would have
rights against the seller for breach of contract with respect to any losses
arising from market fluctuations following the failure of the seller to
perform. In certain circumstances, repurchase agreements may be construed to
be collateralized loans by the purchaser to the seller secured by the
securities transferred to the purchaser. In the event of default by the seller
under a repurchase agreement construed to be a collateralized loan, the
underlying securities are not owned by the Money Fund but only constitute
collateral for the seller's obligation to pay the repurchase price. Therefore,
the Money Fund may suffer time delays and incur costs or possible losses in
connection with the disposition of the collateral. From time to time the Money
Fund also may invest in money market securities pursuant to purchase and sale
contracts. While purchase and sale contracts are similar to repurchase
agreements, purchase and sale contracts are structured so as to be in
substance more like a purchase and sale of the underlying security than is the
case with repurchase agreements.
Also, as discussed in the Prospectus, the Money Fund may invest in
obligations issued by commercial and savings banks and savings and loan
associations. The obligations of commercial banks may be issued by U.S. banks,
foreign branches of U.S. banks ("Eurodollar" obligations) or U.S. branches of
foreign banks ("Yankeedollar" obligations). In addition, the Money Fund may
also invest in U.S. dollar-denominated obligations of foreign depository
institutions and their subsidiaries. Eurodollar and Yankeedollar obligations
and obligations of foreign depository institutions may be general obligations
of the parent bank or may be limited to the issuing branch by the terms of the
specific obligation or by government regulation. The Money Fund may also
invest in U.S. dollar-denominated commercial paper and other short-term
obligations issued by foreign entities. Such investments are subject to
quality standards similar to those applicable to investments in comparable
obligations of domestic issuers.
2
<PAGE>
Eurodollar and Yankeedollar obligations, as well as obligations of foreign
depository institutions and short-term obligations issued by other foreign
entities, involve additional investment risks from the risks of obligations of
U.S. issuers. Such investment risks include adverse political and economic
developments, the possible imposition of withholding taxes on interest income
payable on such obligations, the possible seizure or nationalization of foreign
deposits and the possible establishment of exchange controls or other foreign
governmental laws or restrictions which might adversely affect the payment of
principal and interest. Generally the issuers of such obligations are subject
to few or none of the U.S. regulatory requirements applicable to U.S. issuers.
Foreign branches of U.S. banks may be subject to less stringent reserve
requirements than U.S. banks. U.S. branches of foreign banks are subject to the
reserve requirements of the states in which they are located. There may be less
publicly available information about a U.S. branch or subsidiary of a foreign
bank or other issuer than about a U.S. bank or other issuer, and such entities
may not be subject to the same accounting, auditing and financial record
keeping standards and requirements as U.S. issuers. Evidence of ownership of
Eurodollar and foreign obligations may be held outside of the United States,
and the Money Fund may be subject to the risks associated with the holding of
such property overseas. Eurodollar and foreign obligations of the Money Fund
held overseas will be held by foreign branches of the Money Fund's custodian or
by other U.S. or foreign banks under subcustodian arrangements complying with
the requirements of the Investment Company Act of 1940, as amended (the
"Investment Company Act").
The manager of the Money Fund, Fund Asset Management, L.P. (the "Manager"),
will carefully consider the above factors in making investments in Eurodollar
obligations, Yankeedollar obligations of foreign depository institutions and
other foreign short-term obligations and will not knowingly purchase
obligations which, at the time of purchase, are subject to exchange controls or
withholding taxes. Generally, the Money Fund will limit its Yankeedollar
investments to obligations of banks organized in Canada, France, Germany,
Japan, the Netherlands, Switzerland, the United Kingdom and other western
industrialized nations.
The Money Fund's investments in short-term corporate, partnership and trust
debt and bank money instruments will be rated, or will be issued by issuers who
have been rated, in one of the two highest rating categories for short-term
debt obligations by a nationally recognized statistical rating organization (an
"NRSRO") or, if not rated, will be of comparable quality as determined by the
Trustees of the Money Fund. The Money Fund's investments in corporate,
partnership and trust bonds and debentures (which must have maturities at the
date of purchase of 397 days (13 months) or less) will be in issuers who have
received from an NRSRO a rating with respect to a class of short-term debt
obligations that is comparable in priority and security with the investment in
one of the two highest rating categories for short-term obligations or if not
rated, will be of comparable quality as determined by the Trustees of the Money
Fund. Currently, there are six NRSROs: Duff & Phelps Corporation, Fitch
Investors Service, Inc., IBCA Limited and its affiliate IBCA Inc., Thompson
BankWatch, Inc., Moody's Investors Service, Inc. and Standard & Poor's Ratings
Group. See "Appendix--Description of Commercial Paper, Bank Money Instruments
and Corporate Bond Ratings".
In addition to the investment restrictions set forth in the Prospectus, the
Money Fund has adopted the following restrictions and policies relating to the
investment of its assets and its activities, which are fundamental policies and
may not be changed without the approval of the holders of a majority of the
Money Fund's outstanding voting securities (which for this purpose means the
lesser of (i) 67% of the shares represented at a meeting at which more than 50%
of the outstanding shares are represented or (ii) more than
3
<PAGE>
50% of the outstanding shares). The Money Fund may not (1) make investments for
the purpose of exercising control or management; (2) underwrite securities
issued by other persons; (3) purchase securities of other investment companies,
except in connection with a merger, consolidation, acquisition or
reorganization; (4) purchase or sell real estate (other than money market
securities secured by real estate or interests therein or money market
securities issued by companies which invest in real estate or interests
therein), commodities or commodity contracts, interests in oil, gas or other
mineral exploration or development programs; (5) purchase any securities on
margin, except for the use of short-term credit necessary for clearance of
purchase and sales of portfolio securities; (6) make short sales of securities
or maintain a short position or write, purchase or sell puts, calls, straddles,
spreads or combinations thereof; (7) make loans to other persons, provided that
the Money Fund may purchase money market securities or enter into repurchase
agreements or purchase and sale contracts and lend securities owned or held by
it pursuant to (8) below; (8) lend its portfolio securities in excess of 33
1/3% of its total assets, taken at market value, provided that such loans are
made according to the guidelines set forth below; (9) borrow amounts in excess
of 20% of its total assets, taken at market value (including the amount
borrowed), and then only from banks as a temporary measure for extraordinary or
emergency purposes (the borrowing provisions shall not apply to reverse
repurchase agreements) [Usually only "leveraged" investment companies may
borrow in excess of 5% of their assets; however, the Money Fund will not borrow
to increase income but only to meet redemption requests which might otherwise
require untimely dispositions of portfolio securities. The Money Fund will not
purchase securities while borrowings are outstanding. Interest paid on such
borrowing will reduce net income.]; (10) mortgage, pledge, hypothecate or in
any manner transfer (except as provided in (8) above) as security for
indebtedness any securities owned or held by the Money Fund except as may be
necessary in connection with borrowings referred to in investment restriction
(9) above, and then such mortgaging, pledging or hypothecating may not exceed
10% of the Money Fund's net assets, taken at market value; (11) invest in
securities with legal or contractual restrictions on resale (except for
repurchase agreements) or for which no readily available market exists if,
regarding all such securities, more than 10% of its net assets (taken at market
value) would be invested in such securities; (12) invest in securities of
issuers (other than U.S. Government agency securities) having a record,
together with predecessors, of less than three years of continuous operation
if, regarding all such securities, more than 5% of its total assets (taken at
market value) would be invested in such securities; (13) invest in securities
or investments referred to in investment restriction (11) above and investment
restriction (5) in the Prospectus if, regarding all such securities and
investments, more than 10% of the Money Fund's total assets (taken at market
value) would be invested in such securities or investments; (14) enter into
reverse repurchase agreements if, as a result thereof, the Money Fund's
obligations with respect to reverse repurchase agreements would exceed one-
third of its net assets (defined to be total assets, taken at market value,
less liabilities other than reverse repurchase agreements); and (15) purchase
or retain the securities of any issuer, if those individual officers and
Trustees of the Money Fund, Merrill Lynch Asset Management, L.P. ("MLAM") or
any subsidiary thereof each owning beneficially more than 1/2 of 1% of the
securities of such issuer own in the aggregate more than 5% of the securities
of the issuer.
Lending of Portfolio Securities. Subject to investment restriction (8) above,
the Money Fund may from time to time lend securities from its portfolio to
brokers, dealers and financial institutions and receive collateral in cash or
securities issued or guaranteed by the U.S. Government which will be maintained
at all times in an amount equal to at least 100% of the current market value of
the loaned securities. Such cash
4
<PAGE>
collateral will be invested in short-term securities, the income from which
will increase the return to the Money Fund. Such loans will be terminable at
any time. The Money Fund will have the right to regain record ownership of
loaned securities to exercise beneficial rights and may do so when deemed
appropriate. The Money Fund may pay reasonable fees in connection with the
arranging of such loans.
MANAGEMENT OF THE MONEY FUND
TRUSTEES AND OFFICERS
The Trustees and executive officers of the Money Fund, their ages and their
principal occupations for at least the last five years are set forth below.
Unless otherwise noted, the address of each Trustee and executive officer is
P.O. Box 9011, Princeton, New Jersey 08543-9011.
Arthur Zeikel (63)--President and Trustee (1)(2)--President of the Manager
(which term as used herein includes its corporate predecessor) since 1977;
President of MLAM since 1977 (which term as used herein includes its corporate
predecessor); President and Director of Princeton Services, Inc. ("Princeton
Services") since 1993; Executive Vice President of Merrill Lynch & Co., Inc.
("ML & Co.") since 1990; Executive Vice President of Merrill Lynch since 1990
and Senior Vice President thereof from 1985 to 1990; Director of Merrill Lynch
Funds Distributor, Inc. ("MLFD").
Ronald W. Forbes (54)--Trustee (2)--1400 Washington Avenue, Albany, New York
12222. Professor of Finance, School of Business, State University of New York
at Albany since 1989 and Associate Professor prior thereto; Member, Task Force
on Municipal Securities Markets, Twentieth Century Fund.
Cynthia A. Montgomery (42)--Trustee (2)--Harvard Business School, Soldiers
Field Road, Boston, Massachusetts 20163. Professor, Harvard Business School
since 1989; Associate Professor, J.L. Kellogg Graduate School of Management,
Northwestern University from 1985 to 1989; Assistant Professor, Graduate School
of Business Administration, The University of Michigan from 1979 to 1985;
Director, UNUM Corporation.
Charles C. Reilly (64)--Trustee (2)--9 Hampton Harbor Road, Hampton Bays, NY
11946. Self-employed financial consultant since 1990; President and Chief
Investment Officer of Verus Capital, Inc. from 1979 to 1990; Senior Vice
President of Arnhold and S. Bleichroeder, Inc. from 1973 to 1990; Adjunct
Professor, Columbia University Graduate School of Business, 1990; Adjunct
Professor, Wharton School, University of Pennsylvania, 1990.
Kevin A. Ryan (62)--Trustee (2)--127 Commonwealth Avenue, Chestnut Hill,
Massachusetts 02167. Founder, current Director and Professor of The Boston
University Center for the Advancement of Ethics and Character; Professor of
Education at Boston University from 1982 until 1994; formerly taught on the
faculties of the University of Chicago, Stanford University and The Ohio State
University.
Richard R. West (57)--Trustee (2)--482 Tepi Drive, Southbury, Connecticut
06488. Professor of Finance since 1984, and Dean from 1984 to 1993, New York
University Leonard N. Stern School of Business
5
<PAGE>
Administration; Professor of Finance at the Amos Tuck School of Business
Administration from 1976 to 1984, and Dean from 1976 to 1983; Director,
Vornado, Inc. (real estate investment trust), Bowne & Co., Inc. (financial
printer), Smith Corona Corporation (manufacturer of typewriters and word
processors) and Alexander's Inc. (real estate company).
Terry K. Glenn (54)--Executive Vice President (1)(2)--Executive Vice
President of the Manager and MLAM since 1983; Executive Vice President and
Director of Princeton Services since 1993; President of MLFD since 1986 and
Director thereof since 1991; President of Princeton Administrators, L.P. (and
its corporate predecessor) since 1988.
Joseph T. Monagle, Jr. (46)--Senior Vice President (1)(2)--Senior Vice
President of the Manager and MLAM since 1990; Vice President of MLAM from 1978
to 1990; Senior Vice President of Princeton Services since 1993.
Donald C. Burke (35)--Vice President (1)(2)--Vice President and Director of
Taxation of MLAM since 1990; employee of Deloitte & Touche LLP from 1982 to
1990.
Carlo J. Giannini (51)--Vice President (1)(2)--Vice President of MLAM since
1981.
Kevin J. McKenna (38)--Vice President (1)(2)--Vice President of MLAM since
1985.
Gerald M. Richard (46)--Treasurer (1)(2)--Senior Vice President and Treasurer
of the Manager and MLAM since 1984; Senior Vice President and Treasurer of
Princeton Services since 1993; Vice President of MLFD since 1981 and Treasurer
since 1984.
Robert Harris (43)--Secretary (1)(2)-- Vice President of MLAM since 1984;
Secretary of MLFD since 1982.
- --------
(1) Interested person, as defined in the Investment Company Act, of the Money
Fund.
(2) Such Trustee or officer is a director or officer of certain other
investment companies for which the Manager or MLAM acts as investment
adviser.
At May 31, 1995, the Trustees and officers of the Money Fund as a group (13
persons) owned an aggregate of less than 1% of the outstanding shares of
beneficial interest of the Money Fund. At such date, Mr. Zeikel, an officer
and Trustee of the Money Fund, and the other officers of the Money Fund, owned
less than 1% of the outstanding shares of common stock of ML&Co.
COMPENSATION OF TRUSTEES
Pursuant to the terms of its management agreement with the Money Fund (the
"Management Agreement"), the Manager pays all compensation of officers and
employees of the Money Fund as well as the fees of all Trustees of the Money
Fund who are affiliated persons of ML & Co. or its subsidiaries. The Money
Fund pays each unaffiliated Trustee a fee of $3,000 per year plus $800 per
meeting attended and pays all Trustees' actual out-of-pocket expenses relating
to attendance at meetings; the Money Fund also pays an annual fee of $1,500 to
members of its audit committee and pays all Trustees' actual out-of-pocket
expenses relating to attendance at meetings. Fees and expenses paid to the
unaffiliated Trustees aggregated $38,557 for the year ended February 28, 1995.
6
<PAGE>
The following table sets forth for the fiscal year ended February 28, 1995
compensation paid by the Money Fund to the non-interested Trustees and for the
calendar year ended December 31, 1994 the aggregate compensation paid by all
investment companies advised by MLAM and its affiliate, FAM ("MLAM/FAM Advised
Funds") to the non-interested Trustees.
<TABLE>
<CAPTION>
TOTAL COMPENSATION
FROM FUND AND
AGGREGATE PENSION OR RETIREMENT MLAM/FAM ADVISED
COMPENSATION BENEFITS ACCRUED AS PART FUNDS PAID TO
NAME OF TRUSTEE FROM FUND OF FUND EXPENSE TRUSTEES(1)
--------------- ------------ ------------------------ ------------------
<S> <C> <C> <C>
Ronald W. Forbes(1)..... $8,500 None $154,400
Cynthia A. Montgom-
ery(1)................. $6,950 None $133,817
Charles C. Reilly(1).... $8,500 None $276,900
Kevin A. Ryan(1)........ $8,500 None $154,400
Richard R. West(1)...... $9,500 None $300,900
</TABLE>
- --------
(1) In addition to the Fund, the Trustees served on the boards of other
MLAM/FAM Advised Funds as follows: Mr. Forbes (36 funds); Ms. Montgomery
(36 funds); Mr. Reilly (54 funds); Mr. Ryan (36 funds); and Mr. West (54
funds).
MANAGEMENT AND ADVISORY ARRANGEMENTS
Reference is made to "Management of the Money Fund--Management and Advisory
Arrangements" in the Prospectus for certain information concerning the
management and advisory arrangements of the Money Fund.
Subject to the direction of the Board of Trustees, the Manager performs, or
arranges for affiliates to perform, pursuant to the Management Agreement the
management and administrative services necessary for the operation of the Money
Fund. The Manager and its affiliates will provide a variety of administrative
and operational services to shareholders of the Money Fund, including
processing services related to the purchase and redemption of shares and the
general handling of shareholder relations. The Manager is responsible for the
actual management of the Money Fund's portfolio and constantly reviews the
Money Fund's holdings in light of its own research analysis and that from other
relevant sources. The responsibility for making decisions to buy, sell or hold
a particular security rests with the Manager, subject to review by the
Trustees. The Manager provides the Money Fund with office space, equipment and
facilities and such other services as the Manager, subject to supervision and
review by the Trustees, shall from time to time determine to be necessary to
perform its obligations under the Management Agreement.
Securities held by the Money Fund may also be held by, or be appropriate
investments for, other funds or clients (collectively referred to as "clients")
for which the Manager or MLAM acts as an investment adviser. Because of
different investment objectives or other factors, a particular security may be
bought for one or more clients when one or more clients are selling the
security. If purchases or sales of securities for the Money Fund or other
clients arise for consideration at or about the same time, transactions in such
securities will be made, insofar as feasible, for the respective clients in a
manner deemed equitable to all by the Manager or MLAM. To the extent that
transactions on behalf of more than one client of the Manager or MLAM during
the same period may increase the demand for securities being purchased or the
supply of securities being sold, there may be an adverse effect on price.
7
<PAGE>
The Manager presently receives a fee from the Money Fund at the end of each
month at the annual rate of 0.50% of the first $500 million of average daily
net assets of the Money Fund, 0.425% of average daily net assets in excess of
$500 million but not exceeding $1 billion, and 0.375% of average daily net
assets in excess of $1 billion. For the fiscal years ended February 28, 1993,
1994 and 1995, the total management fee payable by the Money Fund to the
Manager was $5,474,676, $5,480,451 and $5,722,106, respectively.
In the interest of minimizing the expenses of the Money Fund, the Manager has
agreed voluntarily to assume a portion of the expenses of the Money Fund. The
Manager may discontinue or reduce such assumption of expenses at any time
without notice. During the fiscal years ended February 28, 1993, 1994 and 1995,
the Manager paid $523,052, $490,737 and $517,025, respectively, to the Money
Fund pursuant to such arrangement.
The State of California imposes limitations on the operating expenses of the
Money Fund. This expense limitation requires that the Manager reimburse the
Money Fund in any amount necessary to prevent such operating expenses
(excluding interest, taxes, distribution fees, brokerage fees and commissions
and extraordinary charges such as litigation costs) of the Money Fund from
exceeding in any fiscal year 2.5% of the Money Fund's first $30 million of
average daily net assets, 2.0% of the next $70 million of average daily net
assets and 1.5% of the remaining average daily net assets. No fee payment will
be made to the Manager during the year which will cause such expenses to exceed
the pro rata expense limitation at the time of such payment.
The Management Agreement obligates the Manager to provide advisory,
administrative and management services, to furnish office space and facilities
for management of the affairs of the Money Fund, to pay all compensation of and
furnish office space for officers and employees of the Money Fund, as well as
the fees of all Trustees of the Money Fund who are affiliated persons of ML&Co.
or any of its subsidiaries. The Money Fund pays all other expenses incurred in
its operations, including, among other things, organizational expenses, taxes,
expenses for legal and auditing services, costs of printing proxies,
shareholder reports, prospectuses and statements of additional information
(except to the extent paid by the distributors), charges of the custodian and
transfer agent, expenses of redemption of shares, Securities and Exchange
Commission fees, expenses of registering the shares under Federal and state
securities laws, fees, and expenses of unaffiliated Trustees, accounting and
pricing costs (including the daily calculation of net asset value), insurance,
interest, expenses of portfolio transactions, litigation and other
extraordinary or nonrecurring expenses, and other expenses properly payable by
the Money Fund. Accounting services are provided to the Money Fund by the
Manager and the Money Fund reimburses the Manager for its costs in connection
with such services. Merrill Lynch and Broadcort will also pay for other
supplementary sales literature.
For information as to the distribution fee paid by the Money Fund to Merrill
Lynch and Broadcort pursuant to the Distribution Agreement, see "Purchase and
Redemption of Shares" below.
Duration and Termination. Unless earlier terminated as described below, the
Management Agreement will continue in effect from year to year if approved
annually (a) by the Trustees of the Money Fund or by a majority of the
outstanding shares of the Money Fund and (b) by a majority of the Trustees who
are not
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parties to such contract or interested persons (as defined in the Investment
Company Act) of any such party. Such agreement terminates upon assignment and
may be terminated without penalty on 60 days' written notice at the option of
either party thereto or by the vote of the shareholders of the Money Fund.
PURCHASE AND REDEMPTION OF SHARES
Reference is made to "Purchase of Shares" and "Redemption of Shares" in the
Prospectus for certain information as to the purchase and redemption of Money
Fund shares.
The Money Fund has entered into a distribution agreement with Merrill Lynch
and Broadcort as the distributors (the "Distribution Agreement"). The
Distribution Agreement obligates Merrill Lynch and Broadcort to pay certain
expenses in connection with the offering of the shares of the Money Fund. After
the prospectuses, statements of additional information and periodic reports
have been prepared, set in type and mailed to shareholders, Merrill Lynch and
Broadcort will pay for the printing and distribution of copies thereof used in
connection with the offering to investors. Merrill Lynch and Broadcort will
also pay for other supplementary sales literature and advertising costs. The
Distribution Agreement is subject to the same renewal requirements and
termination provisions as the Management Agreement described above.
The Money Fund has also adopted a Distribution and Shareholder Servicing Plan
in compliance with Rule 12b-1 under the Investment Company Act (the
"Distribution Plan") pursuant to which Merrill Lynch and Broadcort receive a
distribution fee under the Distribution Agreement from the Money Fund at the
end of each month at the annual rate of 0.125% of average daily net assets of
the Money Fund attributable to subscribers to the respective Capital Builder
Account and Broadcort Capital Account programs, to investors maintaining
securities accounts at Merrill Lynch or at firms which use the clearing
facilities of Broadcort who are not subscribers to such programs and to
investors maintaining accounts directly with the Transfer Agent, except that
the value of Money Fund shares in accounts maintained directly with the
Transfer Agent which are not serviced by Merrill Lynch financial consultants
will be excluded. The Distribution Plan reimburses Merrill Lynch and Broadcort
only for actual expenses incurred in the fiscal year in which the fee is paid.
The Merrill Lynch distribution fee is to compensate Merrill Lynch financial
consultants and other directly involved Merrill Lynch personnel for selling
shares of the Money Fund and for providing direct personal services to
shareholders. The Broadcort distribution fee is to compensate selected dealers
for activities and services related to the sale, promotion and marketing of
shares of the Money Fund. The distribution fee is not compensation for the
administrative and operational services rendered to the shareholders by Merrill
Lynch which are covered by the Management Agreement (see "Management of the
Money Fund -- Management and Advisory Arrangements") between the Money Fund and
the Manager. For the fiscal years ended February 28, 1993, 1994 and 1995,
$1,500,273, $1,500,403 and $1,581,431, respectively, were paid to Merrill Lynch
and Broadcort pursuant to the Distribution Plan. All of the amounts expended
for the fiscal years ended February 28, 1993, 1994 and 1995 were allocated to
Merrill Lynch and Broadcort personnel and to related administrative costs.
The payment of the distribution fee under the Distribution Agreement is
subject to the provisions of the Distribution Plan and Rule 12b-1. Among other
things, the Distribution Plan provides that Merrill Lynch and Broadcort shall
each provide and the Trustees of the Money Fund shall review quarterly reports
regarding the payment of the respective distribution fees during such period.
In their consideration of the
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Distribution Plan, the Trustees must consider all factors they deem relevant,
including information as to the benefits of the Distribution Plan to the Money
Fund and its shareholders. The Distribution Plan further provides that, so long
as the Distribution Plan remains in effect, the selection and nomination of
Trustees of the Money Fund who are not "interested persons" of the Money Fund
as defined in the Investment Company Act ("Independent Trustees") shall be
committed to the discretion of the Independent Trustees then in office. The
Distribution Plan can be terminated at any time, without penalty, by the vote
of a majority of the Independent Trustees or by the vote of the holders of a
majority of the outstanding voting securities of the Money Fund. Finally, the
Distribution Plan cannot be amended to increase materially the amount to be
spent by the Money Fund thereunder without shareholder approval, and all
material amendments are required to be approved by vote of the Trustees of the
Money Fund, including a majority of the Independent Trustees, cast in person at
a meeting called for that purpose.
The right to receive payment with respect to any redemption of Money Fund
shares may be suspended by the Money Fund for a period of up to seven days.
Suspensions of more than seven days may not be made except (1) for any period
(A) during which the New York Stock Exchange is closed other than customary
weekend and holiday closings or (B) during which trading on the New York Stock
Exchange is restricted; (2) for any period during which an emergency exists as
a result of which (a) disposal by the Money Fund of securities owned by it is
not reasonably practicable or (b) it is not reasonably practicable for the
Money Fund fairly to determine the value of its net assets; or (3) for such
other periods as the Securities and Exchange Commission may by order permit for
the protection of security holders of the Money Fund. The Commission shall by
rules and regulations determine the conditions under which (i) trading shall be
deemed to be restricted and (ii) an emergency shall be deemed to exist within
the meaning of clause (2) above.
PORTFOLIO TRANSACTIONS
The Money Fund has no obligation to deal with any dealer or group of dealers
in the execution of transactions in portfolio securities. Subject to policy
established by the Trustees and officers of the Money Fund, the Manager is
primarily responsible for the Money Fund's portfolio decisions and the placing
of the Money Fund's portfolio transactions. In placing orders, it is the policy
of the Money Fund to obtain the best net results taking into account such
factors as price (including the applicable dealer spread), the size, type and
difficulty of the transaction involved, the firm's general execution and
operational facilities, and the firm's risk in positioning the securities
involved. While the Manager generally seeks reasonably competitive spreads or
commissions, the Money Fund will not necessarily be paying the lowest spread or
commission available. The Money Fund's policy of investing in securities with
short maturities will result in high portfolio turnover.
The money market securities in which the Money Fund invests are traded
primarily in the over-the-counter market. Bonds and debentures are usually
traded over-the-counter, but may be traded on an exchange. Where possible, the
Money Fund will deal directly with the dealers who make a market in the
securities involved except in those circumstances where better prices and
execution are available elsewhere. Such dealers usually are acting as principal
for their own accounts. On occasion, securities may be purchased directly from
the issuer. The money market securities in which the Money Fund invests are
generally traded on a net basis and do not normally involve either brokerage
commissions or transfer taxes. The cost of executing portfolio securities
transactions of the Money Fund will primarily consist of dealer spreads and
underwriting commissions. Under the Investment Company Act, persons affiliated
with the Money Fund are
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prohibited from dealing with the Money Fund as a principal in the purchase and
sale of securities unless a permissive order allowing such transactions is
obtained from the Securities and Exchange Commission. Since over-the-counter
transactions are usually principal transactions, affiliated persons of the
Money Fund may not serve the Money Fund as dealer in connection with such
transactions, except pursuant to the permissive order described below. However,
affiliated persons of the Money Fund may serve as its broker in over-the-
counter transactions conducted on an agency basis. The Money Fund may not
purchase securities from any underwriting syndicate of which Merrill Lynch is a
member, except in accordance with applicable rules under the Investment Company
Act.
The Securities and Exchange Commission has issued an exemptive order
permitting all Merrill Lynch-sponsored money market funds, including the Money
Fund, to conduct principal transactions with Merrill Lynch Government
Securities Inc. ("GSI") in U.S. Government and U.S. Government agency
securities, with Merrill Lynch Money Markets Inc. ("MMI") in certificates of
deposit and other short-term bank money instruments and commercial paper and
with Merrill Lynch in fixed income securities including medium-term notes. This
order contains a number of conditions, including conditions designed to insure
that the price to the Money Fund from GSI, MMI or Merrill Lynch is at least as
favorable as that available from other sources. GSI, MMI and Merrill Lynch have
informed the Money Fund that they will in no way, at any time, attempt to
influence or control the activities of the Money Fund or the Manager in placing
such principal transactions. The permissive order allows GSI, MMI or Merrill
Lynch to receive a dealer spread on any transaction with the Money Fund no
greater than its customary dealer spread for transactions of the type involved.
Generally such spreads do not exceed 0.25% of the principal amount of the
securities involved. During the fiscal years ended February 28, 1993, 1994 and
1995, the Money Fund engaged in 50, 36 and 33 such transactions, respectively,
aggregating approximately $622.2 million, $504.8 million and $467.1 million,
respectively.
The Trustees of the Money Fund have considered the possibilities of
recapturing for the benefit of the Money Fund expenses of possible portfolio
transactions, such as dealer spreads and underwriting commissions, by
conducting such portfolio transactions through affiliated entities, including
GSI, MMI and Merrill Lynch. For example, dealer spreads received by GSI, MMI or
Merrill Lynch on transactions conducted pursuant to the permissive order
described above could be offset against the management fee payable by the Money
Fund to the Manager. After considering all factors deemed relevant, the
Trustees made a determination not to seek such recapture. The Trustees will
reconsider this matter from time to time. The Manager has arranged for the
Custodian to receive any tender offer solicitation fees on behalf of the Money
Fund payable with respect to portfolio securities of the Money Fund.
The Money Fund does not expect to use one particular dealer, but, subject to
obtaining the best price and execution, dealers who provide supplemental
investment research (such as information concerning money market securities,
economic data and market forecasts) to the Manager may receive orders for
transactions of the Money Fund. Information so received will be in addition to
and not in lieu of the services required to be performed by the Manager under
its Management Agreement and the expenses of the Manager will not necessarily
be reduced as a result of the receipt of such supplemental information.
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DETERMINATION OF NET ASSET VALUE
The net asset value of the Money Fund is determined by the Manager at 12
noon, New York time, on each day the New York Stock Exchange or New York banks
are open for business. As a result of this procedure, the net asset value is
determined each day except for days on which both the New York Stock Exchange
and New York banks are closed. Both the New York Stock Exchange and New York
banks are closed for New Year's Day, Presidents' Day, Memorial Day,
Independence Day, Labor Day, Thanksgiving Day and Christmas Day. The net asset
value is determined under the "penny rounding" method by adding the value of
all securities and other assets in the portfolio, deducting the portfolio's
liabilities, dividing by the number of shares outstanding and rounding the
result to the nearest whole cent.
The Money Fund values its portfolio securities with remaining maturities of
60 days or less on an amortized cost basis and values its securities with
remaining maturities of greater than 60 days for which market quotations are
readily available at market value. Other securities held by the Money Fund are
valued at their fair value as determined in good faith by or under the
direction of the Board of Trustees.
In accordance with the Securities and Exchange Commission rule applicable to
the valuation of its portfolio securities, the Money Fund will maintain a
dollar-weighted average portfolio maturity of 90 days or less and will purchase
instruments having remaining maturities of not more than 397 days (13 months),
with the exception of U.S. Government and U.S. Government agency securities,
which may have remaining maturities of up to 762 days (25 months). The Money
Fund will invest only in securities determined by the Trustees to be of high
quality with minimal credit risks. In addition, the Trustees have established
procedures designed to stabilize, to the extent reasonably possible, the Money
Fund's price per share as computed for the purpose of sales and redemptions at
$1.00. Deviations of more than an insignificant amount between the net asset
value calculated using market quotations and that calculated on a "penny
rounded" basis will be reported to the Trustees by the Manager. In the event
the Trustees determine that a deviation exists which may result in material
dilution or other unfair results to investors or existing shareholders, the
Money Fund will take such corrective action as it regards as necessary and
appropriate, including the reduction of the number of outstanding shares of the
Money Fund by having each shareholder proportionately contribute shares to the
Money Fund's capital; the sale of portfolio instruments prior to maturity to
realize capital gains or losses or to shorten average portfolio maturity;
withholding dividends; or establishing a net asset value per share solely by
using available market quotations. If the number of outstanding shares is
reduced in order to maintain a constant net asset value of $1.00 per share, the
shareholders will contribute proportionately to the Money Fund's capital. Each
shareholder will be deemed to have agreed to such contribution by such
shareholder's investment in the Money Fund.
Since the net income of the Money Fund is determined and declared as a
dividend immediately prior to each time the net asset value of the Money Fund
is determined, the net asset value per share of the Money Fund normally remains
at $1.00 per share immediately after each such dividend declaration. Any
increase in the value of a shareholder's investment in the Money Fund,
representing the reinvestment of dividend income, is reflected by an increase
in the number of shares in the account and any decrease in the value of a
shareholder's investment may be reflected by a decrease in the number of shares
in the account. See "Taxes" below.
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YIELD INFORMATION
The Money Fund normally computes its annualized yield by determining the net
income for a seven-day base period for a hypothetical pre-existing account
having a balance of one share at the beginning of the base period, dividing the
net income by the net asset value of the account at the beginning of the base
period to obtain the base period return, multiplying the result by 365 and then
dividing by seven. Under this calculation, the yield on Money Fund shares does
not reflect realized gains and losses on portfolio securities. In accordance
with regulations adopted by the Securities and Exchange Commission, the Money
Fund is required to disclose its annualized yield for certain seven-day base
periods in a standardized manner which does not take into consideration any
realized or unrealized gains or losses on portfolio securities. The Securities
and Exchange Commission also permits the calculation of a standardized
effective or compounded yield. This is computed by compounding the unannualized
base period return which is done by adding one to the base period return,
raising the sum to a power equal to 365 divided by seven and subtracting one
from the result. This compounded yield calculation also reflects realized gains
or losses on portfolio securities.
The yield on the Money Fund's shares normally will fluctuate on a daily
basis. Therefore, the yield for any given past period is not an indication or
representation by the Money Fund of future yields or rates of return on its
shares. The yield is affected by such factors as changes in interest rates on
money market securities, average portfolio maturity, the types and quality of
portfolio securities held and operating expenses.
TAXES
FEDERAL
The Money Fund intends to continue to qualify for the special tax treatment
afforded regulated investment companies ("RICs") under the Internal Revenue
Code of 1986, as amended (the "Code"). If it so qualifies, the Money Fund (but
not its shareholders) will not be subject to Federal income tax on the part of
its net ordinary income and net realized capital gains which it distributes to
shareholders. The Money Fund intends to distribute substantially all of such
income.
Dividends paid by the Money Fund from its ordinary income and distributions
of the Money Fund's net realized short-term capital gains (together referred to
hereafter as "ordinary income dividends") are taxable to shareholders as
ordinary income. Distributions made from the Money Fund's net realized long-
term capital gains ("capital gain dividends") are taxable to shareholders as
long-term capital gains, regardless of the length of time the shareholder has
owned Money Fund shares. Any loss upon the sale or exchange of Money Fund
shares held for six months or less, however, will be treated as long-term
capital loss to the extent of any capital gain dividends received by the
shareholder. Distributions in excess of the Fund's earnings and profits will
first reduce the adjusted tax basis of a holder's shares and, after such
adjusted tax basis is reduced to zero, will constitute capital gains to such
holder (assuming the shares are held as a capital asset).
Dividends are taxable to shareholders even though they are reinvested in
additional shares of the Money Fund. Not later than 60 days after the close of
its taxable year, the Money Fund will provide its shareholders with a written
notice designating the amounts of any ordinary income dividends or capital gain
dividends. Distributions by the Fund, whether from ordinary income or capital
gains, will not be eligible for the dividends received deduction allowed to
corporations under the Code. If the Money Fund pays a dividend in
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January which was declared in the previous October, November or December to
shareholders of record on a specified date in one of such months, then such
dividend will be treated for tax purposes as being paid by the Money Fund and
received by its shareholders on December 31 of the year in which such dividend
was declared.
If the value of assets held by the Trust declines, the Trustees may authorize
a reduction in the number of outstanding shares in shareholders' accounts so as
to preserve a net asset value of $1.00 per share. After such a reduction, the
basis of eliminated shares would be added to the basis of shareholders'
remaining Money Fund shares, and any shareholders disposing of shares at that
time may recognize a capital loss. Distributions, including distributions
reinvested in additional shares of the Money Fund, will nonetheless be fully
taxable, even if the number of shares in shareholders' accounts has been
reduced as described above.
Ordinary income dividends paid by the Money Fund to shareholders who are
nonresident aliens or foreign entities will be subject to a 30% United States
withholding tax under existing provisions of the Code applicable to foreign
individuals and entities unless a reduced rate of withholding or a withholding
exemption is provided under applicable treaty law. Nonresident shareholders are
urged to consult their own tax advisers concerning the applicability of the
United States withholding tax.
Dividends and interest received by the Money Fund may give rise to
withholding and other taxes imposed by foreign countries. Tax conventions
between certain countries and the United States may reduce or eliminate such
taxes.
Under certain provisions of the Code, some shareholders may be subject to a
31% withholding tax on ordinary income dividends, capital gain dividends and
redemption payments ("backup withholding"). Generally, shareholders subject to
backup withholding will be those for whom no certified taxpayer identification
number is on file with the Money Fund or who, to the Money Fund's knowledge,
have furnished an incorrect number. When establishing an account, an investor
must certify under penalty of perjury that such number is correct and that such
investor is not otherwise subject to backup withholding.
A loss realized on a sale or exchange of shares of the Money Fund will be
disallowed if other Money Fund shares are acquired (whether through the
automatic reinvestment of dividends or otherwise) within a 61-day period
beginning 30 days before and ending 30 days after the date that the shares are
disposed of. In such a case, the basis of the shares acquired will be adjusted
to reflect the disallowed loss.
The Code requires a RIC to pay a nondeductible 4% excise tax to the extent
the RIC does not distribute, during any calendar year, 98% of its ordinary
income, determined on a calendar year basis, and 98% of its capital gains,
determined, in general, on an October 31 year end, plus certain undistributed
amounts from previous years. Although the Money Fund intends to distribute its
income and capital gains in the manner necessary to avoid imposition of the
excise tax, there can be no assurance that sufficient amounts of the Money
Fund's taxable ordinary income and capital gains will be distributed to avoid
entirely the imposition of the tax. In such event, the Money Fund will be
liable for the tax only on the amount by which it does not meet the foregoing
distribution requirements.
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The foregoing is a general and abbreviated summary of the applicable
provisions of the Code and Treasury regulations presently in effect. For the
complete provisions, reference should be made to the pertinent Code sections
and the Treasury regulations promulgated thereunder. The Code and Treasury
regulations are subject to change by legislative or administrative action
either prospectively or retroactively.
Ordinary income and capital gain dividends may also be subject to state and
local taxes. Certain states exempt from state income taxation dividends paid by
RICs which are derived from interest on U.S. Government obligations. State law
varies as to whether dividend income attributable to U.S. Government
obligations is exempt from state income tax.
Shareholders are urged to consult their own tax advisers regarding specific
questions as to Federal, foreign, state or local taxes. Foreign investors also
should consider applicable foreign taxes in their evaluation of an investment
in the Money Fund.
GENERAL INFORMATION
DESCRIPTION OF SHARES
The Declaration of Trust permits the Trustees to issue an unlimited number of
full and fractional shares of beneficial interest, par value $.10 per share, of
a single class and to divide or combine the shares into a greater or lesser
number of shares without thereby changing the proportionate beneficial
interests in the Money Fund. Each share represents an equal proportionate
interest in the Money Fund with each other share. Upon liquidation of the Money
Fund, shareholders are entitled to share pro rata in the net assets of the
Money Fund available for distribution to shareholders. Shares have no
preemptive or conversion rights. The rights of redemption are described
elsewhere herein and in the Prospectus. Shares are fully paid and non-
assessable by the Money Fund.
Shareholders are entitled to one vote for each full share held and fractional
votes for fractional shares held in the election of Trustees (to the extent
hereafter provided) and on other matters submitted to the vote of shareholders.
There will normally be no meetings of shareholders for the purpose of electing
Trustees unless and until such time as less than a majority of the Trustees
holding office have been elected by shareholders, at which time the Trustees
then in office will call a shareholders' meeting for the election of Trustees.
Shareholders may, in accordance with the terms of the Declaration of Trust,
cause a meeting of shareholders to be held for the purpose of voting on the
removal of Trustees. Voting rights are not cumulative, so that the holders of
more than 50% of the shares voting in the election of Trustees can, if they
choose to do so, elect all the Trustees of the Money Fund, in which event the
holders of the remaining shares are unable to elect any person as a Trustee. No
amendment may be made to the Declaration of Trust without the affirmative vote
of a majority of the outstanding shares of the Money Fund except under certain
limited circumstances set forth in the Declaration of Trust.
CUSTODIAN
State Street Bank and Trust Company, P.O. Box 1713, Boston, Massachusetts
02101 (the "Custodian"), acts as custodian of the Money Fund's assets. The
Custodian is responsible for safeguarding and controlling the Money Fund's cash
and securities, handling the receipt and delivery of securities and collecting
interest on the Money Fund's investments.
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TRANSFER AGENT
Merrill Lynch Financial Data Services, Inc., 4800 Deer Lake Drive East,
Jacksonville, Florida 32246-6484 (the "'Transfer Agent"), acts as the Money
Fund's transfer agent. The Transfer Agent is responsible for the issuance,
transfer and redemption of shares and the opening, maintenance and servicing of
shareholder accounts.
INDEPENDENT AUDITORS
Deloitte & Touche LLP, 117 Campus Drive, Princeton, New Jersey 08540, has
been selected as the independent auditors of the Money Fund. The selection of
independent auditors is subject to ratification by the Money Fund's
shareholders. The independent auditors are responsible for auditing the annual
financial statements of the Money Fund.
LEGAL COUNSEL
Brown & Wood, One World Trade Center, New York, New York 10048-0557, is
counsel for the Money Fund.
REPORTS TO SHAREHOLDERS
The fiscal year of the Money Fund ends on the last day of February of each
year. The Money Fund will send to its shareholders at least semi-annually
reports showing its portfolio securities and other information. An annual
report containing financial statements audited by independent auditors is sent
to shareholders each year.
Only one copy of each shareholder report and certain shareholder
communications will be mailed to each identified shareholder regardless of the
number of accounts such shareholder has. If a shareholder wishes to receive
separate copies of each report and communication for each of the shareholder's
related accounts the shareholder should notify in writing:
Merrill Lynch Financial Data Services, Inc.
Attn: TAMMO
P.O. Box 45290
Jacksonville, FL 32232-5290
The written notification should include the shareholder's name, address, tax
identification number and Merrill Lynch and/or mutual fund account numbers. If
you have any questions regarding this please call your Merrill Lynch Financial
Consultant or Merrill Lynch Financial Data Services, Inc. at (800) 221-7210.
ADDITIONAL INFORMATION
The Prospectus and Statement of Additional Information with respect to the
shares of the Money Fund do not contain all the information set forth in the
Registration Statement and the exhibits relating thereto, which the Money Fund
has filed with the Securities and Exchange Commission, Washington, D.C., under
the Securities Act of 1933 and the Investment Company Act, to which reference
is hereby made.
The Declaration of Trust establishing the Money Fund, as amended (the
"Declaration"), is on file in the office of the Secretary of the Commonwealth
of Massachusetts. The Declaration provides that the name "CBA (R) Money Fund"
refers to the Trustees under the Declaration collectively as Trustees, but not
as individuals or personally; and no Trustee, shareholder, officer, employee or
agent of the Money Fund shall be held to any personal liability, nor shall
resort be had to their private property for the satisfaction of any obligation
or claim or otherwise in connection with the affairs of said Money Fund but the
"Trust Property" only shall be liable.
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APPENDIX
DESCRIPTION OF COMMERCIAL PAPER, BANK MONEY INSTRUMENTS
AND CORPORATE BOND RATINGS
COMMERCIAL PAPER AND BANK MONEY INSTRUMENTS
Commercial paper with the greatest capacity for timely payment is rated A by
Standard & Poor's Ratings Group ("S&P"). Issues within this category are
further redefined with designations 1, 2 and 3 to indicate the relative degree
of safety; A-1, the highest of the three, indicates the degree of safety is
either overwhelming or very strong; A-2 indicates that capacity for timely
repayment is strong.
Moody's Investors Service Inc. ("Moody's") employes the designations of
Prime-1, Prime-2 and Prime-3 to indicate the relative capacity of the rated
issuers to repay punctually. Prime-1 issues have a superior capacity for
repayment. Prime-2 issues have a strong capacity for repayment, but to a lesser
degree than Prime-1.
Commercial paper rated A.1+ by IBCA Limited or its affiliate IBCA Inc.
(together, "IBCA") are obligations supported by the highest capacity for timely
repayment. Commercial paper rated A.1 has a very strong capacity for timely
repayment. Commercial paper rated A.2 has a strong capacity for timely
repayment, although such capacity may be susceptible to adverse changes in
business, economic or financial conditions.
Fitch Investors Service, Inc. ("Fitch") employs the rating F-1+ to indicate
issues regarded as having the strongest degree of assurance for timely payment.
The rating F-1 reflects an assurance of timely payment only slightly less in
degree than issues rated F-1+, while the rating F-2 indicates a satisfactory
degree of assurance for timely payment, although the margin of safety is not as
great as indicated by the F-1+ and F-1 categories.
Duff & Phelps Corporation ("Duff & Phelps") employs the designation of Duff 1
with respect to top grade commercial paper and bank money instruments. Duff 1+
indicates the highest certainty of timely payment: short-term liquidity is
clearly outstanding, and safety is just below risk-free U.S. Treasury short-
term obligations. Duff 1- indicates high certainty of timely payment. Duff 2
indicates good certainty of timely payment: liquidity factors and company
fundamentals are sound.
Thompson BankWatch, Inc. ("TBW") employs the designations TBW-1, TBW-2, TBW-3
and TBW-4 as ratings for commercial paper, other senior short-term obligations
and deposit obligations of the entities to which the rating has been assigned.
TBW-1 is the highest category and indicates a very high degree of likelihood
that principal and interest will be paid on a timely basis. TBW-2 is the second
highest category and indicates that while the degree of safety regarding timely
repayment of principal and interest is strong, the relative degree of safety is
not as high as for issues rated TBW-1.
CORPORATE BONDS
Bonds rated AAA have the highest rating assigned by S&P to a debt obligation.
Capacity to pay interest and repay principal is extremely strong. Bonds rated
AA have a strong capacity to pay interest and repay principal and differ from
the highest rated issues only in a small degree.
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Bonds rated Aaa by Moody's are judged to be of the best quality. Interest
payments are protected by a large or by an exceptionally stable margin and
principal is secure. Bonds rated Aa are judged to be of high quality by all
standards. They are rated lower than the best bonds because the margins of
protection may not be as large 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 in each generic rating classification from Aa
through B in its corporate bond rating system. The modifier 1 indicates that
the security 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
issue ranks in the lower end of its generic rating category.
Bonds rated AAA by IBCA are obligations for which there is the lowest
expectation of investment risk. Capacity for timely repayment of principal and
interest is substantial such that adverse changes in business, economic or
financial conditions are unlikely to increase investment risk significantly.
Bonds rated AA are obligations for which there is a very low expectation of
investment risk. Capacity for timely repayment of principal and interest is
substantial. Adverse changes in business, economic or financial conditions may
increase investment risk, albeit not very significantly.
Bonds rated AAA by Fitch are considered to be investment grade and of the
highest credit quality. The obligor has an exceptionally strong ability to pay
interest and repay principal, which is unlikely to be affected by reasonably
foreseeable events. Bonds rated AA are considered to be investment grade and of
very high credit quality. The obligor's ability to pay interest and repay
principal is very strong, although not quite as strong as bonds rated AAA.
Bonds rated AAA by Duff & Phelps are deemed to be of the highest credit
quality: the risk factors are negligible, being only slightly more than for
risk-free U.S. Treasury debt. AA indicates high credit quality: protection
factors are strong, and risk is modest but may vary slightly from time to time
because of economic conditions.
Bonds rated AAA by TBW are accorded the highest rating category which
indicates that the ability to repay principal and interest on a timely basis is
very high. AA is the second highest rating category and indicates a superior
ability to repay principal and interest on a timely basis with limited
incremental risk versus issues rated in the highest rating category.
18
<PAGE>
INDEPENDENT AUDITORS' REPORT
The Board of Trustees and Shareholders,
CBA Money Fund:
We have audited the accompanying statement of assets and liabilities, including
the schedule of investments, of CBA Money Fund as of February 28, 1995, the
related statements of operations for the year then ended and changes in net
assets for each of the years in the two-year period then ended, and the
financial highlights for each of the years in the five-year period then ended.
These financial statements and the financial highlights are the responsibility
of the Fund's management. Our responsibility is to express an opinion on these
financial statements and the 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 the 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 owned at
February 28, 1995 by correspondence with the custodian and brokers. 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, such financial statements and financial highlights present
fairly, in all material respects, the financial position of CBA Money Fund as
of February 28, 1995, the results of its operations, the changes in its net
assets, and the financial highlights for the respective stated periods in
conformity with generally accepted accounting principles.
Deloitte & Touche LLP
Princeton, New Jersey
March 31, 1995
19
<PAGE>
CBA Money Fund
Schedule of Investments as of February 28, 1995 (in Thousands)
Face Interest Maturity Value
Issue Amount Rate* Date (Note 1a)
Bank Notes--0.7%
Nations Bank, N.A. $10,000 5.65 % 7/21/95 $ 9,971
(Carolinas)
Total Bank Notes
(Cost--$ 9,993) 9,971
Bankers' Acceptances--Yankee--0.4%
Union Bank of 5,000 6.01 5/18/95 4,933
Switzerland
Total Bankers' Acceptances--Yankee
(Cost--$ 4,934) 4,933
Certificates of Deposit--European--1.8%
Commerzbank, NY 25,000 6.22 4/26/95 25,000
Total Certificates of Deposit--European
(Cost--$ 24,998) 25,000
Certificates of Deposit--Yankee--3.6%
Sanwa Bank Ltd. 25,000 6.04 3/27/95 25,000
Societe Generale, NY 25,000 6.05 4/03/95 25,001
Total Certificates of Deposit--Yankee
(Cost--$ 50,001) 50,001
Commercial Paper--46.8%
ABN-AMRO North 10,000 6.28 5/15/95 9,872
America Finance, Inc.
ANZ (Delaware), Inc. 1,000 6.32 8/08/95 972
APRECO, Inc. 25,000 5.97 3/27/95 24,888
AVCO Financial 25,000 5.82 3/06/95 24,976
Services, Inc.
American Express 25,000 5.96 3/29/95 24,880
Credit Corp.
American General 25,000 6.03 3/02/95 24,992
Corporation
BellSouth Capital Funding 5,500 6.20 4/05/95 5,466
Corporation
Beta Finance Inc. 10,000 5.20 3/13/95 9,978
10,000 5.65 3/13/95 9,978
CXC Incorporated 1,486 6.00 3/17/95 1,482
Central & SouthWest 25,300 6.20 3/02/95 25,291
Corp.
Cheltenham & Glouster 25,000 6.27 4/05/95 24,846
Building Society
Deer Park Refining L.P. 15,000 6.05 3/06/95 14,985
20,000 6.00 3/13/95 19,957
10,991 6.02 3/13/95 10,967
4,000 6.00 3/27/95 3,982
CBA Money Fund
Schedule of Investments as of February 28, 1995 (continued)
(in Thousands)
Face Interest Maturity Value
Issue Amount Rate* Date (Note 1a)
Commercial Paper (concluded)
Eiger Capital Corp. $49,968 5.97 % 3/23/95 $ 49,777
Ford Motor Credit Co. 25,000 6.10 3/27/95 24,889
25,000 6.20 4/20/95 24,782
General Electric 20,000 5.55 4/10/95 19,860
Capital Corp. 10,000 5.56 4/10/95 9,930
Goldman Sachs 15,000 5.08 3/01/95 14,997
Group, L.P.
Hanson Finance 10,000 6.20 3/13/95 9,978
(UK) PLC 25,000 6.24 4/05/95 24,846
Matterhorn Capital Corp. 11,991 5.92 3/23/95 11,946
McKenna Triangle 25,000 6.30 8/02/95 24,336
National Corp.
New Center Asset 25,000 6.20 4/10/95 24,825
Trust 7,000 6.25 7/07/95 6,846
Nomura Holding 25,000 6.20 4/13/95 24,812
America, Inc. 25,000 6.12 4/17/95 24,795
15,000 6.10 5/16/95 14,805
PNC Funding Corp. 15,000 5.73 4/26/95 14,855
Premium Funding, 6,481 6.00 3/14/95 6,466
Inc., Series A
Santander Finance 25,000 6.27 8/07/95 24,315
(Delaware) Inc.
South Australia 4,000 5.65 4/21/95 3,965
Government Financing
Authority
Svenska 25,000 6.28 4/05/95 24,846
Handelsbanken, Inc.
Transamerica Finance 10,000 6.00 3/17/95 9,972
Corp.
USL Capital Corp. 15,000 5.98 4/18/95 14,878
Vattenfall Treasury Inc. 10,000 5.98 3/30/95 9,950
Total Commercial Paper
(Cost--$ 658,171) 658,183
Corporate Notes--0.1%
CIT Group Holdings, 1,500 5.50 11/01/95 1,490
Inc. (The)
Total Corporate Notes
(Cost--$ 1,485) 1,490
Master Notes--2.8%
Goldman Sachs 40,000 6.05 5/26/95 40,000
Group, L.P.
Total Master Notes
(Cost--$ 40,000) 40,000
20
<PAGE>
CBA Money Fund
Schedule of Investments as of February 28, 1995 (concluded)
(in Thousands)
Face Interest Maturity Value
Issue Amount Rate* Date (Note 1a)
US Government & Agency Obligations--
Discount Notes--9.7%
Federal Home Loan $25,000 5.58 % 4/21/95 $ 24,785
Banks
Federal National 40,000 6.10 5/03/95 39,576
Mortgage Association 25,000 5.97 7/26/95 24,383
US Treasury Bills 29,956 6.04 8/03/95 29,193
10,000 5.205 8/24/95 9,708
10,000 6.83 1/11/96 9,466
Total US Government & Agency
Obligations--Discount Notes
(Cost--$137,066) 137,111
US Government & Agency Obligations--
Non-Discount Notes--29.3%
Federal Home Loan 25,000 5.79 4/28/95 24,993
Banks 5,000 6.43++ 6/21/95 5,000
10,000 4.625 8/09/95 9,931
11,000 6.43++ 12/28/95 11,000
4,760 7.16 2/01/96 4,781
10,000 7.13 2/09/96 10,042
10,000 6.787 2/15/96 10,010
12,000 6.46++ 6/17/96 12,000
5,000 6.46++ 6/21/96 5,000
10,000 5.885++ 8/05/96 9,978
7,000 6.58++ 1/31/97 7,007
15,000 6.53++ 2/03/97 14,994
15,000 6.53++ 2/10/97 15,000
Federal Home Loan 10,000 4.635 8/09/95 9,932
Mortgage Corp. 12,000 5.93++ 9/01/95 11,999
Federal National 17,000 5.89 6/01/95 17,000
Mortgage Association++ 5,000 6.40 12/20/95 5,000
5,000 6.37 1/26/96 4,997
CBA Money Fund
Schedule of Investments as of February 28, 1995 (concluded)
(in Thousands)
Face Interest Maturity Value
Issue Amount Rate* Date (Note 1a)
US Government & Agency Obligations--
Non-Discount Notes (concluded)
Federal National $20,000 6.01 % 2/07/96 $ 19,998
Mortgage Association++ 15,000 6.33 5/13/96 15,000
(concluded) 25,000 5.968 10/11/96 25,000
25,000 6.13 2/21/97 25,000
12,000 6.45 5/19/97 12,000
11,000 6.50 5/14/98 11,000
Student Loan Marketing 1,370 6.51 3/20/95 1,370
Association++ 3,430 6.51 3/20/95 3,430
8,500 6.26 8/07/95 8,500
33,000 6.26 3/20/96 33,000
10,000 6.09 5/14/96 10,009
20,000 5.968 9/20/96 20,000
10,000 6.27 1/14/97 10,000
US Treasury Notes 10,000 5.875 5/15/95 9,997
20,000 4.25 11/30/95 19,681
Total US Government & Agency Obligations--
Non-Discount Notes (Cost--$412,630) 412,649
Repurchase Agreements **--4.5%
Face Amount Issue
$63,450 HSBC Securities Inc., purchased
on 2/28/95 to yield 6.12%
to 3/01/95 63,450
Total Repurchase Agreements
(Cost--$63,450) 63,450
Total Investments (Cost--$1,402,728)--99.7% 1,402,788
Other Assets Less Liabilities--0.3% 3,527
----------
Net Assets--100.0% $1,406,315
==========
[FN]
*Bankers' Acceptances, Commercial Paper and certain US Government &
Agency Obligations are traded on a discount basis; the interest
rates shown are the discount rates paid at the time of purchase by
the Fund. Other securities bear interest at the rates shown, payable
at fixed dates or upon maturity. Interest rates on variable rate
securities are adjusted periodically based upon appropriate
indexes;the interest rates shown are those in effect at February 28,
1995.
**Repurchase Agreements are fully collateralized by US Government
Obligations.
++Variable Rate Notes.
See Notes to Financial Statements.
21
<PAGE>
<TABLE>
CBA Money Fund
Statement of Assets and Liabilities as of February 28, 1995
<S> <C> <C>
Assets:
Investments, at value (identified cost--$1,402,728,018*) (Note 1a) $1,402,788,296
Cash 955
Interest receivable 4,622,164
Prepaid registration fees and other assets (Note 1d) 61,981
--------------
Total assets 1,407,473,396
--------------
Liabilities:
Payables:
Investment adviser (Note 2) $ 425,483
Distributor (Note 2) 389,602
Beneficial interest redeemed 1,196 816,281
--------------
Accrued expenses and other liabilities 341,866
--------------
Total liabilities 1,158,147
--------------
Net Assets $1,406,315,249
==============
Net Assets Consist of:
Shares of beneficial interest, $.10 par value, unlimited number of shares authorized $ 140,625,497
Paid-in capital in excess of par 1,265,629,474
Unrealized appreciation on investments--net 60,278
--------------
Net Assets--Equivalent to $1.00 per share based on 1,406,254,971 shares of beneficial
interest outstanding $1,406,315,249
==============
<FN>
*Cost for Federal income tax purposes. As of February 28, 1995, net
unrealized appreciation for Federal income tax purposes amounted to
$60,278, of which $315,937 related to appreciated securities and
$255,659 related to depreciated securities.
See Notes to Financial Statements.
</TABLE>
22
<PAGE>
<TABLE>
CBA Money Fund
Statement of Operations for the Year Ended February 28, 1995
<S> <C> <C>
Investment Income (Note 1c):
Interest and amortization of premium and discount earned $ 61,403,441
Expenses:
Investment advisory fees (Note 2) $ 5,722,106
Transfer agent fees (Note 2) 2,484,681
Distribution fees (Note 2) 1,581,431
Registration fees (Note 1d) 217,429
Printing and shareholder reports 190,037
Accounting services (Note 2) 107,165
Custodian fees 81,524
Professional fees 61,670
Trustees' fees and expenses 38,557
Other 9,690
--------------
Total expenses before reimbursement 10,494,290
Reimbursement of expenses (Note 2) (517,025)
--------------
Total expenses after reimbursement 9,977,265
--------------
Investment Income--Net 51,426,176
Realized Gain on Investments--Net (Note 1c) 19,884
Change in Unrealized Appreciation/Depreciation on Investments--Net 581,662
--------------
Net Increase in Net Assets Resulting from Operations $ 52,027,722
==============
</TABLE>
<TABLE>
CBA Money Fund
Statements of Changes in Net Assets
<CAPTION>
For the Year Ended
February 28,
1995 1994
<S> <C> <C>
Increase (Decrease) in Net Assets:
Operations:
Investment income--net $ 51,426,176 $ 31,634,870
Realized gain on investments--net 19,884 468,706
Change in unrealized appreciation/depreciation on investments--net 581,662 (935,673)
-------------- --------------
Net increase in net assets resulting from operations 52,027,722 31,167,903
-------------- --------------
Dividends & Distributions to Shareholders (Note 1e):
Investment income--net (51,426,176) (31,634,870)
Realized gain on investments--net (19,884) (468,706)
-------------- --------------
Net decrease in net assets resulting from dividends and distributions to
shareholders (51,446,060) (32,103,576)
-------------- --------------
Beneficial Interest Transactions (Note 3):
Net proceeds from sale of shares 4,007,388,057 3,818,160,854
Net asset value of shares issued to shareholders in reinvestment of
dividends (Note 1e) 51,328,362 32,034,051
-------------- --------------
4,058,716,419 3,850,194,905
Cost of shares redeemed (3,940,438,831) (3,804,489,714)
-------------- --------------
Net increase in net assets derived from beneficial interest transactions 118,277,588 45,705,191
-------------- --------------
Net Assets:
Total increase in net assets 118,859,250 44,769,518
Beginning of year 1,287,455,999 1,242,686,481
-------------- --------------
End of year $1,406,315,249 $1,287,455,999
============== ==============
See Notes to Fianancial Highlights.
</TABLE>
23
<PAGE>
<TABLE>
CBA Money Fund
Financial Highlights
<CAPTION>
The following per share data and ratios have been derived For the For the
from information provided in the financial statements. Year Ended Year Ended
For the Year Ended February 28, February 29, February 28,
Increase (Decrease) in Net Asset Value: 1995 1994 1993 1992 1991
<S> <C> <C> <C> <C> <C>
Per Share Operating Performance:
Net asset value, beginning of year $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
---------- ---------- ---------- ---------- ----------
Investment income--net .0396 .0260 .0304 .0511 .0736
Realized and unrealized gain (loss) on investments--net .0005 (.0004) .0017 .0008 .0006
---------- ---------- ---------- ---------- ----------
Total from investment operations .0401 .0256 .0321 .0519 .0742
---------- ---------- ---------- ---------- ----------
Less dividends and distributions:
Investment income--net (.0396) (.0260) (.0304) (.0511) (.0736)
Realized gain on investments--net (.0000)** (.0004) (.0014) (.0008)* (.0006)*
---------- ---------- ---------- ---------- ----------
Total dividends and distributions (.0396) (.0264) (.0318) (.0519) (.0742)
---------- ---------- ---------- ---------- ----------
Net asset value, end of year $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
========== ========== ========== ========== ==========
Total Investment Return 4.03% 2.66% 3.24% 5.32% 7.69%
========== ========== ========== ========== ==========
Ratios to Average Net Assets:
Expenses, net of reimbursement and excluding
distribution fees .65% .59% .59% .56% .57%
========== ========== ========== ========== ==========
Expenses, net of reimbursement .77% .71% .71% .69% .70%
========== ========== ========== ========== ==========
Expenses .81% .75% .75% .74% .75%
========== ========== ========== ========== ==========
Investment income and realized gain on
investments--net 3.98% 2.62% 3.19% 5.18%* 7.40%*
========== ========== ========== ========== ==========
Supplemental Data:
Net assets, end of year (in thousands) $1,406,315 $1,287,456 $1,242,686 $1,211,833 $1,063,827
========== ========== ========== ========== ==========
<FN>
*Includes unrealized gain (loss).
**Amount is less than $.0001 per share.
See Notes to Financial Statements.
</TABLE>
24
<PAGE>
CBA Money Fund
Notes to Financial Statements
1. Significant Accounting Policies:
CBA Money Fund (the "Fund") is a money fund whose shares are offered
to subscribers to the Capital Builder Account service of Merrill
Lynch, Pierce, Fenner & Smith Inc. ("MLPF&S") and to subscribers to
the Broadcort Capital Account service of Broadcort Capital Corp.
("Broadcort"). Shares may also be purchased by individual investors
not subscribing to these services, but such investors will not
receive any of the special features offered as a part of such
services. The Fund is registered under the Investment Company Act of
1940 as a diversified, open-end investment management company. The
following is a summary of significant accounting policies followed
by the Fund.
(a) Valuation of investments--Portfolio securities with remaining
maturities of sixty days or less are valued at amortized cost, which
approximates market value. Securities with remaining maturities of
greater than sixty days, for which market quotations are readily
available, will be valued at market value. When securities are
valued with sixty days or less to maturity, the difference between
the valuation existing on the sixty-first day before maturity and
maturity value is amortized on a straight-line basis to maturity.
Other securities held by the Fund will be valued at their fair value
as determined in good faith by or under the direction of the Board
of Trustees.
(b) Income taxes--It is the Fund's policy to comply with the
requirements of the Internal Revenue Code applicable to regulated
investment companies and to distribute all of its taxable income to
its shareholders. Therefore, no Federal income tax provision is
required.
(c) Security transactions and investment income--Security
transactions are recorded on the dates the transactions are entered
into (the trade dates). Realized gains and losses on security
transactions are determined on the identified cost basis. Interest
income (including amortization of premium and discount) is
recognized on the accrual basis.
(d) Prepaid registration fees--Prepaid registration fees are charged
to expense as the related shares are issued.
(e) Dividends to shareholders--The Fund declares dividends daily and
reinvests daily such dividends (net of non-resident alien tax and
back-up withholding tax withheld) in additional Fund shares at net
asset value. Dividends are declared from the total of net investment
income and net realized gain or loss on investments.
2. Investment Advisory Agreement and
Transactions with Affiliates:
The Fund has entered into an Investment Advisory Agreement with Fund
Asset Management, L.P. ("FAM"). The general partner of FAM is
Princeton Services, Inc. ("PSI"), an indirect wholly-owned
subsidiary of Merrill Lynch & Co., Inc. ("ML & Co."), which is the
limited partner.
FAM (the "Manager") is responsible for the management of the Fund's
portfolio and provides the necessary personnel, facilities,
equipment and certain other services necessary to the operations of
the Fund. For such services, the Fund pays a monthly fee based upon
the average daily value of the Fund's net assets at the following
annual rates: 0.50% of the first $500 million of average daily net
assets, 0.425% of average daily net assets in excess of $500 million
but not exceeding $1 billion, and 0.375% of average daily net assets
in excess of $1 billion. The most restrictive annual expense
limitation requires that the Manager reimburse the Fund in any
amount necessary to prevent such operating expenses of the Fund
(excluding interest, taxes, distribution fees, brokerage fees and
commissions, and extraordinary items) from exceeding in any fiscal
year 2.5% of the Fund's first $30 million of average daily net
assets, 2.0% of the next
25
<PAGE>
$70 million of average daily net assets, and 1.5% of the remaining average daily
net assets. No fee payment will be made to the Manager during the year which
will cause such expenses to exceed the pro rata expense limitation at the time
of such payment. During the year ended February 28, 1995, the Manager earned
$5,722,106, of which $517,025 was voluntarily waived.
Notes to Financial Statements
(concluded)
The Fund has adopted a Distribution and Shareholder Servicing Plan
in compliance with Rule 12b-1 under the Investment Company Act of
1940, pursuant to which MLPF&S and Broadcort each receive a
distribution fee under the Distribution Agreement from the Fund at
the end of each month at the annual rate of 0.125% of average daily
net assets of the Fund attributable to subscribers to the respective
Capital Builder Account and Broadcort Capital Account programs. The
MLPF&S distribution fee is to compensate MLPF&S financial
consultants and other directly involved branch office personnel for
selling shares of the Fund and for providing direct personal
services to shareholders. The Broadcort distribution fee is to
compensate selected dealers for activities and services related to
the sale, promotion and marketing of shares of the Fund. The
distribution fee is not compensation for the administrative and
operational services rendered to the Fund by MLPF&S or Broadcort in
processing share orders and administering shareholder accounts.
Financial Data Services, Inc. ("FDS"), a wholly-owned subsidiary of
ML & Co., is the Fund's transfer agent.
Accounting services are provided to the Fund by FAM at cost.
Certain officers and/or trustees of the Fund are officers and/or
directors of FAM, PSI, FDS, MLPF&S, and/or ML & Co.
3. Beneficial Interest Transactions:
The number of shares purchased and redeemed during the year
corresponds to the amounts included in the Statements of Changes in
Net Assets with respect to net proceeds from sale of shares and cost
of shares redeemed, respectively, since shares are recorded at $1.00
per share.
26
<PAGE>
[This page intentionally left blank]
27
<PAGE>
LOGO MERRILL LYNCH
CBA(R)
MONEY FUND
STATEMENT OF
CBA(R) ADDITIONAL INFORMATION
- --------------------------------------------------------------------------------
Shares of the
Money Fund are CBA(R)
offered to
participants
in the Capital
BuilderSM
Account
service of
Merrill Lynch,
Pierce, Fenner
& Smith
Incorporated,
to
participants
in the
Broadcort
Capital
Account
service of
Broadcort
Capital Corp.
and to
investors
maintaining
accounts
directly with
the Transfer
Agent.
Investors
should be
aware that the
Accounts are
not bank
accounts and
that a
shareholder's
investment in
the Money Fund
is not insured
by any
governmental
agency. As
with any
investment in
securities,
the value of a
shareholder's
investment in
the Money Fund
may fluctuate.
Principal Office of the
Money Fund
800 Scudders Mill Road
Plainsboro, New Jersey
Mailing Address:
P.O. Box 9011
Princeton, New Jersey
08543-9011
Code #10129-0695 June 27, 1995
<PAGE>
PART C. OTHER INFORMATION
ITEM 24. FINANCIAL STATEMENTS AND EXHIBITS.
(A) FINANCIAL STATEMENTS:
Financial Statements Contained in Part A:
Financial Highlights for each of the years in the ten year period
ended February 28, 1995.
Financial Statements Contained in Part B:
Schedule of Investments as of February 28, 1995.
Statement of Assets and Liabilities as of February 28, 1995.
Statement of Operations for the year ended February 28, 1995.
Statements of Changes in Net Assets for each of the years in the two-
year period ended February 28, 1995.
Financial Highlights for each of the years in the five-year period
ended February 28, 1995.
(B) EXHIBITS:
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------- -----------
<S> <C>
1 --Second Amended and Restated Declaration of Trust, dated June 13, 1984.(a)
2 --By-Laws of the Registrant.(a)
3 --None.
4 --None.
5(a) --Management Agreement between Registrant and Fund Asset Management,
L.P.(a)
(b) --Supplement to Management Agreement with Fund Asset Management, L.P.(b)
6 --Form of Distribution Agreement among Registrant, Merrill Lynch, Pierce,
Fenner & Smith Incorporated and Broadcort Capital Corp. and form of
Selected Dealers Agreement.(a)
7 --None.
8 --Form of Custodian Contract between Registrant and State Street Bank and
Trust Company.(a)
9(a) --Transfer Agency, Shareholder Servicing Agency, and Proxy Agency Agreement
between Registrant and Merrill Lynch Financial Data Services, Inc. (a)
(b) --Form of Capital Builder SM Account Agreement.(a)
(c) --Form of Broadcort Capital Account Agreement.(a)
10 --None.
11 --Consent of Deloitte & Touche LLP, independent auditors for the
Registrant.
12 --None.
13 --Certificate of Fund Asset Management, L.P.(a)
14 --None.
15 --Form of Distribution and Shareholder Servicing Plan pursuant to Rule 12b-
1 among Registrant, Merrill Lynch, Pierce, Fenner & Smith Incorporated and
Broadcort Capital Corp. and form of Distribution Plan Sub-Agreement.(a)
16 --Schedule for computation of each performance quotation provided in the
Registration Statement in response to Item 22. (a)
17 --Financial Data Schedule.
</TABLE>
- --------
(a) Refiled pursuant to the Electronic Data Gathering, Analysis, and Retrieval
(EDGAR) phase-in requirements.
(b) Previously filed as an Exhibit to Post-Effective Amendment No. 12 to
Registrant's Registration Statement on Form N-1A filed on June 29, 1994.
C-1
<PAGE>
ITEM 25. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH REGISTRANT.
The Registrant is not controlled by, or under common control with, any person.
ITEM 26. NUMBER OF HOLDERS OF SECURITIES.
<TABLE>
<CAPTION>
NUMBER OF
RECORD HOLDERS
TITLE OF CLASS AT MAY 31, 1995
-------------- ---------------
<S> <C>
Shares of beneficial interest, par value $.10 per share......... 252,976
</TABLE>
ITEM 27. INDEMNIFICATION.
Section 5.3 of the Registrant's Declaration of Trust provides as follows:
"The Trust shall indemnify each of its Trustees, officers, employees, and
agents (including persons who serve at its request as directors, officers or
trustees of another organization in which it has any interest as a
shareholder, creditor or otherwise) against all liabilities and expenses
(including amounts paid in satisfaction of judgments, in compromise, as
fines and penalties, and as counsel fees) reasonably incurred by him in
connection with the defense or disposition of any action, suit or other
proceeding, whether civil or criminal, in which he may be involved or with
which he may be threatened, while in office or thereafter, by reason of his
being or having been such a trustee, officer, employee or agent, except with
respect to any matter as to which he shall have been adjudicated to have
acted in bad faith, willful misfeasance, gross negligence or reckless
disregard of his duties; provided, however, that as to any matter disposed
of by a compromise payment by such person, pursuant to a consent decree or
otherwise, no indemnification either for said payment or for any other
expenses shall be provided unless the Trust shall have received a written
opinion from independent legal counsel approved by the Trustees to the
effect that if either the matter of willful misfeasance, gross negligence or
reckless disregard of duty, or the matter of good faith and reasonable
belief as to the best interests of the Trust, had been adjudicated, it would
have been adjudicated in favor of such person. The rights accruing to any
Person under these provisions shall not exclude any other right to which he
may be lawfully entitled; provided that no Person may satisfy any right of
indemnity or reimbursement granted herein or in Section 5.1 or to which he
may be otherwise entitled except out of the property of the Trust, and no
Shareholder shall be personally liable to any Person with respect to any
claim for indemnity or reimbursement or otherwise. The Trustees may make
advance payments in connection with indemnification under this Section 5.3,
provided that the indemnified person shall have given a written undertaking
to reimburse the Trust in the event it is subsequently determined that he is
not entitled to such indemnification."
Insofar as the conditional advancing of indemnification monies for actions
based upon the Investment Company Act may be concerned, such payments will be
made only on the following conditions: (i) the advances must be limited to
amounts used, or to be used, for the preparation or presentation of a defense
to the action, including costs connected with the preparation of a settlement;
(ii) advances may be made only upon receipt of a written promise by, or on
behalf of, the recipient to repay that amount of the advance which exceeds the
amount to which it is ultimately determined he is entitled to receive from the
Registrant by reason of indemnification; and (iii) (a) such promise must be
secured by a surety bond, other suitable insurance or an equivalent form of
security which assures that any repayments may be obtained by the Registrant
without delay or litigation, which bond, insurance or other form of security
must be provided by the recipient of the advance, or (b) a majority of a quorum
of the Registrant's disinterested, non-party Trustees, or an independent legal
counsel in a written opinion, shall determine, based upon a review of readily
available facts, that the recipient of the advance ultimately will be found
entitled to indemnification.
In Section 10 of the Distribution Agreement relating to the securities being
offered hereby, the Registrant agrees to indemnify the distributors and each
person, if any, who controls the Distributors within the meaning of the
Securities Act of 1933 (the "1933 Act"), against certain types of civil
liabilities arising in connection with the Registration Statement or
Prospectus.
Insofar as indemnification for liabilities arising under the 1933 Act may be
permitted to Trustees, officers and controlling persons of the Registrant and
the principal underwriter pursuant to the foregoing provisions or otherwise,
the Registrant has been advised that in the opinion of the Securities and
Exchange Commission
C-2
<PAGE>
such indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the Registrant of expenses incurred
or paid by a Trustee, officer or controlling person of the Registrant and
principal underwriter in connection with the successful defense of any action
or proceeding) is asserted by such Trustee, officer or controlling person or
the principal underwriter in connection with shares being registered, the
Registrant will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate jurisdiction
the question whether such indemnification by it is against public policy as
expressed in the Act and will be governed by the final adjudication of such
issue.
ITEM 28. BUSINESS AND OTHER CONNECTIONS OF INVESTMENT ADVISER.
Fund Asset Management, L.P. (the "Manager" or FAM) acts as the investment
adviser for the following open-end investment companies: CMA Government
Securities Fund, CMA Money Fund, CMA Multi-State Municipal Series Trust, CMA
Tax-Exempt Fund, CMA Treasury Fund, The Corporate Fund Accumulation Program,
Inc., Financial Institutions Series Trust, Merrill Lynch Basic Value Fund,
Inc., Merrill Lynch California Municipal Series Trust, Merrill Lynch Corporate
Bond Fund, Inc., Merrill Lynch Federal Securities Trust, Merrill Lynch Funds
for Institutions Series, Merrill Lynch Multi-State Limited Maturity Municipal
Series Trust, Merrill Lynch Multi-State Municipal Series Trust, Merrill Lynch
Municipal Bond Fund, Inc., Merrill Lynch Phoenix Fund, Inc., Merrill Lynch
Special Value Fund, Inc., Merrill Lynch World Income Fund, Inc. and The
Municipal Fund Accumulation Program, Inc.; and the following closed-end
investment companies: Apex Municipal Fund, Inc., Corporate High Yield Fund,
Inc., Corporate High Yield Fund II, Inc., Emerging Tigers Fund, Inc., Income
Opportunities Fund 1999, Inc., Income Opportunities Fund 2000, Inc., MuniAsset
Fund, Inc., MuniBond Income Fund, Inc., MuniEnhanced Fund, Inc., MuniInsured
Fund, Inc., MuniVest Fund, Inc., MuniVest Fund II, Inc., MuniVest California
Insured Fund, Inc., MuniVest Florida Fund, MuniVest Michigan Fund, Inc.,
MuniVest New Jersey Fund, Inc., MuniVest New York Insured Fund, Inc., MuniVest
Pennsylvania Insured Fund, MuniYield Arizona Fund, Inc., MuniYield Arizona Fund
II, Inc., MuniYield California Fund, Inc., MuniYield California Insured Fund,
Inc., MuniYield California Insured Fund II, Inc., MuniYield Florida Fund,
MuniYield Florida Insured Fund, MuniYield Fund, Inc., MuniYield Insured Fund,
Inc., MuniYield Insured Fund II, Inc., MuniYield Michigan Insured Fund, Inc.,
MuniYield New Jersey Fund, Inc., MuniYield New Jersey Insured Fund, Inc.,
MuniYield New York Insured Fund, Inc., MuniYield New York Insured Fund II,
Inc., MuniYield New York Insured Fund III, Inc., MuniYield Pennsylvania Fund,
MuniYield Quality Fund, Inc., MuniYield Quality Fund II, Inc., Senior High
Income Portfolio, Inc., Senior High Income Portfolio II, Inc., Senior Strategic
Income Fund, Inc., Taurus MuniCalifornia Holdings, Inc., Taurus MuniNewYork
Holdings, Inc. and Worldwide DollarVest Fund, Inc. Merrill Lynch Asset
Management L.P. ("MLAM"), an affiliate of FAM, acts as investment adviser for
the following open-end investment companies: Merrill Lynch Adjustable Rate
Securities Fund, Inc., Merrill Lynch Americas Income Fund, Inc., Merrill Lynch
Asset Growth Fund, Inc., Merrill Lynch Asset Income Fund, Inc., Merrill Lynch
Balanced Fund for Investment and Retirement, Inc., Merrill Lynch Capital Fund,
Inc., Merrill Lynch Developing Capital Markets Fund, Inc., Merrill Lynch Dragon
Fund, Inc., Merrill Lynch EuroFund, Merrill Lynch Fundamental Growth Fund,
Inc., Merrill Lynch Fund For Tomorrow, Inc., Merrill Lynch Global Allocation
Fund, Inc., Merrill Lynch Global Bond Fund for Investment and Retirement,
Merrill Lynch Global Convertible Fund, Inc., Merrill Lynch Global Holdings,
Inc., Merrill Lynch Global Resources Trust, Merrill Lynch Global SmallCap Fund,
Inc., Merrill Lynch Global Utility Fund, Inc., Merrill Lynch Growth Fund for
Investment and Retirement, Merrill Lynch Healthcare Fund, Inc., Merrill Lynch
Institutional Intermediate Fund, Merrill Lynch International Equity Fund,
Merrill Lynch Latin America Fund, Inc., Merrill Lynch Middle East/Africa Fund,
Inc., Merrill Lynch Municipal Series Trust, Merrill Lynch Pacific Fund, Inc.,
Merrill Lynch Ready Assets Trusts, Merrill Lynch Retirement Asset Builder
Program, Inc., Merrill Lynch Retirement Series Trust, Merrill Lynch Series
Fund, Inc., Merrill Lynch Short-Term Global Income Fund, Inc., Merrill Lynch
Strategic Dividend Fund, Merrill Lynch Technology Fund, Inc., Merrill Lynch
U.S.A. Government Reserves, Merrill Lynch U.S. Treasury Money Fund, Merrill
Lynch Utility Income Fund, Inc. and Merrill Lynch Variable Series Fund, Inc.,
and the following closed-end investment companies: Convertible Holdings, Inc.,
Merrill Lynch High Income Municipal Bond Fund, Inc. and Merrill Lynch Senior
Floating Rate Fund, Inc. The address of each of these investment companies is
P.O. Box 9011, Princeton, New Jersey 08543-9011. The address of Merrill Lynch
Institutional Intermediate Fund and Merrill Lynch Funds for Institutions Series
is One Financial Center,
C-3
<PAGE>
15th Floor, Boston, Massachusetts 02111-2646. The address of the Manager and
MLAM is also P.O. Box 9011, Princeton, New Jersey 08543-9011. The address of
Merrill Lynch, Pierce, Fenner & Smith Incorporated ("Merrill Lynch") and
Merrill Lynch & Co., Inc. ("ML&Co.") is World Financial Center, North Tower,
250 Vesey Street, New York, New York 10281. The address of Merrill Lynch
Financial Data Services, Inc. is 4800 Deer Lake Drive East, Jacksonville,
Florida 32246-6484.
Set forth below is a list of each executive officer and partner of the
Manager indicating each business, profession, vocation or employment of a
substantial nature in which each such person or entity has been engaged since
March 1, 1991 for his own account or in the capacity of director, officer,
partner or trustee. In addition, Mr. Zeikel is President, Mr. Glenn is
Executive Vice President and Mr. Richard is Treasurer of all or substantially
all of the investment companies described in the preceding paragraph. Messrs.
Zeikel, Glenn and Richard also hold the same position with substantially all of
the investment companies advised by MLAM as they do with those advised by the
Manager and Messrs. Durnin, Giordano, Harvey, Hewitt, Kirstein, Monagle and Ms.
Griffin are directors or officers of one or more of such companies.
<TABLE>
<CAPTION>
POSITION(S) WITH OTHER SUBSTANTIAL BUSINESS,
NAME MANAGER PROFESSION, VOCATION OR EMPLOYMENT
---- ---------------- ----------------------------------
<S> <C> <C>
ML & Co................. Limited Partner Financial Services Holding Company
Princeton Services, Inc.
("Princeton Services"). General Partner General Partner of FAM
Arthur Zeikel........... President President of MLAM; President and
Director of Princeton Services; Director
of Merrill Lynch Funds Distributor,
Inc. ("MLFD"); Executive Vice
President of ML & Co. and Executive Vice
President of Merrill Lynch
<CAPTION>
Terry K. Glenn.......... Executive Vice Executive Vice President of MLAM;
President Executive Vice President and Director
of Princeton Services; President and
Director of MLFD; Director of Merrill
Lynch Financial Data Services, Inc.
("FDS");
President of Princeton Administrators,
L.P.
<S> <C> <C>
Bernard J. Durnin....... Senior Vice President Senior Vice President of MLAM; Senior
Vice President of Princeton Services
Vincent R. Giordano..... Senior Vice President Senior Vice President of MLAM; Senior
Vice President of Princeton Services
Elizabeth Griffin....... Senior Vice President Senior Vice President of MLAM
Norman R. Harvey........ Senior Vice President Senior Vice President of MLAM; Senior
Vice President of Princeton Services
N. John Hewitt.......... Senior Vice President Senior Vice President of MLAM; Senior
Vice President of Princeton Services
Philip L. Kirstein...... Senior Vice President, Senior Vice President, General Counsel
General Counsel and Secretary of MLAM; Senior Vice
and Secretary President, General Counsel, Director
and Secretary of Princeton Services;
Director of MLFD
Ronald M. Kloss......... Senior Vice President Senior Vice President and Controller
and Controller of MLAM; Senior Vice President and
Controller of Princeton Services
Stephen M.M. Miller..... Senior Vice President Executive Vice President of Princeton
Administrators, L.P.
Joseph T. Monagle, Jr. . Senior Vice President Senior Vice President of MLAM; Senior
Vice President of Princeton Services
</TABLE>
C-4
<PAGE>
<TABLE>
<CAPTION>
POSITION(S) WITH OTHER SUBSTANTIAL BUSINESS,
NAME MANAGER PROFESSION, VOCATION OR EMPLOYMENT
---- ---------------- ----------------------------------
<S> <C> <C>
Richard L. Reller....... Senior Vice President Senior Vice President of MLAM; Senior Vice
President of Princeton Services
Gerald M. Richard....... Senior Vice President Senior Vice President and Treasurer of
and Treasurer MLAM; Senior Vice President and
Treasurer of Princeton Services; Vice
President and Treasurer of MLFD
Ronald L. Welburn....... Senior Vice President Senior Vice President of MLAM; Senior Vice
President of Princeton Services
Anthony Wiseman......... Senior Vice President Senior Vice President of MLAM; Senior Vice
President of Princeton Services
</TABLE>
ITEM 29. PRINCIPAL UNDERWRITERS.
(a) Merrill Lynch and Broadcort Capital Corp. act as the principal
underwriters for the Registrant. Merrill Lynch also acts as the principal
underwriter for each of the following open-end investment companies referred to
in the first paragraph of Item 28: CMA Money Fund; CMA Treasury Fund; CMA Tax-
Exempt Fund; CMA Multi-State Municipal Series Trust; CMA Government Securities
Fund; The Corporate Fund Accumulation Program, Inc. and The Municipal Fund
Accumulation Program, Inc. and also acts as the principal underwriter for each
of the closed-end investment companies referred to in the first paragraph of
Item 28, and as the depositor of the following unit investment trusts: The
Corporate Income Fund, Municipal Investment Trust Fund, The ML Trust for
Government Guaranteed Securities and The Government Securities Income Fund.
(b) With the exception of Arthur Zeikel, the President and a Trustee of the
Registrant who is an Executive Vice President of Merrill Lynch and ML&Co., none
of the Trustees or officers of the Registrant is a director, officer or
employee of Merrill Lynch or Broadcort Capital Corp.
(c) Not applicable.
ITEM 30. LOCATION OF ACCOUNTS AND RECORDS.
All accounts, books and other documents required to be maintained by Section
31(a) of the Investment Company Act of 1940, as amended, and the Rules
thereunder will be maintained at the offices of the Registrant, 800 Scudders
Mill Road, Plainsboro, New Jersey 08536, and FDS, 4800 Deer Lake Drive East,
Jacksonville, Florida 32246-6484.
ITEM 31. MANAGEMENT SERVICES.
Other than as set forth under the caption "Management of the Money Fund--
Management and Advisory Arrangements" in the Prospectus constituting Part A of
the Registration Statement and under the caption "Management of the Money
Fund--Management and Advisory Arrangements" in the Statement of Additional
Information constituting Part B of the Registration Statement, Registration is
not a party to any management-related service contract.
ITEM 32. UNDERTAKINGS.
(a)Not applicable.
(b) Not applicable.
(c) Registrant undertakes to furnish each person to whom a prospectus is
delivered with a copy of the Registrant's latest annual report to
shareholders upon request and without charge.
C-5
<PAGE>
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 of the
requirements for effectiveness of this Post-Effective Amendment to the
Registration Statement pursuant to Rule 485(b) under the Securities Act of 1933
and has duly caused this Post-Effective Amendment to the Registration Statement
to be signed on its behalf by the undersigned, thereto duly authorized, in the
Township of Plainsboro and State of New Jersey, on the 26th day of June, 1995.
CBA Money Fund
(Registrant)
/s/ Terry K. Glenn
By__________________________________
(TERRY K. GLENN, EXECUTIVE VICE
PRESIDENT)
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS REGISTRATION
STATEMENT HAS BEEN SIGNED BELOW BY THE FOLLOWING PERSONS IN THE CAPACITIES AND
ON THE DATES INDICATED.
SIGNATURE TITLE DATE
Arthur Zeikel* President (Principal Executive Officer)
____________________________________ and Trustee
(ARTHUR ZEIKEL)
Gerald M. Richard* Treasurer (Principal Financial and
____________________________________ Accounting Officer)
(GERALD M. RICHARD)
Ronald W. Forbes*
____________________________________ Trustee
(RONALD W. FORBES)
Cynthia A. Montgomery*
____________________________________ Trustee
(CYNTHIA A. MONTGOMERY)
Charles C. Reilly*
____________________________________ Trustee
(CHARLES C. REILLY)
Kevin A. Ryan*
____________________________________ Trustee
(KEVIN A. RYAN)
Richard R. West*
____________________________________ Trustee
(RICHARD R. WEST)
*By
/s/ Terry K. Glenn
_________________________________
(TERRY K. GLENN, ATTORNEY-IN-FACT) June 26, 1995
C-6
<PAGE>
POWER OF ATTORNEY
The undersigned Trustee of CBA Money Fund (the "Fund") hereby authorizes
Arthur Zeikel, Terry K. Glenn, Gerald M. Richard and Robert Harris, or any of
them, as attorney-in-fact, to sign on her behalf, in the capacity stated below,
any amendments to the Registration Statement (including post-effective
amendments) of the Fund on Form N-1A and to file the same, with all exhibits
thereto, with the Securities and Exchange Commission.
SIGNATURE TITLE DATE
/s/ Cynthia A. Montgomery
____________________________________ Trustee
(CYNTHIA A. MONTGOMERY) June 7, 1994
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------- -----------
<C> <S> <C>
1 --Second Amended and Restated Declaration of Trust, dated June 13,
1984.(a)
2 --By-Laws of the Registrant.(a)
5(a) --Management Agreement between Registrant and Fund Asset Management,
L.P.(a)
(b) --Supplement to Management Agreement with Fund Asset Management.
L.P.(b)
6 --Form of Distribution Agreement among Registrant, Merrill Lynch,
Pierce, Fenner & Smith Incorporated and Broadcort Capital Corp. and
form of Selected Dealers Agreement.(a)
8 --Form of Custodian Contract between Registrant and State Street
Bank and Trust Company.(a)
9(a) --Transfer Agency, Shareholder Servicing Agency, and Proxy Agency
Agreement between Registrant and Merrill Lynch Financial Data Serv-
ices, Inc.(a)
(b) --Form of Capital Builder SM Account Agreement.(a)
(c) --Form of Broadcort Capital Account Agreement.(a)
10 --None.
11 --Consent of Deloitte & Touche LLP, independent auditors for the
Registrant.
13 --Certificate of Fund Asset Management, L.P.(a)
15 --Form of Distribution and Shareholder Servicing Plan pursuant to
Rule 12b-1 among Registrant, Merrill Lynch, Pierce, Fenner & Smith
Incorporated and Broadcort Capital Corp. and form of Distribution
Plan Sub-Agreement.(a)
16 --Schedule for computation of each performance quotation provided in
the Registration Statement in response to Item 22.(a)
17 --Financial Data Schedule.
</TABLE>
- --------
(a) Refiled pursuant to the Electronic Data Gathering, Analysis, and Retrieval
(EDGAR) phase-in requirements.
(b) Previously filed as an Exhibit to Post-Effective Amendment No. 12 to
Registrant's Registration Statement on Form N-1A filed on June 29, 1994.
<PAGE>
EXHIBIT 99.1
SECOND AMENDED AND RESTATED DECLARATION OF TRUST
OF
CBA MONEY FUND
THE DECLARATION OF TRUST OF CBA Money Fund made the 28th day of March, 1983,
as amended through the date hereof, is hereby amended and restated in its
entirety, pursuant to Sections 11.3 and 12.1 thereof, by the parties signatory
hereto, as trustees (such persons, so long as they shall continue in office in
accordance with the terms of this Second Amended and Restated Declaration of
Trust, as amended from time to time, and all other persons who at the time in
question have been duly elected or appointed as trustees in accordance with the
provisions of this Declaration of Trust and are then in office, being
hereinafter called the "Trustees"), and pursuant to the written consent of the
sole shareholder of CBA Money Fund in accordance with Section 10.8 thereof, this
13th day of June, 1984 to read as follows:
W I T N E S S E T H :
- - - - - - - - - -
WHEREAS, the Trustees desire to form a trust fund under the law of
Massachusetts for the investment and reinvestment of funds contributed thereto;
and
WHEREAS, it is proposed that the beneficial interest in the trust assets be
divided into transferable shares of beneficial interest as hereinafter provided;
NOW, THEREFORE, the Trustees hereby declare that they will hold in trust all
money and property contributed to the trust fund to manage and dispose of the
same for the benefit of the holders from time to time of the shares of
beneficial interest issued hereunder and subject to the provisions hereof, to
wit:
<PAGE>
ARTICLE I
The Trust
---------
1.1. Name. The name of the trust created hereby (the "Trust") shall be "CBA
----
Money Fund", and so far as may be practicable the Trustees shall conduct the
Trust's activities, execute all documents and sue or be sued under that names,
which name (and the word "Trust" wherever hereinafter used) shall refer to the
Trustees as Trustees, and not individually, and shall not refer to the officers,
agents, employees or Shareholders of the Trust. However, should the Trustees
determine that the use of such name is not advisable, they may select such other
name for the Trust as they deem proper and the Trust may hold its property and
conduct its activities under such other name. Any name change shall become
effective upon the execution by a majority of the then Trustees of an instrument
setting forth the new name. Any such instrument shall have the status of an
amendment to this Declaration.
1.2. Definitions. As used in this Declaration, the following terms shall have
-----------
the following meanings:
The terms "Affiliated Person", "Assignment", "Commission", "Interested Person"
----------------- ---------- ---------- -----------------
"Majority Shareholder Vote" (the 67% or more than 50% requirement of the third
-------------------------
sentence of Section 2(a)(42) of the 1940 Act, whichever may be applicable) and
"Principal Underwriter" shall have the meanings given them in the 1940 Act, as
---------------------
amended from time to time.
"Declaration" shall mean this Declaration as amended from time to time.
-----------
References in this Declaration to "Declaration", "hereof", "herein" and
----------- ------ ------
"hereunder" shall be deemed to refer to the Declaration rather than the article
---------
or section in which such words appear.
"Fundamental Policies" shall mean the investment restrictions set forth in the
--------------------
Prospectus and designated as fundamental policies therein.
"Person" shall mean and include individuals, corporations, partnerships
------
trusts, associations, joint ventures and other entities, whether or not legal
entities, and governments and agencies and political subdivisions thereof.
"Prospectus" shall mean the currently effective Prospectus of the Trust under
----------
the Securities Act of 1933, as amended.
"Shareholders" shall mean as of any particular time all holders of record of
------------
outstanding Shares at such time.
2.
<PAGE>
"Shares" shall mean the equal proportionate transferable units of interest
------
into which the beneficial interest in the Trust shall be divided from time to
time and includes fractions of Shares as well as whole Shares.
"Trustees" shall mean the signatories to this Declaration, so long as they
--------
shall continue in office in accordance with the terms hereof, and all other
persons who at the time in question have been duly elected or appointed and have
qualified as trustees in accordance with the provisions hereof and are then in
office, are herein referred to as the "Trustees", and reference in this
Declaration to a Trustee or Trustees shall refer to such person or persons in
their capacity as trustees hereunder.
"Trust Property" shall mean as of any particular time any and all property,
--------------
real or personal, tangible or intangible, which at such time is owned or held
by or for the account of the Trust or the Trustees.
The "1940 Act" refers to the Investment Company Act of 1940, as amended from
--------
time to time.
3.
<PAGE>
ARTICLE II
Trustees
--------
2.1. Number and Qualification. The number of Trustees shall be fixed from
------------------------
time to time by written instrument signed by a majority of the Trustees then in
office, provided, however, that the number of Trustees shall in no event be
less than three or more than fifteen (except prior to the first public offering
of Shares of the Trust). Any vacancy created by an increase in Trustees may, to
the extent permitted by the 1940 Act, be filled by the appointment of an
individual having the qualifications described in this Article made by a written
instrument signed by a majority of the Trustees then in office. Any such
appointment shall not become effective, however, until the individual named in
the written instrument of appointment shall have accepted in writing such
appointment and agreed in writing to be bound by the terms of this Declaration.
No reduction in the number of Trustees shall have the effect of removing any
Trustee from office prior to the expiration of his term. Whenever a vacancy in
the number of Trustees shall occur, until such vacancy is filled as provided in
Section 2.3 hereof, the Trustees in office, regardless of their number, shall
have all the powers granted to the Trustees and shall discharge all the duties
imposed upon the Trustees by this Declaration. A Trustee shall be an individual
at least 21 years of age who is not under legal disability. Trustees need not
own Shares.
2.2. Term of Office. The Trustees shall hold office during the lifetime of
--------------
this Trust, and until its termination as hereinafter provided; except (a) that
any Trustee may resign his trust by written instrument signed by him and
delivered to the other Trustees, which shall take effect upon such delivery or
upon such later date as is specified therein; (b) that any Trustee may be
removed at any time by written instrument, signed by at least two-thirds of the
number of Trustees prior to such removal, specifying the date when such removal
shall become effective; (c) that any Trustee who requests in writing to be
retired or who had become incapacitated by illness or injury may be retired by
written instrument signed by a majority of the other Trustees, specifying the
date of his retirement; and (d) a Trustee may be removed at any special meeting
of the Shareholders by a vote of two-thirds of the outstanding Shares. Upon the
resignation or removal of a Trustee, or his otherwise ceasing to be a Trustee,
he shall execute and deliver such documents as the remaining Trustees shall
require for the purpose of conveying to the Trust or the remaining Trustees any
Trust Property held in the name of the resigning or removed Trustee. Upon the
incapacity or death of any Trustee, his legal representative shall execute and
deliver on his behalf such documents as the remaining Trustees shall require as
provided in the preceding sentence.
4.
<PAGE>
2.3. Vacancies. The term of office of a Trustee shall terminate and a
---------
vacancy shall occur in the event of the death, resignation, bankruptcy,
adjudicated incompetence or other incapacity to perform the duties of the
office, or removal, of a Trustee. No such vacancy shall operate to annul this
Declaration or to revoke any existing agency created pursuant to the terms of
this Declaration. In the case of a vacancy, the Shareholders, acting at any
meeting of Shareholders held in accordance with Section 10.2 hereof, or, to the
extent permitted by the 1940 Act, a majority of the Trustees continuing in
office acting by written instrument or instruments, may fill such vacancy, and
any Trustee so elected by the Trustees shall hold office as provided in this
Declaration.
2.4. Meetings. Meetings of the Trustees shall be held from time to time upon
--------
the call of the Chairman, if any, the President, the Secretary or any two
Trustees. Regular meetings of the Trustees may be held without call or notice
at a time and place fixed by the By-Laws or by resolution of the Trustees.
Notice of any other meeting shall be mailed or otherwise given not less than 48
hours before the meeting but may be waived in writing by any Trustee either
before or after such meeting. The attendance of a Trustee at a meeting shall
constitute a waiver of notice of such meeting except where a Trustee attends a
meeting for the express purpose of objecting to the transaction of any business
on the ground that the meeting has not been lawfully called or convened. The
Trustees may act with or without a meeting. A quorum for all meetings of the
Trustees shall be a majority of the Trustees. Unless provided otherwise in this
Declaration, any action of the Trustees may be taken at a meeting by vote of a
majority of the Trustees present (a quorum being present) or without a meeting
by written consents of a majority of the Trustees.
Any committee of the Trustees, including an executive committee, if any, may
act with or without a meeting. A quorum for all meetings of any such committee
shall be a majority of the members thereof. Unless provided otherwise in this
Declaration, any action of any such committee may be taken at a meeting by vote
of a majority of the members present (a quorum being present) or without a
meeting by written consent of a majority of the members.
With respect to actions of the Trustees and any committee of the Trustees,
Trustees who are Interested Persons of the Trust within the meaning of Section
1.2 hereof or otherwise interested in any action to be taken may be counted for
quorum purposes under this Section and shall be entitled to vote to the extent
permitted by the 1940 Act.
All or any one or more Trustees may participate in a meeting of the Trustees
or any committee thereof by means of a conference telephone or similar
communications equipment by means of which all persons partici-
5.
<PAGE>
pating in the meeting can hear each other and participation in a meeting
pursuant to such communications systems shall constitute presence in person at
such meeting.
2.5. Officers. The Trustees shall annually elect a President, a Secretary
--------
and a Treasurer and may elect a Chairman. The Trustees may elect or appoint or
authorize the Chairman, if any, or President to appoint such other officers or
agents with such powers as the Trustees may deem to be advisable. The Chairman
and President shall be and the Secretary and Treasurer may, but need not, be a
Trustee.
2.6. By-Laws. The Trustees may adopt and from time to time amend or repeal
-------
the By-Laws for the conduct of the business of the Trust.
6.
<PAGE>
ARTICLE III
Powers of Trustees
------------------
3.1. General. The Trustees shall have exclusive and absolute control over
-------
the Trust Property and over the business of the Trust to the same extent as if
the Trustees were the sole owners of the Trust Property and business in their
own right, but with such powers of delegation as may be permitted by this
Declaration. The Trustees may perform such acts as in their sole discretion are
proper for conducting the business of the Trust. The enumeration of any specific
power herein shall not be construed as limiting the aforesaid power. Such powers
of the Trustees may be exercised without order of or resort to any court.
3.2. Investments. The Trustees shall have power subject to the Fundamental
-----------
Policies, to:
(a) conduct, operate and carry on the business of an investment company;
(b) subscribe for, invest in, reinvest in, purchase or otherwise acquire,
hold, pledge, sell, assign, transfer, exchange, distribute or otherwise deal
in or dispose of negotiable or nonnegotiable instruments, obligations
evidences of indebtedness, certificates. of deposit or indebtedness,
commercial papers, repurchase agreements reverse repurchase agreements and
other securities, including, without limitation, those issued, guaranteed or
sponsored by any state, territory or possession of the United States and the
District of Columbia and their political subdivisions, agencies and
instrumentalities or by the United States Government or its agencies or
instrumentalities, or international instrumentalities, or by any bank, savings
institution, corporation or other business entity organized under the laws of
the United States and, to the extent provided in the Prospectus and not
prohibited by the Fundamental Policies, organized under foreign laws; and to
exercise any and all rights, powers and privileges of ownership or interest in
respect of any and all such investments of every kind and description,
including, without limitation, the right to consent and otherwise act with
respect thereto, with power to designate one or more persons, firm,
associations or corporations to exercise any of said rights, powers and
privileges in respect of any of said instruments; and the Trustees shall be
deemed to have the foregoing powers with respect to any additional securities
in which the Trust may invest should the investment policies set forth in the
Prospectus or the Fundamental Policies be amended.
7.
<PAGE>
The Trustees shall not be limited to investing in obligations maturing before
the possible termination of the Trust, nor shall the Trustees be limited by any
law limiting the investments which may be made by fiduciaries.
3.3. Legal Title. Legal Title to all the Trust Property shall be vested in
-----------
the Trustees as joint tenants except that the Trustees shall have power to cause
legal title to any Trust Property to be held by or in the name of one or more of
the Trustees, or in the name of the Trust, or in the name of any other Person as
nominee, on such terms as the Trustees may determine, provided that the interest
of the Trust therein is appropriately protected.
The right, title and interest of the Trustees in the Trust Property shall vest
automatically in each person who may hereafter become a Trustee upon his due
election and qualification. Upon the resignation, removal or death of a Trustee
he shall automatically cease to have any right, title or interest in any of the
Trust Property, and the right, title and interest of such Trustee in the Trust
Property shall vest automatically in the remaining Trustees. Such vesting and
cessation of title shall be effective whether or not conveyancing documents have
been executed and delivered.
3.4. Issuance and Repurchase of Securities. The Trustees shall have the
-------------------------------------
power to issue, sell, repurchase, redeem, retire, cancel, acquire, hold,
resell, reissue, dispose of, transfer, and otherwise deal in, Shares, including
shares in fractional denominations, and, subject to the more detailed provisions
set forth in Articles VIII and IX, to apply to any such repurchase, redemption,
retirement, cancellation or acquisition of Shares any funds or property of the
Trust whether capital or surplus or otherwise, to the full extent now or
hereafter permitted by the laws of the Commonwealth of Massachusetts governing
business corporations.
3.5. Borrow Money. Subject to the Fundamental Policies, the Trustees shall
------------
have the power to borrow money or otherwise obtain credit and to secure the same
by mortgaging, pledging or otherwise subjecting as security the assets of the
Trust, including the lending of portfolio securities, and to endorse,
guarantee, or undertake the performance of any obligation, contract or
engagement of any other person, firm, association or corporation.
3.6. Delegation; Committees. The Trustees shall have power, consistent with
-----------------------
their continuing exclusive authority over the management of the Trust and the
Trust Property, to delegate from time to time to such of their number or to
officers, employees or agents of the Trust the doing of such things and the
execution of such instruments either in the
8.
<PAGE>
name of the Trust or the names of the Trustees or otherwise as the Trustees may
deem expedient, to the same extent as such delegation is permitted to directors
of a Massachusetts business corporation and is permitted by the 1940 Act.
3.7. Collection and Payment. The Trustees shall have power to collect all
----------------------
property due to the Trust; to pay all claims, including taxes, against the Trust
Property; to prosecute, defend, compromise or abandon any claims relating to the
Trust Property; to foreclose any security interest securing any obligations, by
virtue of which any property is owed to the Trust; and to enter into releases,
and other instruments.
3.8. Expenses. The Trustees shall have power to incur and pay any expenses
--------
which in the opinion of the Trustees are necessary or incidental to carry out
any of the purposes of this Declaration, and to pay reasonable compensation from
the funds of the Trust to themselves as Trustees. The Trustees shall fix the
compensation of all officers, employees and Trustees. The Trustees may pay
themselves such compensation for special services, including legal,
underwriting, syndicating and brokerage services, as they in good faith may deem
reasonable and reimbursement for expenses reasonably incurred by themselves on
behalf of the Trust.
3.9. Miscellaneous Powers. The Trustees shall have the power to: (a) employ or
--------------------
contract with such Persons as the Trustees may deem desirable for the
transaction of the business of the Trust; (b) enter into joint ventures,
partnerships and any other combinations or associations; (c) purchase, and pay
for out of Trust Property, insurance policies insuring the Shareholders,
Trustees, officers, employees, agents, investment advisers, distributors,
selected dealers or independent contractors of the Trust against all claims
arising by reason of holding any such position or by reason of any action taken
or omitted by any such Person in such capacity, whether or not constituting
negligence, or whether or not the Trust would have the power to indemnify such
Person against such liability; (d) establish pension, profit-sharing, share
purchase, and other retirement, incentive and benefit plans for any Trustees,
officers, employees and agents of the Trust; (e) make donations irrespective of
benefit to the Trust, for charitable, religious, educational, scientific, civic
or similar purposes; (f) to the extent permitted by law, indemnify any Person
with whom the Trust has dealings, including any advisor, administrator,
manager, distributor and selected dealers, to such extent as the Trustees shall
determine; (g) guarantee indebtedness or contractual obligations of others; (h)
determine and change the fiscal year of the Trust and the method in which its
accounts shall be kept; and (i) adopt a seal for the Trust, but the absence of
such seal shall not impair the validity of any instrument executed on behalf of
the Trust.
9.
<PAGE>
3.10. Further Powers. The Trustees shall have power to conduct the business of
--------------
the Trust and carry on its operations in any and all of its branches and
maintain offices both within and without the Commonwealth of Massachusetts, in
any and all states of the United States of America, in the District of Columbia,
and in any and all commonwealths, territories, dependencies, colonies,
possessions, agencies or instrumentalities of the United States of America and
of foreign governments, and to do all such other things and execute all such
instruments as they deem necessary, proper or desirable in order to promote the
interests of the Trust although such things are not herein specifically
mentioned. Any determination as to what is in the interests of the Trust made by
the Trustees in good faith shall be conclusive. In construing the provisions of
this Declaration, the presumption shall be in favor of a grant of power to the
Trustees. The Trustees will not be required to obtain any court order to deal
with the Trust Property.
10.
<PAGE>
ARTICLE IV
Management and Distribution Arrangements
----------------------------------------
4.1. Management Arrangements. Subject to a Majority Shareholder Vote, as
-----------------------
required by the 1940 Act, the Trustees may in their discretion from time to time
enter into advisory or management contracts whereby the other party to such
contract shall undertake to furnish the Trustees such advisory and management
services as the Trustees shall from time to time consider desirable and all upon
such terms and conditions as the Trustees may in their discretion determine.
Notwithstanding any provisions of this Declaration, the Trustees may authorize
any advisor or manager (subject to such general or specific instructions as the
Trustees may from time to time adopt) to effect purchases, sales, loans or
exchanges of portfolio securities of the Trust on behalf of the Trustees or may
authorize any officer, employee or Trustee to effect such purchases, sales,
loans or exchanges pursuant to recommendations of any such advisor or manager
(and all without further action by the Trustees). Any such purchases, sales,
loans and exchanges shall be deemed to have been authorized by all of the
Trustees.
4.2. Distribution Arrangements. The Trustees may in their discretion from
-------------------------
time to time enter into a contract, providing for the sale of the Shares of the
Trust to net the Trust not less than the par value per shares, whereby the Trust
may either agree to sell the Shares to the other party to the contract or
appoint such other party its sales agent for such Shares. In either case, the
contract shall be on such terms and conditions as the Trustees may in their
discretion determine not inconsistent with the provisions of this Article IV or
the By-Laws; and such contract may also provide for the repurchase or sale of
Shares by such other party as principal or as agent of the Trust and may provide
that such other party may enter into selected dealer agreements with registered
securities dealers to further the purpose of the distribution or repurchase of
the Shares.
4.3. Parties to Contract. Any contract of the character described in Section
-------------------
4.1 and 4.2 of this Article IV or in Article VII hereof may be entered into with
any corporation, firm, trust or association, although one or more of the
Trustees or officers of the Trust may be an officer, director Trustees,
shareholder, or member of such other party to the contract, and no such contract
shall be invalidated or rendered voidable by reason of the existence of any such
relationship, nor shall any person holding such relationship be liable merely by
reason of such relationship for any loss or expense to the Trust under or by
reason of said contract
11.
<PAGE>
or accountable for any profit realized directly or indirectly therefrom,
provided that the contract when entered into was reasonable and fair and not
inconsistent with the provisions of this Article IV or the By-Laws. The same
person (including a firm, corporation, trust, or association) may be the other
party to contracts entered into pursuant to Sections 4.1 and 4.2 above or
Article VII, and any individual may be financially interested or otherwise
affiliated with persons who are parties to any or all of the contracts mentioned
in this Section 4.3.
4.4. Provisions and Amendments. Any contract entered into pursuant to Section
-------------------------
4.1 and 4.2 of this Article IV shall be consistent with and subject to the
requirements of Section 15 of the 1940 Act with respect to its continuance in
effect, its termination, and the method of authorization and approval of such
contract or renewal thereof, and no amendment to any contract entered into
pursuant to Section 4.1 shall be effective unless assented to by a Majority
Shareholder Vote.
12.
<PAGE>
ARTICLE V
Limitations of Liability of Shareholders,
Trustees and Others
-----------------------------------------
5.1. No Personal Liability of Shareholders, Trustees, etc. No Shareholder
----------------------------------------------------
shall be subject to any personal liability whatsoever to any Person in
connection with Trust Property or the acts, obligations or affairs of the Trust.
No Trustee, officer, employee or agent of the Trust shall be subject to any
personal liability whatsoever to any Person, other than the Trust or its
Shareholders, in connection with Trust Property or the affairs of the Trust,
save only that arising from his bad faith, willful misfeasance, gross negligence
or reckless disregard of his duty to such Person; and all such Persons shall
look solely to the Trust Property for satisfaction of claims of any nature
arising in connection with the affairs of the Trust. If any Shareholder,
Trustee, officer, employee, or agent, as such, of the Trust, is made a party to
any suit or proceeding to enforce any such liability, he shall not on account
thereof, be held to any personal liability. The Trust shall indemnify and hold
each Shareholder harmless from and against all claims and liabilities, to which
such Shareholder may become subject by reason of his being or having been a
Shareholder, and shall reimburse such Shareholder for all legal and other
expenses reasonably incurred by him in connection,with any such claim or
liability. The rights accruing to a Shareholder under this Section 5.1 shall not
exclude any other right to which such Shareholder may be lawfully entitled, nor
shall anything herein contained restrict the right of the Trust to indemnify or
reimburse a Shareholder in any appropriate situation even though not
specifically provided herein.
5.2. Non-Liability of Trustees, etc. No Trustee, officer, employee or agent
------------------------------
of the Trust shall be liable to the Trust, its Shareholders, or to any
Shareholder, Trustee, officer, employee, or agent thereof for any action or
failure to act (including without limitation the failure to compel in any way
any former or acting Trustee to redress any breach of trust) except for his own
bad faith, willful misfeasance, gross negligence or reckless disregard of his
duties.
5.3. Mandatory Indemnification. The Trust shall indemnify each of its
-------------------------
Trustees, officers, employees, and agents (including persons who serve at its
request as directors, officers or trustees of another organization in which it
has any interest as a shareholder, creditor or otherwise) against all
liabilities and expenses (including amounts paid in satisfaction of judgements,
in compromise, as fines and penalties, and as counsel fees) reasonably incurred
by him in connection with the defense or disposition of any action, suit or
other proceeding, whether
13.
<PAGE>
civil or criminal, in which he may be involved or with which he may be
threatened, while in office or thereafter, by reason of his being or having been
such a trustee, officer, employee or agent, except with respect to any matter as
to which he shall have been adjudicated to have acted in bad faith, willful
misfeasance, gross negligence or reckless disregard of his duties; provided,
however, that as to any matter disposed of by a compromise payment by such
person, pursuant to a consent decree or otherwise, no indemnification either for
said payment or for any other expenses shall be provided unless the Trust shall
have received a written opinion from independent legal counsel approved by the
Trustees to the effect that if either the matter of willful misfeasance, gross
negligence or reckless disregard of duty, or the matter of good faith and
reasonable belief as to the best interests of the Trust, had been adjudicated,
it would have been adjudicated in favor of such person. The rights accruing to
any Person under these provisions shall not exclude any other right to which he
may be lawfully entitled; provided that no Person may satisfy any right of
indemnity or reimbursement granted herein or in Section 5.1 or to which he may
be otherwise entitled except out of the property of the Trust, and no
Shareholder shall be personally liable to any Person with respect to any claim
for indemnity or reimbursement or otherwise. The Trustees may make advance
payments in connection with indemnification under this Section 5.3, provided
that the indemnified person shall have given a written undertaking to reimburse
the Trust in the event it is subsequently determined that he is not entitled to
such indemnification.
5.4. No Bond Required of Trustees. No Trustee shall, as such, be obligated
----------------------------
to give any bond or surety or other security for the performance of any of his
duties hereunder.
5.5. No Duty of Investigation; Notice in Trust Instruments, etc. No
----------------------------------------------------------
purchaser, lender, transfer agent or other person dealing with the Trustees or
any officers, employee or agent of the Trust shall be bound to make any inquiry
concerning the validity of any transaction purporting to be made by the Trustees
or by said officer, employee or agent or be liable for the application of money
or property paid, loaned, or delivered to or on the order of the Trustees or of
said officer, employee or agent. Every obligation, contract, instrument,
certificate, Share, other security of the Trust or undertaking, and every other
act or thing whatsoever executed in connection with the Trust shall be
conclusively taken to have been executed or done by the executors thereof only
in their capacity as Trustees under this Declaration or in their capacity as
officers, employees or agents of the Trust. Every written obligation, contract,
instrument, certificate, Share, other security of the Trust or undertaking made
or issued by the Trustees or by any officers, employees or agents of the Trust,
in their capacity as such, shall contain an appropriate recital to the effect
that the Shareholders, Trustees, officers, employees and agents of the Trust
shall not personally be bound by or liable there-
14.
<PAGE>
under, nor shall resort be had to their private property for the satisfaction of
any obligation or claim thereunder, and appropriate references shall be made
therein to the Declaration, and may contain any further recital which they may
deem appropriate, but the omission of such recital shall not operate to impose
personal liability on any of the Trustees, Shareholders, officers, employees or
agents of the Trust. The Trustees may maintain insurance for the protection of
the Trust Property, its Shareholders, Trustees, officers, employees and agents
in such amount as the Trustees shall deem adequate to cover possible tort
liability, and such other insurance as the Trustees in their sole judgment shall
deem advisable.
5.6. Reliance on Experts, etc. Each Trustee and officer or employee of the
------------------------
Trust shall, in the performance of his duties, be fully and completely justified
and protected with regard to any act or any failure to act resulting from
reliance in good faith upon the books of account or other records of the Trust,
upon an opinion of counsel, or upon reports made to the Trust by any of its
officers or employees or by any investment adviser, distributor selected
dealers, accountants, appraisers or other experts or consultants selected with
reasonable care by the Trustees, officers or employees of the Trust, regardless
of whether such counsel or expert may also be a Trustee.
15.
<PAGE>
ARTICLE VI
Shares of Beneficial Interest
-----------------------------
6.1. Beneficial Interest. The interest of the beneficiaries hereunder shall
-------------------
be divided into transferable shares of beneficial interest, all of one class,
with par value $.10 per share. The number of such shares of beneficial interest
authorized hereunder is unlimited. All Shares issued hereunder including,
without limitation, Shares issued in connection with a dividend in Shares or a
split of Shares, shall be fully paid and nonassessable.
6.2. Rights of Shareholders. The ownership of the Trust Property of every
----------------------
description and the right to conduct any business hereinbefore described are
vested exclusively in the Trustees, and the Shareholders shall have no interest
therein other than the beneficial interest conferred by their Shares, and they
shall have no right to call for any partition or division of any property,
profits, rights or interests of the Trust nor can they be called upon to share
or assume any losses of the Trust or suffer an assessment of any kind by virtue
of their ownership of Shares. The Shares shall be personal property giving only
the rights in this Declaration specifically set forth. The Shares shall not
entitle the holder to preference, preemptive, appraisals, conversion or exchange
rights (except for rights of appraisal specified in Section 11.4).
6.3. Trust Only. It is the intention of the Trustees to create only the
----------
relationship of Trustee and beneficiary between the Trustees and each
Shareholder from time to time. It is not the intention of the Trustees to create
a general partnership, limited partnership, joint stock association,
corporation, bailment or any form of legal relationship other than a trust.
Nothing in this Declaration shall be construed to make the Shareholders, either
by themselves or with the Trustees, partners or members of a joint stock
association.
6.4. Issuance of Shares. The Trustees, in their discretion, may from time to
------------------
time without a vote of the Shareholders issue Shares, in addition to the then
issued and outstanding Shares and Shares held in the treasury, to such party or
parties and for such amount not less than par value and type of consideration,
including cash or property, at such time or times (including, without
limitation, each business day in accordance with the maintenance of a constant
net asset value per share as set forth in Section 9.3 hereof), and on such terms
as the Trustees may deem best, and may in such manner acquire other assets
(including the acquisition of assets subject to, and in connection with the
assumption of, liabilities)
16.
<PAGE>
and businesses. In connection with any issuance of Shares, the Trustees may
issue fractional Shares. The Trustees may from time to time divide or combine
the Shares into a greater or lesser number without thereby changing the
proportionate beneficial interests in the Trust. Reductions in the number of
outstanding Shares may be made pursuant to the constant net asset value per
share formula set forth in Section 9.3. Contributions to the Trust may be
accepted for, and Shares shall be redeemed as, whole Shares and/or 1/l,000ths
of a Share or multiples thereof.
6.5. Register of Shares. A register shall be kept at the Trust or a transfer
------------------
agent duly appointed by the Trustees under the direction of the Trustees which
shall contain the names and addresses of the Shareholders and the number of
Shares held by them respectively and a record of all transfers thereof. Such
register shall be conclusive as to who are the holders of the Shares and who
shall be entitled to receive dividends or distributions or otherwise to exercise
or enjoy the rights of Shareholders. No Shareholder shall be entitled to receive
payment of any dividend or distribution, nor to have notice given to him as
herein provided, until he has given his address to a transfer agent or such
other officer or agent of the Trustees as shall keep the said register for entry
thereon. It is not contemplated that certificates will be issued for the Shares;
however, the Trustees, in their discretion, may authorize the issuance of share
certificates and promulgate appropriate rules and regulations as to their use.
6.6. Transfer Agent and Registrar. The Trustee shall have power to employ a
----------------------------
transfer agent or transfer agents, and a registrar or registrars. The transfer
agent or transfer agents may keep the said register and record therein the
original issues and transfers, if any, of the said shares. Any such transfer
agent and registrars shall perform the duties usually performed by transfer
agents and registrars of certificates of stock in a corporation, except as
modified by the Trustees.
6.7. Transfer of Shares. Shares shall be transferable on the records of the
------------------
Trust only by the record holder thereof or by his agent thereto duly authorized
in writing, upon delivery to the Trustees or a transfer agent of the Trust of a
duly executed instrument of transfer, together with such evidence of the
genuineness of each such execution and authorization and of other matters as may
reasonably be required. Upon such delivery, the transfer shall be recorded on
the register of the Trust. Until such record is made, the Shareholder of record
shall be deemed to be the holder of such Shares for all purposes hereof and
neither the Trustees nor any transfer agent or registrar nor any officer,
employee or agent of the Trust shall be affected by any notice of the proposed
transfer.
Any person becoming entitled to any Shares in consequence of the death,
bankruptcy, or incompetence of any Shareholder, or otherwise by
17.
<PAGE>
operation of law, shall be recorded on the register of Shares as the holder of
such Shares upon production of the proper evidence thereof to the Trustees or a
transfer agent of the Trust, but until such record is made, the Shareholder of
record shall be deemed to be the holder of such Shares for all purposes hereof
and neither the Trustees nor any transfer agent or registrar nor any officer or
agent of the Trust shall be affected by any notice of such deaths, bankruptcy or
incompetence, or other operation of law.
6.8. Notices. Any and all notices to which any Shareholder hereunder may be
-------
entitled and any and all communications shall be deemed duly served or given if
mailed, postage prepaid, addressed to any Shareholder of record at his last
known address as recorded on the register of the Trust.
18.
<PAGE>
ARTICLE VII
Custodian
---------
7.1. Appointment and Duties. The Trustees shall at all times employ a
----------------------
custodian or custodians, meeting the qualifications for custodians for portfolio
securities of investment companies contained in the 1940 Act, as custodian with
authority as its agent, but subject to such restrictions, limitations and other
requirements, if any, as may be contained in the By-Laws of the Trust and the
1940 Act:
(1) to hold the securities owned by the Trust and deliver the same upon
written order;
(2) to receive and receipt for any moneys due to the Trust and deposit the
same in its own banking department or elsewhere as the Trustees may direct;
(3) to disburse such funds upon orders or vouchers;
(4) if authorized by the Trustees, to keep the books and accounts of the
Trust and furnish clerical and accounting services; and
(5) if authorized to do so by the Trustees, to compute the net income of the
Trust;
all upon such basis of compensation as may be agreed upon between the Trustees
and the custodian. If so directed by a Majority Shareholder Vote, the custodian
shall deliver and pay over all property of the Trust held by it as specified in
such vote.
The Trustees may also authorize the custodian to employ one or more sub-
custodians from time to time to perform such of the acts and services of the
custodian and upon such terms and conditions, as may be agreed upon between the
custodian and such sub-custodian and approved by the Trustees, provided that in
every case such sub-custodian shall meet the qualifications for custodians
contained in the 1940 Act.
7.2. Central Certificate System. Subject to such rules, regulations and
--------------------------
orders as the Commission may adopt, the Trustees may direct the custodian to
deposit all or any part of the securities owned by the Trust in a system for the
central handling of securities established by a national securities exchange or
a national securities association registered with the Commission under the
Securities Exchange Act of 1934, or
19.
<PAGE>
such other person as may be permitted by the Commission, or otherwise in
accordance with the 1940 Act, pursuant to which system all securities of any
particular class or series of any issuer deposited within the system are treated
as fungible and may be transferred or pledged by bookkeeping entry without
physical delivery of such securities, provided that all such deposits shall be
subject to withdrawal only upon the order of the Trust.
20.
<PAGE>
ARTICLE VIII
Redemption
----------
8.1. Redemptions. All outstanding Shares may be redeemed at the option of the
-----------
holders thereof, upon and subject to the terms and conditions provided in this
Article VIII. The Trust shall, upon application of any Shareholder or pursuant
to authorization from any Shareholder, redeem or repurchase from such
Shareholder outstanding Shares for an amount per share determined by the
application of a formula adopted for such purpose by resolution of the Trustees
(which formula shall be consistent with the 1940 Act, and the rules and
regulations promulgated thereunder); provided that (a) such amount per share
shall not exceed the cash equivalent of the proportionate interest of each share
in the assets of the Trust at the time of the purchase or redemption and (b) if
so authorized by the Trustees, the Trust may, at any time and from time to
time, charge fees for effecting such redemption, at such rates as the Trustees
may establish, as and to the extent permitted under the 1940 Act, and the rules
and regulations promulgated thereunder, and may, at any time and from time to
time, pursuant to such Act and such rules and regulations, suspend such right of
redemption. The procedures for effecting redemption shall be as set forth in the
Prospectus from time to time.
8.2. Redemption of Shares; Disclosure of Holding. If the Trustees shall, at
-------------------------------------------
any time and in good faith, be of the opinion that direct or indirect ownership
of Shares or other securities of the Trust has or may become concentrated in any
person to an extent which would disqualify the Trust as a regulated investment
company under the internal Revenue Code, then the Trustees shall have the power
by lot or other means deemed equitable by then (i) to call for redemption a
number, or principal amount, of Shares or other securities of the Trust
sufficient, in the opinion of the Trustees, to maintain or bring the direct or
indirect ownership of Shares or other securities of the Trust into conformity
with the requirements for such qualification and (ii) to refuse to transfer or
issue Shares or other securities of the Trust to any Person whose acquisition of
the Shares or other securities of the Trust in question would in the opinion of
the Trustees result in such disqualification. The redemption shall be effected
at a redemption price determined in accordance with Section 8.1.
The holders of Shares or other securities of the Trust shall upon demand
disclose to the Trustees in writing such information with respect to direct and
indirect ownership of Shares or other securities of the Trust as the Trustees
deem necessary to comply with the provisions of the Internal Revenue Code, or to
comply with the requirements of any other taxing authority.
21.
<PAGE>
8.3. Redemptions of Accounts of Less than $1,000. Due to the relatively high
-------------------------------------------
cost of maintaining investment accounts of less than $1,000, the Trustees shall
have the power to redeem shares at a redemption price determined in accordance
with Section 8.1 if at any time the total investment in such account does not
have a value of at least $1,000; provided, however, that the Trustees may not
exercise such power if the Prospectus does not describe such power. In the
event the Trustees determine to exercise their power to redeem Shares provided
in this Section 8.3, shareholders shall be notified that the value of their
account is less than $l,000 and allowed 60 days to make an additional investment
before redemption is processed.
8.4. Redemptions Pursuant to Constant Net Asset Value Formula. The Trust may
--------------------------------------------------------
also reduce the number of outstanding Shares pursuant to the provisions of
Section 9.3.
22.
<PAGE>
ARTICLE IX
Determination of Net Asset Value,
Net Income and Distributions
---------------------------------
9.1. Net Asset Value. The net asset value of each outstanding Share of the
---------------
Trust shall be determined at such time or times on such days as the Trustees may
determine, in accordance with the 1940 Act. The method of determination of net
asset value shall be determined by the Trustees and shall be as set forth in the
Prospectus. The power and duty to make the daily calculations may be delegated
by the Trustees to the adviser, administrator, manager, custodian, transfer
agent or such other person as the Trustees may determine. The Trustees may
suspend the daily determination of net asset value to the extent permitted by
the 1940 Act.
9.2. Distributions to Shareholders. The Trustees shall from time to
-----------------------------
time distribute ratably among the Shareholders such proportion of the net
profits, surplus (including paid-in surplus), capital, or assets held by the
Trustees as they may deem proper. Such distribution may be made in cash or
property (including without limitation any type of obligations of the Trust or
any assets thereof), and the Trustees may distribute ratably among the
Shareholders additional Shares issuable hereunder in such manner, at such times,
and on such term as the Trustees may deem proper. Such distributions may be
among the Shareholders of record at the time of declaring a distribution or
among the Shareholders of record at such later date as the Trustees shall
determine. The Trustees may always retain from the net profits such amount as
they may deem necessary to pay the debts or expenses of the Trust or to meet
obligations of the Trust, or as they may deem desirable to use in the conduct of
its affairs or to retain for future requirements or extensions of the business.
The Trustees may adopt and offer to Shareholders such dividend reinvestment
plans, cash dividend payout plans or related plans as the Trustees shall deem
appropriate.
Inasmuch as the computation of net income and gains for Federal income tax
purposes may vary from the computation thereof on the books, the above
provisions shall be interpreted to give the Trustees the power in their
discretion to distribute for any fiscal year as ordinary dividends and as
capital gains distributions, respectively, additional amounts sufficient to
enable the Trust to avoid or reduce liability for taxes.
9.3. Constant Net Asset Value; Reduction of Outstanding Shares. The Trustees
---------------------------------------------------------
shall have the power to determine the net income of the Trust once on each day
the net asset value of the Trust is determined as provided in Section 9.1 and at
each such determination declare such net
23.
<PAGE>
income as dividends with the result that the net asset value per share of the
Trust shall remain at a constant dollar value. The determination of net income
and the resultant declaration of dividends shall be as set forth in the
Prospectus. In such event, fluctuations in value will be reflected in the
number of outstanding Shares in each shareholder's account. It is expected that
the Trust will have a positive net income at the time of each determination. If
for any reason the net income of the Trust is a negative amount, the Trust may
offset such amount against dividends accrued in each Shareholder account. If
and to the extent such negative amount exceeds such accrued dividends, the Trust
shall have authority to reduce the number of its outstanding Shares. Such
reduction will be effected by having each Shareholder proportionately contribute
to the Trust's capital the necessary Shares that represent the amount of the
excess upon such determination. Each Shareholder will be deemed to have agreed
to such contribution in these circumstances by his investment in the Trust.
This procedure will permit the net asset value per share of the Trust to be
maintained at a constant dollar value per share.
The Trustees, by resolution, may discontinue or amend the practice of
maintaining the net asset value per share at a constant dollar amount at any
time and such modification shall be evidenced by appropriate changes in the
Prospectus.
9.4. Power to Modify Foregoing Procedures. Notwithstanding any of the
------------------------------------
foregoing provisions of this Article IX, the Trustees may prescribe, in their
absolute discretion, such other bases and times for determining the per share
net asset value of the Trust's Shares or net income, or the declaration and
payment of dividends and distributions as they may deem necessary or desirable
or to enable the Trust to comply with any provision of the 1940 Act, or any rule
or regulation thereunder, including any rule or regulation adopted pursuant to
Section 22 of the 1940 Act by the Commission or any securities association
registered under the Securities Exchange Act of 1934, or any order of exemption
issued by said Commission, all as in effect now or hereafter amended or
modified.
24.
<PAGE>
ARTICLE X
Shareholders
------------
10.1. Voting Powers. The Shareholders shall have power to vote (i) for the
--------------
removal of Trustees as provided in Section 2.2, (ii) with respect to any
advisory or management contract as provided in Section 4.1; (iii) with respect
to the amendment of this Declaration as provided in Section 11.3; and (iv) with
respect to such additional matters relating to the Trust as may be required or
authorized by the 1940 Act or other applicable law or by this Declaration or the
By-Laws of the Trust.
10.2. Meetings of Shareholders. Special meetings of the Shareholders may be
------------------------
called at any time by a majority of the Trustees and shall be called by any
Trustee upon written request of Shareholders holding in the aggregate not less
than 10% of the outstanding Shares having voting rights, such request specifying
the purpose or purposes for which such meeting is to be called. Any such
meeting shall be held within or without the Commonwealth of Massachusetts on
such day and at such time as the Trustees shall designate. The holders of one-
third of the outstanding Shares present in person or by proxy shall constitute a
quorum for the transaction of any business, except as may otherwise be required
by the 1940 Act or other applicable law or by this Declaration or the By-Laws of
the Trust. If a quorum is present at a meeting, the affirmative vote of a
majority of the Shares represented at the meeting constitutes the action of the
Shareholders, unless the 1940 Act, other applicable law, the Declaration or the
By-Laws of the Trust requires a greater number of affirmative votes.
10.3. Notice of Meetings. Notice of all meetings of the Shareholders,
------------------
stating the time, place and purposes of the meeting, shall be given by the
Trustees by mail to each Shareholder at his registered address, mailed at least
10 days and not more than 60 days before the meeting. Only the business stated
in the notice of the meeting shall be considered at such meeting. Any adjourned
meeting may be held as adjourned without further notice.
10.4. Record Date for Meetings. For the purpose of determining the
------------------------
Shareholders who are entitled to notice of and to vote at any meeting, or to
participate in any distribution, or for the purpose of any other action, the
Trustees may from time to time close the transfer books for such period, not
exceeding 30 days, as the Trustees may determine; or without closing the
transfer books the Trustees may fix a date not more than 60 days prior to the
date of any meeting of Shareholders or daily dividends or other action as a
record date for the determination of the Persons to be treated as Shareholders
of record for such purposes, except for dividend payments which shall be
governed by Section 9.2 hereof.
25.
<PAGE>
10.5. Proxies, etc. At any meeting of Shareholders, any holder of Shares
------------
entitled to vote thereat may vote by proxy, provided that no proxy shall be
voted at any meeting unless it shall have been placed on file with the
Secretary, or with such other officer or agent of the Trust as the Secretary may
direct, for verification prior to the time at which such vote shall be taken.
Pursuant to a resolution of a majority of the Trustees, proxies may be solicited
in the name of one or more Trustees or one or more of the officers of the Trust.
Only Shareholders of record shall be entitled to vote. Each full Share shall be
entitled to one vote and fractional Shares shall be entitled to a vote of such
fraction. When any Share is held jointly by several persons, any one of them may
vote at any meeting in person or by proxy in respect of such Share, but if more
than one of them shall be present at such meeting in person or by proxy, and
such joint owners or their proxies so present disagree as to any vote to be
cast, such vote shall not be received in respect of such Share. A proxy
purporting to be executed by or on behalf of a Shareholder shall be deemed valid
unless challenged at or prior to its exercise, and the burden of proving
invalidity shall rest on the challenger. If the holder of any such Share is a
minor or a person of unsound mind, and subject to guardianship or to the legal
control of any other person as regards the charge or management of such Share,
he may vote by his guardian or such other person appointed or having such
control, and such vote may be given in person or by proxy.
10.6. Reports. The Trustees shall cause to be prepared at least annually a
-------
report of operations containing a balance sheet and statement of income and
undistributed income of the Trust prepared in conformity with generally accepted
accounting principles and an opinion of an independent public accountant on such
financial statements. Copies of such reports shall be mailed to all Shareholders
of record within the time required by the 1940 Act, and in any event within a
reasonable period preceding the annual meeting of Shareholders. The Trustees
shall, in addition, furnish to the Shareholders at least semi-annually interim
reports containing an unaudited balance sheet of the Trust as of the end of such
period and an unaudited statement of income and surplus for the period from the
beginning of the current fiscal year to the end of such period.
10.7. Inspection of Records. The records of the Trust shall be open to
---------------------
inspection by Shareholders to the same extent as is permitted shareholders of a
Massachusetts business corporation.
10.8. Shareholder Action by Written Consent. Any action which may be taken
-------------------------------------
by Shareholders may be taken without a meeting if a majority of Shareholders
entitled to vote on the matter (or such larger proportion thereof as shall be
required by any express provision of this Declaration) consent to the action in
writing and the written consents are filed with the records of the meetings of
Shareholders. Such consent shall be treated for all purposes as a vote taken at
a meeting of Shareholders.
26.
<PAGE>
ARTICLE XI
Duration; Termination of Trust;
Amendment; Mergers, Etc.
-------------------------------
11.1. Duration. Subject to possible termination in accordance with the
--------
provisions of Section 11.2 hereof, the Trust created hereby shall continue until
the expiration of 20 years after the death of the last survivor of the initial
Trustees named herein and the following named persons:
<TABLE>
<CAPTION>
Name Address Date of Birth
---- ------- -------------
<S> <C> <C>
Lindsay Rider MacKinnon Mountain Farm Road January 27, 1981
Tuxedo Park, N.Y.
10987
Eric Alfred Pietrzak 95 Corona Avenue January 29, 1981
Pelham, N.Y.
10803
Angus Washburn Smith 12 Masterton Road October 15, 1982
Bronxville, N.Y.
10708
Ashley Chapin Smith 12 Masterton Road May 20, 1972
Bronxville, N.Y.
10708
Elisabeth Lyon Smith 12 Masterton Road October 15, 1982
Bronxville, N.Y.
10708
Thomas Ervin Smith 12 Masterton Road November 14, 1973
Bronxville, N.Y.
10708
</TABLE>
11.2. Termination of Trust.
--------------------
(a) The Trust may be terminated by the affirmative vote of the holders of
not less than two-thirds of the Shares at any meeting of
27.
<PAGE>
Shareholders or by an instrument in writing, without a meeting, signed by a
majority of the Trustees and consented to by the holders of not less than two-
thirds of such Shares. Upon the termination of the Trust,
(i) The Trust shall carry on no business except for the purpose of winding
up its affairs.
(ii) The Trustees shall proceed to wind up the affairs of the Trust and all
of the powers of the Trustees under this Declaration shall continue until the
affairs of the Trust shall have been wound up, including the power to fulfill
or discharge the contracts of the Trust, collect its assets, sell, convey,
assign, exchange, transfer or otherwise dispose of all or any part of the
remaining Trust Property to one or more persons at public or private sale for
consideration which may consist in whole or in part of cash, securities or
other property of any kind, discharge or pay its liabilities, and do all
other acts appropriate to liquidate its business; provided that any sale,
conveyance assignment, exchange, transfer or other disposition of all or
substantially all the Trust Property shall require approval of the principal
terms of the transaction and the nature and amount of the consideration by
vote or consent of the holders of a majority of the Shares entitled to vote.
(iii) After paying or adequately providing for the payment of all
liabilities and upon receipt of such releases, indemnities and refunding
agreements as they deem necessary for their protection, the Trustees may
distribute the remaining Trust Property, in cash or in kind or partly each,
among the Shareholders according to their respective rights.
(b) After termination of the Trust and distribution to the Shareholders as
herein provided, a majority of the Trustees shall execute and lodge among the
records of the Trust an instrument in writing setting forth the fact of such
termination, and the Trustees shall thereupon be discharged from all further
liabilities and duties hereunder, and the rights and interests of all
Shareholders shall thereupon cease.
11.3. Amendment Procedure.
-------------------
(a) This Declaration may be amended by the affirmative vote of the holders
of not less than a majority of the Shares at any meeting of Shareholders or by
an instrument in writing, without a meeting, signed by a majority of the
Trustees and consented to by the holders of not less than a majority of such
Shares. The Trustees may also amend this Declaration without the vote or consent
of Shareholders if they deem it necessary to conform this Declaration to the
requirements of applicable federal laws or regulations or the requirements of
the regulated investment company provisions of the Internal Revenue Code, but
the Trustees shall not be liable for failing so to do.
28.
<PAGE>
(b) No amendment may be made, under Section 11.3 (a) above, which would
change any rights with respect to any Shares of the Trust by reducing the amount
payable thereon upon liquidation of the Trust or by diminishing or eliminating
any voting rights pertaining thereto, except with the vote or consent of the
holders of two-thirds of the Shares. Nothing contained in this Declaration shall
permit the amendment of this Declaration to impair the exemption from personal
liability of the Shareholders, Trustees, officers, employees and agents of the
Trust or to permit assessments upon Shareholders.
(c) A certification in recordable form signed by a majority of the
Trustees setting forth an amendment and reciting that it was duly adopted by the
Shareholders or by the Trustees as aforesaid or a copy of the Declaration, as
amended, in recordable form, and executed by a majority of the Trustees, shall
be conclusive evidence of such amendment when lodged among the records of the
Trust.
Notwithstanding any other provision hereof, until such time as a Registration
Statement under the Securities Act of 1933, as amended, covering the first
public offering of Shares of the Trust shall have become effective, this
Declaration may be terminated or amended in any respect by the affirmative vote
of a majority of the Trustees or by an instrument signed by a majority of the
Trustees.
11.4. Merger, Consolidation and Sale of Assets. The Trust may merge or
----------------------------------------
consolidate with any other corporation, association, trust or other organization
or may sell, lease or exchange all or substantially all of the Trust Property,
including its good will, upon such terms and conditions and for such
consideration when and as authorized at any meeting of Shareholders called for
the purpose by the affirmative vote of the holders of not less than two-thirds
of the Shares, or by an instrument or instruments in writing without a meeting,
consented to by the holders of not less than two-thirds of such Shares, and any
such merger, consolidation, sale, lease or exchange shall be deemed for all
purposes to have been accomplished under and pursuant to the statutes of the
Commonwealth of Massachusetts. In respect of any such merger, consolidation,
sale or exchange of assets, any Shareholder shall be entitled to rights of
appraisal of his Shares to the same extent as a shareholder of a Massachusetts
business corporation in respect of a merger, consolidation, sale or exchange of
assets of a Massachusetts business corporation, and such rights shall be his
exclusive remedy in respect of his dissent from any such action.
11.5. Incorporation. With the approval of the holders of a majority of the
-------------
Shares, the Trustees may cause to be organized or assist in organizing a
corporation or corporations under the laws of any jurisdiction or any other
trust, partnership, association or other organization to take over all of the
Trust Property or to carry on any business in
29.
<PAGE>
which the Trust shall directly or indirectly have any interest, and to sell,
convey and transfer the Trust Property to any such corporation, trust,
association or organization in exchange for the Shares or securities thereof or
otherwise, and to lend money to, subscribe for the Shares or securities of, and
enter into any contracts with any such corporation, trust, partnership,
association or organization, or any corporation, partnership, trust, association
or organization in which the Trust holds or is about to acquire shares or any
other interest. The Trustees may also cause a merger or consolidation between
the Trust or any successor thereto and any such corporation, trust,
partnership, association or other organization if and to the extent permitted
by law, as provided under the law then in effect. Nothing contained herein
shall be construed as requiring approval of Shareholders for the Trustees to
organize or assist in organizing one or more corporations, trusts, partnerships,
associations or other organizations and selling, conveying or transferring a
portion of the Trust Property to such organizations or entities.
30.
<PAGE>
ARTICLE XII
Miscellaneous
-------------
12.1. Filing. This Declaration and any amendment hereto shall be filed in
------
the office of the Secretary of the Commonwealth of Massachusetts and in such
other places as may be required under the laws of Massachusetts and may also be
filed or recorded in such other places as the Trustees deem appropriate. Each
amendment so filed shall be accompanied by a certificate signed and acknowledged
by a Trustee stating that such action was duly taken in a manner provided
herein, and unless such amendment or such certificate sets forth some later
time for the effectiveness of such amendments, such amendment shall be effective
upon its filing. A restated Declaration, containing the original Declaration and
all amendments theretofore made, nay be executed from time to time by a majority
of the Trustees and shall, upon filing with the Secretary of the Commonwealth of
Massachusetts, be conclusive evidence of all amendments contained
therein and may thereafter be referred to in lieu of the original Declaration
and the various amendments thereto.
12.2. Resident Agent. The Trust shall maintain a resident agent in the
--------------
Commonwealth of Massachusetts, which agent shall initially be CT Corporation
System, 10 Post Office Square, Boston, Massachusetts 02109. The Trustees may
designate a successor resident agent, provided, however, that such appointment
shall not become effective until written notice thereof is delivered to the
office of the Secretary of the Commonwealth.
12.3. Governing Law. This Declaration is executed by the Trustees and
-------------
delivered in the Commonwealth of Massachusetts and with reference to the laws
thereof, and the rights of all parties and the validity and construction of
every provision hereof shall be subject to and construed according to the laws
of said State and reference shall be specifically made to the business
corporation law of the Commonwealth of Massachusetts as to the construction of
matters not specifically covered herein or as to which an ambiguity exists.
12.4. Counterparts. This Declaration may be simultaneously executed in
------------
several counterparts, each of which shall be deemed to be an original, and such
counterparts, together, shall constitute one and the same instrument, which
shall be sufficiently evidenced by any such original counterpart.
12.5. Reliance by Third Parties. Any certificate executed by an individual
-------------------------
who, according to the records of the Trust, or of any recording office in which
this Declaration may be recorded, appears to be a Trustee hereunder, certifying
to: (a) the number or identity of Trustees or shareholders, (b) the due
authorization of the execution of any instrument or writing, (c) the form of
any vote passed at a meeting of Trustees or Shareholders, (d) the fact that the
number of Trustees or Shareholders present at any meeting or executing any
written instrument satisfies the requirements of this Declaration, (e) the form
of any
31.
<PAGE>
By-Laws adopted by or the identity of any officers elected by the Trustees, or
(f) the existence of any fact or facts which in any manner relate to the affairs
of the Trust, shall be conclusive evidence as to the matters so certified in
favor of any person dealing with the Trustees and their successors.
12.6. Provisions in Conflict With Law or Regulations.
----------------------------------------------
(a) The provisions of this Declaration are severable, and if the Trustees
shall determine, with the advice of counsel, that any of such provisions, is in
conflict with 1940 Act, the regulated investment company provisions of the
Internal Revenue Code or with other applicable laws and regulations, the
conflicting provision shall be deemed never to have constituted a part of this
Declaration; provided, however, that such determination shall not affect any of
the remaining provisions of this Declaration or render invalid or improper any
action taken or omitted prior to such determination.
(b) If any provision of this Declaration shall be held invalid or
unenforceable in any jurisdiction, such invalidity or unenforceability shall
attach only to such provision in such jurisdiction and shall not in any manner
affect such provision in any other jurisdiction or any other provision of this
Declaration in any jurisdiction.
IN WITNESS WHEREOF, the undersigned, constituting a majority of the Trustees
of the Trusts, have caused these presents to be executed as of the day and year
first above written.
/s/ Arthur Zeikel
-------------------------
Arthur Zeikel
/s/ Howard O. Colgan, Jr.
-------------------------
Howard O. Colgan, Jr.
/s/ Ronald W. Forbes
-------------------------
Ronald W. Forbes
/s/ Thomas H. Lenagh
-------------------------
Thomas H. Lenagh
/s/ Richard T. O'Reilly
-------------------------
Richard T. O'Reilly
/s/ Richard R. West
-------------------------
Richard R. West
/s/ Marc A. White
-------------------------
Marc A. White
32.
<PAGE>
EXHIBIT 99.2
================================================================================
BY-LAWS
OF
CBA MONEY FUND
================================================================================
<PAGE>
MERRILL LYNCH CBA MONEY FUND
----------------------------
BY-LAWS
-------
These By-Laws are made and adopted pursuant to Section 2.7 of the
Declaration of Trust establishing CBA MONEY FUND, dated March 28, 1983, as from
time to time amended (hereinafter called the "Declaration"). All words and
terms capitalized in these By-Laws shall have the meaning or meanings set forth
for such words or terms in the Declaration.
ARTICLE I
---------
Shareholder Meetings
--------------------
Section 1.1. Chairman. The Chairman, if any, shall act as chairman at all
--------
meetings of the Shareholders; in his absence, the President shall act as
chairman; and in the absence of the Chairman and President, the Trustee or
Trustees present at each meeting may elect a temporary chairman for the meeting,
who may be one of themselves.
Section 1.2. Proxies; Voting. Shareholders may vote either in person or by
---------------
duly executed proxy and each full share represented at the meeting shall have
one vote, all as provided in Article X of the Declaration. No proxy shall be
valid after eleven (11) months from the date
<PAGE>
of its execution, unless a longer period is expressly stated in such proxy.
Section 1.3. Closing of Transfer Books and Fixing Record Dates. For the
-------------------------------------------------
purpose of determining the Shareholders who are entitled to notice of or to
vote or act at any meeting, including any adjournment thereof, or who are
entitled to participate in any dividends, or for any other proper purpose, the
Trustees may from time to time close the transfer books or fix a record date
in the manner provided in Section 10.3 of the Declaration. If the Trustees do
not prior to any meeting of Shareholders so fix a record date or close the
transfer books, then the date of mailing notice of the meeting or the date upon
which the dividend resolution is adopted, as the case may be, shall be the
record date.
Section 1.4. Inspectors of Election. In advance of any meeting of
----------------------
Shareholders, the Trustees may appoint Inspectors of Election to act at the
meeting or any adjournment thereof. If Inspectors of Election are not so
appointed, the Chairman, if any, of any meeting of Shareholders may, and on the
request of any Shareholder or his proxy shall, appoint Inspectors of Election
of the meeting. The number of Inspectors shall be either one or three. If
appointed at the meeting on the request of one or more Shareholders or proxies,
a majority of Shares present shall determine whether one or three Inspectors
are to be appointed, but
2.
<PAGE>
failure to allow such determination by the Shareholders shall not affect the
validity of the appointment of Inspectors of Election. In case any person
appointed as Inspector fails to appear or fails or refuses to act, the vacancy
may be filled by appointment made by the Trustees in advance of the convening of
the meeting or at the meeting by the person acting as chairman. The Inspectors
of Election shall determine the number of Shares outstanding, the Shares
represented at the meeting, the existence of a quorum, the authenticity,
validity and effect of proxies, shall receive votes, ballots or consents, shall
hear and determine all challenges and questions in any way arising in connection
with the right to vote, shall count and tabulate all votes or consents,
determine the results, and do such other acts as may be proper to conduct the
election or vote with fairness to all Shareholders. If there are three
Inspectors of Election, the decision, act or certificate of a majority is
effective in all respects as the decision, act or certificate of all. On
request of the Chairman, if any, of the meeting, or of any Shareholder or his
proxy, the Inspectors of Election shall make a report in writing of any
challenge or question or matter determined by them and shall execute a
certificate of any facts found by them.
3.
<PAGE>
Section 1.5. Records at Shareholder Meetings. At each meeting of the
-------------------------------
Shareholders there shall be open for inspection the minutes of the last previous
Annual or Special Meeting of Shareholders of the Trust and a list of the
Shareholders of the Trust, certified to be true and correct by the Secretary or
other proper agent of the Trust, as of the record date of the meeting or the
date of closing of transfer books, as the case may be. Such list of Shareholders
shall contain the name of each Shareholder in alphabetical order and the address
and number of Shares owned by such Shareholder. Shareholders shall have such
other rights and procedures of inspection of the books and records of the Trust
as are granted to shareholders of a Massachusetts business corporation.
ARTICLE II
----------
Trustees
--------
Section 2.1. Annual and Regular Meetings. The Trustees shall hold an annual
---------------------------
meeting for the election of officers and the transaction of other business which
may come before such meeting, as soon as practicable after the Annual Meeting of
Shareholders. Regular meetings of the Trustees may be held without call or
notice at such place or places and times as the Trustees may by resolution
provide from time to time.
4.
<PAGE>
Section 2.2. Special Meetings. Special Meetings of the Trustees shall be
----------------
held upon the call of the Chairman, if any, the President, the Secretary or any
two Trustees, at such time, on such day, and at such place, as shall be
designated in the notice of the meeting.
Section 2.3. Notice. Notice of a meeting shall be given by mail or by
------
telegram (which term shall include a cablegram) or delivered personally. If
notice is given by mail, it shall be mailed not later than 48 hours preceding
the meeting and if given by telegram or personally, such telegram shall be sent
or delivery made not later than 48 hours preceding the meeting. Notice by
telephone shall constitute personal delivery for these purposes. Notice of a
meeting of Trustees may be waived before or after any meeting by signed written
waiver. Neither the business to be transacted at, nor the purpose of, any
meeting of the Board of Trustees need be stated in the notice or waiver of
notice of such meeting, and no notice need be given of action proposed to be
taken by unanimous written consent. The attendance of a Trustee at a meeting
shall constitute a waiver of notice of such meeting except where a Trustee
attends a meeting for the express purpose of objecting to the transaction of any
business on the ground that the meeting has not been lawfully called or
convened.
5.
<PAGE>
Section 2.4. Chairman; Records. The Chairman, if any, shall act as chairman
-----------------
at all meetings of the Trustees; in his absence the President shall act as
chairman; and, in the absence of the Chairman and the President, the Trustees
present shall elect one of their number to act as temporary chairman. The
results of all actions taken at a meeting of the Trustees, or by unanimous
written consent of the Trustees, shall be recorded by the Secretary.
ARTICLE III
-----------
Officers
--------
Section 3.1. Officers of the Trust. The officers of the Trust shall
---------------------
consist of a Chairman, if any, a President, a Secretary, a Treasurer and such
other officers or assistant officers, including Vice-Presidents, as may be
elected by the Trustees. Any two or more of the offices may be held by the same
person, except that the same person may not be both President and Secretary.
The Trustees may designate a Vice-President as an Executive Vice-President and
may designate the order in which the other Vice-Presidents may act. The
Chairman and the President shall be Trustees, but no other officer of the Trust
need be a Trustee.
Section 3.2. Election and Tenure. At the initial organization meeting and
-------------------
thereafter at each annual meeting
6.
<PAGE>
of the Trustees, the Trustees shall elect the Chairman, if any, President,
Secretary, Treasurer and such other officers as the Trustees shall deem
necessary or appropriate in order to carry out the business of the Trust. Such
officers shall hold office until the next annual meeting of the Trustees and
until their successors have been duly elected and qualified. The Trustees may
fill any vacancy in office or add any additional officers at any time.
Section 3.3. Removal of Officers. Any officer may be removed at any time,
-------------------
with or without cause, by action of a majority of the Trustees. This provision
shall not prevent the making of a contract of employment for a definite term
with any officer and shall have no effect upon any cause of action which any
officer may have as a result of removal in breach of a contract of employment.
Any officer may resign at any time by notice in writing signed by such officer
and delivered or mailed to the Chairman, if any, President, or Secretary, and
such resignation shall take effect immediately upon receipt by the Chairman, if
any, President, or Secretary, or at a later date according to the terms of such
notice in writing.
Section 3.4. Bonds and Surety. Any officer may be required by the Trustees
----------------
to be bonded for the faithful performance of his duties in such amount and with
such sureties as the Trustees may determine.
7.
<PAGE>
Section 3.5. Chairman, President, and Vice-Presidents. The Chairman, if
----------------------------------------
any, shall, if present, preside at all meetings of the Shareholders and of the
Trustees and shall exercise and perform such other powers and duties as may be
from time to time assigned to him by the Trustees. Subject to such supervisory
powers, if any, as may be given by the Trustees to the Chairman, if any, the
President shall be the chief executive officer of the Trust and, subject to the
control of the Trustees, shall have general supervision, direction and control
of the business of the Trust and of its employees and shall exercise such
general powers of management as are usually vested in the office of President of
a corporation. In the absence of the Chairman, if any, the President shall
preside at all meetings of the Shareholders and of the Trustees. The President
shall be, ex-officio, a member of all standing committees, except as otherwise
provided in the resolutions or instruments creating any such committees.
Subject to direction of the Trustees, the Chairman, if any, and the President
shall each have power in the name and on behalf of the Trust to execute any and
all loan documents, contracts, agreements, deeds, mortgages, and other
instruments in writing, and to employ and discharge employees and agents of the
Trust. Unless otherwise directed by the Trustees, the Chairman, if any, and the
President shall each have full authority and power,
8.
<PAGE>
on behalf of all of the Trustees, to attend and to act and to vote, on behalf of
the Trust at any meetings of business organizations in which the Trust holds an
interest, or to confer such powers upon any other persons, by executing any
proxies duly authorizing such persons. The Chairman, if any, and the President
shall have such further authorities and duties as the Trustees shall from time
to time determine. In the absence or disability of the President, the Vice-
Presidents in order of their rank as fixed by the Trustees or, if more than one
and not ranked, the Vice-President designated by the Trustees, shall perform all
of the duties of the President, and when so acting shall have all the powers of
and be subject to all of the restrictions upon the President. Subject to the
direction of the Trustees, and of the President, each Vice-President shall have
the power in the name and on behalf of the Trust to execute any and all loan
documents, contracts, agreements, deeds, mortgages and other instruments in
writing, and, in addition, shall have such other duties and powers as shall be
designated from time to time by the Trustees or by the President.
Section 3.6. Secretary. The Secretary shall keep the minutes of all
---------
meetings of, and record all votes of, Shareholders, Trustees and the Executive
Committee, if any. He shall be custodian of the seal of the Trust, if any, and
9.
<PAGE>
he (and any other person so authorized by the Trustees) shall affix the seal
or, if permitted, a facsimile thereof, to any instrument executed by the Trust
which would be sealed by a Massachusetts corporation executing the same or a
similar instrument and shall attest the seal and the signature or signatures of
the officer or officers executing such instrument on behalf of the Trust. The
Secretary shall also perform any other duties commonly incident to such office
in a Massachusetts business corporation, and shall have such other authorities
and duties as the Trustees shall from time to time determine.
Section 3.7. Treasurer. Except as otherwise directed by the Trustees, the
---------
Treasurer shall have the general supervision of the monies, funds, securities,
notes receivable and other valuable papers and documents of the Trust, and
shall have and exercise under the supervision of the Trustees and of the
President all powers and duties normally incident to his office. He may
endorse for deposit or collection all notes, checks and other instruments
payable to the Trust or to its order. He shall deposit all funds of the Trust
in such depositories as the Trustees shall designate. He shall be responsible
for such disbursement of the funds of the Trust as may be ordered by the
Trustees or the President. He shall keep accurate account of the books of
10.
<PAGE>
the Trust's transactions which shall be the property of the Trust, and which
together with all other property of the Trust in his possession, shall be
subject at all times to the inspection and control of the Trustees. Unless the
Trustees shall otherwise determine, the Treasurer shall be the principal
accounting officer of the Trust and shall also be the principal financial
officer of the Trust. He shall have such other duties and authorities as the
Trustees shall from time to time determine. Notwithstanding anything to the
contrary herein contained, the Trustees may authorize any adviser,
administrator, manager or transfer agent to maintain bank accounts and deposit
and disburse funds of the Trust.
Section 3.8. Other Officers and Duties. The Trustees may elect such other
-------------------------
officers and assistant officers as they shall from time to time determine to be
necessary or desirable in order to conduct the business of the Trust. Assistant
officers shall act generally in the absence of the officer whom they assist and
shall assist that officer in the duties of his office. Each officer, employee
and agent of the Trust shall have such other duties and authority as may be
conferred upon him by the Trustees or delegated to him by the President.
11.
<PAGE>
ARTICLE IV
----------
Miscellaneous
-------------
Section 4.1. Depositories. In accordance with Section 7.1 of the
------------
Declaration, the funds of the Trust shall be deposited with such custodian or
custodians as the Trustees shall designate and shall be drawn out on checks,
drafts or other orders signed by such officer, officers, agent or agents
(including any adviser, administrator or manager), as the Trustees may from time
to time authorize.
Section 4.2. Signatures. All contracts and other instruments shall be
----------
executed on behalf of the Trust by such officer, officers, agent or agents, as
provided in these By-Laws or as the Trustees may from time to time by resolution
provide.
Section 4.3. Seal. The seal of the Trust, if any, may be affixed to any
----
document, and the seal and its attestation may be lithographed, engraved or
otherwise printed on any document with the same force and effect as if it had
been imprinted and attested manually in the same manner and with the same effect
as if done by a Massachusetts business corporation.
ARTICLE V
---------
Stock Transfers
---------------
Section 5.1. Certificates. Certificates representing Shares of the Trust
------------
shall not be issued.
12.
<PAGE>
Section 5.2. Transfer Agents, Registrars and the Like. As provided in
----------------------------------------
Section 6.6 of the Declaration, the Trustees shall have authority to employ and
compensate such transfer agents and registrars with respect to the Shares of the
Trust as the Trustees shall deem necessary or desirable. In addition, the
Trustees shall have power to employ and compensate such dividend disbursing
agents, warrant agents and agents for the reinvestment of dividends as they
shall deem necessary or desirable. Any of such agents shall have such power and
authority as is delegated to any of them by the Trustees.
Section 5.3. Transfer of Shares. The Shares of the Trust shall be
------------------
transferable on the books of the Trust only upon delivery to the Trustees or a
transfer agent of the Trust of proper documentation as provided in Section 6.7
of the Declaration. The Trust, or its transfer agents, shall be authorized to
refuse any transfer unless and until presentation of such evidence as may be
reasonably required to show that the requested transfer is proper.
Section 5.4. Registered Shareholders. The Trust may deem and treat the
-----------------------
holder of record of any Share as the absolute owner thereof for all purposes and
shall not be required to take any notice of any right or claim of right of any
other person.
13.
<PAGE>
ARTICLE VI
----------
Amendment of By-Laws
--------------------
Section 6.1. Amendment and Repeal of By-Laws. In accordance with Section
-------------------------------
2.7 of the Declaration, the Trustees shall have the power to alter, amend or
repeal the By-Laws or adopt new By-Laws at any time. Action by the Trustees
with respect to the By-Laws shall be taken by an affirmative vote of a majority
of the Trustees. The Trustees shall in no event adopt By-Laws which are in
conflict with the Declaration, and any apparent inconsistency shall be
construed in favor of the related provisions in the Declaration.
The Declaration of Trust establishing CBA Money Fund, dated March 28, 1983,
a copy of which, together with all amendments thereto (the "Declaration"), is
on file in the office of the Secretary of the Commonwealth of Massachusetts,
provides that the name CBA Money Fund refers to the Trustees under the
Declaration collectively as Trustees, but not as individuals or personally; and
no Trustee, shareholder officer, employee or agent of CBA Money Fund shall be
held to any personal liability, nor shall resort be had to their private
property for the satisfaction of any obligation or claim or otherwise in
connection with the affairs of said CBA Money Fund but the Trust Property only
shall be liable.
14.
<PAGE>
EXHIBIT 99.5(A)
MANAGEMENT AGREEMENT
AGREEMENT made this 29th day of March, 1984, by and between CBA MONEY FUND,
a Massachusetts business trust (hereinafter referred to as the "Fund"), and FUND
ASSET MANAGEMENT, INC., a Delaware corporation (hereinafter referred to as the
"Manager").
W I T N E S S E T H:
-------------------
WHEREAS, the Fund is engaged in business as a diversified open-end
investment company registered under the Investment Company Act of 1940, as
amended (hereinafter referred to as the "Investment Company Act"); and
WHEREAS, the Manager is engaged in business as a registered investment
adviser under the Investment Advisers Act of 1940, as amended; and
WHEREAS, the Manager is willing to provide management and investment
advisory services to the Fund on the terms and conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the mutual covenants and agreements of
the parties hereto as herein set forth, the parties covenant and agree as
follows:
<PAGE>
ARTICLE I
---------
Duties of the Manager
---------------------
The Fund hereby retains the Manager to act as the manager and investment
adviser of the Fund and to furnish, or arrange for affiliates to furnish, the
management and investment advisory services described below, subject to the
supervision of the Trustees of the Fund, for the period and on the terms and
conditions set forth in this Agreement. The Manager hereby accepts such
employment and agrees during such period, at its own expense, to render, or
arrange for the rendering of, such services and to assume the obligations herein
set forth for the compensation provided for herein. The Manager and its
affiliates shall for all purposes herein be deemed to be an independent
contractor and shall, unless otherwise expressly provided or authorized, have no
authority to act for or represent the Fund in any way or otherwise be deemed an
agent of the Fund.
(a) Management Services. The Manager shall perform (or arrange for the
-------------------
performance by affiliates of) the management and administrative services
necessary for the operation of the Fund including processing shareholder orders,
administering shareholder accounts and handling shareholder relations. The
Manager shall provide the Fund with office space, equipment and facilities and
such
2.
<PAGE>
other services as the Manager, subject to review by the Trustees, shall from
time to time determine to be necessary or useful to perform its obligations
under this Agreement. The Manager shall also, on behalf of the Fund, conduct
relations with custodians, depositories, transfer agents, accountants,
attorneys, underwriters, brokers and dealers, corporate fiduciaries, insurers,
banks and such other persons in any such other capacity deemed to be necessary
or desirable. The Manager shall make reports to the Trustees of its performance
of obligations hereunder and furnish advice and recommendations with respect to
such other aspects of the business and affairs of the Fund as it shall determine
to be desirable.
(b) Investment Advisory Services. The Manager shall provide the Fund with
----------------------------
such investment research, advice and supervision as the latter may from time to
time consider necessary for the proper supervision of the assets of the Fund,
shall furnish continuously an investment program for the Fund and shall
determine from time to time which securities shall be purchased, sold or
exchanged and what portion of the assets of the Fund shall be held in the
various securities in which the Fund invests or cash, subject always to the
restrictions of the Declaration of Trust and By-Laws of the Fund, as amended
from time to time, the provisions
3.
<PAGE>
of the Investment Company Act and the statements relating to the Fund's
investment objectives, investment policies and investment restrictions as the
same are set forth in the currently effective prospectus and statement of
additional information relating to the shares of beneficial interest of the Fund
under the Securities Act of 1933, as amended (the "Prospectus" and "Statement of
Additional Information", respectively). The Manager shall also make decisions
for the Fund as to the manner in which voting rights, rights to consent to
corporate action and any other rights pertaining to the Fund's portfolio
securities shall be exercised. Should the Trustees at any time, however, make
any definite determination as to investment policy and notify the Manager
thereof in writing, the Manager shall be bound by such determination for the
period, if any, specified in such notice or until similarly notified that such
determination has been revoked. The Manager shall take, on behalf of the Fund,
all actions which it deems necessary to implement the investment policies
determined as provided above, and in particular to place all orders for the
purchase or sale of portfolio securities for the Fund's account with brokers or
dealers selected by it, and to that end, the Manager is authorized as the agent
of the Fund to give instructions to the Custodian of the Fund as to deliveries
of securities and payments of cash for the account of the Fund. In connection
4.
<PAGE>
with the selection of such brokers or dealers and the placing of such orders
with respect to assets of the Fund, the Manager is directed at all times to seek
to obtain execution and price within the policy guidelines determined by the
Trustees of the Fund and set forth in the Prospectus and Statement of Additional
Information. Subject to this requirement and the provisions of the Investment
Company Act, the Securities Exchange Act of 1934, as amended, and other
applicable provisions of law, the Manager may select brokers or dealers with
which it or the Fund is affiliated.
ARTICLE II
Allocation of Charges and Expenses
----------------------------------
(a) The Manager. The Manager assumes and shall pay for maintaining the
-----------
staff and personnel necessary to perform its obligations under this Agreement,
and shall at its own expense, provide the office space, equipment and
facilities which it is obligated to provide under Article I hereof, and shall
pay all compensation of officers of the Fund and all Trustees of the Fund who
are affiliated persons of the Manager.
(b) The Fund. The Fund assumes and shall pay or cause to be paid all other
--------
expenses of the Fund (except for the expenses incurred by the Distributor),
including, without limitation: redemption expenses, expenses of portfolio
5.
<PAGE>
transactions, expenses of registering shares under Federal and state securities
laws, pricing costs (including the daily calculation of net asset value),
expenses of printing shareholder reports, prospectuses and statements of
additional information, Securities and Exchange Commission fees, interest,
taxes, fees and actual out-of-pocket expenses of Trustees who are not affiliated
persons of the Manager, fees for legal and auditing services, litigation
expenses, costs of printing proxies and other expenses related to shareholders
meetings, and other expenses properly payable by the Fund. It is also understood
that the Fund will reimburse the Manager for its costs in providing accounting
services to the Fund. The Distributor will pay certain of the expenses of the
Fund incurred in connection with the continuous offering of Fund shares.
ARTICLE III
Compensation of the Manager
---------------------------
(a) Management Fee. For the services rendered, the facilities furnished
--------------
and the expenses assumed by the Manager, the Fund shall pay to the Manager
compensation at the following annual rates calculated as hereinafter set forth,
commencing on the day following effectiveness hereof:
6.
<PAGE>
Management
fee
----------
Portion of average daily value of net assets:
Not exceeding $500 million ............................. 0.500%
in excess of $500 million but not exceeding $1 billion.. 0.425%
In excess of $1 billion ................................ 0.375%
Except as hereinafter set forth, compensation under this Agreement shall be
calculated and accrued daily and paid monthly by applying the annual rate to the
average daily net assets of the Fund determined as of each business day. If this
Agreement becomes effective subsequent to the first day of a month or shall
terminate before the last day of a month, compensation for that part of the
month this Agreement is in effect shall be prorated in a manner consistent with
the calculation of the fees as set forth above. Subject to the provisions of
subsection (b) hereof, payment of the Manager's compensation for the preceding
month shall be made as promptly as possible after completion of the computations
contemplated by subsection (b) hereof.
(b) Expense Limitations. In the event the operating expenses of the Fund,
-------------------
including amounts payable to the Manager pursuant to subsection (a) hereof, for
any fiscal year ending on a date on which this Agreement is in effect exceed
7.
<PAGE>
the expense limitations applicable to the Fund imposed by applicable state
securities laws or regulations thereunder, as such limitations may be raised or
lowered from time to time, the Manager shall reduce its management fee by the
extent of such excess and, if required pursuant to any such laws or regulations,
will reimburse the Fund in the amount of such excess, provided, however, to the
extent permitted by law, there shall be excluded from such expenses the amount
of any interest, taxes, brokerage commissions and extraordinary expenses
(including but not limited to legal claims and liabilities and litigation costs
and any indemnification related thereto) paid or payable by the Fund. Whenever
the expenses of the Fund exceed a pro rata portion of the applicable annual
expense limitations, the estimated amount of reimbursement under such
limitations shall be applicable as an offset against the monthly payment of the
fee due to the Manager. Should two or more such expense limitations be
applicable as at the end of the last business day of the month, that expense
limitation which results in the largest reduction in the Manager's fee shall be
applicable.
ARTICLE IV
----------
Limitation of Liability of the Manager
--------------------------------------
The Manager shall not be liable for any error of judgment or mistake of law
or for any loss arising out of any
8.
<PAGE>
investment or for any act or omission in the management of the Fund, except for
willful misfeasance, bad faith or gross negligence in the performance of its
duties, or by reason of reckless disregard of its obligations and duties
hereunder. As used in this Article IV, the term "Manager" shall include any
affiliates of the Manager performing services for the Fund contemplated hereby
and directors, officers and employees of the Manager and such affiliates.
ARTICLE V
---------
Activities of the Manager
-------------------------
The services of the Manager to the Fund are not to be deemed to be
exclusive, the Manager being free to render services to others. It is understood
that Trustees, officers, employees and shareholders of the Fund are or may
become interested in the Manager, as directors, officers, employees and
shareholders or otherwise and that directors, officers, employees and
shareholders of the Manager are or may become similarly interested in the Fund,
and that the Manager may become interested in the Fund as shareholder or
otherwise.
ARTICLE VI
----------
Duration and Termination of this Agreement
------------------------------------------
This Agreement shall become effective as of the date
9.
<PAGE>
first above written and shall remain in force until December 31, 1985 and
thereafter, but only so long as such continuance is specifically approved at
least annually by (i) the Trustees of the Fund, or by the vote of a majority of
the outstanding voting securities of the Fund, and (ii) a majority of those
Trustees 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.
This Agreement may be terminated at any time, without the payment of any
penalty, by the Trustees of the Fund or by vote of a majority of the outstanding
voting securities of the Fund, or by the Manager, on sixty days' written notice
to the other party. This Agreement shall automatically terminate in the event
of its assignment.
ARTICLE VII
-----------
Amendments of this Agreement
----------------------------
This Agreement may be amended by the parties only if such amendment is
specifically approved by (i) the vote of a majority of outstanding voting
securities of the Fund, and (ii) a majority of those Trustees 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.
10.
<PAGE>
ARTICLE VIII
------------
Definitions of Certain Terms
----------------------------
The terms "vote of a majority of the outstanding voting securities",
"assignment" "affiliated person" and "interested person", when used in this
Agreement, shall have the respective meanings specified in the investment
Company Act.
ARTICLE IX
----------
Governing Law
-------------
This Agreement shall be construed in accordance with laws of the State of
New York and the applicable provisions of the Investment Company Act. To the
extent that the applicable laws of the State of New York, or any of the
provisions herein, conflict with the applicable provisions of the Investment
Company Act, the latter shall control.
ARTICLE X
---------
Personal Liability
------------------
The Declaration of Trust establishing CBA Money Fund, dated March 28, 1983,
a copy of which, together with all amendments thereto (the "Declaration"), is on
file in the office of the Secretary of the Commonwealth of Massachusetts,
11.
<PAGE>
provides that the name "CBA Money Fund" refers to the Trustees under the
Declaration collectively as Trustees, but not as individuals or personally; and
no Trustee, shareholder, officer, employee or agent of CBA Money Fund shall be
held to any personal liability, nor shall resort be had to their private
property for the satisfaction of any obligation or claim or otherwise in
connection with the affairs of said CBA Money Fund, but the Trust Property only
shall be liable.
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement as of the date first above written.
CBA MONEY FUND
By /s/ Arthur Zeikel
-------------------------
FUND ASSET MANAGEMENT, INC.
By /s/ Philip L. Kirstein
-------------------------
12.
<PAGE>
EXHIBIT 99.6
DISTRIBUTION AGREEMENT
AGREEMENT made this 11th day of September, 1991 between CBA MONEY FUND, a
trust organized under the laws of Massachusetts (the "Fund"), and MERRILL LYNCH,
PIERCE, FENNER & SMITH INCORPORATED, a Delaware corporation ("MLPF&S") and
Broadcort Capital Corp., a Delaware corporation ("Broadcort", and together with
MLPF&S, the "Distributors");
W I T N E S S E T H :
- - - - - - - - - -
WHEREAS, the Fund is registered under the Investment Company Act of 1940, as
amended (the "Investment Company Act"), as a diversified, open-end investment
company and it is affirmatively in the interest of the Fund to offer its shares
to participants in the Capital Builder Account financial service program (the
"CBA program") of MLPF&S and to subscribers to the Broadcort financial service
program ("Broadcort program") described in the currently effective prospectus
under the Securities Act of 1933 (the "Securities Act") of the Fund, to
customers of firms which use the clearing facilities of Broadcort and to other
prospective shareholders; and
WHEREAS, the Distributors are securities firms engaged in the business of
selling shares of investment companies to investors; and
WHEREAS, the Fund and the Distributors have entered into a Distribution and
Shareholder Servicing Plan (the "Plan") made as
<PAGE>
of September 11, 1991, and continued thereafter, pursuant to the provisions of
Rule 12b-1 under the Investment Company Act which provides that the Fund should
make direct payments to (i) MLPF&S for distribution to its financial consultants
and other directly involved MLPF&S personnel as compensation for selling shares
and providing shareholder services to shareholders of the Fund who are
participants in the CBA program or whose accounts are serviced by MLPF&S
financial consultants whether maintained through MLPF&S or directly with the
Fund's Transfer Agent (collectively such accounts being referred to herein as
the "MLPF&S Fund Accounts"; the term "MLPF&S Fund Accounts" does not include
those accounts maintained directly with the Fund's Transfer Agent which are not
serviced by MLPF&S financial consultants) and (ii) Broadcort for distribution to
selected dealers for activities and services related to the sales marketing and
promotion of shares of the Fund; and
WHEREAS, it is affirmatively in the interest of the Fund to offer its shares
for sale in a continuous offering; and
WHEREAS, the Fund and the Distributors wish to enter into an agreement with
each other with respect to the continuous offering of the shares of the Fund and
the Plan.
NOW, THEREFORE, the parties agree as follows:
Section 1. Appointment of the Distributor. The Fund hereby appoints MLPF&S
------------------------------
as the exclusive distributor and representative of the Fund to sell the shares
of the Fund to participants in the
2
<PAGE>
CBA program and other prospective shareholders and MLPF&S hereby accepts such
appointment. All of the above-mentioned prospective purchasers of shares
through the Distributors are hereinafter sometimes referred to collectively as
"investors". The Fund hereby appoints Broadcort as the exclusive distributor
and representative of the Fund to sell shares of the Fund to selected dealers
for resale to participants in the Broadcort program and to other customers of
selected dealers which use the clearing facilities of Broadcort and Broadcort
hereby accepts such appointment. The Fund during the term of this Agreement
shall sell the shares of the Fund to the Distributors upon the terms and
conditions set forth below.
Section 2. Exclusive Nature of Duties. The Distributors shall be the
--------------------------
exclusive representatives of the Fund to act as principal underwriters and
distributors, except that such exclusive rights shall not apply to shares issued
by the Fund pursuant to reinvestments of dividends and capital gains
distributions.
Section 3. Purchase of Shares from the Fund.
--------------------------------
(a) The Distributors shall have the right to buy from the Fund the shares
of the Fund needed, but not more than the shares needed (except for clerical
errors in transmission), to fill unconditional orders for shares of the Fund
placed through the Distributors by investors. The price which the Distributors
shall pay for the shares so purchased from the Fund shall be the
3
<PAGE>
current public offering price described below on which such orders were based.
(b) The public offering price of the shares of the Fund, i.e., the price
per share at which MLPF&S and Broadcort may sell shares of the Fund to
investors, shall be the net asset value determined as set forth in the currently
effective prospectus and statement of additional information of the Fund under
the Securities Act (the "Prospectus" and "Statement of Additional information,"
respectively).
(c) The Fund, or any agent of the Fund designated in writing by it, shall
be promptly advised of all purchase orders for shares of the Fund received by
the Distributors. All issuances of shares of the Fund to participants in the
CBA program or the Broadcort program and other customers of Merrill Lynch and of
selected dealers which use the clearing facilities of Broadcort shall be deemed
to be issued pursuant to Section 3 hereof. Procedures may be established by the
Fund and the Distributors whereby purchase orders for shares are presented
directly to the Fund or an agent designated by the Fund upon the condition that
in such cases it shall be deemed that the sale of the shares to be purchased is
made pursuant to this Section 3. Any order may be rejected by the Fund or the
Distributors, provided, however, that neither will arbitrarily or without
reasonable cause refuse to accept or confirm orders for the purchase of shares
of the Fund. The Fund (or its agent) will confirm orders upon their
4
<PAGE>
receipt, or in accordance with any exemptive order of the Securities and
Exchange Commission, and will make appropriate book entries pursuant to the
instructions of the Distributors. Purchase orders are effective when Federal
Funds become available to the Fund. The Distributors agree to cause such
payment and such instructions to be delivered promptly to the Fund (or its
agent).
Section 4. Redemption of Shares by the Fund.
--------------------------------
(a) Any of the outstanding shares of the Fund may be tendered for
redemption in accordance with the Prospectus and Statement of Additional
Information, and the Fund shall redeem the shares so tendered in accordance with
its obligations and rights as set forth in its Declaration of Trust, and in
accordance with the applicable provisions set forth in the Prospectus and
Statement of Additional Information of the Fund. The price to be paid to redeem
the shares shall be equal to the net asset value calculated in accordance with
the provisions of Section 3(b) hereof. Shares redeemed due to an unauthorized
use of a Visa card of a shareholder shall be reinstated by the Fund at the cost
of the respective Distributor as set forth in Section 6(d) hereof.
(b) The Fund reserves the right to reject any order for repurchase through
a securities dealer, but the right to redeem shares, or to receive payment with
respect to any such redemption, upon the presentation of properly submitted
5
<PAGE>
redemption requests in accordance with the procedures set forth in the
Prospectus and Statement of Additional Information may only be suspended in
accordance with the provisions of the Investment Company Act.
Section 5. Duties of the Fund.
------------------
(a) The Fund shall furnish to each Distributor copies of all information,
financial statements and other papers which the Distributor may reasonably
request for use in connection with the distribution of shares of the Fund, and
this shall include one certified copy, upon request by the Distributor, of all
financial statements prepared for the Fund by independent public accountants.
The Fund shall make available to the Distributor such number of copies of the
Prospectus and Statement of Additional Information of the Fund as the
Distributor shall reasonably request.
(b) The Fund shall take, from time to time, all necessary action to
register shares of the Fund under the Securities Act to the end that there will
be available for sale such number of shares as investors may reasonably be
expected to purchase.
(c) The Fund shall use its best efforts to qualify and maintain the
qualification of an appropriate number of shares of the Fund for sale under the
securities laws of such states as the Distributors and the Fund may approve. Any
such qualification may be withheld, terminated or withdrawn by the Fund at any
time in its discretion. As provided in Section 9(c) hereof, the
6
<PAGE>
expense of qualification and maintenance of qualification shall be borne by the
Fund. The Distributors shall furnish such information and other material
relating to its affairs and activities as may be required by the Fund in
connection with such qualifications.
(d) The Fund will furnish, in reasonable quantities upon request by the
Distributors, copies of annual and interim reports of the Fund.
Section 6. Duties of the Distributors.
--------------------------
(a) The Distributors shall devote reasonable time and effort to effect
sales of shares of the Fund, but shall not be obligated to sell any specific
number of shares. The services of the Distributors hereunder are not to be
deemed exclusive and nothing herein contained shall prevent the Distributors
from entering into distribution arrangements with other investment companies so
long as the performance of its obligations hereunder is not impaired thereby.
(b) In selling the shares of the Fund, the Distributors shall use their
best efforts in all respects duly to conform with the requirements of all
Federal and state laws and regulations and the regulations of the National
Association of Securities Dealers, Inc. (the "NASD") relating to the sale of
such securities. Neither the Distributors nor any other person is authorized by
the Fund to give any information or to make any representations, other than
those contained in the registration
7
<PAGE>
statement or related Prospectus of the Fund and any sales literature
specifically approved by the Fund for use with respect to the Fund.
(c) The Distributors shall adopt and follow procedures, as approved by the
Fund, for the confirmation of sales of shares of the Fund to investors, the
collection of amounts payable by investors on such sales, and the cancellation
of unsettled transactions, as may be necessary to comply with the requirements
of the NASD, as such requirements may from time to time exist.
(d) Through the CBA program and the Broadcort program, the Fund is linked
to a securities account and a Visa account and automatic purchases and
redemptions of shares of the Fund will be effected pursuant to such programs.
CBA and Broadcort customers may be liable for the unauthorized use of their Visa
card as set forth in the Prospectus and Statement of Additional Information. If
shares of the Fund are redeemed due to the unauthorized use of the Visa card,
the Fund agrees to reinstate such shares in the account of the shareholder as if
never sold and the Distributors agree to indemnify the Fund against any losses
caused thereby and all costs associated therewith.
Section 7. Selected Dealers Agreements.
---------------------------
(a) Broadcort shall have the right to enter into selected dealers
agreements with securities dealers of its choice for which it acts as clearing
agent ("selected dealers") for the sale of shares; provided that the form of
selected dealers agreement
8
<PAGE>
shall be approved by the Fund. Shares sold to selected dealers shall be for
resale by such dealers only in accordance with the provisions in the Prospectus
and Statement of Additional Information. The initial form of agreement with
selected dealers is attached hereto as Exhibit A.
(b) Broadcort shall offer and sell shares only to such selected dealers as
are members in good standing of the NASD.
Section 8. Distribution Fee.
----------------
(a) The Fund shall pay MLPF&S a distribution fee at the end of each month
at the annual rate of 0.125% of average daily net asset value of the MLPF&S Fund
Accounts. The fee is not payable with respect to the asset value of
shareholders who maintain their accounts directly with the Fund's Transfer Agent
and whose accounts are not serviced by MLPF&S financial consultants. MLPF&S is
obligated to use the entire amount of the distribution fee to compensate MLPF&S'
financial consultants and other directly involved branch office personnel for
selling shares of the Fund to the MLPF&S Fund Accounts and for providing
services to shareholders with MLPF&S Fund Accounts, including furnishing
information as to the status of accounts of the Fund and handling purchase and
redemption orders for shares of the Fund. The distribution fee may not be used
to pay for other expenditures of MLPF&S, such as sales contests, special
seminars and media advertising related to the Fund.
9
<PAGE>
(b) The Fund shall pay Broadcort a distribution fee at the end of each
month at the annual rate of 0.125% of average daily net assets of the Fund.
Broadcort is obligated to expend the entire amount of the distribution fee for
compensation to selected dealers for activities and services related to the
sale, marketing and promotion of shares of the Fund.
(c) In the event that the aggregate payments received by MLPF&S or
Broadcort under this Agreement in any fiscal year of the Fund shall exceed the
amount of the distribution expenditures of MLPF&S or Broadcort, as the case may
be, in such fiscal year, MLPF&S and/or Broadcort shall be required to reimburse
the Fund the amount of such excess. The payment of the distribution fee is
being made pursuant to a Distribution and Shareholder Servicing Plan (the
"Plan") of the Fund adopted by the Fund pursuant to Rule 12b-1 of the Investment
Company Act and payment of such fee shall be subject to the terms and provisions
of the Plan. The Distributors shall provide the Fund for review by the
Trustees, and the Trustees shall review at least quarterly, a written report
complying with the requirements of Rule 12b-1 regarding the disbursement of the
distribution fee during such period. The report shall include an itemization of
the distribution expenses incurred by such Distributor on behalf of the Fund,
the purpose of such expenditures and a description of the benefits derived by
the Fund therefrom.
Section 9. Payment of Expenses.
-------------------
10
<PAGE>
(a) The Fund shall bear all costs and expenses of the Fund, including fees
and disbursements of its counsel and auditors, in connection with the
preparation and filing of any required registration statements and Prospectuses
and Statements of Additional Information under the Investment Company Act, the
Securities Act, and all amendments and supplements thereto, and the expense of
preparing, printing, mailing and otherwise distributing Prospectuses, annual or
interim reports and proxy materials to the Fund's shareholders.
(b) After the Prospectuses and annual and interim reports have been
prepared, set in type and mailed to shareholders, each Distributor shall bear
the costs and expenses of printing and distributing any copies thereof which are
used in connection with the offering of the shares of the Fund. Each
Distributor shall bear the costs and expenses of preparing, printing and
distributing any supplementary sales literature used by the Distributor or
furnished by it for use by selected dealers in connection with the offering of
the shares for sale. Any expenses of advertising incurred in connection with
such offering will also be the obligation of the Distributors.
(c) The Fund shall bear the cost and expenses of qualification of the
shares of the Fund for sale, and, if necessary or advisable in connection
therewith, of qualifying the Fund as a broker or dealer, in such states of the
United States or other jurisdictions as shall be selected by the Fund and the
<PAGE>
Distributors, and the cost and expenses payable to each such state for
continuing qualification therein until the Fund decides to discontinue such
qualification.
Section 10. Indemnification.
---------------
(a) The Fund shall indemnify and hold harmless the Distributors and each
person, if any, who controls the Distributors against any loss, liability,
claim, damage or expense (including the reasonable cost of investigating or
defending any alleged loss, liability, claim, damage or expense and reasonable
counsel fees incurred in connection therewith), arising by reason of any person
acquiring any shares of the Fund, which may be based upon the Securities Act, or
on any other statute or at common law, on the ground that the registration
statement or related Prospectus and Statement of Additional Information of the
Fund, as from time to time amended and supplemented, or an annual or interim
report to shareholders of the Fund includes an untrue statement of a material
fact or omits to state a material fact required to be stated therein or
necessary in order to make the statements therein not misleading, unless such
statement or omission was made in reliance upon and in conformity with
information furnished to the Fund in connection therewith by or on behalf of
either Distributor; provided, however, that in no case (i) is the indemnity of
the Fund in favor of the Distributors and any such controlling persons to be
deemed to protect such Distributor or any such
12
<PAGE>
controlling persons thereof against any liability to the Fund or its security
holders to which the Distributors or any such controlling persons would
otherwise be subject by reason of willful misfeasance, bad faith or gross
negligence in the performance of its duties or by reason of reckless disregard
of its obligations and duties under this Agreement, or (ii) is the Fund to be
liable under its indemnity agreement contained in this paragraph with respect to
any claim made against either Distributor or any such controlling persons,
unless the Distributor or such controlling persons, as the case may be, shall
have notified the Fund in writing within a reasonable time after the summons or
other first legal process giving information of the nature of the claim shall
have been served upon such Distributor or such controlling persons (or after
such Distributor or such controlling persons shall have received notice of such
service on any designated agent), but failure to notify the Fund of any such
claim shall not relieve it from any liability which it may have to the person
against whom such action is brought otherwise than on account of its indemnity
agreement contained in this paragraph. The Fund will be entitled to participate
at its own expense in the defense, or, if it so elects, to assume the defense of
any suit brought to enforce any such liability, but if the Fund elects to assume
the defense, such defense shall be conducted by counsel chosen by it and
satisfactory to each Distributor or such controlling person or
13
<PAGE>
persons, defendant or defendants in the suit. In the event the Fund elects to
assume the defense of any such suit and retain such counsel, such Distributor or
such controlling person or persons, defendant or defendants in the suit, shall
bear the fees and expenses of any additional counsel retained by them, but, in
case the Fund does not elect to assume the defense of any such suit, it will
reimburse such Distributor or such controlling person or persons, defendant or
defendants in the suit, for the reasonable fees and expenses of any counsel
retained by them. The Fund shall promptly notify the Distributors of the
commencement of any litigation or proceedings against it or any of its officers
or Trustees in connection with the issuance or sale of any of the shares of the
Fund.
(b) MLPF&S shall indemnify and hold harmless the Fund and each of its
Trustees and officers and each person, if any, who controls the Fund against any
loss, liability, claim, damage or expense described in the foregoing indemnity
contained in subsection (a) of this Section, but only with respect to
information contained in supplemental sales literature prepared by or on behalf
of MLPF&S relating to the CBA program or the Fund and with respect to statements
or omissions made in reliance upon, and in conformity with, information
furnished to the Fund in writing by or on behalf of MLPF&S for use in connection
with the registration statement or related Prospectus and Statement of
Additional Information, as from time to time amended, or the
14
<PAGE>
annual or interim reports to shareholders of the Fund. In case any action shall
be brought against the Fund or any person so indemnified, in respect of which
indemnity may be sought against MLPF&S, MLPF&S shall have the rights and duties
given to the Fund, and the Fund and each person so indemnified shall have the
rights and duties given to MLPF&S by the provisions of subsection (a) of this
Section 10.
(c) Broadcort shall indemnify and hold harmless the Fund and each of its
Trustees and officers and each person, if any, who controls the Fund against any
loss, liability, claim, damage, or expense described in the foregoing indemnity
contained in subsection (a) of this Section, but only with respect to
information contained in supplemental sales literature prepared by or on behalf
of Broadcort relating to the Broadcort program or the Fund and with respect to
statements or omissions made in reliance upon, and in conformity with,
information furnished to the Fund in writing by or on behalf of Broadcort for
use in connection with the registration statement or related Prospectus and
Statement of Additional Information, as from time to time amended, or the annual
or interim reports to shareholders of the Fund. In case any action shall be
brought against the Fund or any person so indemnified, in respect of which
indemnity may be sought against Broadcort, Broadcort shall have the rights and
duties given to the Fund, and the Fund and each person so
15
<PAGE>
indemnified shall have the rights and duties given to Broadcort by the
provisions of subsection (a) of this Section 10.
Section 11. Duration and Termination of this Agreement.
------------------------------------------
This Agreement shall become effective as of the date first above written and
shall remain in force until February 28, 1993 and shall continue thereafter only
so long as such continuance is specifically approved at least annually by (i)
the Trustees of the Fund and (ii) those Trustees who are not interested persons
of the Fund and have no direct or indirect financial interest in the operation
of the Distribution and Shareholder Servicing Plan or in any agreements related
thereto (the "Rule 12b-1 Trustees") cast in person at a meeting called for the
purpose of voting on such approval.
This Agreement may be terminated at any time, without the payment of any
penalty, by the Rule 12b-1 Trustees or by vote of a majority of the outstanding
voting securities of the Fund, or by the Distributors, on sixty days' written
notice to the other party. This Agreement shall automatically terminate in the
event of its assignment.
The terms "vote of a majority of the outstanding voting securities,"
"assignment," "affiliated person" and "interested person," when used in this
Agreement, shall have the respective meanings specified in the Investment
Company Act.
16
<PAGE>
Section 12. Governing Law.
-------------
This Agreement shall be construed in accordance with the laws of the State
of New York and the applicable provisions of the Investment Company Act. To the
extent the applicable law of the State of New York, or any of the provisions
herein, conflict with the applicable provisions of the Investment Company Act,
the latter shall control.
Section 13. Amendments
----------
This Agreement may be amended by the parties hereto only if such amendment
is specifically approved (i) by the Trustees of the Fund, or by the vote of a
majority of outstanding voting securities of the Fund, and (ii) by a majority of
those Trustees who are not parties to this Agreement or interested persons of
any such party, which vote must be cast in person at a meeting called for the
purpose of voting on such approval.
Section 14. Personal Liability
------------------
The Declaration of Trust establishing CBA Money Fund, dated March 28, 1983,
a copy of which, together with all amendments thereto (the "Declaration"), is on
file in the office of the Secretary of the Commonwealth of Massachusetts,
provides that the name of the Fund, "CBA Money Fund," refers to the Trustees
under the Declaration collectively as Trustees, but not as individuals or
personally; and no Trustee, shareholder, officer, employee or agent of CBA Money
Fund shall be held to any personal liability, nor shall resort be had to their
private property for the
17
<PAGE>
satisfaction of any obligation or claim of said CBA Money Fund, but the Fund
Property only shall be liable.
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement as of the day and year first above written in New York, New York.
CBA MONEY FUND
Attest: By
----------------------------------
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
Attest: By
----------------------------------
BROADCORT CAPITAL CORP.
Attest: By
----------------------------------
18
<PAGE>
EXHIBIT A
---------
CBA MONEY FUND
SHARES OF BENEFICIAL INTEREST
SELECTED DEALERS AGREEMENT
Gentlemen:
Broadcort Capital Corp. (the "Distributor") has an agreement with CBA Money
Fund, a Massachusetts business trust (the "Fund"), pursuant to which it acts as
a distributor for the sale of shares of beneficial interest, par value $0.10 per
share, of the Fund, and as such has the right to distribute shares of the Fund
for resale to participants in the Broadcort financial service program
("Broadcort program") and to customers of selected dealers which use the
clearing facilities of Broadcort. The Fund is a diversified open-end investment
company registered under the Investment Company Act of 1940, as amended,
operating as a money market fund, and its shares being offered to the public are
registered under the Securities Act of 1933, as amended. You have received a
copy of the Distribution Agreement among ourselves, the Fund and Merrill Lynch,
Pierce, Fenner & Smith Incorporated and reference is made herein to certain
provisions of such Distribution Agreement. The terms "Prospectus" and
"Statement of Additional Information" as used herein refer to the prospectus and
Statement of Additional Information on file with the Securities and Exchange
Commission which is part of the most recent effective registration statement of
the Fund pursuant to the Securities Act of 1933, as amended. As principal, we
offer to sell you, as a member of the Selected Dealers Group, shares of the Fund
upon the following terms and conditions:
1. In all sales of these shares to participants in the Broadcort program
and to your customers, you shall act as dealer for your own account, and in no
transaction shall you have any authority to act as agent for the Fund, for us or
for any other member of the Selected Dealers Group.
2. Orders received from you will be accepted through us only at the public
offering price applicable to each order, as set forth in the Prospectus and
Statement of Additional Information. The procedure relating to the handling of
orders shall be subject to the provisions set forth in the Prospectus and
Statement of Additional Information. All orders are subject to acceptance or
rejection by the Distributor or the Fund in the sole discretion of either.
3. You agree that you will not offer or sell any of the shares except
under circumstances that will result in compliance with the applicable Federal
and state securities laws and that in
A-1
<PAGE>
connection with sales and offers to sell shares you will furnish to each person
to whom any such sale or offer is made, a copy of the Prospectus and, if
requested, the Statement of Additional Information (as then amended or
supplemented) and will not furnish to any person any information relating to the
shares of the Fund, which is inconsistent in any respect with the information
contained in the Prospectus and Statement of Additional Information (as then
amended or supplemented) or cause any advertisement to be published in any
newspaper or posted in any public place without our consent and the consent of
the Fund.
4. No person is authorized to make any representations concerning shares
of the Fund except those contained in the current Prospectus and Statement of
Additional Information of the Fund and in such printed information subsequently
issued by us or the Fund as information supplemental to such Prospectus and
Statement of Additional Information. In purchasing shares through us you shall
rely solely on the representations obtained in the Prospectus and Statement of
Additional Information and supplemental information above mentioned. Any
printed information which we furnish you other than the Fund's Prospectus,
Statement of Additional Information, periodic reports and proxy solicitation
materials are our sole responsibility and not the responsibility of the Fund,
and you agree that the Fund shall have no liability or responsibility to you in
these respects unless expressly assumed in connection therewith.
5. We reserve the right in our discretion, without notice, to suspend
sales or withdraw the offering of shares entirely. Each party hereto has the
right to cancel this Agreement upon notice to the other party.
6. We shall have full authority to take such action as we may deem
advisable in respect of all matters pertaining to the continuous offering. We
shall be under no liability to you except for lack of good faith and for
obligations expressly assumed by us herein. Nothing contained in this paragraph
is intended to operate as, and the provisions of this paragraph shall not in any
way whatsoever constitute, a waiver by you of compliance with any provision of
the Securities Act of 1933, as amended, or of the rules and regulations of the
Securities and Exchange Commission issued thereunder.
7. You represent that you are a member of the National Association of
Securities Dealers, Inc. and, with respect to any sales in the United States, we
both hereby agree to abide by the Rules of Fair Practice of such Association.
8. Upon application to us, we will inform you as to the states in which we
believe the shares have been qualified for sale under, or are exempt from the
requirements of, the respective securities laws of such states, but we assume no
A-2
<PAGE>
responsibility or obligation as to your right to sell shares in any
jurisdiction. We will file with the Department of State in New York a Further
State Notice with respect to the shares, if necessary.
9. All communications to us should be sent to the address below. Any
notice to you shall be duly given if mailed or telegraphed to you at the address
specified by you below.
10. Your first order placed pursuant to this Agreement for the purchase of
shares of the Fund will represent your acceptance of this Agreement.
BROADCORT CAPITAL CORP.
By
--------------------------------------
Please return one signed copy
of this Agreement to:
BROADCORT CAPITAL CORP.
100 Church Street
New York, New York 10004
Accepted:
Firm Name:
----------------------------------------
By:
-----------------------------------------------
Address:
------------------------------------------
---------------------------------------------------
Date:
---------------------------------------------
A-3
<PAGE>
EXHIBIT 99.8
CUSTODIAN CONTRACT
Between
CBA MONEY FUND
and
STATE STREET BANK AND TRUST COMPANY
<PAGE>
TABLE OF CONTENTS
-----------------
<TABLE>
<CAPTION>
Page
----
<C> <S> <C>
1. Employment of Custodian and Property to be
Held by It............................................1
2. Duties of the Custodian with Respect to Property
of the Fund Held by the Custodian.....................2
2.1 Holding Securities..............................2
2.2 Delivery of Securities..........................2
2.3 Registration of Securities......................5
2.4 Bank Accounts...................................6
2.5 Payments for Shares.............................7
2.6 Collection of Income............................7
2.7 Payment of Fund Moneys..........................8
2.8 Liability for Payment in Advance of
Receipt of Securities Purchased................10
2.9 Payment for Repurchases or Redemptions
of Shares of the Fund..........................11
2.10 Appointment of Agents..........................11
2.11 Deposit of Fund Assets in Securities System....12
2.12 Ownership Certificates for Tax Purposes........15
2.13 Proxies .......................................15
2.14 Communications Relating to Fund
Portfolio Securities...........................15
2.15 Proper Instructions............................16
2.16 Actions Permitted Without Express Authority....17
2.17 Evidence of Authority..........................17
3. Duties of Custodian With Respect to the Books
of Accounts and Calculation of Net Asset Value
and Net Income.......................................18
4. Records..............................................18
5 . Opinion of Fund's Independent Accountant.............19
6 . Reports to Fund by Independent Public Accountants....19
7. Compensation of Custodian............................20
8. Responsibility of Custodian..........................20
9. Effective Period, Termination and Amendment..........21
10. Successor Custodian..................................22
11. Interpretive and Additional Provisions...............24
12. Massachusetts Law to apply...........................24
13. Prior Contracts......................................24
14. Personal Liability...................................25
</TABLE>
<PAGE>
CUSTODIAN CONTRACT
------------------
This Contract between CBA Money Fund, a business trust organized and
existing under the laws of the Commonwealth of Massachusetts, hereinafter called
the "Fund", and State Street Bank and Trust Company, a Massachusetts trust
company, having its principal place of business at 225 Franklin Street, Boston,
Massachusetts, 02110, hereinafter called the "Custodian",
WITNESSETH: That in consideration of the mutual covenants and agreements
hereinafter contained, the parties hereto agree as follows:
1. Employment of Custodian and Property to be Held by It
-----------------------------------------------------
The Fund hereby employs the Custodian as the custodian of its assets
pursuant to the provisions of its Declaration of Trust, as amended from time to
time (the "Declaration of Trust"). The Fund agrees to deliver to the Custodian
all securities and cash owned, by it, and all payments of income, payments of
principal or capital distributions received by it with respect to all securities
owned by the Fund from time to time and the cash consideration received by it
for such shares of beneficial interest, par value $0.10 per share ("Shares") of
the Fund as may be issued or sold from time to time. The Custodian shall not be
responsible for any property of the Fund held or received by the Fund and not
delivered to the Custodian.
Upon receipt of "Proper Instructions" (within the meaning of Section
2.15), the Custodian shall from time to time employ
<PAGE>
one or more sub-custodians, but only in accordance with the terms of resolution
adopted by the Trustees of the Fund, and provided that the Custodian shall have
no more or less responsibility or liability to the Fund on account of any
actions or omissions of any sub-custodian so employed than any such sub-
custodian has to the Custodian.
2. Duties of the Custodian with Respect to Property of the Fund Held By the
------------------------------------------------------------------------
Custodian
---------
2.1 Holding Securities. The Custodian shall hold and physically segregate
------------------
for the account of the Fund all non-cash property, including all
securities owned by the Fund, other than securities which are maintained
pursuant to Section 2.11 in a clearing agency which acts as a securities
depository or in a book-entry system authorized by the U.S. Department
of the Treasury, collectively referred to herein as 'Securities System'.
2.2 Delivery of Securities. The Custodian shall release and deliver
----------------------
securities owned by the Fund held by the Custodian or in a Securities
System account of the Custodian only upon receipt of Proper
Instructions, which may be continuing instructions when deemed
appropriate by the parties, and only in the following cases:
1) Upon sale of such securities for the account of the Fund and
receipt of payment therefor;
2) Upon the receipt of payment in connection with any repurchase
agreement related to such securities entered into by the Fund;
-2-
<PAGE>
3) In the case of a sale effected through a Securities System, in
accordance with the provisions of Section 2.11 hereof;
4) To the depository agent in connection with tender or-other
similar offers for portfolio securities of the Fund;
5) To the issuer thereof or its agent when such securities are
called, redeemed, retired or otherwise become payable; provided
that, in any such case, the cash or other consideration is to
be delivered to the Custodian;
6) To the issuer thereof, or its agent, for transfer into the name
of the Fund or into the name of any nominee or nominees of the
Custodian or into the name or nominee name of any agent
appointed pursuant to Section 2.10 or into the name or nominee
name of any sub-custodian appointed pursuant to Article 1; or
for exchange for a different number of bonds, certificates or
other evidence representing the same aggregate face amount or
number of units; provided that, in any such case, the new
--------
securities are to be delivered to the Custodian;
7) To the broker selling the same for examination in accordance
with the "street
-3-
<PAGE>
delivery" custom;
8) For exchange or conversion pursuant to any plan of merger,
consolidation, recapitalization, reorganization or readjustment
of the securities of the issuer of such securities, or pursuant
to provisions for conversion contained in such securities, or
pursuant to any deposit agreement; provided that, in any such
case, the new securities and cash, if any, are to be delivered
to the Custodian;
9) In the case of warrants, rights or similar securities, the
surrender thereof in the exercise of such warrants, rights or
similar securities or the surrender of interim receipts or
temporary securities for definitive securities; provided that,
in any such case, the new securities and cash, if any, are to
be delivered to the Custodian;
10) For delivery in connection with any loans of securities made by
the Fund, but only against receipt of collateral as deemed
--- ----
adequate by the Fund;
11) For delivery as security in connection with any borrowings by
the Fund requiring a pledge of assets by the Fund, but only
--- ----
against receipt of amounts borrowed;
-4-
<PAGE>
12) Upon receipt of instructions from the transfer agent
("Transfer Agent") for the Fund, for delivery to such
Transfer Agent or to the holders of shares in connection with
distributions in kind, as may be described from time to time
in the Fund's currently effective prospectus and Statement of
Additional Information ("Statement"), in satisfaction of
requests by holders of Shares for repurchase or redemption;
and
13) For any other proper corporate purpose, but only upon receipt
--------
of, in addition to Proper Instructions, a certified copy of a
resolution of the Trustees, or of the Executive Committee
signed by an officer of the Fund and certified by the
Secretary or an Assistant Secretary, specifying the
securities to be delivered, setting forth the purpose for
which such delivery is to be made, declaring such purposes to
be proper corporate purposes, and naming the person or
persons to whom delivery of such securities shall be made.
2.3 Registration of Securities. Securities held by the Custodian (other than
--------------------------
bearer securities) shall be registered in the name of the Fund or in the
name of any nominee of the Fund or of any nominee of the Custodian
-5-
<PAGE>
which nominee shall be assigned exclusively to the Fund, unless the Fund
------
has authorized in writing the appointment of a nominee to be used in
common with other registered investment companies having the same
investment adviser as the Fund, or in the name or nominee name of any
agent appointed pursuant to Section 2.10 or in the name or nominee name
of any sub-custodian appointed pursuant to Article 1. All securities
accepted by the Custodian on behalf of the Fund under the terms of this
Contract shall be in "street name" or other good delivery form.
2.4 Bank Accounts. The Custodian shall open and maintain a separate bank
-------------
account or accounts in the name of the Fund, subject only to draft or
order by the Custodian acting pursuant to the terms of this Contract, and
shall hold in such account or accounts, subject to the provision hereof,
all cash received by it from or for the account of the Fund, other than
cash maintained by the Fund in a bank account established and used in
accordance with Rule 17f-3 under the Investment Company Act of 1940.
Funds held by the Custodian for the Fund may be deposited by it to its
credit as Custodian in the Banking Department of the Custodian or in such
other banks or trust companies as it may in its discretion deem necessary
or desirable; provided, however, that every such bank or trust company
--------
shall be qualified to act as a custodian under the Investment Company Act
of 1940 and that each such bank or trust company and the funds to be
-6-
<PAGE>
deposited with each such bank or trust company shall be approved by vote
of a majority of the Trustees of the Fund. Such funds shall be deposited
by the Custodian in its capacity as Custodian and shall be withdrawable
by, the Custodian only in that capacity.
2.5 Payments for Shares. The Custodian shall receive from the distributor
-------------------
for the Fund's Shares or from the Transfer Agent of the Fund and deposit
into the Fund's account such payments as are received for Shares of the
Fund issued or sold from time to time by the Fund. The Custodian will
provide timely notification to the Fund and the Transfer Agent of any
receipt by it of payments for Shares of the Fund.
2.6 Collection of Income. The Custodian shall collect on a timely basis all
--------------------
income and other payments with respect to registered securities held
hereunder to which the Fund held hereunder to which the Fund shall be
entitled either by law or pursuant to custom in the securities business
and shall collect on a timely basis all income and other payments with
respect to bearer securities if, on the date of payment by the issuer,
such securities are held by the Custodian or agent thereof and shall
credit such income, as collected, to the Fund's custodian account.
Without limiting the generality of the foregoing, the Custodian shall
detach and present for payment all coupons and other income items
requiring presentation as and when they become due and shall collect
interest when due on securities held
-7-
<PAGE>
hereunder. Collection of income due the Fund on securities loaned
pursuant to the provisions of Section 2.2 (10) shall be the
responsibility of the Fund. The Custodian will have no duty or
responsibility in connection therewith, other than to provide the Fund
with such information or data as may be necessary to assist the Fund in
arranging for the timely delivery to the Custodian of the income to which
the Fund is properly entitled.
2.7 Payment of Fund Moneys. Upon receipt of Proper Instructions, which may
----------------------
be continuing instructions when deemed appropriate by the parties, the
Custodian shall pay out moneys of the Fund in the following cases only:
1) Upon the purchase of securities for the account of the Fund
but only (a) against the delivery of such securities to the
Custodian (or any bank, banking firm or trust company doing
business in the United States or abroad which is qualified
under the Investment Company Act of 1940, as amended, to act
as a Custodian and has been designated by the Custodian as
its agent for this purpose) registered in the name of the
Fund or in the name of a nominee of the Custodian referred to
in Section 2.3 hereof or in proper form for transfer; (b) in
the case of a purchase effected through a Securities System,
in
-8-
<PAGE>
accordance with the conditions set forth in Section 2.11
hereof or (c) in the case of repurchase agreements entered
into between the Fund and the Custodian, or another bank, (i)
against delivery of the securities either in certificate form
or through a Securities System as provided for in Section
2.11 hereof or (ii) against delivery of the receipt
evidencing purchase by the Fund of securities owned by the
Custodian along with written evidence of the agreement by the
Custodian to repurchase such securities from the Fund;
2) In connection with conversion, exchange or surrender of
securities owned by the Fund as set forth in Section 2.2
hereof;
3) For the redemption or repurchase of Shares issued by the
Fund as set forth in Section 2.9 hereof;
4) For the payment of any expense or liability incurred by the
Fund, including but not limited to the following payments for
the account of the Fund: interest, taxes, management,
accounting, transfer agent and legal fees, and operating
expenses of the Fund whether or not such expenses are to be
in whole or part capitalized or treated as deferred expenses;
-9-
<PAGE>
5) For the payment of any dividends declared pursuant to the
governing documents of the Fund;
6) For any other proper purpose, but only upon receipt of, in
--------
addition to Proper Instructions, a certified copy of a
resolution of the Trustees or of the Executive Committee of
the Fund signed by an officer of the Fund and certified by
its Secretary or an Assistant Secretary, specifying the
amount of such payment, setting forth the purpose for which
such payment is to be made, declaring such purpose to be a
proper purpose, and naming the person or persons to whom such
payment is to be made.
2.8 Liability for Payment in Advance of Receipt of Securities Purchased. In
-------------------------------------------------------------------
any and every case where payment for purchase of securities for the
account of the Fund is made by the Custodian in advance of receipt of the
securities purchased in the absence of specific written instructions from
the Fund to so pay in advance, the Custodian shall be absolutely liable
to the Fund for such securities to the same extent as if the securities
had been received by the Custodian, except that in the case of repurchase
------
agreements entered into by the Fund with a bank which is a member of the
Federal Reserve System, the
-10-
<PAGE>
Custodian may transfer funds to the account of such bank prior to the
receipt of written evidence that the securities subject to such
repurchase agreement have been transferred by book-entry into a
segregated non-proprietary account of the Custodian maintained with the
Federal Reserve Bank of Boston or of the safe-keeping receipt, provided
that such securities have in fact been so transferred by book-entry.
2.9 Payments for Repurchases or Redemptions of Shares of the Fund. From such
------------------------ ------------------------
funds as may be available for the purpose but subject to the limitations
of the Declaration of Trust and any applicable resolutions of the
Trustees of the Fund pursuant thereto, the Custodian shall, upon receipt
of instructions from the Transfer Agent, make funds available for payment
to holders of Shares who have delivered to the Transfer Agent a request
for redemption or repurchase of their Shares. In connection with the
redemption or repurchase of Shares of the Fund, the Custodian is
authorized upon receipt of instructions from the Transfer Agent to wire
funds to or through a commercial bank designated by the redeeming
shareholders.
2.10 Appointment of Agents. The Custodian may at any time or times in its
---------------------
discretion appoint (and may at any time remove) any other bank or trust
company which is itself qualified under the Investment Company Act of
1940, as amended, to act as a custodian, as its agent (but not as its
sub-custodian) to carry out such of the provisions
-11-
<PAGE>
of this Article 2 as the Custodian may from time to time direct; provided,
--------
however, that the appointment of any agent shall not relieve the Custodian
of its responsibilities or liabilities hereunder.
2.11 Deposit of Fund Assets in Securities Systems. Consistent with the
--------------------------------------------
provisions of Sections 2.2 and 2.7, the Custodian may deposit and/or
maintain securities owned by the Fund in a clearing agency registered with
the Securities and Exchange Commission under Section 17A of the Securities
Exchange Act of 1934, which acts as a securities depository, or in the
book-entry system authorized by the U.S. Department of the Treasury and
certain federal agencies, collectively referred to herein as "securities
system" in accordance with applicable Federal Reserve Board and Securities
and Exchange Commission rules and regulations, if any, and subject to the
following provisions:
1) The Custodian may keep securities of the Fund in a Securities
System provided that such securities are represented in an
account ("Account") of the Custodian in the Securities System
which shall not include any assets of the Custodian other than
assets held as a fiduciary, custodian or otherwise
-12-
<PAGE>
for customers;
2) The records of the Custodian with respect to securities of the
Fund which are maintained in a Securities System shall identify
by book-entry those securities belonging to the Fund;
3) The Custodian shall pay for securities purchased for the account
of the Fund upon (i) receipt of advice from the Securities System
that such securities have been transferred to the Account, and
(ii) the making of an entry on the records of the Custodian to
reflect such payment and transfer for the account of the Fund.
The Custodian shall transfer securities sold for the account of
the Fund upon (i) receipt of advice from the Securities System
----
that payment for such securities has been transferred to the
Account, and (ii) the making of an entry on the records of the
Custodian to reflect such transfer and payment for the account of
the Fund. Copies of all advices from the Securities System of
transfers of securities for the account of the Fund shall
identify the Fund, be maintained for the Fund by the Custodian
and be provided to the Fund at its request. The
-13-
<PAGE>
Custodian shall furnish the Fund confirmation of each transfer to
or from the account of the Fund in the form of a written advice
or notice and shall furnish to the Fund copies of daily
transaction sheets reflecting each day's transactions in the
Securities System for the account of the Fund on the next
business day;
4) The Custodian shall provide the Fund with any report obtained by
the Custodian on the Securities System's accounting system,
internal accounting control and procedures for safeguarding
securities deposited in the Securities System;
5) Anything to the contrary in this Contract notwithstanding, the
Custodian shall be liable to the Fund for any loss or damage to
the Fund resulting from use of the Securities System by reason of
any negligence, misfeasance or misconduct of the Custodian or any
of its agents or of any of its or their employees or from failure
of the Custodian or any such agent to enforce effectively such
rights as it may have against the Securities System; at the
election of the Fund, it shall be entitled to be subrogated to
the rights of the Custodian with respect to any claim
-14-
<PAGE>
against the Securities System or any other person which the
Custodian may have as a consequence of any such loss or damage if
and to the extent that the Fund has not been made whole for any
such loss or damage.
2.12 Ownership Certificates for Tax Purposes. The Custodian shall execute
---------------------------------------
ownership and other certificates and affidavits for all federal and state
tax purposes in connection with receipt of income or other payments with
respect to securities of the Fund held by it and in connection with
transfers of securities.
2.13 Proxies. The Custodian shall, with respect to the securities held
-------
hereunder, cause to be promptly executed by the registered holder of such
securities, if the securities are registered otherwise than in the name
of the Fund or a nominee of the Fund, all proxies, without indication of
the manner in which such proxies are to be voted, and shall promptly
deliver to the Fund such proxies, all proxy soliciting materials and all
notices relating to such securities.
2.14 Communications Relating to Fund Portfolio Securities. The Custodian
----------------------------------------------------
shall transmit promptly to the Fund all written information (including,
without limitation, pendency of calls and maturities of securities and
expirations of rights in connection therewith) received by the Custodian
from issuers of the securities being held for the Fund. With respect to
tender or exchange
-15-
<PAGE>
offers, the Custodian shall transmit promptly to the Fund all written
information received by the Custodian from issuers of the securities
whose tender or exchange is sought and from the party (or his agents)
making the tender or exchange offer. If the Fund desires to take action
with respect to any tender offer, exchange offer or any other similar
transaction, the Fund shall notify the Custodian at least three business
days prior to the date on which the Custodian is to take such action.
2.15 Proper Instructions. Proper Instructions as used throughout this Article
-------------------
2 means a writing signed or initialled by two or more officers of the
Fund or such other persons as the Trustees shall have from time to time
authorized. Each such writing shall set forth the specific transaction
or type of transaction involved, including a specific statement of the
purpose for which such action is requested. Oral instructions will be
considered Proper Instructions if the Custodian reasonably believes them
to have been given by a person authorized to given such instructions with
respect to the transaction involed. The Fund shall cause all oral
instructions to be confirmed in writing. Upon receipt of a certificate
of the Secretary or an Assistant Secretary as to the authorization by the
Trustees of the Fund accompanied by a detailed description of procedures
approved by the Trustees, Proper Instructions may include communications
effected directly between electro-
-16-
<PAGE>
mechanical or electronic devices provided that the Trustees and the
Custodian are satisfied that such procedures afford adequate safeguards
for the Fund's assets.
2.16 Actions Permitted without Express Authority. The Custodian may in its
-------------------------------------------
discretion, without express authority from the Fund:
1) surrender securities in temporary form for securities in
definitive form;
2) endorse for collection, in the name of the Fund, checks,
drafts and other negotiable instruments; and
3) in general, attend to all non-discretionary details in
connection with the sale, exchange, substitution, purchase,
transfer and other dealings with the securities and property
of the Fund except as otherwise directed by the Trustees of
the Fund.
2.17 Evidence of Authority. The Custodian shall be protected in acting upon
---------------------
any instructions, notice, request, consent, certificate or other
instrument or paper believed by it to be genuine and to have been
properly executed by or on behalf of the Fund. The Custodian may
receive and accept a certified copy of a vote of the Trustees of the
Fund as conclusive evidence (a) of the authority of any person to act
in accordance with such vote or (b) of any determination or of any
action by the
-17-
<PAGE>
Trustees pursuant to the Declaration of Trust as described in such vote,
and such vote may be considered as in full force and effect until
receipt by the Custodian of written notice to the contrary.
3. Duties of Custodian with Respect to the Books of Account and Calculation
------------------------------------------------------------------------
of Net Asset Value and Net Income.
---------------------------------
The Custodian shall cooperate with and supply necessary information to
the entity or entities appointed by the Trustees of the Fund to keep the books
of account of the Fund and/or compute the net asset value per share of the
outstanding shares of the Fund or, if directed in writing to do so by the Fund,
shall itself keep such books of account and/or compute such net asset value per
share. If so directed, the Custodian shall also calculate daily the net income
of the Fund as described in the Fund's currently effective prospectus and
Statement and shall advise the Fund and the Transfer Agent daily of the total
amounts of such net income and, if instructed in writing by an officer of the
--
Fund to do so, shall advise the Transfer Agent periodically of the division of
such net income among its various components. The calculations of the net asset
value per share and the daily income of the Fund shall be made at the time or
times described from time to time in the Fund's currently effective prospectus
and Statement.
4. Records
-------
The Custodian shall create and maintain all records relating to its
activities and obligations under this Contract in such manner as will meet the
obligations of the Fund under the
-18-
<PAGE>
Investment Company Act of 1940, with particular attention to Section 31 thereof
and Rules 3la-1 and 3la-2 thereunder, applicable federal and state tax laws and
any other law or administrative rules or procedures which may be applicable to
the Fund. All such records shall be the property of the Fund and shall at all
times during the regular business hours of the Custodian be open for inspection
by duly authorized officers, employees or agents of the Fund and employees and
agents of the Securities and Exchange Commission. The Custodian shall, at the
Fund's request, supply the Fund with a tabulation of securities owned by the
Fund and held by the Custodian and shall, when requested to do so by the Fund
and for such compensation as shall be agreed upon between the Fund and the
Custodian, include certificate numbers in such tabulations.
5. Opinion of Fund's Independent Accountant
----------------------------------------
The Custodian shall take all reasonable action, as the Fund may from time
to time request, to obtain from year to year favorable opinions from the Fund's
independent accountants with respect to its activities hereunder in connection
with the preparation of the Fund's Form N-lA, and Form N-lR or other annual
reports to the Securities and Exchange Commission and with respect to any other
requirements of such Commission.
6. Reports to Fund by Independent Public Accountants
-------------------------------------------------
The Custodian shall provide the Fund, at, such times as the Fund may
reasonably require, with reports by independent public accountants on the
accounting system, internal accounting
-19-
<PAGE>
control and procedures for safeguarding securities, including securities
deposited and/or maintained in a Securities System, relating to the services
provided by the Custodian under this Contract; such reports, which shall be of
sufficient scope and in sufficient detail, as may reasonably be required by the
Fund, to provide reasonable assurance that any material inadequacies would be
disclosed by such examination, and, if there are no such inadequacies, shall so
state.
7. Compensation of Custodian
-------------------------
The Custodian shall be entitled to reasonable compensation for its
services and expenses as Custodian, as agreed upon from time to time between the
Fund and the Custodian.
8. Responsibility of Custodian
---------------------------
So long as and to the extent that it is in the exercise of reasonable
care, the Custodian shall not be responsible for the title, validity or
genuineness of any property or evidence of title thereto received by it or
delivered by it pursuant to this Contract and shall be held harmless in acting
upon any notice, request, consent, certificate or other instrument reasonably
believed by it to be genuine and to be signed by the proper party or parties.
The Custodian shall be held to the exercise of reasonable care in carrying out
the provisions of this Contract, but shall be kept indemnified by and shall be
without liability to the Fund for any action taken or omitted by it in good
faith without negligence. It shall be entitled to rely on and may act upon
advice of counsel (who may be counsel for the Fund) on all matters, and shall be
without liability for any action reasonably
-20-
<PAGE>
taken or omitted pursuant to such advice.
If the Fund requires the Custodian to take any action with respect to
securities, which action involves the payment of money or which action may, in
the opinion of the Custodian, result in the Custodian or its nominee assigned to
the Fund being liable for the payment of money or incurring liability of some
other form, the Fund, as a prerequisite to requiring the Custodian to take such
action, shall provide indemnity to the Custodian in an amount and form
satisfactory to it.
If the Fund requires the Custodian to advance cash or securities for any
purpose, including overdrafts, or in the event that the Custodian or its nominee
shall incur or be assessed any taxes, charges, expenses, assessments, claims or
liabilities in connection with the performance of this Contract, 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 and should the Fund fail to repay the Custodian
promptly, the Custodian shall be entitled to utilize available cash and to
dispose of the Fund assets to the extent necessary to obtain reimbursement.
9. Effective Period, Termination and Amendment
-------------------------------------------
This Contract shall become effective as of its execution, shall continue
in full force and effect until terminated as hereinafter provided, may be
amended at any time by mutual agreement of the parties hereto and may be
terminated by either party by an instrument in writing delivered or mailed,
postage
-21-
<PAGE>
prepaid to the other party, such termination to take effect not sooner than
thirty (30) days after the date of such delivery or mailing; provided, however
--------
that the Custodian shall not act under Section 2.11 hereof in the absence of
receipt of an initial certificate of the Secretary or an Assistant Secretary
that the Trustees of the Fund have approved the initial use of a particular
Securities System, as required in each case by Rule 17f-4 under the Investment
Company Act of 1940, as amended; provided further, however, that the Fund shall
-------- -------
not amend or terminate this Contract in contravention of any applicable federal
or state regulations, or any provision of its Declaration of Trust, and further
provided, that the Fund may at any time by action of its Trustees (i) substitute
another bank or trust company for the Custodian by giving notice as described
above to the Custodian, or (ii) immediately terminate this Contract in the event
of the appointment of a conservator or receiver for the Custodian by the
Comptroller of the Currency or upon the happening of a like event at the
direction of an appropriate regulatory agency or court of competent
jurisdiction.
Upon termination of the Contract, the Fund shall pay to the Custodian
such compensation as may be due as of the date of such termination and shall
likewise reimburse the Custodian for its costs, expenses and disbursements.
10. Successor Custodian
-------------------
If a successor custodian shall be appointed by the Trustees of the Fund,
the Custodian shall, upon termination, deliver to such successor custodian at
the office of the
-22-
<PAGE>
Custodian, duly endorsed and in the form for transfer, all securities then held
by it hereunder and shall transfer to an account of the successor custodian all
of the Fund's securities held in a Securities System.
If no such successor custodian shall be appointed, the Custodian shall,
in like manner, upon receipt of a certified copy of a resolution of the Trustees
of the Fund, deliver at the office of the Custodian and transfer such
securities, funds and other properties in accordance with such resolution.
In the event that no written order designating a successor custodian or
certified copy of a vote of the Trustees shall have been delivered to the
Custodian on or before the date when such termination shall become effective,
then the Custodian shall have the right to deliver to a bank or trust company,
which is a "bank" as defined in the Investment Company Act of 1940, doing
business in Boston, Massachusetts, of its own selection, having an aggregate
capital, surplus, and undivided profits, as shown by its last published report?
of not less than $25,000,000, all securities, funds and other properties held by
the Custodian and all instruments held by the Custodian relative thereto and all
other property held by it under this Contract and to transfer to an account of
such successor custodian all of the Fund's securities held in any Securities
System. Thereafter, such bank or trust company shall be the successor of the
Custodian under this Contract.
In the event that securities, funds and other properties remain in the
possession of the Custodian after the date of
-23-
<PAGE>
termination hereof owing to failure of the Fund to procure the certified copy of
resolution referred to or of the Trustees to appoint a successor custodian, the
Custodian shall be entitled to fair compensation for its services during such
period as the Custodian retains possession of such securities, funds and other
properties and the provisions of this Contract relating to the duties and
obligations of the Custodian shall remain in full force and effect.
11. Interpretive and Additional Provisions
--------------------------------------
In connection with the operation of this Contract, the Custodian and the
Fund may from time to time agree on such provisions interpretive of or in
addition to the provisions of this Contract as may in their joint opinion be
consistent with the general tenor of this Contract. Any such interpretive or
additional provisions shall be in a writing signed by both parties and shall be
annexed hereto, provided that no such interpretive or additional provisions
--------
shall contravene any applicable federal or state regulations or any provision of
the Declaration of Trust of the Fund. No interpretive or additional provisions
made as provided in the preceding sentence shall be deemed to be an amendment of
this Contract.
12. Massachusetts Law to Apply
--------------------------
This Contact shall be construed and the provisions thereof interpreted
under and in accordance with laws of The Commonwealth of Massachusetts.
13. Prior Contracts
---------------
This Contract supersedes and terminates, as of the date
-24-
<PAGE>
hereof, all prior contracts between the Fund and the Custodian relating to the
custody of the Fund's assets.
14. Personal Liability
------------------
The Declaration of Trust establishing the Fund, dated March 28, 1984, a
copy of which, together with all amendments thereto (the "Declaration"), is on
file in the office of the Secretary of the Commonwealth of Massachusetts,
provides that the name "CBA Money Fund" refers to the Trustees under the
Declaration collectively as Trustees, but not as individuals or personally; and
no Trustee, shareholder, officer, employee or agent of the Fund shall be held to
any personal liability, nor shall resort be had to their private property for
the satisfaction of any obligation or claim otherwise in connection with the
affairs of said Fund but the Trust Property only shall be liable.
IN WITNESS WHEREOF, each of the parties has caused this instrument to be
executed in its name and behalf by its duly authorized representative and its
seal to be hereunder affixed as
of the day of , 1984.
ATTEST CBA MONEY FUND
____________________________ By ________________________________
ATTEST STATE STREET BANK AND TRUST COMPANY
____________________________ By ________________________________
Assistant Secretary Vice President
-25-
<PAGE>
EXHIBIT 99.9(a)
TRANSFER AGENCY, SHAREHOLDER SERVICING
AGENCY, AND PROXY AGENCY AGREEMENT
THIS AGREEMENT made as of the 31st day of December, 1985 by and between
---- -------- -
CBA Money Fund (the "Fund"), an unincorporated business trust organized under
the laws of the Commonwealth of Massachusetts, and Merrill Lynch Financial Data
Service, Inc., a corporation organized and existing under the laws of New
Jersey (the "Transfer Agent") .
W I T N E S S E T H:
--------------------
WHEREAS, the Fund wishes to appoint the Transfer Agent to be its transfer
agent, shareholder servicing agent and proxy agent upon, and subject to, the
terms and provisions of this Agreement, and the Transfer Agent is desirous of
accepting such appointment upon, and subject to, such terms and provisions;
NOW THEREFORE,, in consideration of the mutual covenants contained in this
Agreement, the Fund and the Transfer Agent agree as follows:
1. Appointment as Transfer Agent, Shareholder Servicing
----------------------------------------------------
Agent and Proxy Agent for the Fund.
- -----------------------------------
1.1. The Fund hereby appoints the Transfer Agent to act as its
transfer agent, shareholder servicing agent and proxy agent upon, and subject
to, the terms and provisions of this Agreement.
<PAGE>
1.2. The Transfer Agent hereby accepts the appointment as transfer
agent, shareholder servicing agent, and proxy agent for the Fund, and agrees to
act as such upon, and subject to, the terms and provisions of this Agreement.
The Transfer Agent hereby agrees to hire, purchase, develop and maintain such
dedicated personnel, facilities, equipment, software, resources and capabilities
as may be reasonably determined by the Fund to be necessary for the satisfactory
performance of the duties and responsibilities of the Transfer Agent under this
Agreement.
2. Definitions
-----------
In this Agreement:
2.1. The term "Act" means the Investment Company Act of 1940, as
amended from time to time, and any applicable rule, regulation or order
thereunder.
2.2. The term "Account" means any account of a Shareholder
established in connection with the Capital Building Account ("CBA") of Merrill
Lynch, Pierce, Fenner & Smith Incorporated.
2.3. The term "Custodian" means the bank duly appointed to act as
Custodian for the assets of the Fund and the term "Custodian Agreement" means
any agreement in effect between the Fund and the Custodian.
2.4. The term "Officer's Instruction" means an instruction given in
writing on behalf of the Fund to the Transfer Agent by the President, any Vice
President, the Secretary, the Treasurer or the Controller of the Fund.
-2-
<PAGE>
2.5. The term "Prospectus" means the prospectus of the Fund from time
to time in effect.
2.6. The term "Shares" means the shares of the Fund.
2.7. The term "Shareholder" means the bolder of record of Shares,
irrespective of the category of Account maintained in respect of such Shares.
2.8. The term "Statement of Additional Information" means the
statement of additional information of the Fund from time to time in effect.
3. Functions of Transfer Agent, Shareholder Servicing Agent and Proxy
------------------------------------------------------------------
Agent.
- ------
3.1. Subject to the succeeding provisions of this Agreement, the
Transfer Agent hereby agrees to perform the following functions on behalf of the
Fund:
3.1.1. Issuing, transferring and redeeming shares;
3.1.2. Opening, maintaining, servicing and closing Accounts.
3.1.3. Acting as agent of the Fund and/or Shareholders in connection
with Accounts, upon the terms and subject to the conditions contained in the
Prospectus and the Statement of Additional Information.
3.1.4. Causing the reinvestment in Accounts of dividends declared upon
Shares.
3.1.5. Processing liquidations.
3.1.6. Furnishing to Shareholders appropriate income tax information
and income tax forms duly completed.
-3-
<PAGE>
3.1.7. Mailing to Shareholders annual, semi-annual, and quarterly
reports prepared by or on behalf of the Fund, and mailing new Prospectuses upon
their issue to Shareholders whose Shares are held in Accounts.
3.1.8. Furnishing to the Fund such periodic statements of transactions
effected by the Transfer Agent, reconciliations, balances and summaries as set
forth in Exhibit A and as shall be necessary in connection with the CBA program.
3.1.9. Maintaining such books and records relating to transactions
effected by the Transfer Agent as are required by the Act or by any other
applicable provisions of law to be maintained by the Fund or the Transfer Agent
with respect to such transactions, and preserving, or causing to be preserved,
any such books and records for such periods as may be required by any law, rule
or regulation.
3.2. The Transfer Agent agrees to act as proxy agent in connection
with the holding of annual or special meetings of Shareholders, such services to
include, but not limited to, mailing to Shareholders notices, proxies and proxy
statements in connection with the holding of such meetings, receiving and
tabulating votes cast by proxy, communicating to the Fund the results of such
tabulation accompanied by appropriate certificates, and preparing and
furnishing to the Fund certified lists of Shareholders, all of the foregoing in
such form and containing such information as may be required by the Fund to
comply with any provisions of law applicable to such meetings.
- 4 -
<PAGE>
3.3. The Transfer Agent agrees to deal with, and answer, all
correspondence from or on behalf of Shareholders relating to the functions of
the Transfer Agent under this Agreement.
3.4. The Transfer Agent agrees to furnish to the Fund such information
and at such intervals as is necessary for the Fund to comply with the
registration and/or the reporting requirements of the Securities and Exchange
Commission, Blue Sky authorities or other regulatory agencies.
3.5. The Transfer Agent agrees to provide to the Fund upon request
such information as may reasonably be required to enable the Fund to reconcile
the number of outstanding Shares between the Transfer Agent's records and the
account books of the Fund.
3.6. The parties hereto agree that, without prejudice to any other
provisions of this section 3, the functions of the Transfer Agent under this
section 3 will be performed in accordance with the Activities List set out in
Exhibit A to this Agreement.
3.7. Notwithstanding anything in the foregoing provisions of this
section 3, the Transfer Agent agrees to perform its functions hereunder subject
to such modification (whether in respect of particular cases or in any
particular class of cases) as may from time to time be contained in an Officer's
Instruction.
4. Compensation of Transfer Agent.
-------------------------------
The charges for services described in this Agreement, including
"out-of-pocket" expenses will be established
-5-
<PAGE>
by a Fee Agreement between the Fund and the Transfer Agent under separate cover.
5. Right to Inspect Records, etc., of Transfer Agent.
--------------------------------------------------
The Transfer Agent agrees that it will make available for
examination, upon request by any officer of the Fund, its accountant or its
investment adviser, to any officer, employee, or agent of the Fund, of its
accountant or of its investment adviser any books and records (whether or not
books and records to be preserved as required by law) which relate to any
transaction or function to be performed by the Transfer Agent under or pursuant
to this Agreement and shall permit any such person to transcribe or to duplicate
on equipment provided by the Transfer Agent any such book or record, in whole or
in part.
6. Confidential Relationships of the Transfer Agent, etc.
------------------------------------------------------
The Transfer Agent agrees, on behalf of itself and its officers,
employees, vendors and agents, that each of the foregoing shall treat the
identity and all transactions of Shareholders, and all other transactions
contemplated by this Agreement, and all information germane thereto, as
confidential and not to be disclosed to any person (other than the Shareholder
concerned, or the Fund, or as may be disclosed in the examination of any books
or records by any person lawfully entitled to examine the same) except as may be
authorized by an Officer's Instruction. The Transfer Agent agrees to adopt
procedures for and written instructions to its officers, employees, vendors, and
agents
-6-
<PAGE>
reasonably designed to implement the agreement established in this section 6.
7. Standard of Care; loss caused by impostors.
-------------------------------------------
The Transfer Agent shall use its best efforts to insure the accuracy
of all services performed under this Agreement, but assumes no responsibility
for and shall not be liable for, any loss or damage to any party unless the
negligence, bad faith or willful misconduct of the Transfer Agent is a proximate
cause of such loss or damage; provided, however, that losses due to the failure
of the Transfer Agent to detect payments made by it under this Agreement to
impostors shall be borne by the Transfer Agent.
8. Termination of Appointment.
---------------------------
The appointment of the Transfer Agent provided by this Agreement shall
be in effect for one year from the date hereof and thereafter on a year-to-year
basis, each such term to expire on the anniversary of the date hereof. Any party
may terminate such appointment by delivering a written notice to that effect at
the principal place of business of the other party at least 60 days prior to the
expiration of the then current term of the Agreement. In the event such
appointment shall be terminated, for whatever reason, the Transfer Agent will
provide the Fund without further charge with:
8.1. A complete and current computer reproducible record, within 7
days of the date of termination, of that file data which may reasonably be
required to establish transfer agency, shareholder servicing agency and proxy
agency services elsewhere.
-7-
<PAGE>
8.2. All hard copy records in file containers or other acceptable
container for shipping to a new location.
8.3. A referral service, for a reasonable period of time, indicating
to Shareholders or potential Shareholders the next appropriate address for
inquiries or Shareholder information.
8.4. Any other services, including correction of errors or the costs
of such correction, as may be normal and necessary to effect the transfer of
Shareholder information in an orderly and timely manner, should the occasion
arise.
Notwithstanding anything in the foregoing provisions of this section
8, if it appears impracticable in the circumstances to effect an orderly
delivery of the necessary and appropriate records of the Transfer Agent to a
successor transfer agent, shareholder servicing agent, and/or proxy agent for
the Fund within the time specified in the notice of termination as a foresaid,
the Transfer Agent agrees that its appointment shall remain in force and effect
for such reasonable period as may be required to complete necessary arrangements
with a successor transfer agent, shareholder servicing agent, and/or proxy
agent.
9. Amendment, etc. of Agreement.
-----------------------------
Except to the extent that the performance by the Transfer Agent of its
functions under this Agreement may from time to time be modified by an Officer's
Instruction, this Agreement may be amended or modified only by a further written
agreement between the parties.
-8-
<PAGE>
10. No Personal Liability of Trustees, etc.
---------------------------------------
The Transfer Agents acknowledges that the Declaration of Trust
establishing the Fund, a copy of which, together with all amendments thereto
(the "Declaration"), is on file in the office of the Secretary of the
Commonwealth of Massachusetts, provides that the name of the Fund refers to the
trustees under the Declaration collectively as trustees, but not as individuals
or personally; and no trustee, Shareholder, officer, employee or agent of the
Fund shall be held to any personal liability, nor shall resort be had to their
private property for the satisfaction of any obligation or claim or otherwise in
connection with the affairs of said Fund but the Trust Estate only shall be
liable.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the date first above written by their respective officers
hereunto duly authorized.
CBA MONEY FUND
By /s/ Gerald M. Richard
---------------------
Treasurer
ATTEST:
/s/ Robert Harris
- -----------------
Secretary
MERRILL LYNCH FINANCIAL DATA
SERVICE, INC.
By /s/ Robert C. Doan
---------------------
ATTEST:
/s/ Herbert R. Hirsch Jr.
- --------------------------
Secretary
-9-
<PAGE>
Exhibit A
Activities List
I Services Further Described
A. Shareholder and Accounting Services.
1. General Scope.
The Transfer Agent will provide a comprehensive accounting and
shareholder service generally consistent with that provided to other
investment companies. The Transfer Agent acknowledges that the services
necessitated for the Fund may be significantly more demanding from a
time and precision viewpoint than other types of investment companies
with respect to such features as:
a. Daily dividend accounting.
b. Wire receipt and payout of Shareholders' funds.
c. Immediate determination of Federal Funds availability on
subscriptions received.
d. Rapid and efficient transfers of investment monies
between the Fund's various accounts (e.g., subscription/
custody/redemption).
e. Effective and controlled processing of redemptions.
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2. Computer Accounting and Record Keeping.
a. The Transfer Agent will perform daily maintenance
and routine file update prior to investment of the daily
dividend or establishing new Accounts.
b. The Transfer Agent will perform a dividend reinvestment
run daily in order to credit all existing Accounts with
dividends earned that day.
c. The Transfer Agency will take reasonable precautions for
safeguarding all Accounts during computer runs.
d. The Transfer Agent will provide continuous proof of the
outstanding Shares on a daily basis and on-line availability
of all file data.
3. Establishing and Servicing accounts.
The Transfer Agent will accept instructions from
the Fund opening a new account and will:
a. Audit and verify payment items for proper registration and
other particulars as prescribed by the Prospectus or
Statement of Additional Information.
b. Verify that there is no other existing Account with the
same registration.
c. Assign Account numbers.
d. Produce microfilm record of all incoming checks
and source documentation of filmstrips so as to be
retrievable and reproducible on command.
e. Process address changes and acknowledge such
changes to previous address of record.
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f. Answer inquiries from Shareholders.
g. Process on a daily basis routine transactions such
as:
i. Change of address.
ii. Miscellaneous changes.
h. Incorporate in the Shareholder accounting software
and procedures the necessary flags, audits, and tests to
assure that the various provisions and requirements specified
elsewhere in this contract are satisfied.
B. Transfer Agent Services.
The Transfer Agent will perform all functions normally
required of a transfer agent for an investment company. Such
functions shall include but not necessarily be limited to:
1. Keeping such records in the form and manner as it may
deem advisable consistent with the rules and regulations of
appropriate governmental authorities.
2. Processing transfers as requested, including obtaining
and reviewing papers and all other documents necessary to
satisfy transfer requirements.
3. Processing initial and subsequent investments from
Shareholders.
4. Processing and record liquidation of Account balances to
satisfy full or partial account redemptions.
5. Accepting the daily dividend income calculated by the
Fund and reinvesting such income to the benefit of the
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Shareholders in additional full and fractional non-
certificated Shares. The procedure used must prove that the
amount reinvested daily balances to the total net income
accrued to this portfolio, and that each Account is credited
daily with the corresponding Shares reinvested. To insure
these objectives are achieved appropriate reports and proofs
are to be generated.
C. Subscription Agent Services.
The Transfer Agent will accept subscriptions as set forth in
the Prospectus and Statement of Additional Information. In
addition to subscription functions described elsewhere in
this Agreement, the Transfer Agent will:
1. Maintain a subscription account for the Fund. This
account shall be established and operated so as to satisfy
the following criteria:
a. The account shall be established for the benefit of the
Fund at First Jersey National Bank (the "Bank"), which shall
be prepared to receive, efficiently process, and cashier as
promptly as possible all income, cash, checks, Federal
Reserve Drafts and bank wire transfers.
b. The account shall serve as the sole depository for
subscription monies intended for the purchase of Share until
such funds are transferred to the custody account.
c. All withdrawals from the account shall be for the
exclusive purpose of transferring funds into the Fund's
custody account.
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<PAGE>
d. No dividend or redemption or any other payments shall be
made to Shareholders from the subscription account.
2. In connection with managing the subscription account, the
Transfer Agent will exercise all possible care in satisfying,
or causing the Bank to satisfy, operational requirements in
each of the following critical areas:
a. Determining on each business day the availability of
Federal Funds on all items paid in or to be paid in to the
subscription account. The determination of Federal Funds
availability shall be made as early as possible the same day
an item is received, and shall be made in specific accord
with the Federal Reserve Schedule (Federal Reserve Bank of
New York). Federal Funds availability shall be reported to
the Fund during the course of each business day.
b. Adopting such procedures as the Fund's auditors may
reasonably specify to monitor compliance with the terms
and conditions set forth in Fund's prospectus or Statement of
Additional Information in the determination and timely
transfer of Federal Funds.
D. Dividend Disbursment and Redemption Agent Services.
1. Dividends.
a. Determination of daily dividend amounts shall be as
generally described in Section I.B.5. and as more
specifically as set forth in:
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i. The Fund's Prospectus and Statement of
Additional Information.
ii. The Transfer Agent's dividend accrual and
update routine.
b. Dividends shall be reinvested daily in additional non-
certificated Shares of the Fund.
c. Additional dividend information shall be provided to
Shareholders upon written request.
2. Redemption Processing
The Transfer Agent will take all necessary steps to insure
that redemptions and repurchase requirements have been met,
including the receipt and examination of signature guarantees
and obtain any needed papers or documents.
a. All redemption requests will be automatically reviewed:
i. To insure there are sufficient Shares
available in the Account.
ii. To insure collection of the applicable
subscription check before using funds for
redemption (other than payment received by the
Transfer Agent from Bank Wire and Federal
Reserve Drafts).
iii. To notify the Fund of all redemption requests
in excess of $1,000,0000.
iv. And signed by an individual other than, the
preparer of the checks, to insure that the
checks issued in redemption correspond to the
amounts requested to be redeemed.
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<PAGE>
b. Develop and employ a method for validating receipt of
good subscription funds to comply with section I.D.2.a.ii.
c. No signature guarantees shall be acceptable unless
provided by a domestic bank or by a brokerage firm which is a
member of the New York, American, Midwest, Pacific or Boston
Stock Exchange.
3. Redemption Account.
The Transfer Agent shall maintain a redemption account for
the Fund. This account shall be established and operated so
as to satisfy the following criteria:
a. The account shall be established at the Bank for the
benefit of the Fund.
b. All withdrawals from the redemption account shall be for
the exclusive purpose of making payments in accordance with
the Fund's prospectus and Statement of Additional Informa-
tion. Monies paid out will be paid out in accordance with
the description set forth therein and elsewhere in this
contract.
c. All deposits into this account shall be from the
Fund's custody account. No deposits of subscription receipts
shall be made directly in the redemption account.
d. The Transfer Agent will advise the Fund at various
mutually established times during each business day as to the
total demand for valid dividends and full or partial Account
liquidations. The notification of demand for payment shall
only include valid demands for payment which are actually in
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hand, such that the Fund need not fund the redemption account
with an amount in excess of what is actually required to
satisfy current demands for payment. The specific objective
of this procedure is mutually recognized to be the maximum
employment of the Fund's assets through minimization of any
float in the redemption account. The Transfer Agent agrees
to develop with the Fund methods and procedures to accomplish
this objective.
e. Wire redemptions shall be made in Federal Funds.
f. Federal Reserve Draft redemption payments shall only be
made upon specific request.
g. Adopt such reasonable safeguards as may be prescribed by
the Fund's auditors to safeguard redemption assets.
h. Employ all due diligence in servicing redemption requests
as rapidly as possible. Rapid servicing of redemptions are
specifically recognized as a key feature of the Fund.
C. Proxy Agent Services.
The Transfer Agent agrees to act as proxy agent in connection
with the holding of annual or special meetings of
Shareholders, mailing to Shareholders notices, proxies and
proxy statements in connection with the holding of such
meetings, receiving and tabulating votes cast by proxy and
communicating to the Fund the results of such tabulations
accompanied by appropriate certificates, and preparing and
furnishing to the fund certified lists of shareholders as of
such date, and in such form and containing such information
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<PAGE>
as may be required by the Fund to comply with any provisions
of law applicable to such meetings.
II. Reports.
The Transfer Agent will establish, maintain and provide to the Fund the
following:
A. Daily Journal of Subscription Receipts, Availability and Funds
Transfers to Custody.
B. Daily Journal of Redemption Payment Demand.
C. Daily Sales and Transaction Journals containing the day's detail of
all transactions.
D. Daily Closed Account Journal.
E. Daily Dividend Proof (Daily & Monthly).
F. Daily Redemption Blotter.
G. Daily Shares Proof (Daily & Monthly).
H. Daily Master Control Proof.
I. Daily Prospectus Mailing Report.
J. Daily Blue Sky Report (frequency as agreed upon).
K. Daily Quality Control Reports.
L. Large Item Report.
M. Weekly Status Report.
N. Research and Correspondence Status Report.
0. Monthly Sales by State and Dividends Reinvested.
P. Monthly Shareholders Master File List.
Q. Monthly Record of Out-of-Pocket Costs Incurred.
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<PAGE>
111. OTHER SERVICES.
The Transfer Agent will provide the following additional services
within the basic fee structure:
A. Referral of Inquiries.
Refer all Shareholder or governmental inquiry questions of a policy or
non-routine nature to the Fund.
B. Account Officer at The Transfer Agent.
Assign an account officer who will serve as the primary point of
contact between the Fund, its investment adviser, and the Transfer
Agent in its various capacities. The Transfer Agent will exercise due
care in assigning an individual to this function who is both conversant
with standard investment company practice and of sufficient stature to
deal quickly and efficiently with problems peculiar to placing a new
investment company on line and which may be peculiar to the cash
management variety of investment company.
C. Security.
1. Provide reasonable security against possible theft and/or use by
others of the names, addresses and properties of the Shareholders and
the properties of the Fund.
2. Periodic duplication of all records (computer/microfilm/hardcopy/
copy) at a frequency and in a detail sufficient to assure full
protection of Shareholder record information in the event of a
disaster to the Transfer Agent's facilities.
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<PAGE>
D. Other Mailings.
Provide mailing services to all Accounts, including addressing,
enclosing and mailing quarterly reports, semi-annual reports, annual
reports, Prospectuses, Statements of Additional Information, proxy
cards, proxy statements, and notices. Postage will be paid by the Fund.
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EXHIBIT 99.9(B)
CAPITAL BUILDER(SM) ACCOUNT AGREEMENT
INTRODUCTION
This Agreement contains the terms governing the Capital Builder(SM) Account
("CBA(R) Service") financial service. I will read this Agreement and keep it for
my records because I know that by signing below I am agreeing to its terms.
DEFINITIONS
In this Agreement, "I," "me" or "my" means each person who signs below. "You,"
"your" or "MLPF&S" means Merrill Lynch, Pierce, Fenner & Smith Incorporated.
"MLB&T" means Merrill Lynch Bank & Trust Co. "BANK ONE" means Bank One Columbus,
N.A. "CHASE" means The Chase Manhattan Bank, N.A. MLB&T, CHASE and BANK ONE are
referred to collectively as "Banks."
"Card/Check Account" means the account(s) established for me by the Banks.
"Checks" means checks issued to me by BANK ONE for use with my Card/Check
Account. "Card" or "Cards" means one or more Visa cards issued to me by MLB&T
for use with my Card/Check Account, "Money Fund" means the CBA money market
fund. "Money Account(s)" means the Money Fund and any FDIC-insured money market
deposit accounts opened for me through the Insured Savings(SM) Account program.
For purposes of this Agreement, "securities and other property" means, but is
not limited to, money, securities, financial instruments and commodities of
every kind and nature and related contracts and options. This definition
includes securities or other property currently or hereafter held, carried or
maintained by you or by any of your affiliates, in your possession and control,
or in the possession and control of any such affiliate, for any purpose, in and
for any of my accounts now or hereafter opened, including any account in which I
may have an interest.
I understand that before the CBA Service is provided to me, the Banks will open
an account for me and, if applicable, provide me with Checks and issue me one or
more Cards.
DESCRIPTION OF THE CBA(R) SERVICE
1. The CBA Service consists of three parts: (1) a MLPF&S securities account,
(referred to as the "Securities Account"), which is either a cash account,
or with the Investor CreditLines(SM) service, a margin account, (2) a choice of
Money Accounts and (3) a Card/Check Account.
AGREEMENT REGARDING CASH, MONEY ACCOUNT BALANCES AND OTHER ASSETS AND FEES.
2. Available free credit balances in my Securities Account will automatically
be invested or deposited at least once a week through the Money Account that I
have designated as my Primary Money Account. I understand that you may
reasonably withhold access to my Money Account balances until you are satisfied
that checks credited to my Securities Account have been collected. You may
satisfy amounts that I owe in connection with my CBA Service account (such as
debit balances in the Securities Account, amounts owing in my Card/Check
Account, or investments or deposits made for me that are later reversed), from
the assets in my Money Accounts (including funds obtained by redeeming Money
Funds shares) or from my Securities Account (including, if applicable, by making
loans to me). Certain fees, including an annual fee, which are subject to
change, will be charged to my account with you for the financial services
provided to me.
REPRESENTATIONS, ADDITIONAL TERMS AND AMENDMENTS
3. I have received a copy of the Money Fund prospectus, the Insured Savings
Account Fact Sheet and the Capital Builder Account Program Description. These
documents shall be referred to in this Agreement as the "Documents." The
Documents contain additional terms governing the CBA Service. I agree that
these Documents are incorporated into this Agreement as though they were fully
set out in this Agreement. Subject to applicable law, you also have the right
to amend the Documents by so notifying me in writing. Unless the context
otherwise requires, the term "Agreement" shall include the Documents, as
amended from time to time.
I agree that you and the Banks shall have the right to amend this Agreement, by
modifying or rescinding any of is existing provisions or by adding any new
provision, at any time by sending notice of the amendment to me. Any such
amendment shall be effective as of a date to be established by you and the Banks
subject to application law.
I understand there may be additional documentation required by applicable law or
the policies and procedures of MLPF&S or the Banks. I agree to promptly comply
with any such requests for additional documents.
HEADINGS ARE DESCRIPTIVE
4. The heading of each provision of this Agreement is for descriptive purposes
only and shall not be deemed to modify or qualify any of the rights or
obligations set forth in each such provision.
JOINT ACCOUNTS AND JOINT AND SEVERAL LIABILITY
5. If more than one person signs this Agreement, each person shall be an
accountholder and their obligations under this Agreement shall be joint and
several. The legal ownership of the account shall be in such form as the
accountholders shall designate in the Application and Agreement form and as
reflected in the account title. In the event no designation is made, MLPF&S is
authorized to deal with the accountholders as tenants in common (without right
of survivorship).
Notwithstanding the choice of law provisions of Paragraph 11, which shall
govern the contractual obligations of the parties under this Agreement, the
legal ownership of the account shall be governed by and interpreted under the
internal laws of the state of permanent residence of accountholders who are
U.S. citizens. Non-resident aliens agree that the form Of joint ownership
designated for the account shall be governed (notwithstanding the laws of any
other jurisdiction to the contrary) by the internal laws of the State of New
York and, for purposes of determining all matters with regard to the account,
agree to submit to the jurisdiction of the courts of New York and the Federal
Courts in the Southern District of New York and consent to service of process by
certified mail to the account's address of record.
All accountholders agree that each accountholder has authority to transact any
business on behalf of the account as fully and completely as if each
accountholder were the sole owner of the account. Subject to MLPF&S policies,
MLPF&S may accept orders and instructions, written or oral, with respect to the
account from each accountholder, without notice to any other accountholder, for
the receipt, transfer and withdrawal of funds by check, wire transfer or
otherwise and for the purchase, sale, exchange, transfer or other disposition of
securities and other property (including margin transactions and short sales if
the accountholders have selected the Investor CreditLine service). All
accountholders further agree that all securities and other property that MLPF&S
may be holding for any of them, either in this account or otherwise, shall be
subject to a lien for the discharge of the obligations of this account to
MLPF&S, such lien to be in addition to any rights and remedies MLPF&S may
otherwise have.
In the event of the death of an accountholder, divorce of married
accountholders, assignment of an accountholder's interest or other event that
causes a change in ownership of the account, all accountholders or the surviving
accountholder(s) as the case may be shall immediately give MLPF&S written notice
thereof, and MLPF&S may, in such event, take such action, including requiring
such documents or imposing such restrictions on the account, as MLPF&S may deem
necessary in the circumstances. The estate of a deceased accountholder and a
departing accountholder by assignment or divorce shall remain liable, jointly
and severally, with the remaining or surviving accountholder(s), for any
obligations of the account arising before MLPF&S receives such notice, or
incurred in liquidation of the account or the adjustment of the interests of the
accountholders.
In the event of any such change in ownership of the account, MLPF&S is
authorized to divide or retitle the account in accordance with the form of legal
ownership of the account as reflected on the records of MLPF&S, or by written
instructions of the remaining or surviving accountholder(s), or by obtaining a
court order, as MLPF&S may reasonably determine is appropriate in the
circumstances. Unless agreed otherwise among the accountholders in a writing
provided to MLPF&S, joint accounts designated "with right of survivorship"
(e.g., JTWROS) shall vest the interest of a deceased accountholder in the
surviving accountholder(s) and accounts designated "without right of
survivorship" (e.g., TIC) shall entitle the estate of a deceased accountholder
and the surviving accountholder(s) to equal shares of the account. All
accountholders agree to indemnify MLPF&S against any liability, loss or expense
incurred from acting in accordance with this Agreement in the event of a change
in ownership of the account.
All statements, notices or other communications sent or given to one
accountholder by MLPF&S shall be considered notice to all accountholders. In the
event MLPF&S receives inconsistent instructions from two or more accountholders,
reasonably believes instructions received from one accountholder are not
mutually agreeable to all accountholders, or receives a court order with respect
to the account, MLPF&S may , but is not obligated to, restrict activity in the
account, require that all instructions be in writing signed by all
accountholders, suspend or terminate the CBA Service and/or file an interpleader
action in an appropriate court at the expense of the accountholders.
TERMINATION OF THE CBA SERVICE
6. The Banks, you or I may terminate my subscription to the CBA Service,
including the use of my Checks or Cards, if applicable, at any time. I shall
remain responsible for authorized charges which arise before or after
termination.
If my subscription is terminated, you may redeem all my Money Fund shares and,
unless I advise you otherwise, withdraw all my Money Account deposit balances.
Also, I shall promptly return all unused Checks and any Cards to you or the
Banks. My failure to do so may result in a delay in your complying with my
instructions regarding the disposition of my assets with you.
PRESUMPTION OF RECEIPT OF COMMUNICATIONS
7. Communications may be sent to me at my address or at such other address as I
give you in writing. All communications so sent, whether by mail, telegraph,
messenger or otherwise, will be considered to have been given to me personally
upon such sending, whether or not I actually receive them.
CREDIT INFORMATION
8. I authorize you, each of your affiliates, and the Banks to request a
consumer report about me from one or more consumer reporting agencies for the
purposes of considering my subscription to the CBA Service, reviewing or
collecting any account opened for me, or for any other legitimate business
purpose. Upon my request, you will inform me of the name and address of each
consumer reporting agency from which you obtained a consumer report, if any, in
connection with my subscription or accounts. I also authorize you, each of your
affiliates, and the Banks to share any credit information you may have or obtain
about me for any legitimate business purpose.
AGREEMENT TO ARBITRATE CONTROVERSIES WITH MLPF&S
9. . Arbitration is final and binding on the parties
. The parties are waiving their right to seek remedies in court, including
the right to jury trial.
. Pre-arbitration discovery is generally more limited than and different from
court proceedings.
. The arbitrators' award is not required to include factual findings or legal
reasoning and any party's right to appeal or to seek modification of
rulings by the arbitrators is strictly limited.
. The panel of arbitrators will typically include a minority of arbitrators
who were or are affiliated with the securities industry.
I agree that all controversies which may arise between us, including but not
limited to those involving any transaction or the construction, performance, or
breach of this or any other agreement between us, whether entered into prior, on
or subsequent to the date hereof, shall be determined by arbitration. Any
arbitration under this Agreement shall be conducted only before the New York
Stock Exchange, Inc., the American Stock Exchange, Inc., or arbitration facility
provided by any other exchange, the National Association of Securities Dealers,
Inc., or the Municipal Securities Rulemaking Board, and in accordance with its
arbitration rules then in force. I may elect in the first instance whether
arbitration shall be conducted before the New York Stock Exchange, Inc., the
American Stock Exchange, Inc., other exchanges, the National Association of
Securities Dealers, Inc., or the Municipal Securities Rulemaking Board, but if I
fail to make such election, by registered letter or telegram addressed to you at
the office where I maintain my account, before the expiration of five days after
receipt of a written request from you to make such election, then you may make
such election. Judgment upon the award of arbitrators may be entered in any
court, state or federal, having jurisdiction.
No person shall bring a putative or certified class action to arbitration, nor
seek to enforce any pre-dispute arbitration agreement against any person who is
a member of a putative class who has not opted out of the class with respect to
any claims encompassed by the putative class action until: (i) the class
certification is denied; (ii) the class is decertified; or (iii) the customer is
excluded from the class by the court. Such forbearance to enforce an agreement
to arbitrate shall not constitute a waiver of any rights under this Agreement to
the extent stated herein.
Client Copy
Retain for Your Records
Do Not Return to Merrill Lynch
Code #10357-0195
<PAGE>
CAPITAL BUILDER(SM) ACCOUNT AGREEMENT
APPLICABLE LAWS
10. This Agreement, with respect to all portions of the CBA Service, including
interest charges on loans you may make to me, will be governed by and
interpreted under the laws of the State of New York. The terms of my agreement
with MLB&T including those relating to issuance and use of the Card are governed
by federal and New Jersey law. The terms of my agreement with CHASE, including
those relating to finance charges on overdrafts are governed by federal law and
New York law. The terms of my agreement with BANK ONE are governed by Ohio law.
SEPARABILITY
11. If any provision of this Agreement is held to be invalid, illegal, void or
unenforceable, by reason of any law, rule, administrative order or judicial
decision, such determination will not affect the validity of the remaining
provisions of this Agreement.
LIABILITY FOR COSTS OF COLLECTION
12. To the extent permitted by the laws of the State of New York, I agree to pay
you the reasonable costs and expenses of collection, including attorneys' fees,
for any debit balance and any unpaid deficiency that I owe.
EXTRAORDINARY EVENTS
13. I agree that you shall not be liable for loss caused directly or indirectly
by government restrictions, exchange or market rulings, suspension of trading,
war, strikes or other conditions beyond your control.
APPLICABLE RULES AND REGULATIONS
14. All transactions in my Securities Account shall be subject to the
constitution, rules, regulations, customs and usages of the exchange or market
and its clearing house, if any, on which such transactions are executed by you
or your agents, including your subsidiaries and affiliates.
PARAGRAPHS 15 THROUGH 23 BELOW APPLY ONLY IF I REQUEST THAT MY SECURITIES
ACCOUNT BE ESTABLISHED WITH THE INVESTOR CREDITLINE SERVICE.
COLLATERAL REQUIREMENTS AND CREDIT CHARGES
15. I will maintain such securities and other property in my accounts as you
shall require from time to time. In accordance with your usual custom, the
monthly debit balance of such accounts shall be charged interest at a rate
permitted by the laws of the State of New York. Unless I pay the interest
charged to my Securities Account at the close of a charge period, it will be
added to the opening balance for the next charge period. Interest will then be
charged upon the entire opening balance of that next charge period which will,
therefore, include any such unpaid interest from the previous charge period.
CALLS FOR ADDITIONAL COLLATERAL--LIQUIDATION RIGHTS
16.(a) You shall have the right to require additional collateral:
(1) In accordance with your general policies regarding your maintenance
requirements for the Investor CreditLine service, as such may be
modified, amended or supplemented from time to time; or
(2) If in your discretion you consider it necessary for your protection
at an earlier or later point in time than called for by said general
policies; or
(3) In the event that a petition in bankruptcy or for appointment of a
receiver is filed by or against me; or
(4) If an attachment is levied against my accounts; or
(5) In the event of my death.
(b) If I do not provide you with additional collateral as you may require in
accordance with (a)(1) or (2), or should an event described in (a)(3),
(4) or (5) occur (whether or not you elect to require additional
collateral), you shall have the right:
(1) to sell any or all securities and other property in my accounts
with you or with any of your affiliates, whether carried
individually or jointly with others;
(2) to buy any or all securities and other property which may be short
in such accounts; and
(3) to cancel any open orders and to close any or all outstanding
contracts.
You may exercise any or all of your rights under (b)(1), (2) and (3)without
further demand for additional collateral, or notice of sale or purchase, or
purchases may be made at your discretion on any exchange or other market where
such business is usually transacted, or at public auction or private sale; and
you may be the purchaser for your own account. I understand that your giving of
any prior demand or call or prior notice of the time and place of such sale or
purchase shall not be considered a waiver of your right to sell or buy without
any such demand, call or notice as provided in this Agreement.
PURPOSE OF CREDIT
17. I understand and agree that any credit extended by you to me in connection
with my Securities Account is primarily for investment or business purposes.
REPRESENTATION AS TO BENEFICIAL OWNERSHIP AND CONTROL
18. I represent that, with respect to securities against which credit is or may
be extended by you: (a) I am not the beneficial owner or more than three percent
(3%) of the number of outstanding shares of any class of equity securities, and
(b) I do not control, am not controlled by and am not under common control with
the issuer of any such securities. In the event that any of the foregoing
representations become inaccurate, I will promptly advise you in writing.
SECURITY INTEREST IN FAVOR OF MLPF&S
19. All securities and other property shall be subject to a lien for the
discharge of all my indebtedness and any other obligations that I may owe to
you, and are to be held by you as security for the payment of any such
obligations or indebtedness to you in any account you maintain for me, including
any accounts in which I may have an interest. You shall have the right to
transfer securities and other property so held by you from or to any other of
such accounts whenever in your judgment you consider such a transfer necessary
for your protection. In enforcing your lien, you shall have the discretion to
determine which securities and property are to be sold and which contracts are
to be closed.
PAYMENT OF INDEBTEDNESS UPON DEMAND
20. I shall at all times be liable for the payment upon demand of any debit
balance or other obligation owing in any of my accounts with you. I shall be
liable to you for any deficiency remaining in any such accounts in the event of
the liquidation thereof, in whole or in part, by you or by me. I will pay such
obligations and indebtedness upon demand.
PLEDGE OF SECURITIES AND OTHER PROPERTY
21. Within the limitations imposed by applicable laws, rules and regulations,
all securities and other property may be pledged and repledged by you from time
to time, without notice to me either separately or in common with other such
securities and other property, for any amount due in my accounts, or for any
greater amount. You may do so without retaining in your possession or under your
control for delivery a like amount of similar securities or other property.
LENDING AGREEMENT
22. In return for your extension or maintenance of any credit in my account, I
acknowledge and agree that the securities in my account, together with all
attendant rights of ownership, may be lent to you or lent out to others to the
extent not prohibited by applicable laws, rules and regulations. In connection
with such securities loans, you may receive and retain certain benefits to which
I will not be entitled. I understand that, in certain circumstances, such loans
could limit my ability to exercise voting rights, in whole or part, with respect
to the securities lent.
REPRESENTATION AS TO CAPACITY TO ENTER INTO AGREEMENT
23. I represent that no one except the person(s) signing this Agreement has an
interest in my account or accounts with you. If a natural person, I represent
that I am of full age, am not an employee of any exchange, nor of any
corporation of which any exchange owns a majority of the capital stock, nor of a
member of any exchange, nor of a member firm or member corporation registered on
any exchange; nor of a bank, trust company,
insurance company or any corporation, firm or individual engaged in the
business of dealing either as broker or as principal in securities, bills or
exchange, acceptances or other forms of commercial paper. If any of the
foregoing representations is inaccurate or becomes inaccurate, I will promptly
so advise you in writing.
PARAGRAPHS 24 THROUGH 29 BELOW APPLY ONLY WHEN THE CARD/CHECK ACCOUNT IS USED,
INCLUDING WHEN CHECKS AND/OR CARDS ARE OBTAINED.
CARD OWNERSHIP
24. The Card remains the property of MLB&T and may be canceled by MLB&T at any
time without prior notice.
LIABILITY
25. I will be liable for all authorized transactions arising through the use of
the Card(s) and checks in connection with my Card/Check Account. I will be
responsible, on a continuing basis, for the safekeeping of my Card(s) and Checks
and shall not permit unauthorized persons to have access to my Card(s) or
Checks. I will also be responsible for reviewing my CBA Monthly Statement in
order to discover and report to MLPF&S the possible unauthorized use of my
Card(s) and Checks. I agree to notify MLPF&S immediately if I believe or have
reason to believe that my Card(s) or Checks have been or may be used by an
unauthorized person. Unless limited by law, I will be responsible for any and
all losses and damages that arise from any breach of my undertakings to
safeguard my Card(s) and Checks, to review my CBA Monthly Statement for possible
unauthorized activity and to promptly report any unauthorized activity to
MLPF&S.
I also agree to pay the reasonable costs and expenses of collection of any
unpaid balance due, including any accrued finance charges, as a result of any
overdraft(s), including but not limited to attorneys' fees, to the extent
allowed by law, involved in such collection. I understand that the Banks have
not taken a security interest in any of the assets in my Securities Account or
Money Accounts pursuant to this Agreement.
PURCHASING POWER
6. I agree that I will not incur charges to my Card/Check Account in excess of
my Purchasing Power. The Purchasing Power for my Card/Check Account will be the
total of any available free credit balance in my Securities Account, the
available balances in my Money Accounts, and, if applicable, the available loan
value of my securities in my Securities Account. I understand that my Purchasing
Power may fluctuate from day to day.
TRANSACTIONS EXCEEDING PURCHASING POWER
27. I understand that I will be in default if I incur charges in my Card/Check
Account that exceed my Purchasing Power. If I am in default, you may, among
other things, terminate my subscription to the CBA Service. If I exceed my
Purchasing Power, CHASE may accept the transaction amount exceeding my
Purchasing Power as an overdraft, and advance funds to you or the Banks in the
amount exceeding my Purchasing Power. If CHASE does so, I will be notified and I
agree that I will immediately pay CHASE the amount of the overdraft and any
applicable finance charge which is computed as described in this section.
In each overdraft statement cycle, finance charges are figured by applying a
Daily Periodic Rate to the Average Daily Balance of overdrafts and by
multiplying the resulting figure by the number of days in that statement cycle.
The Average Daily Balance of overdrafts is calculated each day by starting with
the beginning balance of amounts I owe, adding any new overdrafts and
subtracting any payments or credits received that day and unpaid finance
charges. This gives CHASE the daily balance of overdrafts. The Average Daily
Balance is calculated by adding all of the daily balances of overdrafts in that
statement cycle and dividing the total by the number of days in the overdraft
statement cycle. The Daily Periodic Rate that is applied is disclosed in the
Capital Builder Account Program Description and is subject to change upon
notice. Finance charges accrue from the date CHASE accepts an overdraft until
the date payment is made.
Any payments that I make will be applied as of the date of receipt by CHASE
first to any accrued and unpaid finance charges and then to the balance of
overdrafts in the order in which they were incurred.
OVERDRAFT NOTICES
28. If CHASE extends an overdraft to me, I will be notified in writing. The
initial overdraft notice will inform me of the overdraft(s), which is due and
payable by me immediately, together with any accrued finance charges. Subsequent
overdraft notices from CHASE will detail, among other disclosures, any
overdraft(s) plus finance charges imposed on such overdraft(s), payments and
credits and the balance due.
ACCOUNT INQUIRIES
29. I understand that inquiries and error allegations concerning my Card/Check
Account, any overdraft notices and my monthly statement should be directed
through MLPF&S.
<PAGE>
EXHIBIT 99.9(C)
BROADCORT CAPITAL CORP. CUSTOMER AGREEMENT
- --------------------------------------------------------------------------------
In consideration of your accepting and carrying one or more accounts for the
undersigned, the undersigned hereby consents and agrees that:
APPLICABLE RULES AND REGULATIONS
1. All transactions shall be subject to the constitution, rules, regulations,
customs and usages of the exchange or market and its clearing house, if any,
on which such transactions are executed by you (Broadcort Capital Corp.) or
your agents, including your subsidiaries and affiliates.
DEFINITION
2. For purposes of this agreement, "securities and other property" shall
include, but not be limited to, money, securities, financial instruments and
commodities of every kind and nature, and all contracts and options relating
thereto, whether for present or future delivery.
MARGIN REQUIREMENTS AND CREDIT CHARGES
3. THE UNDERSIGNED WILL MAINTAIN SUCH SECURITIES AND OTHER PROPERTY IN THE
ACCOUNTS OF THE UNDERSIGNED FOR MARGIN PURPOSES AS YOU SHALL REQUIRE FROM
TIME TO TIME; AND THE MONTHLY DEBIT BALANCE OF SUCH ACCOUNTS SHALL BE
CHARGED, IN ACCORDANCE WITH YOUR USUAL CUSTOM, WITH INTEREST AT A RATE
PERMITTED BY THE LAWS OF THE STATE OF NEW YORK. IT IS UNDERSTOOD THAT THE
INTEREST CHARGE MADE TO THE UNDERSIGNED'S ACCOUNT AT THE CLOSE OF A CHARGE
PERIOD WILL, UNLESS PAID, BE ADDED TO THE OPENING BALANCE FOR THE NEXT CHARGE
PERIOD AND THAT INTEREST WILL BE CHARGED UPON SUCH OPENING BALANCE, INCLUDING
ALL INTEREST SO ADDED.
SECURITY INTEREST
4. All securities and other property now or hereafter held, carried or
maintained by you or by any of your affiliates in your possession and
control, or in the possession and control of any such affiliate, for any
purpose, in or for any account of the undersigned now or hereafter opened,
including any account in which the undersigned may have an interest, shall be
subject to a lien for the discharge of all the indebtedness and other
obligations of the undersigned to you, and are to be held by you as security
for the payment of any liability or indebtedness of the undersigned to you in
any of said accounts. You shall have the right to transfer securities and
other property so held by you from or to any other of the accounts of the
undersigned whenever in your judgment you consider such a transfer necessary
for your protection. In enforcing your lien, you shall have the discretion to
determine which securities and property are to be sold and which contracts
are to be closed.
REPRESENTATIONS AS TO BENEFICIAL OWNERSHIP AND CONTROL
5. The undersigned represents that, with respect to securities against which
margin credit is or may be extended by you: (a) the undersigned is not the
beneficial owner of more than three percent (3%) of the number of outstanding
shares of any class of equity securities, and (b) does not control, is not
controlled by and is not under common control with, the issuer of any such
securities. In the event that any of the foregoing representations is
inaccurate or becomes inaccurate, the undersigned will promptly so advise you
in writing.
CALLS FOR ADDITIONAL COLLATERAL--LIQUIDATION RIGHTS
6. (a) You shall have the right to require additional collateral:
(1) in accordance with your general policies regarding your margin
maintenance requirements, as such may be modified, amended or
supplemented from time to time; or
(2) if in your discretion you consider it necessary for your protection
at an earlier or later point in time than called for by said general
policies; or
(3) in the event that a petition in bankruptcy or for appointment of a
receiver is filed by or against the undersigned; or
(4) if an attachment is levied against the accounts of the undersigned;
or
(5) in the event of the death of the undersigned.
(b) If the undersigned does not provide you with additional collateral as you
may require in accordance with (a) (1) or (2), or should an event
described in (a) (3), (4) or (5) occur, (whether or not you elect to
require additional collateral), you shall have the right:
(1) to sell any or all securities and other property in the accounts of
the undersigned with you or with any of your affiliates, whether
carried individually or jointly with others;
(2) to buy any or all securities and other property which may be short in
such accounts; and
(3) to cancel any open orders and to close any or all outstanding
contracts.
<PAGE>
You may exercise any or all of your rights under (b) (1), (2) and (3)
without further demand for additional collateral, or notice of sale or
purchase, or other notice or advertisement. Any such sales or purchases may
be made at your discretion on any exchange or other market where such
business is usually transacted, or at public auction or private sale; and
you may be the purchaser for your own account. It is understood that your
giving of any prior demand or call or prior notice of the time and place of
such sale or purchase shall not be considered a waiver of your right to sell
or buy without any such demand, call or notice as herein provided.
PAYMENT OF INDEBTEDNESS UPON DEMAND
7. The undersigned shall at all times be liable for the payment upon demand of
any debit balance or other obligations owing in any of the accounts of the
undersigned with you, and the undersigned shall be liable to you for any
deficiency remaining in any such accounts in the event of the liquidation
thereof, in whole or in part, by you or by the undersigned; and the
undersigned shall make payment of such obligations and indebtedness upon
demand.
LIABILITY FOR COSTS OF COLLECTION
8. TO THE EXTENT PERMITTED BY THE LAWS OF THE STATE OF NEW YORK, THE REASONABLE
COSTS AND EXPENSES OF COLLECTION OF THE DEBIT BALANCE AND ANY UNPAID
DEFICIENCY IN THE ACCOUNTS OF THE UNDERSIGNED WITH YOU, INCLUDING BUT NOT
LIMITED TO ATTORNEYS' FEES INCURRED AND PAYABLE OR PAID BY YOU, SHALL BE
PAYABLE TO YOU BY THE UNDERSIGNED.
PLEDGE OF SECURITIES AND OTHER PROPERTY
9. All securities and other property now or hereafter held, carried or
maintained by you in your possession or control in any of the accounts of
the undersigned may be pledged and repledged by you from time to time,
without notice to the undersigned, either separately or in common with other
such securities and other property, for any amount due in the accounts of
the undersigned, or for any greater amount, and you may do so without
retaining in your possession or under your control for delivery a like
amount of similar securities or other property.
LENDING AGREEMENT
10. Within the limitations imposed by applicable laws, rules and regulations,
you are hereby authorized to lend to yourselves, as principal or otherwise,
or to others, any securities held by you on margin for any accounts of the
undersigned or as collateral therefor, either separately or with other
securities. It is recognized that any losses or other detriments, or gains
or other benefits, arising from any such lending of securities shall not
accrue to the account of the undersigned.
PRESUMPTION OF RECEIPT OF COMMUNICATIONS
11. Communications may be sent to the undersigned at the address of the
undersigned or at such other address as the undersigned may hereafter give
you in writing. All communications so sent, whether by mail, telegraph,
messenger or otherwise, shall be deemed given to the undersigned personally,
whether actually received or not.
ACCOUNTS CARRIED AS CLEARING BROKER
12. If you are carrying the account of the undersigned as clearing broker by
arrangement with another broker through whose courtesy the account of the
undersigned has been introduced to you, then until receipt from the
undersigned of written notice to the contrary, you may accept from such
other broker, without inquiry or investigation by you (a) orders for the
purchase or sale in said account of securities and other property on margin
or otherwise, and (b) any other instructions concerning said account. You
shall not be responsible or liable for any acts or omissions of such other
broker or its employees.
JOINT AND SEVERAL LIABILITY
13. If the undersigned shall consist of more than one person, their obligations
under this agreement shall be joint and several.
REPRESENTATION AS TO CAPACITY TO ENTER INTO AGREEMENT
14. The undersigned represents that no one except the undersigned has an
interest in the account or accounts of the undersigned with you. If a
natural person, the undersigned represents that the undersigned is of full
age, is not an employee of any exchange, nor of any corporation of which any
exchange owns a majority of the capital stock, nor of a member of any
exchange, nor of a member firm or member corporation registered on any
exchange, nor of a bank, trust company, insurance company or any
corporation, firm or individual engaged in the business of dealing either as
broker or as principal in securities, bills of exchange, acceptances or
other forms of commercial paper. If any of the foregoing representations is
inaccurate or becomes inaccurate, the undersigned will promptly so advise
you in writing.
EXTRAORDINARY EVENTS
15. You shall not be liable for loss caused directly or indirectly by government
restrictions, exchange or market rulings, suspension of trading, war,
strikes or other conditions beyond your control.
2
<PAGE>
THE LAWS OF THE STATE OF NEW YORK GOVERN
16. THIS AGREEMENT AND ITS ENFORCEMENT SHALL BE GOVERNED BY THE LAWS OF THE
STATE OF NEW YORK; SHALL COVER INDIVIDUALLY AND COLLECTIVELY ALL ACCOUNTS
WHICH THE UNDERSIGNED MAY OPEN OR REOPEN WITH YOU; SHALL INURE TO THE
BENEFIT OF YOUR AFFILIATES AND YOUR SUCCESSORS, WHETHER BY MERGER,
CONSOLIDATION OR OTHERWISE, AND ASSIGNS, AND THEIR RESPECTIVE EMPLOYEES AND
AGENT; YOU MAY TRANSFER THE ACCOUNTS OF THE UNDERSIGNED TO YOUR SUCCESSORS
AND ASSIGNS; AND THIS AGREEMENT SHALL BE BINDING UPON THE HEIRS, EXECUTORS,
ADMINISTRATORS, SUCCESSORS AND ASSIGNS OF THE UNDERSIGNED.
AMENDMENTS
17. The undersigned agrees that you shall have the right to amend this
Agreement, by modifying or rescinding any of its existing provisions or by
adding any new provision. Any such amendment shall be effective as of a date
to be established by you, which shall not be earlier than thirty days after
you send notification of any such amendment to the undersigned.
SEPARABILITY
18. If any provision or condition of this agreement shall be held to be invalid
or unenforceable by any court, or regulatory or self-regulatory agency or
body, such invalidity or unenforceability shall attach only to such
provision or condition. The validity of the remaining provisions and
conditions shall not be affected thereby and this agreement shall be carried
out as if any such invalid or unenforceable provision or condition were not
contained herein.
HEADINGS ARE DESCRIPTIVE
19. The heading of each provision hereof is for descriptive purposes only and
shall not be deemed to modify or qualify any of the rights or obligations
set forth in each such provision.
3
<PAGE>
AGREEMENT TO ARBITRATE CONTROVERSIES
20. [] Arbitration is final and binding on the parties.
[] The parties are waiving their right to seek remedies in court, including
the right to jury trial.
[] Pre-arbitration discovery is generally more limited than and different
from court proceedings.
[] The arbitrators' award is not required to include factual findings or
legal reasoning and any party's right to appeal or to seek modification
of rulings by the arbitrators is strictly limited.
[] The panel of arbitrators will typically include a minority of arbitrators
who were or are affiliated with the securities industry.
I/We agree that all controversies which may arise between us, or between me
and the organization that has introduced my account carried by you,
including but not limited to those involving any transaction or the
construction, performance, or breach of this or any other agreement between
us, whether entered into prior, on or subsequent to the date hereof, shall
be determined by arbitration. Any arbitration under this agreement shall be
conducted only before the New York Stock Exchange, Inc., the American Stock
Exchange, Inc., or arbitration facility provided by any other exchange or
the National Association of Securities Dealers, Inc., or the Municipal
Securities Rulemaking Board, and in accordance with its arbitration rules
then in force. I/We may elect in the first instance whether arbitration
shall be conducted before the New York Stock Exchange, Inc., the American
Stock Exchange, Inc., other exchanges, or the National Association of
Securities Dealers, Inc., or the Municipal Securities Rulemaking Board, but
if I/we fail to make such election, by registered letter or telegram
addressed to you at the office where I maintain my account, before the
expiration of five days after receipt of a written request from you to make
such election, then you may make such election. Judgment upon the award of
arbitrators may be entered in any court, state or federal, having
jurisdiction.
BY SIGNING THIS AGREEMENT, I/WE ACKNOWLEDGE (1) THAT, IN ACCORDANCE WITH
PARAGRAPH (20), I/WE AGREE IN ADVANCE TO ARBITRATE ANY CONTROVERSIES WHICH MAY
ARISE WITH BROADCORT CAPITAL CORP., OR BETWEEN ME/US AND THE ORGANIZATION THAT
HAS INTRODUCED MY/OUR ACCOUNT CARRIED BY YOU, (2) THAT, PURSUANT TO PARAGRAPH
(10) ABOVE, CERTAIN OF MY/OUR SECURITIES MAY BE LOANED TO YOU OR LOANED OUT TO
OTHERS, AND (3) RECEIPT OF A COPY OF THIS AGREEMENT.
SIGNATURES
CORPORATION INDIVIDUALS
____________________________________ ____________________________________
(NAME OF CORPORATION)
DATED_______________________________ ____________________________________
(SECOND PARTY, IF JOINT ACCOUNT)
BY__________________________________ PARTNERSHIP OR TRUST
TITLE_______________________________
____________________________________
(NAME OF PARTNERSHIP OR TRUST)
BY__________________________________
(A PARTNER OR TRUSTEE)
BY__________________________________
(A PARTNER OR TRUSTEE)
ATTEST______________________________ BY__________________________________
(CORPORATE SEAL) (A PARTNER OR TRUSTEE)
ACCOUNT NO._________________________ BY__________________________________
(A PARTNER OR TRUSTEE)
4
<PAGE>
BROADCORT CAPITAL(SM)
BROADCORT CAPITAL CORP. ACCOUNT AGREEMENT
- --------------------------------------------------------------------------------
This Agreement sets forth the terms and conditions governing the Broadcort
Capital(SM) Account which the person(s) signing below (referred to in this
Agreement as "I" or "me" or "we") subscribes to with BROADCORT CAPITAL CORP.
(referred to in this Agreement as "you"). I understand that subscription to the
Broadcort Capital Account is made available to persons who have and maintain an
account relationship with a securities firm that has a contract with you
(referred to in this Agreement as the "Introducing Firm"). I also understand
that before the Broadcort Capital Account is provided to me, it will be
necessary for a bank or banks that you designate to open an account and to
provide me with checks and issue me one or more cards, if applicable (referred
to in this Agreement as the "Bank"). Certain fees, including an annual fee,
which are subject to change, will be charged to my account for the financial
services provided to me.
DESCRIPTION OF BROADCORT CAPITAL ACCOUNT
1. The Broadcort Capital Account offers an integrated program which links
together three components: (1) a conventional securities account, (2) a Money
Account, currently consisting of a money market fund, and (3) an account
which provides card and checking services maintained by the Bank. The money
market fund is referred to in this Agreement as the "Money Fund." The account
at the Bank is referred to in this Agreement as the "Check/Card Account. "
Free credit balances in my Securities Account will automatically be invested
at least once a week through the Money Account. I understand that you may
reasonably withhold access to my Money Account, including the redemption
proceeds of shares of the Money Fund, until you are satisfied that checks
placed into my Securities Account have been collected. You may satisfy
amounts that I owe in connection with my Broadcort Capital Account (such as
debit balances in the Securities Account, amounts owing in my Check/Card
Account, or investments or deposits made for me that are later reversed),
from the assets in my Money Account (including by redeeming Money Fund
shares) or from my Securities Account (including, if applicable, by making
loans to me).
REPRESENTATIONS, ADDITIONAL TERMS AND CONDITIONS, AND AMENDMENTS
2. I have received a copy of the CBA Money Fund prospectus and the Broadcort
Capital Account Description, which contain additional terms and conditions
governing the Broadcort Capital Account. I agree that those terms and
conditions, as amended from time to time, are part of this Agreement and I
agree to be bound by them. You also have the right to amend this Agreement by
notifying me.
TERMINATION OF BROADCORT CAPITAL ACCOUNT
3. The Bank, the Introducing Firm, you or I may terminate my subscription to the
Broadcort Capital Account at any time. I shall remain responsible for
authorized charges arising before or after termination.
If my subscription is terminated, you may redeem all my Money Fund shares.
Also, I shall promptly return all unused checks and card(s) to you or the
Bank. My failure to do so may result in a delay in your complying with my
instructions regarding the disposition of my assets with you.
PRESUMPTION OF RECEIPT OF COMMUNICATIONS
4. Communications may be sent to me at my address or at such other address as I
may give in writing. All communications so sent, whether by mail, telegraph,
messenger or otherwise, shall be deemed to be given to me personally upon
such sending, whether I actually received them or not.
PURPOSE OF CREDIT
5. I acknowledge and agree that any credit extended to me in this account is
primarily for investment or business purposes.
CREDIT REPORTS
6. I authorize you and each of your affiliates to request a consumer report
about me from one or more consumer reporting agencies for the purposes of
considering my subscription to the Broadcort Capital Account Financial
service, reviewing or collecting any account opened for me, or for any other
legitimate business purpose. Upon my request, you will inform me of the name
and address of each consumer reporting agency from which you obtained a
consumer report, if any, in connection with my subscription or accounts.
EXTRAORDINARY EVENTS
7. I agree that you shall not be liable for any loss caused directly or
indirectly by government restrictions, exchange or market rulings, suspension
of trading, war, strikes or other conditions beyond your control.
SEPARABILITY
8. If any provision of this Agreement is held to be unenforceable, such
determination shall not affect the validity of the remaining provisions of
this Agreement.
5
<PAGE>
AGREEMENT TO ARBITRATE CONTROVERSIES
9. [] Arbitration is final and binding on the parties.
[] The parties are waiving their right to seek remedies in court, including
the right to jury trial.
[] Pre-arbitration discovery is generally more limited than and different
from court proceedings.
[] The arbitrators' award is not required to include factual findings or
legal reasoning and any party's right to appeal or to seek modification of
rulings by the arbitrators is strictly limited.
[] The panel of arbitrators will typically include a minority of arbitrators
who were or are affiliated with the securities industry.
I/We agree that all controversies which may arise between us, or between me
and the organization that has introduced my account carried by you, including
but not limited to those involving any transaction or the construction,
performance, or breach of this or any other agreement between us, whether
entered into prior, on or subsequent to the date hereof, shall be determined
by arbitration. Any arbitration under this agreement shall be conducted only
before the New York Stock Exchange, Inc., the American Stock Exchange, Inc.,
or arbitration facility provided by any other exchange or the National
Association of Securities Dealers, Inc., or the Municipal Securities
Rulemaking Board, and in accordance with its arbitration rules then in force.
I/We may elect in the first instance whether arbitration shall be conducted
before the New York Stock Exchange, Inc., the American Stock Exchange, Inc.,
other exchanges, or the National Association of Securities Dealers, Inc., or
the Municipal Securities Rulemaking Board, but if I/we fail to make such
election, by registered letter or telegram addressed to you at the office
where I maintain my account, before the expiration of five days after receipt
of a written request from you to make such election, then you may make such
election. Judgment upon the award of arbitrators may be entered in any court,
state or federal, having jurisdiction.
LIABILITY OF COSTS OF COLLECTION
10. To the extent permitted by the laws of the State of New York, I agree to pay
you the reasonable costs and expenses of collection, including but not
limited to attorney's fees, for any unpaid balance that I owe you.
APPLICABLE LAW
11. This Agreement shall be governed by and construed in accordance with the
laws of the State of New York.
I/We consent and agree to all of the terms and conditions of this Agreement.
BY SIGNING THIS AGREEMENT, I/WE ACKNOWLEDGE (1) THAT, IN ACCORDANCE WITH
PARAGRAPH (9), I/WE AGREE IN ADVANCE TO ARBITRATE ANY CONTROVERSIES WHICH MAY
ARISE WITH BROADCORT CAPITAL CORP., OR BETWEEN ME/US AND THE ORGANIZATION THAT
HAS INTRODUCED MY/OUR ACCOUNT CARRIED BY YOU, AND (2) RECEIPT OF A COPY OF THIS
AGREEMENT.
SIGNATURES
CORPORATION INDIVIDUALS
_______________________________________ _________________________________
(NAME OF CORPORATION)
DATED__________________________________ _________________________________
(SECOND PARTY, IF JOINT ACCOUNT)
BY_____________________________________ PARTNERSHIP OR TRUST
TITLE__________________________________
__________________________________
(NAME OF PARTNERSHIP OR TRUST)
BY________________________________
(A PARTNER OR TRUSTEE)
BY________________________________
(A PARTNER OR TRUSTEE)
ATTEST_________________________________ BY_________________________________
(CORPORATE SEAL) (A PARTNER OR TRUSTEE)
ACCOUNT NO.____________________________ BY_________________________________
(A PARTNER OR TRUSTEE)
6
<PAGE>
CHECK/CARD ACCOUNT
APPLICATION AND AGREEMENT
- --------------------------------------------------------------------------------
The person(s) signing below (referred to in this Agreement as "I" or "me" or
"we") have executed a BROADCORT CAPITAL CORP. ("BROADCORT") Broadcort
Capital(SM) Account Agreement governing the terms and conditions of the
Broadcort Capital Account financial service. In connection with the Broadcort
Capital Account, I apply to MERRILL LYNCH BANK & TRUST CO. ("MLB&T") for a Visa
account ("Visa Account") and request, if applicable, that one or more Visa cards
be issued by MLB&T for use with my Visa Account ("Card"). I also apply to BANK
ONE, COLUMBUS, N.A. ("BANK ONE") to provide checks for use with my Visa Account
("Checks"). I understand that this Application is accepted when Checks and, if
applicable, a Card are issued to me, and I agree that by signing, using or
permitting another to use the Card or Checks, I will be bound by the following
terms and conditions:
OWNERSHIP
1. The card remains the property of MLB&T and may be canceled by MLB&T at any
time without prior notice. I agree to surrender the Card and any unused
Checks immediately upon the request of MLB&T, BANK ONE or BROADCORT.
LIABILITY
2. I will be liable for all transactions made by me, or by any person authorized
to act on my behalf ("Authorized Users"), through the use of the Checks or
Card in connection with my Visa Account. I also agree to pay the reasonable
costs and expenses of collection of any unpaid balance due as a result of any
overdraft(s), including but not limited to attorneys' fees, to the extent
allowed by law, involved in such collection.
AUTHORIZATION LIMIT
3. Neither I nor any Authorized User will use the Checks or Card for any
transaction that would exceed the amount authorized for my Visa Account
("Authorization Limit"). I understand that my Authorization Limit will be the
sum of any available free credit balance in my BROADCORT Securities Account,
the available balances in or from my Money Account, and, if applicable, the
available margin loan value of my securities in my BROADCORT Securities
Account.
TRANSACTIONS EXCEEDING AUTHORIZATION LIMIT
4. I understand that I will be in default if I incur charges in my Card/Check
Account that exceed my Authorization Limit. If I am in default, BROADCORT
may, among other things, terminate my subscription to the Broadcort Capital
Account. If I exceed my Authorization Limit, The Chase Manhattan Bank, N.A
("Chase") may accept the transaction amount exceeding my Authorization Limit
as an overdraft, and advance funds to BROADCORT, MLB&T or BANK ONE in the
amount exceeding my Authorization Limit. If Chase does so, I will be
notified and I agree that I will immediately pay Chase the amount of the
overdraft and any applicable finance charge which is computed as described in
this section. In each overdraft statement cycle, finance charges are figured
by applying a daily periodic rate to the Average Daily Balance of overdrafts
and by multiplying the resulting figure by the number of days in that
statement cycle. The Average Daily Balance of overdrafts is calculated each
day by starting with the beginning balance of amounts I owe, adding any new
overdrafts and subtracting any payments or credits received that day and
unpaid finance charges. This gives Chase the daily balance of overdrafts. The
Average Daily Balance is calculated by adding all of the daily balances of
overdrafts in that statement cycle and dividing the total by the number of
days in the overdraft statement cycle. Finance charges accrue from the date
Chase accepts an overdraft until the date payment is made.
The Average Daily Balance is multiplied by a Daily Periodic Rate of .049315%
(18% ANNUAL PERCENTAGE RATE), unless I reside in Colorado, North Carolina,
Puerto Rico or Iowa. For purposes of this section, I will be deemed to reside
in the state listed on BROADCORT'S records. If I reside in Colorado, Chase
will multiply the Average Daily Balance by a Daily Periodic Rate of .032877%
(12% ANNUAL PERCENTAGE RATE). If I reside in North Carolina, Chase will
multiply the Average Daily Balance by a Daily Periodic Rate of .043836% (16%
ANNUAL PERCENTAGE RATE). If I reside in Puerto Rico, chase will multiply the
average daily Balance by a Daily Periodic Rate of .041096% (15% ANNUAL
PERCENTAGE RATE). If I reside in Iowa, the Daily Periodic Rate applied on
overdrafts may vary since it will be determined by applying a variable
interest rate which is computed as follows. The interest rate on overdrafts
will be the monthly average 10-year constant maturity interest rate of United
States government notes and bonds, plus two percentage points. This index may
change monthly. If there is a change in the index in any month, the new Daily
Periodic Rate will be effective on the first day of the following month.
However, in any overdraft statement cycle in which the daily Periodic Rate
changes, I will be charged the lesser of the two Daily Periodic Rates in
effect during that statement cycle. Based on this index, as of August 1, 1991
you would multiply the Average Daily Balance by a Daily Periodic Rate of
.027397% (10.00% ANNUAL PERCENTAGE RATE). An increase or decrease in the
Daily Periodic Rate I pay on overdrafts will result in an increase or
decrease in the amount I owe Chase for overdrafts.
If I move to Colorado, North Carolina, Puerto Rico or Iowa, I understand that
without notice to me, if I incur a new overdraft after my address changes on
7
<PAGE>
your records, Chase will apply the Daily Periodic Rate described above that
is applicable in the state to which I move, to my entire outstanding balance
and to any new overdrafts that I incur. If I reside in Colorado, North
Carolina, Puerto Rico or Iowa and I move to any state other than one of
those states or Puerto Rico, I understand that without prior notice to me,
if I incur a new overdraft after my address changes on your records, Chase
will apply the Daily Periodic Rate of .049315% (18% ANNUAL PERCENTAGE RATE)
to my entire outstanding balance and to any new overdrafts that I incur.
Any payments that I make will be applied, as of the date of receipt by
Chase, first to any accrued and unpaid finance charges and then to the
balance of overdrafts in the order in which they were incurred.
PERIODIC OVERDRAFT BILLING STATEMENT
5. I will receive a periodic overdraft billing statement from Chase which will
detail, among other disclosures, any overdraft(s), plus Finance Charges on
the overdraft(s), payments and credits and the balance due.
CREDIT INFORMATION
6. I authorize Broadcort, each of your affiliates, MLB&T, BANK ONE and Chase to
request a consumer report about me from one or more consumer reporting
agencies for the purposes of considering my subscription to the Broadcort
Capital Account, reviewing or collecting any account opened for me, or for
any other legitimate business purpose. Upon my request, you will inform me
of the name and address of each consumer reporting agency from which you
obtained a consumer report, if any, in connection with my subscription or
accounts. I also authorize you, each of your affiliates, MLB&T, BANK ONE,
and Chase to share any credit information you may have or obtain about me
for any legitimate business purpose.
TERMINATION OF ACCOUNT
7. I understand that my Visa Account will automatically be terminated if my
subscription to the Broadcort Capital Account is terminated for any reason.
I also understand that MLB&T may terminate my Visa Account at any time at
its discretion without prior notice. If my Visa Account is terminated for
any reason, I shall promptly return all unused Checks and Card, if any, to
MLB&T, BANK ONE or BROADCORT.
ACCOUNT INQUIRIES
8. I understand that inquiries and error allegations concerning my Visa
Account, my periodic overdraft billing statement and my monthly statement
should be directed through BROADCORT.
SEPARABILITY
9. If any provision of this Agreement is held to be unenforceable for any
reason, such determination shall not affect the validity of the remaining
provisions of this Agreement.
APPLICABLE LAW
10. THE TERMS AND CONDITIONS OF THIS AGREEMENT RELATING TO THE ISSUANCE AND USE
OF THE CARD ARE GOVERNED BY FEDERAL AND NEW JERSEY LAW. THE FINANCE CHARGE
UNDER THIS AGREEMENT IS GOVERNED BY FEDERAL AND, EXCEPT TO THE EXTENT MY
STATE LAW EXPLICITLY APPLIES, TO NEW YORK LAW. ALL OTHER TERMS AND
CONDITIONS OF THIS AGREEMENT ARE GOVERNED BY OHIO LAW.
I/WE ACKNOWLEDGE RECEIPT OF A COPY OF THIS AGREEMENT AND CONSENT TO ITS TERMS
AND CONDITIONS.
SIGNATURES
CORPORATION INDIVIDUALS
____________________________________ ____________________________________
(NAME OF CORPORATION)
DATED_______________________________ ____________________________________
(SECOND PARTY, IF JOINT ACCOUNT)
BY__________________________________ PARTNERSHIP OR TRUST
TITLE_______________________________
____________________________________
(NAME OF PARTNERSHIP OR TRUST)
BY__________________________________
(A PARTNER OR TRUSTEE)
BY__________________________________
(A PARTNER OR TRUSTEE)
ATTEST______________________________ BY__________________________________
(CORPORATE SEAL) (A PARTNER OR TRUSTEE)
ACCOUNT NO._________________________ BY__________________________________
(A PARTNER OR TRUSTEE)
8
<PAGE>
EXHIBIT 99.13
CERTIFICATE OF SOLE SHAREHOLDER
Fund Asset Management, Inc., the holder of 100,000 shares of beneficial
interest, par value $0.10 per share, of the CBA Money Fund, a Massachusetts
business trust (the "Fund"), does hereby confirm to the Fund its representation
that it purchased such shares for investment purposes, with no present intention
of redeeming or reselling any portion thereof, and does further agree that if it
redeems any portion of such shares prior to the amortization of the Fund's
organizational expenses, the proceeds thereof will be reduced by the
proportionate amount that the total unamortized organizational expenses which
the number of shares redeemed bears to the 100,000 shares it initially
purchased.
FUND ASSET MANAGEMENT, INC.
BY /S/ PHILIP L. KIRSTEIN
----------------------
Dated: April 17, 1984
<PAGE>
EXHIBIT 99.15
DISTRIBUTION AND SHAREHOLDER SERVICING PLAN
OF
CBA MONEY FUND
PURSUANT TO RULE 12b-1
WHEREAS, CBA Money Fund (the "Fund") is a no-load, open-end investment
company registered under the Investment Company Act of 1940, as amended (the
"Investment Company Act"); and
WHEREAS, Merrill Lynch, Pierce, Fenner & Smith Incorporated, a Delaware
corporation ("MLPF&S") is a securities firm engaged in the business of selling
shares of investment companies to investors; and
WHEREAS, Broadcort Capital Corp., a Delaware corporation ("Broadcort"), is a
wholly-owned subsidiary of MLPF&S which acts as the clearing agent for certain
securities firms (the "Introducing Firms") pursuant to clearing agreements; and
WHEREAS, MLPF&S acts as the exclusive distributor and representative of the
Fund in the offer and sale of shares of the Fund to participants in the Capital
Builder Account program (the "CBA program") of MLPF&S and other investors whose
Fund accounts are serviced by MLPF&S financial consultants (collectively such
accounts being referred to herein as the "MLPF&S Fund Accounts"; the term
"MLPF&S Fund Accounts" does not include those accounts maintained directly with
the Fund's Transfer Agent which are not serviced by MLPF&S financial
consultants) pursuant to a Distribution Agreement dated September 11, 1991 (the
"Distribution Agreement"); and
<PAGE>
WHEREAS, MLPF&S financial consultants and other personnel offer and sell
shares to existing and prospective shareholders with MLPF&S Fund Accounts and
provide shareholder services to existing and prospective MLPF&S Fund Accounts;
and
WHEREAS, Broadcort acts as the exclusive distributor and representative of
the Fund in the offer and sale of shares of the Fund pursuant to the
Distribution Agreement to subscribers to the Broadcort financial service program
(the "Broadcort program") and to other customers of selected dealers which use
the clearing facilities of Broadcort; and
WHEREAS, the Fund desires to adopt a Distribution and Shareholder Servicing
Plan for the Fund pursuant to Rule 12b-1 under the Investment Company Act
pursuant to which (i) the Fund will pay a distribution fee to MLPF&S under the
Distribution Agreement and (ii) the Fund will pay a distribution fee to
Broadcort under the Distribution Agreement; and
WHEREAS, the Trustees of the Fund have determined that there is a
reasonable likelihood that adoption of this Distribution and Shareholder
Servicing Plan will benefit the Fund and the Fund's shareholders:
NOW, THEREFORE, the Fund hereby adopts this Distribution and Shareholder
Servicing Plan (the "Plan") in accordance with Rule 12b-1 under the Investment
Company Act on the following terms and conditions:
2
<PAGE>
1. The Fund is hereby authorized to pay MLPF&S a distribution fee under
the Distribution Agreement at the end of each month at the annual rate of 0.125%
of the average daily net asset value of the MLPF&S Fund Accounts. The fee is
not payable with respect to the asset value of shareholders who maintain their
accounts directly with the Fund's Transfer Agent and whose accounts are not
serviced by MLPF&S financial consultants. MLPF&S is obligated to expend the
entire amount of the distribution fee for compensation to MLPF&S financial
consultants and other directly involved branch office personnel for selling
shares of the Fund to shareholders with MLPF&S Fund Accounts and for providing
direct personal services to such shareholders, including furnishing information
as to the status of Fund accounts and handling purchase and redemption orders
for Fund shares. The MLPF&S distribution fee may not be used to pay for other
expenditures of MLPF&S such as sales contests, special seminars and media
advertising relating to the Fund. The MLPF&S distribution fee is not
compensation for the administrative and operational services rendered to the
Fund by MLPF&S in processing share orders and administering shareholder
accounts.
2. The Fund is hereby authorized to pay Broadcort a distribution fee under
the Distribution Agreement at the end of each month at the annual rate of 0.125%
of average daily net assets of the Fund attributable to participants in the
Broadcort program and to other customers of selected dealers which use the
3
<PAGE>
clearing facilities of Broadcort (the "Broadcort distribution fee"). Broadcort
is obligated to expend the entire amount of the Broadcort distribution fee for
compensation to Introducing Firms for activities and services related to the
sale, promotion and marketing of shares of the Fund.
3. The Fund hereby authorizes Broadcort to enter into SubAgreements with
Introducing Firms in the form attached hereto as Exhibit A, to provide
compensation to such Introducing Firms for activities and services of the type
referred to in Paragraph 2.
4. MLPF&S and Broadcort shall each provide the Fund for review by the
Trustees, and the Trustees shall review at least quarterly, a written report
complying with the requirements of Rule 12b-1 regarding the disbursement of the
respective distribution fees of the Fund during such period. The report shall
include an itemization of the distribution expenses incurred on behalf of the
Fund, the purpose of such expenditures and a description of the benefits derived
by the Fund therefrom.
5. In the event that the aggregate payments received by MLPF&S or
Broadcort under the Distribution Agreement in any fiscal year of the Fund shall
exceed the amount of the distribution expenditures of MLPF&S or Broadcort, as
the case may be, in respect of the Fund in such fiscal year, MLPF&S and/or
Broadcort shall be required to reimburse the Fund the amount of such excess.
4
<PAGE>
6. This Plan shall not take effect until it has been approved by a vote of
at least a majority, as defined in the Investment Company Act, of the
outstanding voting securities of the Fund.
7. This Plan shall not take effect until it has been approved, together
with any related agreements, by votes of a majority of both (a) the Trustees of
the Fund and (b) those Trustees of the Fund who are not "interested persons" of
the Fund, as defined in the Investment Company Act, and have no direct or
indirect financial interest in the operation of this Plan or any agreements
related to it (the "Rule 12b-1 Trustees"), cast in person at a meeting or
meetings called for the purpose of voting on this Plan and such related
agreements.
8. This Plan, if approved pursuant to Paragraphs 6 and 7 hereof, shall take
effect on the first day of the month following approval of the Plan pursuant to
Paragraph 6 hereof.
9. This Plan shall continue in effect for so long as such continuance is
specifically approved at least annually in the manner provided for approval of
this Plan in Paragraph 7.
10. This Plan may be terminated at any time by vote of a majority of the
Rule 12b-1 Trustees, or by vote of a majority of the outstanding voting
securities of the Fund.
11. This Plan may not be amended to increase materially the rate of
distribution payments provided for in Paragraphs 1 or 2 hereof unless such
amendment is approved in the manner provided
5
<PAGE>
for initial approval in Paragraphs 6 and 7 hereof, and no material amendment to
the Plan shall be made unless approved in the manner provided for approval and
annual renewal in Paragraph 7 hereof.
12. While this Plan is in effect, the selection and nomination of Trustees
who are not interested persons, as defined in the Investment Company Act, of the
Fund shall be committed to the discretion of the Trustees who are not interested
persons.
13. The Fund shall preserve copies of this Plan and any related agreements
and all reports made pursuant to Paragraph 4 hereof, for a period of not less
than six years from the date of this Plan or the date of the agreements or such
report, as the case may be, the first two years in an easily accessible place.
14. The Declaration of Trust establishing CBA Money Fund, dated March 28,
1983, a copy of which, together with all amendments thereto (the "Declaration"),
is on file in the office of the Secretary of the Commonwealth of Massachusetts,
provides that the name of the Fund, "CBA Money Fund," refers to the Trustees
under the Declaration collectively as Trustees, but not as individuals or
personally; and no Trustee, shareholder, officer, employee or agent of CBA Money
Fund shall be held to any personal liability, nor shall resort be had to their
private property for the satisfaction of any obligation or claim of said CBA
Money Fund, but the Fund Property only shall be liable.
6
<PAGE>
IN WITNESS WHEREOF, the Fund has executed this Distribution and Shareholder
Servicing Plan this llth day of September, 1991.
CBA MONEY FUND
By
---------------------------
MERRILL LYNCH, PIERCE, FENNER &
SMITH INCORPORATED
By
---------------------------
BROADCORT CAPITAL CORP.
By
---------------------------
7
<PAGE>
EXHIBIT A
DISTRIBUTION PLAN SUB-AGREEMENT
AGREEMENT by and between Broadcort Capital Corp., a Delaware corporation,
and _________________________________________________, a _____________________
corporation ("Introducing Firm").
WHEREAS, Broadcort has entered into an agreement with CBA Money Fund, a
Massachusetts business trust (the "Fund"), pursuant to which it acts as the
exclusive distributor and representative of the Fund in the offer and sale of
shares of the Fund to subscribers to the Broadcort financial service program
("Broadcort program") and to other customers of selected dealers which use the
clearing facilities of Broadcort'
WHEREAS, the Fund has adopted a Distribution Plan (the "Plant") pursuant to
Rule 12b-1 under the Investment Company Act of 1940 (the "Investment Company
Act") pursuant to which Broadcort is obligated to expend the distribution fee
received by it thereunder for compensation to Introducing Firms for providing
sales and promotional activities related to the distribution of Fund shares; and
WHEREAS, the Introducing Firm has entered into a Selected Dealers Agreement
with Broadcort and in connection therewith is willing to perform certain sales
and promotional activities for the Fund's shareholders as set forth below.
NOW, THEREFORE, the parties hereby agree as follows:
1. The Introducing Firm shall sell shares of the Fund and will engage in
activities and services related to the promotion and marketing of shares of the
Fund.
2. As compensation for its services performed under this Sub-Agreement,
Broadcort shall pay the Introducing Firm a fee at the end of each calendar month
at the annual rate of 0.125% of average daily net asset value of the shareholder
accounts maintained by the Introducing Firm, minus an administrative charge
based on Broadcort's costs in disbursing the distribution fee. The Introducing
Firm represents that it will utilize such compensation solely for activities
related to the promotion and marketing of sales of the Fund. The Introducing
Firm shall reimburse Broadcort to the extent that the aggregate payments
received by the Introducing Firm under this Sub-Agreement are not utilized for
the foregoing purpose.
8
<PAGE>
3. This Sub-Agreement shall continue in effect for as long as such
continuance is specifically approved at least annually in the manner provided
for approval of the continuance of the Plan.
4. This Sub-Agreement shall automatically terminate in the event of its
assignment or in the event of the termination of the Plan or any amendment to
the Plan that requires such termination. This Sub-Agreement shall also
terminate upon the vote of a majority of the Trustees of the Fund who are not
"interested persons" of the Fund, as defined in the Investment Company Act, and
have no direct or indirect financial interest in the operation of the Plan or in
this Agreement, or by vote of a majority of the outstanding voting securities of
the Fund on not more than sixty days notice.
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement as of the date set forth below.
BROADCORT CAPITAL CORP.
By:
------------------------
(Authorized Signature)
------------------------
By:
------------------------
(Authorized Signature)
Date: __________, 199_.
9
<PAGE>
EXHIBIT 99.16
CBA Money Fund
Schedule for Computation of Performance Quotations
As of February 29, 1988
Base Period Return
------------------
<TABLE>
<CAPTION>
Including Excluding
gains and losses gains and losses
---------------- ----------------
<S> <C> <C>
Net income of one share
for a seven-day base period 0.001192 0.001167
Divided by
Net asset value of one share at
beginning of base period $1.00 $1.00
Equals 0.001192 0.001167
Base period return (unannualized) 0.001192 0.001167
Annualized Return
-----------------
Base period return (unannualized) 0.001192 0.001167
Divided by 7 0.000170 0.0001167
Multiplied by 365
Equals
Annualized Return 6.21% 6.10%
Effective or Compounded Yield
-----------------------------
Base period return (unannualized) 0.001167
Divided by 7 0.0001167
Add
1
Equals 1.000167
Sum raised to 365th power 1.062846
Subtract
1
Equals
Effective or Compounded Yield 6.28%
</TABLE>
- ----------
*Calculated using base period return (unannualized) excluding gains and losses.
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> FEB-28-1995
<PERIOD-START> MAR-01-1994
<PERIOD-END> FEB-28-1995
<INVESTMENTS-AT-COST> 1402728018
<INVESTMENTS-AT-VALUE> 1402788296
<RECEIVABLES> 4622164
<ASSETS-OTHER> 62936
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 1407473396
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 1158147
<TOTAL-LIABILITIES> 1158147
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 1406254971
<SHARES-COMMON-STOCK> 1406254971
<SHARES-COMMON-PRIOR> 1287977383
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 60278
<NET-ASSETS> 1406315249
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 61403441
<OTHER-INCOME> 0
<EXPENSES-NET> 9977265
<NET-INVESTMENT-INCOME> 51426176
<REALIZED-GAINS-CURRENT> 19884
<APPREC-INCREASE-CURRENT> 581662
<NET-CHANGE-FROM-OPS> 52027722
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 51426176
<DISTRIBUTIONS-OF-GAINS> 19884
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 4007388057
<NUMBER-OF-SHARES-REDEEMED> 3940438831
<SHARES-REINVESTED> 51328362
<NET-CHANGE-IN-ASSETS> 118859250
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 5722106
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 10494290
<AVERAGE-NET-ASSETS> 1292561516
<PER-SHARE-NAV-BEGIN> 1.00
<PER-SHARE-NII> .04
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> (.04)
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 1.00
<EXPENSE-RATIO> .81
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<PAGE>
EXHIBIT 11
INDEPENDENT AUDITORS' CONSENT
CBA Money Fund:
We consent to the use in Post-Effective Amendment No. 13 to Registration
Statement No. 2-82766 of our report dated March 31, 1995 appearing in the
Statement of Additional Information, which is a part of such Registration
Statement, and to the reference to us under the caption "Financial Highlights"
appearing in the Prospectus, which also is a part of such Registration
Statement.
Deloitte & Touche LLP
Princeton, New Jersey
June 23, 1995
