<PAGE> 1
As filed with the Securities and Exchange Commission on August 18, 1995
Registration No. 2-97840
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 /x/
POST-EFFECTIVE AMENDMENT NO. 12 /x/
and
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY /x/
ACT OF 1940
AMENDMENT NO. 15 /x/
------------------------------
NAVIGATOR MONEY MARKET FUND, INC.
(Exact Name of Registrant as Specified in Charter)
200 Gibraltar Road
Horsham, Pennsylvania 19044
(Address of Principal Executive Offices)
Registrant's Telephone Number : (215) 443-7850
JAMES W. JENNINGS, ESQUIRE
MORGAN, LEWIS & BOCKIUS
2000 One Logan Square
Philadelphia, Pennsylvania 19103
(Name and Address of Agent for Service)
------------------------------
It is proposed that this filing become effective on August 18, 1995
pursuant to paragraph (b) of Rule 485.
CALCULATION OF REGISTRATION FEE UNDER THE SECURITIES ACT OF 1933
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------------------------------------
Title of Securities Amount Being Proposed Maximum Proposed Maximum Amount of
Being Registered Registered Offering Price Per Unit Aggregate Offering Price (1) Registration Fee
----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Shares of Common Stock 103,490,245 shares $1.00 per share - - $100 (1)
----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Registrant has calculated the maximum aggregate offering price
pursuant to Rule 24e-2 under the Investment Company Act of 1940
(the "1940 Act") for fiscal year ended May 31, 1995. Registrant
had actual aggregate redemptions of 979,870,062 shares for the
fiscal year ended May 31, 1995; has used 876,669,817 of available
redemptions for reductions pursuant to Rule 24f-2(c) under the
1940 Act and has previously used no available redemptions for
reductions pursuant to Rule 24e-2(a) of the 1940 Act during the
current year. Registrant elects to use redemptions in the
aggregate amount of 103,200,245 shares for reductions in its
current amendment.
<PAGE> 2
The Registrant has registered an indefinite number of shares
pursuant to Rule 24f-2 under the Investment Company Act of 1940, as amended.
The Registrant has filed a Rule 24f-2 notice covering the fiscal year ended May
31, 1995 on July 28, 1995.
<PAGE> 3
CROSS REFERENCE SHEET
<TABLE>
<CAPTION>
FORM N-1A ITEM LOCATION
-------------- --------
PART A
------
<S> <C> <C>
Item 1. Cover Page........................... Cover Page
Item 2. Synopsis............................. Fund Expenses
Item 3. Condensed Financial Information...... Financial
Highlights
Item 4. General Description of Registrant...... The Fund;
Investment
Objective
and Policies;
Investment
Restrictions;
General
Information
Item 5. Management of the Fund............... Management
of the Fund
Item 6. Capital Stock and Other Securities... Cover Page, The
Fund; How To
Purchase and
Redeem Shares;
Dividends and
Taxes; Descrip-
tion of Shares;
General
Information
Item 7. Purchase of Securities Being
Offered............................. Valuation of
Shares; How to
Purchase and
Redeem Shares
Item 8. Redemption or Repurchase............ How to
Purchase and
Redeem Shares
Item 9. Legal Proceedings................... *
</TABLE>
<PAGE> 4
<TABLE>
<CAPTION>
PART B LOCATION
------ --------
<S> <C> <C>
Item 10. Cover Page.......................... Cover Page
Item 11. Table of Contents................... Table of
Contents
Item 12. General Information and History..... The Fund
Item 13. Investment Objectives and Policies.. Investment
Objective and
Policies
Item 14. Management of the Registrant........ Directors and
Officers;
Investment
Adviser,
Administrator
and Distributor
Item 15. Control Persons and Principal
Holders of Securities............... Principal
Holders of
Securities
Item 16. Investment Advisory and Other
Services............................ Investment
Adviser,
Administrator
and Distributor
Item 17. Brokerage Allocation and Other
Practices........................... Portfolio
Transactions
Item 18. Capital Stock and Other Securities... Description of
Shares
Item 19. Purchase, Redemption and Pricing
of Securities Being Offered......... Included in
Part A
Item 20. Tax Status.......................... Included in
Part A
Item 21. Underwriters........................ *
Item 22. Calculation of Performance Data..... Yield
</TABLE>
<PAGE> 5
<TABLE>
<CAPTION>
LOCATION
--------
<S> <C> <C>
Item 23. Financial Statements................ Financial
Statements
</TABLE>
* Omitted since the answer is negative or the Item is inapplicable.
PART C
Information required to be included in Part C is set forth under
the appropriate item, so numbered, in Part C of this Registration Statement.
<PAGE> 6
[LOGO]
PROSPECTUS
--------------------------------------------------------------------------------
Navigator Money Market Fund--Prime Obligations Portfolio (the "Fund") is a
portfolio offered by Navigator Money Market Fund, Inc. (the "Company"), a
no-load, diversified, open-end investment company.
The Fund's investment objective is to provide its shareholders with as high
a level of current interest income as is consistent with liquidity and relative
stability of principal. The Fund intends to achieve this objective by investing
substantially all of its assets in a diversified portfolio of money market
instruments of the highest quality, with remaining maturities of 397 days or
less.
THE FUND'S SHARES ARE NEITHER INSURED NOR GUARANTEED BY THE FDIC, OR THE
U.S. GOVERNMENT OR ANY OF ITS AGENCIES. THE FUND ATTEMPTS TO MAINTAIN A STABLE
NET ASSET VALUE PER SHARE OF $1.00, BUT THERE CAN BE NO ASSURANCE THAT IT WILL
BE ABLE TO DO SO. THE FUND'S SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF ANY BANK,
NOR ARE THEY ENDORSED OR GUARANTEED BY ANY BANK.
Shares of the Fund ("Shares") are sold by Fairfield Group, Inc.
("Fairfield") to institutional investors ("Institutions") for investment of
their own funds or funds for which they act in a fiduciary, agency or custodial
capacity ("Customer Accounts"). Fund Shares may not be purchased by individuals
directly, but institutional investors may purchase Shares for Customer Accounts
maintained for individuals. Fairfield (the "Manager") acts as the Fund's
Investment Adviser, Administrator, and Distributor. Shares are sold and redeemed
without any purchase or redemption charge imposed by the Fund, although
Institutions may charge their Customer Accounts for services provided in
connection with the purchase or redemption of Shares. See "How to Purchase and
Redeem Shares."
This Prospectus sets forth certain information about the Fund that a
prospective investor ought to know before investing. Investors should read this
Prospectus and retain it for future reference.
Additional information about the Fund, contained in a Statement of
Additional Information, has been filed with the Securities and Exchange
Commission and is available upon request without charge by writing to the Fund
at its address. The Statement of Additional Information bears the same date as
this Prospectus and is incorporated by reference in its entirety into this
Prospectus.
------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
------------------------
THE DATE OF THIS PROSPECTUS IS AUGUST 18, 1995.
<PAGE> 7
Navigator Money Market Fund, Inc.
Prime Obligations Portfolio
<TABLE>
<S> <C>
200 Gibraltar Road For current
Horsham, PA 19044 performance,
redemption, and
other information,
call:
1-800-441-3885
</TABLE>
--------------------------------------------------------------------------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
The Company............................................ 3
Fund Expenses.......................................... 3
Financial Highlights................................... 4
Performance Information................................ 5
Investment Objective and Policies...................... 5
Investment Restrictions................................ 7
Valuation of Shares.................................... 8
How to Purchase and Redeem Shares...................... 8
Dividends.............................................. 10
Taxes.................................................. 11
Management of the Fund................................. 12
Description of Shares.................................. 14
General Information.................................... 14
</TABLE>
<PAGE> 8
THE COMPANY
The Company was originally organized as a Pennsylvania business trust under
a Declaration of Trust dated May 16, 1985, and the Fund commenced operations on
July 22, 1985. The Company was subsequently reorganized as a Maryland
corporation on December 9, 1986, such reorganization having been effected in
order to enable the Fund to take advantage of certain state tax benefits
accruing therefrom. The Company's Articles of Incorporation permit the Company's
Board of Directors ("Navigator's Board") to offer additional, separate classes
of shares of Common Stock ("Portfolios") in the future. However, the Company
currently offers only Shares of the Fund, a money market portfolio.
FUND EXPENSES
The table below sets forth information concerning shareholder transaction
expenses and annual Fund operating expenses.
SHAREHOLDER TRANSACTION EXPENSES
<TABLE>
<S> <C>
Maximum Sales Load Imposed on Purchases (as a percentage of offering price)........ 0%
Maximum Sales Load Imposed on Reinvested Dividends (as a percentage of offering
price)........................................................................... 0%
Deferred Sales Load
(as a percentage of original purchase price or redemption proceeds, as
applicable)...................................................................... 0%
Redemption Fee..................................................................... None
Exchange Fee....................................................................... None
</TABLE>
ANNUAL FUND OPERATING EXPENSES (A)
<TABLE>
<S> <C>
12b-1 Fees......................................................................... 0%
Investment Advisory Fees After Fee Waivers (B)..................................... .05%
Administrative Fees (C)............................................................ .10%
Other Expenses (D)................................................................. .13%
-----
Net Annual Fund Operating Expenses (E)............................................. .28%
=====
</TABLE>
------------------------------------------
<TABLE>
<S> <C>
(A) The annual Fund operating expenses as set forth in this table reflect expenses incurred
by the Fund for the fiscal year ended May 31, 1995, shown as a percentage of average net
assets for such year.
(B) Absent voluntary waivers, Fairfield's investment advisory fees, which are graduated,
would have been calculated at the annual rate of .20% of the Fund's average net assets.
(C) Fairfield's administrative fees, which are graduated, were calculated at the annual rate
of .10% of the Fund's average net assets.
(D) Includes (among others) custodial, transfer agency, legal, and auditing fees.
(E) Fairfield may, from time to time and at its discretion, voluntarily waive all or a
portion of its investment advisory and/or administrative fees. The expense ratio of .28%
is net of investment advisory fee waivers in effect during the fiscal year. Absent any
fee waivers, such expense ratio would have been .43%.
</TABLE>
EXAMPLE:
<TABLE>
<CAPTION>
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 (1) 5% annual return
and (2) redemption at the end of each time period*........ $3 $ 9 $16 $36
</TABLE>
------------------------------------------
* Absent the voluntary waiver of fees by Fairfield, the expense amounts in the
above Example for 1 year, 3 years, 5 years, and 10 years would be $4, $14,
$24, and $54, respectively.
The purpose of the tables is to assist the investor in understanding the
various costs and expenses that a shareholder in the Fund will bear directly or
indirectly. Financial institutions that are the record owner of Shares on behalf
of their Customer Accounts may impose separate fees for the account services
they provide to their Customers. For additional information regarding fees and
other expenses, see "The Manager" and "Expenses."
THE EXAMPLE SET FORTH ABOVE SHOULD NOT BE CONSIDERED A REPRESENTATION OF
PAST OR FUTURE FUND EXPENSES. ACTUAL EXPENSES MAY BE GREATER OR LESS THAN THOSE
SHOWN.
3
<PAGE> 9
FINANCIAL HIGHLIGHTS
The table below sets forth certain financial information with respect to
the per-share data and ratios for the Fund for the periods indicated. This
information has been derived from the financial statements audited by Ernst &
Young LLP, independent auditors for the Fund, whose report thereon is
incorporated by reference into the Fund's Statement of Additional Information,
which can be obtained at no charge by calling Fairfield at 1-800-441-3885.
<TABLE>
<CAPTION>
6/01/94 6/01/93 6/01/92 6/01/91 6/01/90 6/01/89 6/01/88 6/01/87 6/01/86 7/22/85*
TO TO TO TO TO TO TO TO TO TO
5/31/95 5/31/94 5/31/93 5/31/92 5/31/91 5/31/90 5/31/89 5/31/88 5/31/87 5/31/86
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
------- ------- ------- ------- ------- ------- ------- ------- ------- -------
Net Asset Value,
beginning of
period............. $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
------- ------- ------- ------- ------- ------- ------- ------- ------- -------
Income from
Investment
Operations:
Net Investment
Income......... .0501 .0314 .0323 .0499 .0728 .0853 .0859 .0686 .0614 .0645
Net Gain on
Securities
(both realized
and
unrealized).... -- -- -- .0001 -- -- -- -- -- --
------- ------- ------- ------- ------- ------- ------- ------- ------- -------
Total Income
from
Investment
Operations... .0501 .0314 .0323 .0500 .0728 .0853 .0859 .0686 .0614 .0645
------- ------- ------- ------- ------- ------- ------- ------- ------- -------
Less Distributions:
Dividends from
Net Investment
Income........... (.0501) (.0314) (.0323) (.0499) (.0728) (.0853) (.0859) (.0686) (.0614) (.0645)
Dividends from
Capital Gains.... -- -- -- (.0001) -- -- -- -- -- --
------- ------- ------- ------- ------- ------- ------- ------- ------- -------
Total
Distributions... (.0501) (.0314) (.0323) (.0500) (.0728) (.0853) (.0859) (.0686) (.0614) (.0645)
------- ------- ------- ------- ------- ------- ------- ------- ------- -------
Net Asset Value,
end of period...... $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
======= ======= ======= ======= ======= ======= ======= ======= ======= =======
Total Return......... 5.19% 3.18% 3.28% 5.12% 7.53% 8.87% 8.94% 7.08% 6.32% 7.50%(A)
Net Assets,
end of period
(000).............. $238,109 $341,136 $417,114 $443,368 $563,265 $508,859 $464,483 $326,406 $234,560 $177,519
Ratios and
Supplemental Data:
Ratio of Expenses
to Average Net
Assets........... .28% .27% .26% .22% .21% .22% .22% .23% .17% .19%(A)
Ratio of Expenses
to Average Net
Assets,
excluding Fee
Waivers.......... .43% .42% .41% .37% .35% .37% .38% .39% .43% .49%(A)
Ratio of Net
Investment Income
to Average Net
Assets........... 5.01% 3.14% 3.23% 4.99% 7.28% 8.53% 8.59% 6.86% 6.14% 7.50%(A)
Ratio of Net
Investment Income
to Average Net
Assets,
excluding Fee
Waivers.......... 4.86% 2.99% 3.08% 4.84% 7.14% 8.38% 8.43% 6.69% 5.88% 7.20%(A)
</TABLE>
---------------------------
* Commencement of Operations
(A) Annualized
4
<PAGE> 10
PERFORMANCE INFORMATION
IN GENERAL
The performance of any investment will generally reflect market conditions,
portfolio quality and maturity, type of investment, and operating expenses. The
Fund's performance will fluctuate and is not necessarily representative of
future results. Any fees charged by Institutions to their Customers in
connection with investments in Fund Shares are not reflected in the Fund's
performance, and such fees, if charged, will reduce the actual return received
by Customers on their investments. Conversely, the Fund's performance would be
favorably affected by any management fee waivers on the part of Fairfield.
From time to time, in advertisements or reports to shareholders, the
performance of the Fund may be quoted and compared to that of other mutual funds
with similar investment objectives and to relevant indices such as
"IBC/Donoghue's Money Fund Averages(R)."
Shareholders will receive unaudited semi-annual reports describing the
Fund's investment operations and annual financial statements audited by
independent auditors.
YIELDS
The Fund may advertise its "yield" and "effective yield." Both yield
figures are based on historical earnings and are not intended to indicate future
performance. The "yield" of the Fund refers to the income generated by an
investment in the Fund over a 7-day period (which period will be stated in the
advertisement). This income is then "annualized." That is, the amount of income
generated by the investment during that week is assumed to be generated each
week over a 52-week period and is shown as a percentage of the investment. The
"effective yield" is calculated similarly but, when annualized, the income
earned by an investment in the Fund is assumed to be reinvested. The "effective
yield" will be slightly higher than the "yield" because of the compounding
effect of this assumed reinvestment. See "Yield" in the Statement of Additional
Information.
For the 7-day period ended May 31, 1995, the Fund's yield was 5.83% and its
compounded effective yield was 6.00%. During this 7-day period, 70% of the
Fund's investment advisory fees were voluntarily waived by Fairfield. Absent
such fee waivers, the yield for such period would have been 5.69% and the
compounded effective yield would have been 5.85%. During this 7-day period,
there was no waiver in effect with respect to Fairfield's administrative fees.
INVESTMENT OBJECTIVE AND POLICIES
IN GENERAL
The Fund's investment objective is to provide as high a level of current
interest income as is consistent with liquidity and relative stability of
principal. The Fund intends to achieve its stated objective by investing in a
diversified portfolio of money market instruments of the highest quality,
including a broad range of U.S. dollar-denominated government, bank, and
commercial paper obligations.
The securities held by the Fund will have remaining maturities of 397 days
or less, although securities subject to repurchase agreements and certain other
securities may bear longer maturities. In addition, the portfolio's average
weighted maturity will not exceed 90 days.
Certain investment vehicles utilized by the Fund are subject to the
limitations discussed herein under "Investment Restrictions." The following
descriptions illustrate the types of instruments in which the Fund may invest:
GOVERNMENT OBLIGATIONS
The Fund may invest in obligations issued or guaranteed by the U.S.
Government or its agencies and instrumentalities. U.S. Treasury bills and notes
and obligations of certain agencies and instrumentalities of the U.S.
Government, such as the Government National Mortgage Association, are supported
by the full faith and credit of the United States; others, such as those of the
Export-Import Bank of the United States, are supported by the right of the
issuer to borrow from the Treasury; others, such as those of the Federal
National Mortgage Association, are supported by the discretionary authority of
the U.S. Treasury to purchase the agency's
5
<PAGE> 11
obligations; still others, such as those of the Student Loan Marketing
Association, are supported only by the credit of the agency or instrumentality.
No assurance can be given that the U.S. Government would provide financial
support to U.S. Government-sponsored instrumentalities if it is not obligated to
do so by law.
BANK OBLIGATIONS
The Fund may purchase the types of bank obligations listed below, provided
they are issued or guaranteed by domestic branches of U.S. commercial banks
having total assets at the time of purchase in excess of $1 billion. The Fund
may also make interest-bearing savings deposits in domestic commercial and
savings banks in amounts not in excess of 5% of the Fund's total assets.
1. CERTIFICATES OF DEPOSIT
Certificates of deposit are negotiable certificates representing a
commercial bank's obligation to repay funds deposited with it, earning specified
rates of interest over given periods. The Fund may invest in certificates of
deposit of banks which are members of the Federal Reserve System or the deposits
of which are insured by the Federal Deposit Insurance Corporation.
2. BANKERS' ACCEPTANCES
Bankers' acceptances are negotiable drafts or bills of exchange, normally
drawn by an importer or exporter to pay for specific merchandise, which are
"accepted" by a bank; meaning, in effect, that the bank unconditionally agrees
to pay the face value of the instrument upon maturity.
3. TIME DEPOSITS
Time deposits are non-negotiable deposits in a banking institution earning
a specified interest rate over a given period of time. Such deposits cannot be
withdrawn before the date specified at the time of deposit.
COMMERCIAL PAPER
The Fund may invest in commercial paper (short-term promissory notes issued
by corporations), including variable amount master demand notes (described
below), having been assigned short-term ratings at the time of purchase of
"Prime-1" by Moody's Investors Service, Inc. ("Moody's") and/or "A-1" or better
by Standard & Poor's Corporation ("S&P").
Pursuant to Securities and Exchange Commission ("SEC") regulations
applicable to money market funds, the Fund will only purchase securities that
have no short-term ratings at the time of purchase if they are determined to be
of comparable quality by Fairfield, pursuant to guidelines approved by
Navigator's Board, or if the issuer of such securities has comparable short-term
securities outstanding which are rated "Prime-1" by Moody's or "A-1" or better
by S&P. Any purchases by the Fund of unrated securities must be approved or
ratified by Navigator's Board. To the extent that the ratings accorded by
Moody's or S&P may change as a result of changes in their rating systems, the
Fund will attempt to use comparable ratings as standards for its investments, in
accordance with the investment policies contained herein. Where necessary to
ensure that an instrument meets, or is of comparable quality to, the Fund's
rating criteria, the Fund will require that the issuer's obligation to pay the
principal of, and the interest on, the instrument be backed by insurance or by
an unconditional bank letter or line of credit, guarantee, or commitment to
lend.
All obligations, including any underlying guarantees, must be deemed by
Fairfield to present minimal credit risks, pursuant to guidelines approved by
Navigator's Board. See the "Appendix" to the Statement of Additional Information
for a description of applicable ratings.
Variable amount master demand notes in which the Fund may invest are
unsecured demand notes that permit the indebtedness thereunder to vary and
provide for periodic adjustments in the interest rate according to the terms of
the instrument. The rate of interest on such notes is generally based upon the
interest rates for commercial paper issued by the master demand note issuer. The
rate will be adjusted automatically at periodic intervals which normally will
not exceed thirty-one days, but may extend longer. Because master demand notes
are direct lending arrangements between the Fund and the issuer, they are not
normally traded. Although there is no secondary market for the notes, the Fund
may demand payment of the principal of and accrued interest on the instrument at
any time. While the notes are not typically rated by credit rating agencies,
issuers of variable
6
<PAGE> 12
amount master demand notes (which are normally manufacturing, retail, financial,
and other business concerns) must satisfy the same criteria as set forth above
for issuers of commercial paper. Fairfield will consider the earning power, cash
flows, and other liquidity ratios of the issuers of such notes and will
continuously monitor their financial status to meet payment on demand. In
determining the Fund's average weighted portfolio maturity, a variable amount
master demand note will be deemed to have a maturity equal to the longer of the
periods remaining to the next interest rate adjustment or the demand notice
period.
REPURCHASE AGREEMENTS
The Fund may enter into repurchase agreements with respect to portfolio
securities. Under the terms of a repurchase agreement, the Fund purchases
securities ("collateral") from financial institutions such as banks and
broker-dealers ("seller") which are deemed to be creditworthy under guidelines
approved by the Fund's management, subject to the seller's agreement to
repurchase them at a mutually agreed-upon date and price. The repurchase price
generally equals the price paid by the Fund (plus interest) negotiated on the
basis of current short-term rates (which may be more or less than the rate on
the underlying portfolio securities). The seller under a repurchase agreement is
required to maintain the value of the collateral held pursuant to the agreement
at not less than 100% of the repurchase price, and securities subject to
repurchase agreements are held by the Fund's Custodian in the Federal Reserve's
book-entry system. Default by the seller would, however, expose the Fund to
possible loss because of adverse market action or delay in connection with the
disposition of the underlying securities. Repurchase agreements are considered
to be loans by the Fund under the Investment Company Act of 1940, as amended
(the "Investment Company Act").
REVERSE REPURCHASE AGREEMENTS
The Fund may borrow funds for temporary purposes by entering into reverse
repurchase agreements. Pursuant to such agreements, the Fund would sell
portfolio securities to financial institutions such as banks and broker-dealers,
and agree to repurchase them at a mutually agreed-upon date and price. The Fund
enters into reverse repurchase agreements only to avoid otherwise selling
securities during unfavorable market conditions to meet redemptions. At the time
the Fund enters into a reverse repurchase agreement, it places in a segregated
custodial account liquid assets such as U.S. Government securities or liquid
debt securities rated in the highest rating category and having a value equal to
the repurchase price (including accrued interest), and will subsequently monitor
the account to ensure that such equivalent value is maintained. Reverse
repurchase agreements involve the risk that the market value of the securities
sold by the Fund may decline below the price at which it is obligated to
repurchase the securities. Reverse repurchase agreements are considered to be
borrowings by the Fund under the Investment Company Act.
INVESTMENT RESTRICTIONS
Certain investment policies of the Fund may be changed at any time and from
time to time by Navigator's Board without shareholder approval, provided such
change is deemed to be consistent with the Fund's objective and in the best
interests of its shareholders. However, the Fund's investment objective, along
with the restrictions and certain limitations described herein and in the
Statement of Additional Information, are fundamental and may be changed only by
the affirmative vote of a majority of the outstanding Shares of the Fund. See
"Description of Shares."
THE FUND MAY NOT:
1. Purchase securities of any one issuer (other than obligations of
the U.S. Government, its agencies or instrumentalities) if, as a result
thereof, more than 5% of the value of the Fund's total assets would be
invested in such issuer, except that up to 25% of the value of its total
assets may be invested without regard to such 5% limitation. There is no
limit to the percentage of assets that may be invested in U.S. Treasury
bills and notes, or other obligations issued or guaranteed by the U.S.
Government or its agencies and instrumentalities.
As a result of the rules described herein under "Portfolio Valuation"
and in the Statement of Additional Information under "Net Asset Value," the
Fund will only exceed the foregoing 5% limitation (as to securities of a
single issuer) under limited circumstances for periods up to three business
days.
7
<PAGE> 13
2. Purchase any securities which would cause 25% or more of the value
of the Fund's total assets at the time of purchase to be invested in the
securities of one or more issuers conducting their principal business
activities in the same industry, provided that: (a) there is no limitation
with respect to obligations issued or guaranteed by the U.S. Government or
its agencies or instrumentalities, domestic bank certificates of deposit,
bankers' acceptances, and repurchase agreements secured by such
obligations; (b) wholly-owned finance companies will be considered to be in
the industries of their parents if their activities are primarily related
to financing the activities of their parents; and (c) utilities will be
divided according to their services -- for example, gas, gas transmission,
electric, electric and gas, and telephone will each be considered a
separate industry.
3. Make loans, except that the Fund may purchase or hold certain debt
instruments and enter into repurchase agreements, in accordance with its
policies and limitations.
4. Borrow money or issue senior securities, except that the Fund may
borrow from banks and enter into reverse repurchase agreements for
temporary purposes in amounts not to exceed 10% of the value of its total
assets at the time of such borrowing; or mortgage, pledge or hypothecate
any assets, except in connection with any such borrowing and in amounts not
in excess of the lesser of the dollar amounts borrowed or 10% of the value
of its total assets at the time of such borrowing. The Fund will not
purchase any securities while its borrowings (including reverse repurchase
agreements) are outstanding.
5. Knowingly invest more than 10% of its total assets in illiquid
securities, including time deposits with maturities longer than seven days,
and repurchase agreements providing for settlement more than seven days
after notice.
VALUATION OF SHARES
NET ASSET VALUE
The Fund's net asset value per Share for purposes of pricing purchase and
redemption orders is normally determined as of 4:00 P.M. (Eastern time) (the
"valuation time") on each business day of the Fund. A "business day" is a day on
which the New York Stock Exchange is open for trading, and any other day (other
than a day on which no Shares of the Fund are tendered for redemption and no
order to purchase any Shares is received) during which there is a sufficient
degree of trading in securities or instruments held by the Fund such that the
Fund's net asset value per Share might be materially affected. Net asset value
per Share is calculated by dividing the value of all of the Fund's portfolio
securities and other assets, less liabilities, by the number of outstanding
Shares of the Fund at the time of the valuation. The result (adjusted to the
nearest cent) is the net asset value per Share.
PORTFOLIO VALUATION
The assets in the Fund are valued based upon the amortized cost method,
pursuant to rules promulgated under the Investment Company Act. Under this
method of valuation, the portfolio value of the assets normally will not change
in response to fluctuating interest rates. In connection with its use of this
valuation method, however, the Fund monitors the deviation between the amortized
cost value of its assets and their market value (which can be expected to vary
inversely with changes in prevailing interest rates). Although the Fund seeks,
through its use of amortized cost valuation, to maintain its net asset value per
Share at $1.00, there can be no assurance that the net asset value will not
vary.
HOW TO PURCHASE AND REDEEM SHARES
DISTRIBUTOR
Shares in the Fund are sold on a continuous basis by Fairfield, as the
Fund's Distributor. The principal offices of Fairfield are located at 200
Gibraltar Road, Horsham, Pennsylvania 19044.
8
<PAGE> 14
PURCHASE OF SHARES
In addition to Institutions purchasing Shares directly from Fairfield,
Shares may be purchased through procedures established by Fairfield in
connection with the requirements of Customer Accounts of various Institutions.
Shares of the Fund sold to Institutions acting in a fiduciary, advisory,
custodial, or other similar capacity on behalf of persons maintaining Customer
Accounts at the Institutions will normally be held of record by the
Institutions. Since it will be primarily discretionary Customer Accounts at
Institutions that are invested in the Fund, references in this Prospectus to
shareholders of the Fund mean the Institutions rather than their Customers.
Institutions purchasing or holding Fund Shares on behalf of their Customers are
responsible for the transmission of purchase and redemption orders (and the
delivery of funds) to the Fund on a timely basis. Confirmations of such Share
purchases and redemptions will be sent to the Institutions. Beneficial ownership
of Fund Shares will be recorded by the Institutions and reflected in the regular
account statements provided by them to their Customers.
Shares of the Fund may be purchased on any business day of the Fund at the
net asset value per Share (see "Valuation of Shares") next determined after
receipt by the Distributor of an order to purchase Shares. An order to purchase
Shares will be deemed to have been received only when federal funds with respect
thereto are available to the Fund's Custodian for investment. Federal funds are
monies transferred from one bank to another through the Federal Reserve System.
Payment for an order to purchase Shares which is transmitted by federal funds
wire will be available that same day for investment by the Custodian, if
received prior to the valuation time on such day and in accordance with
Fairfield's established procedures. Payments transmitted by other means (such as
by check drawn on a member of the Federal Reserve System) will normally be
converted into federal funds within two banking days after receipt. An order
received before the valuation time on any business day will be executed on the
date of receipt at the net asset value determined on such date. An order
received after the valuation time on any business day will be executed on the
next business day of the Fund at the net asset value determined on such date.
The Fund strongly recommends that investors of substantial amounts use federal
funds to purchase Shares.
The minimum investment is $25,000 for the initial purchase of Fund Shares
by an Institution and $1.00 for each subsequent investment. However,
Institutions may set different minimums for their Customers' investments in
Accounts which hold Fund Shares.
No sales charge is imposed by the Fund in connection with the purchase of
its Shares. Depending upon the terms of a particular Customer Account, however,
Institutions may charge their Customers fees for automatic investment and other
cash management services provided in connection with investments in the Fund.
Information concerning these services and any applicable charges will be
provided by the Institutions. This Prospectus should be read by Customers in
connection with any such information received from the Institutions. Any such
fees, charges, or other requirements imposed by an Institution upon its
Customers will be in addition to the fees and requirements described in this
Prospectus.
The Fund reserves the right to reject any order for the purchase of its
Shares in whole or in part, or to waive any minimum investment requirements.
Every shareholder of record will receive a confirmation of each new Share
transaction with the Fund, which will also show the total number of Shares being
held in safekeeping by Fund/Plan Services, Inc. (the Fund's "Transfer Agent")
for the account of the shareholder. Shareholders may rely on these statements in
lieu of certificates. Certificates representing Shares of the Fund will not be
issued to the shareholder but, rather, shareholdings will be recorded on the
books of the Fund in non-certificate form and shareholders will be regularly
advised of their ownership position.
TELEPHONE TRANSACTIONS
The Fund and its Transfer Agent have established reasonable procedures to
confirm that instructions communicated by telephone are genuine. These
procedures require Institutions to provide certain identification information at
the time an account is opened, such as the names of Institution personnel
authorized to effect daily trades with the Fund, as well as specific
instructions as to the wiring of federal funds for redemptions.
9
<PAGE> 15
The Fund or its Transfer Agent may be liable for any losses due to
unauthorized or fraudulent telephone instructions if the Fund or its Transfer
Agent do not employ such procedures. However, neither the Fund nor its Transfer
Agent will be responsible for any loss, liability, cost or expense for following
instructions received by telephone that it reasonably believes to be genuine.
REDEMPTION OF SHARES
Shares are ordinarily redeemed by a shareholder via telephone, in
accordance with Fairfield's established procedures. Redemption payments to
shareholders closing their accounts will include any unpaid dividends and
distributions credited to the account as of the date of redemption.
However, with respect to Fund Shares held by Institutions on behalf of
their Customer Accounts, all or part of the Fund Shares beneficially owned by a
Customer must be redeemed in accordance with instructions and limitations
pertaining to his Account at the institution.
Shareholders may have their telephone redemption requests paid by a direct
wire to a domestic commercial bank account previously designated by the
shareholder on the Account Application Form, or by a check mailed to the name
and address in which the shareholder's account is registered with the Fund. Such
payments will normally be transmitted on the next business day following receipt
of a valid request for redemption. Telephone redemption requests may be made by
calling Fairfield at 1-800-441-3885.
PAYMENTS TO SHAREHOLDERS
Redemption orders are effected at the net asset value per Share next
determined after the Shares are properly tendered for redemption, as described
above. Except as stated in the following paragraph, payment to shareholders for
redeemed Shares will be made not later than seven business days after receipt by
the Fund's Distributor of the request for redemption, absent extraordinary
circumstances. However, to the largest extent possible, the Fund will attempt to
honor requests from shareholders for same-day payment, if such payment would be
consistent with the Fund's need for liquidity and stability.
Shareholders should note that payment for the redemption of Shares which
were purchased by check may not be made until the Fund can verify that the
payment for such purchase has been, or will be, collected, which may take up to
eight business days after the date of purchase. The Fund intends to pay cash for
all Shares redeemed, but under abnormal conditions which make payment in cash
unwise, the Fund may make payment wholly or partly in portfolio securities at
their then market value equal to the redemption price. In such cases, an
investor may incur brokerage costs in converting such securities to cash.
Because of the relatively high cost of handling small investments, the Fund
reserves the right to redeem, at net asset value, the Shares held by any
Institution whose account has a value of less than $25,000. Before the Fund
redeems such Shares and sends the proceeds to the shareholder, the shareholder
will be given notice that the value of the Shares in the account is less than
the minimum amount and will be allowed sixty days to make an additional
investment in an amount which will increase the value of the account to at least
$25,000. As stated previously, Institutions may establish different minimum
shareholding requirements for their Customers.
The Fund may redeem Shares involuntarily if it appears appropriate to do so
in light of the Fund's responsibilities under the Investment Company Act. See
the Statement of Additional Information ("Additional Purchase and Redemption
Information" and "Net Asset Value") for examples of when the Fund may
involuntarily redeem Shares, or suspend the right of redemption and refuse to
record the transfer of its Shares.
DIVIDENDS
The net investment income of the Fund is declared daily as a dividend to
its shareholders. Capital gain distributions, if any, will be made at least
annually. Shares begin earning dividends on the day on which the purchase order
for the Shares is executed and continue to earn dividends through, and
including, the day before the redemption order for the Shares is executed.
Dividends are distributable monthly on the first business day of each month in
the form of additional Shares of the Fund, or, if specifically requested (in
writing) by the shareholder from the Fund's Distributor prior to the
distribution date, in cash. Dividends are automatically paid in cash (along with
any redemption proceeds) not later than seven business days after a shareholder
closes an account with the Fund.
10
<PAGE> 16
TAXES
IN GENERAL
The following summary of federal income tax consequences is based on
current tax laws and regulations, which may be changed by legislative, judicial,
or administrative action.
No attempt has been made to present a detailed explanation of the federal,
state, or local income tax treatment of the Fund or its shareholders.
Accordingly, shareholders are urged to consult their tax advisers regarding
specific questions as to their own federal, state, and local income tax
situations.
TAX STATUS OF THE FUND
1. INTERNAL REVENUE CODE
The Fund intends to qualify for the favorable tax treatment afforded a
"regulated investment company" under the Internal Revenue Code of 1986, as
amended (the "Code"). This generally requires, among other things, that the Fund
distribute to its shareholders at least 90% of its net investment income.
Provided it meets this 90% distribution requirement, as well as other
requirements discussed in detail in the Statement of Additional Information, the
Fund will be relieved of federal income tax on that part of its net investment
income and on any net capital gain (the excess of net long-term capital gain
over net short-term capital loss) distributed to shareholders.
The Fund anticipates declaring as dividends 100% of its net investment
income. The Fund does not expect to realize any net long-term capital gain and,
therefore, does not foresee paying any "capital gain dividends," as described in
the Code.
Dividends declared by the Fund in October, November, or December of any
year and payable to shareholders of record on a date in that month will be
deemed to have been paid by the Fund and received by the shareholders on
December 31 of that year, if paid by the Fund during the following January.
2. FEDERAL EXCISE TAX
The Fund intends to make sufficient distributions each calendar year to
avoid liability for the federal excise tax. See the Statement of Additional
Information for further discussion regarding this tax.
TAX STATUS OF THE FUND'S DISTRIBUTIONS
Corporate investors should note that dividends from the Fund's net
investment income will generally not qualify for the dividends-received
deduction for corporations.
Whether paid in cash or in the form of additional, reinvested Shares, any
dividends from the Fund's investment company taxable income would be taxable to
shareholders as ordinary income to the extent of a shareholder's ratable share
of the Fund's earnings and profits as determined for tax purposes. Likewise, any
capital gain distributions would also be taxable and would be treated as a
long-term capital gain regardless of how long a shareholder has held Fund
Shares.
However, in the opinion of counsel, the Fund's Shares are exempt from
current Pennsylvania Personal Property Taxes.
In addition, the sale or redemption of shares of a mutual fund is a taxable
event to the selling or redeeming shareholder. Gains or losses (if any) may be
realized from an ordinary redemption of Shares, as described herein.
Shareholders will be advised at least annually as to the federal income tax
consequences of distributions made during the year. See the Statement of
Additional Information for further information regarding taxes.
11
<PAGE> 17
MANAGEMENT OF THE FUND
DIRECTORS AND OFFICERS
The business and affairs of the Fund are managed under the direction of
Navigator's Board of Directors. The current Directors and Executive Officers of
the Navigator Group of Funds, their addresses, principal occupations during the
past five years, and other affiliations are as follows:
<TABLE>
<CAPTION>
NAME AND ADDRESS POSITION WITH COMPANY PRINCIPAL OCCUPATIONS DURING PAST 5 YEARS
<S> <C> <C>
---------------- --------------------- -----------------------------------------
Robert J. Walker, Jr * Chairman, President, President, Chief Executive Officer,
200 Gibraltar Road and Director Secretary, and a Director of Fairfield from
Horsham, PA 19044 1995 to present; Senior Vice President,
Fidelity Investments Institutional Services
Co., 1991 to 1995; Senior Vice President,
SEI Corporation, 1987 to 1990.
Philip D. Croll Director Retired; Senior Staff Analyst and Trust
Pine Run Community Officer with Glenmede Trust Co., from 1973
1 Dogwood Cluster to 1979; Manager, Public Affairs for Sun
Doylestown, PA 18901 Company, prior to 1973.
Richard G. Gilmore Director Independent Consultant; Director of CSS
5534 Chanteclaire Industries, Inc.; Director, Philadelphia
Sarasota, FL 34235-0946 Electric Company; Director, Legg Mason
Tax-Exempt Trust, Inc., Legg Mason Value
Trust, Inc., Legg Mason Special Investment
Trust, Inc., Legg Mason Global Trust, Inc.,
Legg Mason Investors Trust, Inc. and Legg
Mason Income Trust, Inc.; Trustee, Legg
Mason Tax-Free Income Fund; Senior Vice
President and Chief Financial Officer,
Philadelphia Electric Company, 1986 to
1991.
Robert E. Keith Director Chief Operating Officer, Technology
800 Safeguard Building Leaders, 1989 to present; Managing
435 Devon Park Drive Director, Radnor Venture Partners, 1989 to
Wayne, PA 19087 present; Director, Wave Technologies
International Inc.; Director, Technology
Partners; Director, Gandolf Technologies
Inc.
Jan J. Wieckowski Director Retired; Part-time consultant to financial
504 Meadowbrook Circle institutions; Executive Vice President of
St. Davids, PA 19087 Mellon Bank East, from 1983 to 1986;
Executive Vice President of Girard Bank,
prior to 1983.
James R. Lesher Vice President, Vice President of Fairfield, since 1994
200 Gibraltar Road Treasurer and Asst. (Controller from 1991 to 1994); Assistant
Horsham, PA 19044 Secretary Vice President of Fidelity Mutual Life
Insurance Company, from 1974 to 1991.
James W. Jennings Secretary Partner with the law firm of Morgan, Lewis
2000 One Logan Square & Bockius, since 1970.
Philadelphia, PA 19103
</TABLE>
------------------------
* Mr. Walker, as a Director and Executive Officer of the Manager, is an
"interested person" of the Company, within the meaning of Section 2(a)(19) of
the Investment Company Act.
THE MANAGER
As Manager, Fairfield, a wholly-owned subsidiary of Legg Mason, Inc. serves
as the Fund's Investment Adviser, Administrator, and Distributor. Fairfield is a
broker-dealer registered with the Securities and Exchange Commission, and is a
member of the National Association of Securities Dealers, Inc. Fairfield also
provides investment and related financial services to institutional clients.
Fairfield's business address is 200 Gibraltar Road, Horsham, Pennsylvania 19044.
12
<PAGE> 18
The management services performed by and the fees payable to Fairfield are
described below.
1. INVESTMENT ADVISORY SERVICES
Investment Advisory services are provided to the Fund by Fairfield, as
Manager, pursuant to a Management Agreement dated April 17, 1993, between the
Fund and Fairfield Group (the "Management Agreement").
As Investment Adviser, Fairfield manages the Fund's investment portfolio,
makes decisions with respect to and places orders for all purchases and sales of
the Fund's portfolio securities, and maintains the Fund's records relating to
such purchases and sales. Fairfield pays all expenses incurred by it in
connection with its investment advisory activities, other than the cost of
securities (including any brokerage commissions) purchased for the Fund and the
cost of obtaining market quotations for portfolio securities held by the Fund.
Fairfield also currently provides investment advisory and administrative
services to Navigator Tax-Free Money Market Fund, Inc.
For the investment advisory services provided and expenses assumed pursuant
to the Management Agreement, Fairfield is entitled to receive a fee from the
Fund, computed daily and paid monthly, at the annual rate of .20% on the first
$500 million of the average net assets of the Fund; .15% on the next $1 billion;
and .10% thereafter. Fairfield may, from time to time and at its discretion,
voluntarily waive all or a portion of its investment advisory fees in order to
assist the Fund in maintaining a competitive expense ratio.
For the fiscal year ended May 31, 1995, Fairfield was paid investment
advisory fees totalling $154,833, after voluntary fee waivers of $402,425.
Absent such waivers, the investment advisory fees payable by the Fund for such
year would have been $557,258.
During the fiscal years ended May 31, 1993 and 1994, Fairfield was paid
investment advisory fees (after voluntary fee waivers) of $200,820 and $185,158,
respectively. Absent any waivers, the investment advisory fees payable by the
Fund for such years would have been $804,582 and $740,336, respectively.
Richard A. Myers, in his capacity as Fund Manager with Fairfield, is
primarily responsible for managing the Fund's investment portfolio. Mr. Myers is
a graduate of Bloomsburg State College and has nineteen years of experience in
banking and money management. Prior to joining Fairfield in 1994, he was
responsible for three money market mutual funds with the Provident Institutional
Management Corporation.
2. ADMINISTRATIVE SERVICES
Fairfield also acts as the Fund's Administrator pursuant to the Management
Agreement.
As Administrator, Fairfield generally assists in the Fund's administration
and operations. See "Investment Adviser, Administrator, and Distributor" in the
Statement of Additional Information for a list of Fairfield's specific
administrative services. For the administrative services it performs pursuant to
the Management Agreement, Fairfield is entitled to receive a fee from the Fund,
computed daily and paid monthly, at the annual rate of .10% on the first $1.5
billion of the average net assets of the Fund and .05% thereafter.
For the fiscal year ended May 31, 1995, Fairfield was paid administrative
fees totalling $278,512.
As of the date of this Prospectus, Fairfield was not waiving any of its
administrative fees from the Fund, but may in the future waive all or a portion
of its administrative fees in order to assist the Fund in maintaining a
competitive expense ratio.
In connection with transactions relating to repurchase agreement activity,
the Fund may also utilize the services of Fairfield for a fee not to exceed 1%
of the purchase or sale price of the transaction. During the fiscal year ended
May 31, 1995, the Fund paid fees totalling $24,211 to Fairfield with respect to
such transactions.
EXPENSES
The Fund's expenses are accrued daily and are deducted from total income
before dividends are paid. Except as noted herein and in the Statement of
Additional Information, the Fund's service contractors bear all expenses
incurred in connection with the performance of their services on behalf of the
Fund. Similarly, the Fund bears the expenses incurred in its operations.
13
<PAGE> 19
DESCRIPTION OF SHARES
The Company has currently authorized 2 billion shares of Common Stock at
$.001 par value per share and may in the future reclassify any authorized but
unissued shares into one or more additional "Portfolios," or into one or more
series of shares within a Portfolio. The Company presently offers only Shares of
Class "A" Common Stock, which represent interests in the Fund.
THIS PROSPECTUS AND THE STATEMENT OF ADDITIONAL INFORMATION INCORPORATED
HEREIN RELATE PRIMARILY TO THE FUND AND DESCRIBE ONLY THE INVESTMENT OBJECTIVE
AND POLICIES, OPERATIONS, CONTRACTS, AND OTHER MATTERS RELATING TO THE FUND.
INVESTORS WISHING TO OBTAIN SIMILAR INFORMATION REGARDING NAVIGATOR TAX-FREE
MONEY MARKET FUND, INC. MAY OBTAIN A SEPARATE PROSPECTUS DESCRIBING THAT FUND BY
CONTACTING FAIRFIELD AT 1-800-441-3885.
Each Fund Share represents an equal proportionate interest in the Fund with
each other Share, and is entitled to such dividends and distributions out of the
income earned on the assets belonging to the Fund as are declared in the
discretion of Navigator's Board. Shareholders of the Fund are entitled to one
vote for each full Share held, and fractional votes for fractional Shares held.
Voting rights are not cumulative and, accordingly, the holders of more than 50%
of the aggregate number of Shares of the Fund may elect all of the Directors if
they choose to do so and, in such event, the holders of the remaining Shares
would not be able to elect any person or persons to Navigator's Board. Customers
of Institutions should refer to their agreements with their institution for
information regarding procedures for voting their Shares.
As used in this Prospectus, a "vote of a majority of the outstanding
Shares" of the Fund means the affirmative vote of the lesser of (a) more than
50% of the outstanding Shares of the Fund, or (b) at least 67% of the Shares of
the Fund present at a meeting at which the holders of more than 50% of the
outstanding Shares of the Fund are represented in person or by proxy.
GENERAL INFORMATION
In accordance with the Maryland General Corporation Law, the Fund is not
required to hold annual meetings of shareholders unless the Investment Company
Act requires the shareholders to elect members of the Board of Directors.
However, a meeting of shareholders may be called for any purpose upon the
written request of the holders of at least 10% of the outstanding Shares of the
Fund.
As used in this Prospectus, "assets belonging to the Fund" means the
consideration received by the Company upon the issuance or sale of Shares in the
Fund, together with all income, earnings, profits and proceeds derived from the
investment thereof, including any proceeds from the sale, exchange or
liquidation of such investments, and any funds or payments derived from any
reinvestment of such proceeds, and a portion of any general assets of the
Company not belonging to the Fund or any future additional Portfolios of the
Company. Assets belonging to the Fund are charged with the direct liabilities in
respect of the Fund and with a share of the general liabilities of the Company
allocated in proportion to the relative asset value of the Fund (and any future
additional Portfolios) at the time the expense or liability is incurred. The
management of the Company makes determinations with respect to the Fund as to
liabilities when they are incurred and as to assets when they are acquired. Such
determinations are reviewed and approved annually by Navigator's Board and are
conclusive.
14
<PAGE> 20
<TABLE>
<S> <C> <C>
-----------------------------------------------------------------------------------------------
NAVIGATOR MONEY MARKET FUND, INC.
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INVESTMENT ADVISER,
INFORMATION OR TO MAKE ANY REPRESENTATIONS ADMINISTRATOR,
NOT CONTAINED IN THIS PROSPECTUS, OR THE AND DISTRIBUTOR
FUND'S STATEMENT OF ADDITIONAL INFORMATION Fairfield Group, Inc.
INCORPORATED HEREIN BY REFERENCE, IN Horsham, PA 19044
CONNECTION WITH THE OFFERING MADE BY THIS
PROSPECTUS AND, IF GIVEN OR MADE, SUCH LEGAL COUNSEL
INFORMATION OR REPRESENTATIONS MUST NOT BE Morgan, Lewis & Bockius
RELIED UPON AS HAVING BEEN AUTHORIZED BY Philadelphia, PA 19103
THE FUND OR ITS DISTRIBUTOR. THIS
PROSPECTUS DOES NOT CONSTITUTE AN OFFERING AUDITORS
BY THE FUND OR BY THE DISTRIBUTOR IN ANY Ernst & Young LLP
JURISDICTION IN WHICH SUCH OFFERING MAY Philadelphia, PA 19103
NOT LAWFULLY BE MADE.
PROSPECTUS DATED AUGUST 18, 1995.
-----------------------------------------------------------------------------------------------
</TABLE>
<PAGE> 21
[NAVIGATOR MONEY MARKET FUND LOGO]
200 Gibraltar Road
Horsham, PA 19044
1-800-441-3885
<PAGE> 22
NAVIGATOR MONEY MARKET FUND, INC.
(PRIME OBLIGATIONS PORTFOLIO)
- STATEMENT OF ADDITIONAL INFORMATION -
AUGUST 18, 1995
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
The Company............................................................. B-2
Additional Investment Restrictions and Limitations...................... B-2
Additional Purchase and Redemption Information.......................... B-4
Net Asset Value......................................................... B-5
Dividends............................................................... B-6
Yield................................................................... B-6
Additional Information Concerning Taxes................................. B-7
Description of Shares................................................... B-9
Directors and Officers.................................................. B-10
Principal Holders of Securities......................................... B-11
Investment Adviser, Administrator, and Distributor...................... B-12
Portfolio Transactions.................................................. B-14
Custodian and Transfer Agent............................................ B-15
Expenses................................................................ B-16
Financial Statements and Independent Auditors........................... B-17
Legal Counsel........................................................... B-17
Miscellaneous........................................................... B-17
Appendix................................................................ B-18
</TABLE>
This Statement of Additional Information is meant to be read in
conjunction with the Prospectus for Navigator Money Market Fund--Prime
Obligations Portfolio (the "Fund") offered by Navigator Money Market Fund, Inc.
(the "Company"), dated August 18, 1995, and is incorporated by reference in its
entirety into that Prospectus. Because this Statement of Additional
Information is not itself a prospectus, no investment in Shares of the Fund
should be made solely upon the information contained herein. Copies of the
Prospectus for the Fund may be obtained by writing the Fund at 200 Gibraltar
Road, Horsham, Pennsylvania 19044, or by telephoning 1-800-441-3885.
Capitalized terms used but not defined herein have the same meanings as in the
Prospectus.
B-1
<PAGE> 23
THE COMPANY
The Company was originally organized as a Pennsylvania business trust
under a Declaration of Trust dated May 16, 1985, and the Fund commenced
operations on July 22, 1985. The Company was subsequently reorganized as a
Maryland corporation on December 9, 1986, such reorganization having been
effected in order to enable the Fund to take advantage of certain state tax
benefits accruing therefrom. The Company's Articles of Incorporation permit
the Company's Board of Directors ("Navigator's Board") to offer additional,
separate classes of shares of Common Stock ("Portfolios") in the future.
However, the Company currently offers only Shares of the Fund, a money market
portfolio.
Shares of the Fund are sold by Fairfield only to Institutions for
investment of their own funds or funds for which they act in a fiduciary,
agency or custodial capacity. As Manager, Fairfield performs investment
advisory, administrative, and distribution services to the Fund.
THIS STATEMENT OF ADDITIONAL INFORMATION AND THE FUND'S PROSPECTUS
RELATE PRIMARILY TO THE FUND AND DESCRIBE ONLY THE INVESTMENT OBJECTIVE AND
POLICIES, OPERATIONS, CONTRACTS, AND OTHER MATTERS RELATING TO THE FUND.
INVESTORS WISHING TO OBTAIN SIMILAR INFORMATION REGARDING NAVIGATOR TAX-FREE
MONEY MARKET FUND, INC. MAY OBTAIN A SEPARATE PROSPECTUS DESCRIBING THAT FUND
BY CONTACTING FAIRFIELD AT 1-800-441-3885.
ADDITIONAL INVESTMENT RESTRICTIONS AND LIMITATIONS
IN GENERAL
The following policies supplement the Fund's investment objective and
policies as set forth in the Prospectus.
FUNDAMENTAL INVESTMENT RESTRICTIONS
The Fund's Prospectus lists certain investment restrictions that may
be changed only by a vote of a majority of the outstanding Shares of the Fund,
as defined in the Prospectus. The additional investment restrictions listed
below supplement those contained in the Prospectus and may be changed only by
such a shareholder vote.
B-2
<PAGE> 24
THE FUND MAY NOT:
1. Purchase securities on margin, sell securities short, or
participate on a joint or joint and several basis in any securities
trading account.
2. Purchase or sell commodities, commodity contracts
(including futures contracts), oil, gas or mineral exploration or
development programs, or real estate (although investments in
marketable securities of companies engaged in such activities are not
hereby precluded).
3. Purchase securities of other investment companies, except
as they may be acquired as part of a merger, consolidation,
reorganization, acquisition of assets, or where otherwise permitted by
the Investment Company Act of 1940.
4. Write or purchase options, including puts, calls,
straddles, spreads, or any combination thereof.
5. Buy common stocks or voting securities, or state,
municipal or industrial revenue bonds.
6. Invest in any issuer for purposes of exercising control or
management.
7. Purchase securities with legal or contractual restrictions.
8. Purchase or retain securities of any issuer, if the
Officers or Directors of the Company or its Manager owning
beneficially more than one-half of 1% of the securities of such issuer
together own beneficially more than 5% of such securities.
9. Invest more than 10% of its total assets in the securities
of issuers which together with any predecessors have a record of less
than three years' continuous operation.
10. Underwrite the securities of other issuers, except to the
extent that the purchase of debt obligations directly from an issuer
thereof, in accordance with the Fund's investment objective, policies
and restrictions, may be deemed to be an underwriting.
The foregoing percentages will apply at the time of the purchase of a
security and shall not be considered violated unless an excess or deficiency
occurs or exists immediately after and as a result of a purchase of such
security.
B-3
<PAGE> 25
NON-FUNDAMENTAL INVESTMENT LIMITATIONS
The following are non-fundamental investment limitations that may be
changed by a majority of Navigator's Board.
1. With regard to Restriction #2 above, the Fund has a
non-fundamental investment limitation which precludes investments in
oil, gas, or other mineral leases; as well as investments in real
estate limited partnerships, except for readily marketable interests
in real estate investment trusts.
2. Notwithstanding the language in Restriction #9 above, the
Fund currently has no intention of investing more than 5% of its total
assets in the securities of issuers which together with any
predecessors have a record of less than three years continuous
operation.
ADDITIONAL PURCHASE AND REDEMPTION INFORMATION
The various types of Customer Accounts, in addition to qualified
Individual Retirement and Keogh Plan Accounts, maintained by Institutions which
may be used to purchase Fund Shares include: trust accounts; managed agency
accounts; custodial accounts; and various other depository accounts.
Information on the types of Customer Accounts which may be used should be
obtained from the Institutions to which the Fund is marketed. Investors
purchasing Fund Shares may include officers, directors, or employees of a
particular Institution.
The Fund may suspend the right of redemption or postpone the date of
payment for Shares during any period when: (a) trading on the New York Stock
Exchange (the "Exchange") is restricted by applicable rules and regulations of
the Securities and Exchange Commission; (b) the Exchange is closed for other
than customary weekend and holiday closings; (c) the Securities and Exchange
Commission has by order permitted such suspension; or (d) an emergency exists
as determined by the Securities and Exchange Commission. Upon the occurrence
of any of the foregoing conditions, the Fund may also suspend or postpone the
recordation of the transfer of its Shares.
In addition, the Fund may compel the redemption of, reject any order
for, or refuse to give effect on the Fund's books to the transfer of, its
Shares in an effort to prevent personal holding company status within the
meaning of the Internal Revenue Code of 1986, as amended (the "Code"). The
Fund may also redeem Shares involuntarily or make payment for redemption in
portfolio securities if it otherwise appears appropriate to do so in light of
the Fund's responsibilities under the Investment Company Act of 1940, as
amended (the "Investment Company Act"). See "Net Asset Value."
B-4
<PAGE> 26
NET ASSET VALUE
RULE 2A-7
The Fund has elected to use the amortized cost method of valuation
pursuant to Rule 2a-7 under the Investment Company Act. This involves valuing
an instrument at its cost initially 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. This
method may result in periods during which value, as determined by amortized
cost, is higher or lower than the price the Fund would receive if it sold the
instrument. The value of securities held by the Fund can be expected to vary
inversely with changes in prevailing interest rates.
Pursuant to Rule 2a-7, as amended, the Fund will maintain a
dollar-weighted average portfolio maturity appropriate to its objective of
maintaining a stable net asset value per Share, provided that the Fund will
neither purchase any security with a remaining maturity of more than 397 days
(securities subject to repurchase agreements and certain other securities may
bear longer maturities) nor maintain a dollar-weighted average portfolio
maturity which exceeds 90 days.
In addition, the Fund may acquire only U.S. dollar-denominated
obligations that present minimal credit risks and that are "First Tier
Securities" at the time of investment. First Tier Securities are those that
are rated in the highest rating category by at least two nationally recognized
security rating organizations ("NRSROs") or by one if it is the only NRSRO
rating such obligation or, if unrated, determined to be of comparable quality.
A security is deemed to be rated if the issuer has any security outstanding of
comparable priority and security which has received a short-term rating by an
NRSRO. Fairfield will determine that an obligation presents minimal credit
risks or that unrated investments are of comparable quality, in accordance with
guidelines established by Navigator's Board. Navigator's Board must approve or
ratify the purchase of any unrated obligations or obligations rated by only one
NRSRO.
Navigator's Board has also undertaken to establish procedures
reasonably designed, taking into account current market conditions and the
Fund's investment objective, to stabilize the Fund's net asset value per Share
for purposes of sales and redemptions at $1.00. These procedures include
review by such Board, at such intervals as it deems appropriate, to determine
the extent, if any, to which the Fund's net asset value per Share calculated by
using available market quotations deviates from $1.00 per Share.
B-5
<PAGE> 27
In the event such deviation exceeds one-half of one percent, the Rule
requires that Navigator's Board promptly consider what action, if any, should
be initiated. If the Board believes that the extent of any deviation from the
Fund's $1.00 amortized cost price per Share may result in material dilution or
other unfair results to new or existing investors, it will take such steps as
it considers appropriate to eliminate or reduce to the extent reasonably
practicable any such dilution or unfair results. These steps may include:
selling portfolio instruments prior to maturity; shortening the average
portfolio maturity; withholding or reducing dividends; or redeeming Shares in
kind.
DIVIDENDS
The policy of the Fund is to generally declare its net investment
income on a daily basis and to make distributions to shareholders in the form
of monthly dividends.
Net income for dividend purposes includes (i) interest and dividends
accrued and discount earned on the Fund's assets (including both original issue
and market discount), less (ii) amortization of any premium on such assets, and
accrued expenses. Capital gains dividends (if any) would be calculated
separately and distributed to shareholders on an annual basis.
YIELD
SEVEN-DAY YIELD
The Fund's standardized 7-day yield is computed by determining the net
change, exclusive of capital changes, in the value of a hypothetical
pre-existing account in the Fund having a balance of one Share at the beginning
of the period, dividing the net change in account value by the value of the
account at the beginning of the base period to obtain the base period return,
and multiplying the base period return by 365/7. The net change in the value
of an account in the Fund includes the value of additional Shares purchased
with dividends from the original Share and any such additional Shares, and all
fees, other than non-recurring account or sales charges, that are charged to
all shareholder accounts in proportion to the length of the base period and the
Fund's average account size. The capital changes to be excluded from the
calculation of the net change in account value are realized gains and losses
from the sale of securities and unrealized appreciation and depreciation. The
Fund's effective annualized yield is computed by compounding the unannualized
base period return (calculated as above) by adding 1 to the base period return,
raising the sum to a power equal to 365 divided by 7, and subtracting 1 from
the result.
B-6
<PAGE> 28
ADDITIONAL INFORMATION CONCERNING TAXES
IN GENERAL
The following discussion of federal income tax consequences is based
on the Internal Revenue Code of 1986, as amended (the "Code") and the
regulations issued thereunder as in effect on the date of this Statement of
Additional Information. New legislation, as well as administrative changes or
court decisions, may significantly change the conclusions expressed herein, and
may have a retroactive effect with respect to the transactions contemplated
herein.
TAX STATUS OF THE FUND
1. INTERNAL REVENUE CODE
The Fund intends to qualify and elect to be treated for each taxable
year as a "regulated investment company" ("RIC") under Subchapter M of the
Code. Accordingly, the Fund must, among other things: (a) derive at least 90%
of its gross income each taxable year from dividends, interest, payments with
respect to securities loans, gains from the sale or other disposition of stock,
securities or foreign currencies, and certain other related income, generally
including gains from options, futures and forward contracts; (b) derive less
than 30% of its gross income each taxable year from the sale or other
disposition of the following items if held less than three months -- (A) stock
or securities, (B) options, futures or forward contracts (other than options,
futures or forward contracts on foreign currencies), and (C) foreign currencies
(or options, futures or forward contracts on foreign currencies), that are not
directly related to the Fund's principal business of investing in stocks or
securities (or options or forward contracts with respect to stock or
securities); and (c) diversify its holdings so that at the end of each fiscal
quarter of the Fund's taxable year, (i) at least 50% of the market value of the
Fund's total assets is represented by cash and cash items, United States
Government securities, securities of other RICs, and other securities, with
such other securities limited in respect to any one issuer, to an amount not
greater than 5% of the value of the Fund's total assets and not greater than
10% of the outstanding voting securities of such issuer, and (ii) not more than
25% of the value of its total assets is invested in the securities (other than
United States Government securities or securities of other RICs) of any one
issuer or two or more issuers which the Fund controls and which are engaged in
the same, similar, or related trades or businesses.
In addition to the requirements described above, in order to qualify
as a RIC, the Fund must distribute at least 90% of its net investment income
(which generally includes dividends, taxable interest, and net short-term
capital gains less operating expenses) to shareholders. If the Fund meets all
of the RIC requirements, it will not be subject to federal income tax on any of
its net investment income or capital gains that it distributes to shareholders.
B-7
<PAGE> 29
2. FEDERAL EXCISE TAX
A non-deductible, 4% federal excise tax will be imposed on any
"regulated investment company" to the extent that it does not distribute to
investors in each calendar year an amount equal to (i) 98% of its calendar year
ordinary income, (ii) 98% of its capital gain net income (the excess of short-
and long-term capital gains over short- and long-term capital losses) for the
one-year period ending October 31, and (iii) 100% of any undistributed ordinary
income or capital gain net income from the prior year.
As discussed herein, the Fund intends to declare and pay dividends
and any capital gain distributions so as to avoid imposition of the federal
excise tax.
TAX STATUS OF THE FUND'S DISTRIBUTIONS
Although the Fund does not expect to realize any net capital gain (the
excess of net long-term capital gain over net short-term capital loss), such
gain, if any, will be distributed at least annually. The Fund will have no tax
liability with respect to such distributions and they will be taxable to Fund
shareholders as a long-term capital gain, regardless of how long a shareholder
has held Fund Shares. Such distributions will be designated as "capital gain
dividends" in a written notice mailed by the Fund to shareholders not later
than sixty days after the close of the Fund's taxable year.
While the Fund expects to qualify as a "regulated investment company"
and be relieved of all or substantially all federal income taxes, depending
upon the extent of its activities in states and localities in which its offices
are maintained, in which its agents or independent contractors are located, or
in which it is otherwise deemed to be conducting business, the Fund may be
subject to the tax laws of such states or localities.
If for any taxable year the Fund does not qualify for the special tax
treatment afforded to "regulated investment companies," all of the Fund's
taxable income will be subject to federal income tax at regular corporate rates
(without any deduction for distributions to Fund shareholders), and all of the
Fund's distributions will be taxable to shareholders as ordinary income. Such
dividend distributions would then be eligible for the dividends-received
deduction for corporate shareholders.
B-8
<PAGE> 30
DESCRIPTION OF SHARES
IN GENERAL
The Company's Articles of Incorporation authorize Navigator's Board to
issue up to 2 billion full and fractional shares of Common Stock. The Company
presently offers one class of Common Stock, as defined in the Prospectus.
Navigator's Board may classify or reclassify any authorized but
unissued shares of the Company into one or more additional Portfolios, or
series of shares within a Portfolio.
Shares have no subscription or pre-emptive rights and only such
conversion or exchange rights as Navigator's Board may grant in its discretion.
When issued for payment as described in the Fund's Prospectus and this
Statement of Additional Information, the Fund's Shares will be fully paid and
non-assessable. In the event of a liquidation or dissolution of the Company,
Shares of the Fund are entitled to receive the assets available for
distribution belonging to the Fund, and a proportionate distribution, based
upon the relative asset values of the Fund and any future additional
Portfolios, of any general assets not belonging to any particular Portfolio
which are available for distribution.
RULE 18F-2
Rule 18f-2 under the Investment Company Act provides that any matter
required to be submitted to the holders of the outstanding voting securities of
an investment company such as the Company shall not be deemed to have been
effectively acted upon unless approved by the holders of a majority of the
outstanding shares of each Portfolio affected by the matter. A Portfolio is
affected by a matter unless it is clear that the interests of each Portfolio in
the matter are identical or that the matter does not affect any interest of the
Portfolio. Under Rule 18f-2, the approval of an investment advisory agreement
or any change in a fundamental investment policy would be effectively acted
upon with respect to a Portfolio only if approved by a majority of the
outstanding shares of such Portfolio. However, Rule 18f-2 also provides that
the ratification of independent auditors, the approval of principal
underwriting contracts, and the election of Directors may be effectively acted
upon by shareholders of the Company voting together without regard to class.
Notwithstanding any provision of Maryland law requiring a greater vote
of the Company's shares (or of any class voting as a class) in connection with
any corporate action, unless otherwise provided by law (for example, by Rule
18f-2) or by the Company's Articles of Incorporation, the Company may take or
authorize such action upon the favorable vote of the holders of more than 50%
of the outstanding Common Stock of the Fund and any future additional
Portfolios (voting together without regard to class).
B-9
<PAGE> 31
DIRECTORS AND OFFICERS
The Fund's Prospectus contains the names and general background
information concerning the Directors and Executive Officers of Navigator's
Board. The "non-interested" Directors receive fees and expenses for each
meeting of Navigator's Board attended, and an annual retainer. During the
fiscal year ended May 31, 1995, the Company paid a total of $13,278 on behalf of
the Fund to the Navigator Directors. No officer or employee of Fairfield
receives any compensation from the Company for acting as a Director of the
Company (although they are reimbursed for expenses incurred in connection with
their attendance at Board meetings), and the Officers of the Company receive no
compensation from the Company for performing the duties of their offices.
Fairfield, of which Mr. Walker is an officer, receives fees from the Company
for acting as Manager. Morgan, Lewis & Bockius, of which Mr. Jennings is a
partner, receives legal fees as counsel to the Company and as counsel to the
Manager. The Directors and Officers of the Company as a group own less than 1%
of the outstanding Shares of the Fund. All of the Company's Directors and
Officers hold like positions with Navigator Tax-Free Money Market Fund, Inc.
B-10
<PAGE> 32
PRINCIPAL HOLDERS OF SECURITIES
The Fund believes that as of August 1, 1995, the following nominee
accounts may have been beneficial owners of 5% or more of the outstanding
Shares of the Fund because they possessed voting or investment power with
respect to such Shares:
<TABLE>
<CAPTION>
AMOUNT OF PERCENT OF TOTAL
NAME AND ADDRESS BENEFICIAL OWNERSHIP SHARES OUTSTANDING
---------------- -------------------- ------------------
<S> <C> <C>
First National Bank of Newtown
40 South State Street
Newtown, PA 18940.......................... 11,566,916................ 5.47%
BRT Co.
c/o Associated Bank-Lakeshore
1000 Franklin Street
Manitowoc, WI 54220........................ 18,401,657................ 8.71%
Jobatru
c/o BT Management Trust Company
532 - 534 Main Street
BT Financial Plaza
Johnstown, PA 15907........................ 18,610,947................ 8.81%
ACO
c/o Integra Trust Services
P.O. Box 837
Pittsburgh, PA 15278....................... 40,403,915............... 19.12%
Fetter & Co.
c/o CoreStates Bank, N.A.
530 Walnut Street
Philadelphia, PA 19105..................... 58,697,613............... 27.78%
</TABLE>
B-11
<PAGE> 33
INVESTMENT ADVISER, ADMINISTRATOR, AND DISTRIBUTOR
THE MANAGEMENT AGREEMENT
Investment advisory and administrative services are provided by
Fairfield, as Manager, pursuant to the "Management Agreement" discussed in the
Prospectus. Fairfield, a wholly-owned subsidiary of Legg Mason, is a
broker-dealer registered with the Securities and Exchange Commission, and is a
member of the National Association of Securities Dealers, Inc. Fairfield also
provides investment and related financial services to institutional clients.
The investment advisory services performed by and the investment
advisory fees payable to Fairfield are described in the Fund's Prospectus.
In addition to serving as Investment Adviser under the Management
Agreement, Fairfield also provides administrative services to the Fund. As
Administrator, Fairfield has agreed to (i) monitor the computation by the
Fund's Transfer Agent of the net asset value per Share, (ii) maintain office
facilities for the Fund, (iii) maintain certain financial accounts and records,
(iv) furnish the Fund statistical and research data, data processing, clerical,
accounting and bookkeeping services, and (v) furnish certain other services
required by the Fund. Fairfield prepares annual and other reports to the
Securities and Exchange Commission, compiles data for and arranges for the
preparation of federal and state tax returns and filings with state securities
commissions, and generally assists in the Fund's operations. The
administrative fees payable to the Manager for the above services are described
in the Fund's Prospectus.
The Management Agreement between the Fund and Fairfield provides that
Fairfield shall not be liable for any error of judgment or mistake of law or
for any loss suffered by the Fund in connection with its performance under the
Management Agreement, except a loss resulting from a breach of fiduciary duty
with respect to the receipt of compensation for services or loss resulting from
willful misfeasance, bad faith or gross negligence on the part of Fairfield in
the performance of its duties, or from reckless disregard by it of its duties
and obligations thereunder.
B-12
<PAGE> 34
Unless sooner terminated, the Management Agreement will continue in
effect from year to year if such continuance is approved at least annually by
Navigator's Board, or by vote of a majority of the outstanding Shares of the
Fund (as defined in the Prospectus), and by a majority of the Directors who are
not parties to the Management Agreement or interested persons (as defined in
the Investment Company Act) of any party to the Management Agreement, by vote
cast in person at a meeting called for such purpose. The Management Agreement
is terminable at any time on sixty days' written notice without penalty by the
Directors, by vote of a majority of the outstanding Shares of the Fund, or by
Fairfield. The Management Agreement also terminates automatically in the event
of its assignment, as defined in the Investment Company Act.
THE DISTRIBUTION AGREEMENT
In addition to providing management services, Fairfield also acts as
the Distributor of the Fund's Shares. Shares of the Fund are sold on a
continuous basis by Fairfield as agent, although Fairfield is not obliged to
sell any particular amount of Shares. As Distributor, Fairfield pays the costs
of printing and distributing prospectuses to persons who are not shareholders
of the Fund (excluding preparation and printing expenses necessary for the
continued registration of the Fund's Shares) and of preparing, printing and
distributing all sales literature. No compensation is payable by the Fund to
Fairfield for its distribution services.
Unless sooner terminated, the "Distribution Agreement" between the
Fund and Fairfield, dated April 17, 1993, will remain in effect from year to
year if such continuance is approved at least annually by Navigator's Board, or
by vote of a majority of the outstanding Shares of the Fund, and by a majority
of the Directors who are not parties to the Distribution Agreement or
interested persons of any such party, by vote cast in person at a meeting
called for the purpose of voting on such approval.
B-13
<PAGE> 35
PORTFOLIO TRANSACTIONS
Pursuant to the Management Agreement, Fairfield (as Investment
Adviser) determines which securities are to be purchased and sold by the Fund
and which brokers are to be eligible to execute the Fund's portfolio
transactions. Portfolio securities are normally purchased directly from the
issuer or from an underwriter or market maker for the securities. Purchases
from underwriters of portfolio securities include a commission or concession
paid by the issuer to the underwriter, and purchases from dealers serving as
market makers may include the spread between the bid and asked price. While
Fairfield generally seeks competitive spreads or commissions, the Fund may not
necessarily pay the lowest spread or commission available on each transaction
for reasons discussed below.
Allocation of security transactions, including their frequency, to
various dealers is determined by Fairfield in its best judgment and in a manner
deemed fair and reasonable to shareholders. The primary consideration is the
prompt execution of orders in an effective manner at the most favorable price.
Subject to this consideration, dealers who provide supplemental investment
research to Fairfield may receive orders for transactions by the Fund.
Information so received is in addition to and not in lieu of services required
to be performed by Fairfield, nor would the receipt of such information reduce
Fairfield's investment advisory fees. Such information may be useful to
Fairfield in serving both the Fund and their other clients, and conversely,
supplemental information obtained by the placement of business of other clients
may be useful to Fairfield in carrying out its obligations to the Fund.
The Fund will not acquire portfolio securities issued by, make savings
deposits in, or enter into repurchase or reverse repurchase agreements with
Fairfield or its affiliates, or any Institution owning more than 5% of the
Fund's total assets, and will not give preference to any Institutions investing
in the Fund with respect to such transactions, securities, savings deposits,
repurchase agreements, and reverse repurchase agreements.
B-14
<PAGE> 36
CUSTODIAN AND TRANSFER AGENT
CUSTODIAN AGREEMENT
Cash and securities owned by the Fund are held by CoreStates Bank,
N.A. ("CoreStates Bank") as the Company's Custodian pursuant to a Custodian
Agreement. Under the Custodian Agreement, CoreStates Bank (i) holds the Fund's
portfolio securities and cash items, (ii) makes receipts and disbursements of
money on behalf of the Fund, (iii) collects and receives all income and other
payments and distributions on account of the Fund's portfolio securities, and
(iv) performs other related services. CoreStates Bank may, in its discretion
and at its own expense, appoint another qualified bank or trust company to act
as its agent in carrying out the provisions of the Custodian Agreement. Such
appointment will not, however, relieve CoreStates Bank of its responsibilities
or liabilities under the Custodian Agreement. The Fund has also, from time to
time, appointed other custodians to hold its cash and securities in connection
with the investment in repurchase agreements.
TRANSFER AGENCY AGREEMENT
Fund/Plan Services, Inc. ("Fund/Plan"), as the Company's Transfer
Agent, provides the Fund with transfer agency, dividend disbursing, and
accounting services pursuant to a Transfer Agency Agreement. Under the
Transfer Agency Agreement, Fund/Plan has agreed to (i) issue and redeem Shares
of the Fund, (ii) forward dividends and distributions to shareholders, (iii)
maintain the Fund's books of original entry, (iv) maintain shareholder
accounts, (v) compute the Fund's net asset value per Share and calculate the
Fund's net income, and (vi) perform other related services. Fund/Plan's
business address is #2 Elm Street, Conshohocken, Pennsylvania 19428.
FEES
For the services provided under their respective Agreements,
CoreStates Bank (as Custodian) and Fund/Plan (as Transfer Agent) may receive
fees from the Fund. Such fees are based upon relative asset values and
shareholder accounts, and may include certain transaction charges and
out-of-pocket expenses.
B-15
<PAGE> 37
EXPENSES
Except as noted herein and in the Fund's Prospectus, the Fund's
service contractors bear all expenses incurred in connection with the
performance of their services. Similarly, the Fund bears the expenses incurred
in its operations. Expenses borne by the Fund include: taxes (including
preparation of returns); interest; brokerage fees and commissions, if any; fees
of the "non-interested" Navigator Directors; Securities and Exchange Commission
fees; state securities qualification fees (including preparation of filings);
costs of preparing and printing prospectuses for regulatory purposes and for
distribution to current Fund shareholders; charges of the Custodian and the
Transfer Agent; auditing and legal expenses; management fees (investment
advisory and administrative); certain insurance premiums; costs of maintenance
of the Fund's existence; costs of shareholder reports and shareholder meetings;
and any extraordinary expenses incurred in the Fund's operations.
The aggregate rates of the investment advisory and administrative fees
payable to Fairfield are subject to reduction as the Fund's net assets
increase. However, if total expenses borne by the Fund in any fiscal year
exceed expense limitations imposed by applicable state securities regulations,
Fairfield will reimburse the Fund by the amount of such excess.
Certain of the Fund's expenses may be reduced because the regulations
in various states where Fund Shares may be qualified for sale impose
limitations on the annual expense ratio of the Fund. For example, under
California law, the Fund's aggregate annual expenses (excluding brokerage
commissions, interest, taxes, and extraordinary expenses such as legal claims,
liabilities, litigation costs and indemnification related thereto) may not
exceed 2.5% of the first $30 million of its average daily net assets; 2.0% of
the next $70 million of average daily net assets; and 1.5% of average daily net
assets in excess of $100 million. The Fund may also seek to qualify its Shares
in other jurisdictions which impose expense limitations.
To the Fund's knowledge, as of the date hereof, there are no state
expense limitations applicable to the Fund. Any future expense reimbursements
required by a state to be paid by Fairfield would be estimated daily and
reconciled and paid on a monthly basis.
B-16
<PAGE> 38
FINANCIAL STATEMENTS AND INDEPENDENT AUDITORS
The financial statements of the Fund for the fiscal year ended May 31,
1995 appearing in the Fund's 1995 Annual Report to Shareholders (which is
incorporated by reference into this Statement of Additional Information) have
been audited by Ernst & Young LLP, independent auditors, as set forth in their
report thereon included therein and incorporated herein by reference. Such
financial statements are incorporated herein by reference in reliance upon such
report given upon the authority of such firm as experts in auditing and
accounting. The Fund's 1995 Annual Reports to Shareholders, with the Report of
Independent Auditors contained therein, was filed on Form N-30D with the
Securities and Exchange Commission on July 28, 1995 (Accession No. 0000893220-
95-000488). Copies of the Fund's 1995 Annual Report to Shareholders may be
obtained without charge by contacting Fairfield.
LEGAL COUNSEL
Morgan, Lewis & Bockius (of which Mr. Jennings, Secretary of the
Company, is a partner), 2000 One Logan Square, Philadelphia, Pennsylvania
19103, is counsel to the Company. From time to time, Morgan, Lewis & Bockius
has rendered legal services to Fairfield.
MISCELLANEOUS
The Company is registered with the Securities and Exchange Commission
as a management investment company. Such registration does not involve
supervision by the Commission of the management or policies of the Fund.
The Prospectus and this Statement of Additional Information omit
certain of the information contained in the Company's Registration Statement
filed with the Securities and Exchange Commission. Copies of such information
may be obtained from the Commission upon payment of the prescribed fee.
The Prospectus and this Statement of Additional Information do not
constitute an offering of the securities herein described in any state in which
such offering may not lawfully be made. No salesman, dealer, or other person
is authorized to give any information or make any representations other than
those contained in the Prospectus and this Statement of Additional Information.
B-17
<PAGE> 39
APPENDIX
- RATED INVESTMENTS -
COMMERCIAL PAPER
Commercial paper ratings of MOODY'S are current assessments of the
ability of issuers to repay punctually senior debt obligations which have an
original maturity of no more than one year.
"PRIME-1": The rating "Prime-1," or "P-1," is the highest commercial
paper rating assigned by Moody's. These issues (or related supporting
institutions) are considered to have a superior capacity for repayment
of short-term debt obligations.
Commercial paper ratings of S&P are current assessments of the
likelihood of timely payment of debt having an original maturity of no more
than 365 days.
"A-1": This highest category indicates that the degree of safety
regarding timely payment is strong. Those issues determined to
possess extremely strong safety characteristics are denoted "A-1+."
- UNRATED INVESTMENTS -
Prior to the purchase of any unrated security or instrument by the
Fund, the Manager shall evaluate the creditworthiness of the issuer of the
security or instrument, considering all factors deemed relevant, which may
include: a review of the issuer's financial statements; a comparison of the
issuer's financial position with those of other companies in the same industry
and a review of the general outlook of the issuer's industry; a review of the
profitability, capital adequacy, quality of assets, liquidity, interest
sensitivity, and financial reports of the institution involved; and the paper
rating of such institution's holding company, if any. Based upon the foregoing
evaluation, the Manager shall determine whether the unrated security or
instrument is of "comparable investment quality" to securities or instruments
having been assigned at least the minimum ratings described herein and in the
Fund's Prospectus. In the event that subsequent to the purchase of a rated (or
unrated) security or instrument for the Fund, such security or instrument falls
below the minimum standards required for purchase by the Fund, the Manager
shall consider such an event in determining whether the Fund should continue to
hold the security or instrument in question, and shall report to the Directors
of Navigator's Board any securities or instruments which are held subsequent to
such an event.
B-18
<PAGE> 40
PART C. OTHER INFORMATION
Item 24. Financial Statements and Exhibits
(a) Financial Statements:
(1) The following financial statements are incorporated by
reference into Parts A and B of the Registration
Statement from the Registrant's 1995 Annual Report to
Shareholders filed on July 28, 1995.
- Report of Independent Auditors dated July 10,
1995.
- Statement of Net Assets - May 31, 1995.
- Statement of Operations for the year ended May
31, 1995.
- Statement of Changes in Net Assets for the
fiscal years ended May 31, 1995 and May 31, 1994.
- Notes to Financial Statements.
(2) All required financial statements are incorporated by
reference from the Registrant's 1995 Annual Report to
Shareholders and included in Parts A and B hereof. All
other financial statements and schedules are
inapplicable.
(b) Exhibits:
(1) Articles of Incorporation of Navigator Money Market
Fund, Inc., dated October 31, 1986, are incorporated
herein by reference to Exhibit (1) of Post-Effective
Amendment No. 4 to Registrant's Registration Statement
on Form N-1A, filed on September 28, 1987.
(2) By-Laws, as amended by Registrant's Directors on March
6, 1990, are incorporated herein by reference to Exhibit
(2) of Post-Effective Amendment No. 7, filed on August
9, 1990.
(3) None.
(4) None.
(5) (a) Management Agreement between Registrant and
Fairfield Group, Inc. is incorporated by
<PAGE> 41
reference to Exhibit (5) of Registrant's
Registration Statement on Form N-1A, filed
on May 20, 1985.
(b) Amendment of Management Agreement between
Registrant and Fairfield Group, Inc.
incorporated herein by reference to Exhibit
(5)(a) of Post Effective Amendment No. 2 to
Registrant's Registration Statement on Form
N-1A, filed on July 30, 1986.
(c) Management Agreement, dated April 17, 1993,
between Registrant and Fairfield Group, Inc.
incorporated herein by reference to Exhibit
(5)(c) of Post-Effective Amendment No. 10 to
Registrant's Registration Statement on Form
N-1A, filed on September 3, 1993.
(6) (a) Distribution Agreement between Registrant and
Fairfield Group, Inc. incorporated herein by
reference to Exhibit (6) of Registrant's
Registration Statement on Form N-1A, filed on
May 20, 1985.
(b) Amendment of Distribution Agreement between
Registrant and Fairfield Group, Inc. is
incorporated herein by reference to Exhibit
(6)(a) of Post-Effective Amendment No. 2 to
Registrant's Registration Statement on Form
N-1A, filed on July 30, 1986.
(c) Distribution Agreement, dated April 17, 1993,
between Registrant and Fairfield Group, Inc.
incorporated herein by reference to Exhibit
(6)(c) of Post-Effective Amendment No. 10 to
Registrant's Registration Statement on Form
N-1A, filed on September 3, 1993.
(7) None.
(8) (a) Custodian Agreement between Registrant and
CoreStates Bank, N.A. incorporated herein by
reference to Exhibit (8) of Registrant's
Registration Statement on Form N-1A, filed on
May 20, 1985.
(b) Transfer Agency Agreement between Registrant and
CoreStates Bank, N.A. is incorporated herein
reference to Exhibit (8)(b) of Pre-Effective
Amendment No. 1 to Registrant's Registration
Statement on Form N-1A, filed on July 3, 1985.
C-2
<PAGE> 42
(c) First Amendment to Transfer Agency Agreement
between Registrant and CoreStates Bank, N.A.
incorporated herein by reference to Exhibit
(8)(c) of Post-Effective Amendment No. 1 to
Registrant's Registration Statement on Form
N-1A, filed on January 10, 1986.
(d) Amendment of Transfer Agency Agreement between
Registrant and CoreStates Bank, N.A.
incorporated herein by reference to Exhibit 8(d)
of Post-Effective Amendment No. 1 to
Registrant's Registration Statement on Form
N-1A, filed on January 10, 1986.
(9) None.
(10) (a) Opinion and consent of counsel incorporated
herein by reference to Exhibit (10) of
Pre-Effective Amendment No. 1 to Registrant's
Registration Statement on Form N-1A, filed on
July 3, 1985.
(b) Opinion and consent of counsel as to legality of
the securities filed under Rule 24f-2 as part of
Registrant's Rule 24f-2 Notice as filed on July
26, 1993.
(11) Consent of Ernst & Young LLP, filed herewith.
(12) None.
(13) None.
(14) None.
(15) None.
(16) Schedules for Computation of Performance Quotations
provided in the Post-Effective Amendment, filed
herewith.
(24) Powers of Attorny, dated June 27, 1995,
filed herewith.
C-3
<PAGE> 43
(27) Financial Data Schedule, filed herewith.
Item 25. Persons Controlled by or under Common Control with Registrant
None.
Item 26. Number of Holders of Securities
The following information is as of August 16, 1995:
(1) (2)
Title of Class Number of Recordholders
Shares of Common Stock, 34
$0.001 par value
Item 27. Indemnification
Article VII of the Articles of Incorporation of the Fund
provides for the indemnification of the directors and the officers of the Fund
to the full extent permitted by the laws of the State of Maryland and by the
Investment Company Act. Under the Maryland law pertaining to corporations and
associations, a corporation may indemnify any director made a party to any
proceeding by reason of service in such capacity if the director acted in good
faith and (i) in the case of conduct in the director's official capacity with
the corporation, reasonably believed that the conduct was in the best interests
of the corporation, (ii) in the case of any criminal proceeding, had no
reasonable cause to believe that the conduct was unlawful and
C-4
<PAGE> 44
(iii) in all other cases, reasonably believed that the conduct was at least not
opposed to the best interests of the corporation.
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the Registrant by the Registrant pursuant to such By-Laws or
otherwise, the Registrant is aware that in the opinion of the Securities and
Exchange Commission, such indemnification is against public policy as expressed
in the Act and, therefore, is 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 directors, officers or controlling
persons of the Registrant in connection with the successful defense of any act,
suit or proceeding) is asserted by such directors, officers or controlling
persons in connection with the shares being registered, the Registrant will,
unless in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the Act and
will be governed by the final adjudication of such issues.
Item 28. Business and Other Connections of Investment Advisor
Fairfield Group, Inc. (the "Manager"), Registrant's manager and
distributor, was organized on September 21, 1983. The Manager is a
wholly-owned subsidiary of Legg Mason, Inc. Legg Mason, Inc., headquartered in
Baltimore, is a holding company which provides securities brokerage, investment
advisory, investment banking and mortgage banking services through its
wholly-owned subsidiaries. Information about the Manager and its officers and
directors is contained in the response to Item 29 hereof.
Item 29. Principal Underwriter
(a) Fairfield Group, Inc. also acts as investment advisor,
distributor, administrator for Navigator Tax-Free Money Market Fund, Inc., a
management investment company registered under the Investment Company Act of
1940.
(b) Directors and executive officers of Fairfield Group,
Inc., as of August 18, 1995, were as follows:
<TABLE>
<CAPTION>
Positions Positions and
Name and Principal and Offices Offices
Business Addresses with Fairfield with Registrant
------------------ -------------- ---------------
<S> <C> <C>
Robert J. Walker, Jr.* President, Chief Chairman,
</TABLE>
C-5
<PAGE> 45
<TABLE>
<S> <C> <C>
Executive Officer President and
and Director. Director.
John F. Curley, Jr. Director. None.
211 S. Calvert Street
Baltimore, MD 21203
Edward A. Taber Director. None.
211 S. Calvert Street
Baltimore, MD 21203
James R. Lesher* Chief Financial Vice President,
Officer, Vice Treasurer and
President,Assistant Assistant
Secretary/Treasurer, Secretary.
Controller.
</TABLE>
-----------------
*200 Gibraltar Road, Horsham, PA 19044
Item 30. Location of Accounts and Records
Books or other documents required to be maintained by Section
31(a) of the Investment Company Act of 1940, and the rules promulgated
thereunder, are maintained as follows:
(a) With respect to Rules 31a-1(a); 31(b)(1); (2)(a) and
(b); (3); (6); (8); (12); and 31a-1(d), the required
books and records are maintained at the offices of
Registrant's Custodian:
CoreStates Bank, N.A.
1500 Market Street
Philadelphia, PA 19101
(b) With respect to Rules 31a-1(a); 31a-1(b)(1); (2)(C) and
(D); (4); (5); (6); (8); (9); (10); (11); and 31a- 1(f),
the required books and records are maintained at the
offices of Registrant's Manager:
Fairfield Group, Inc.
200 Gibraltar Road
Horsham, PA 19044
C-6
<PAGE> 46
(c) With respect to Rules 31a-1(b)(4), and certain other
documents, the required books and records are maintained
at the Registrant's principal office:
Morgan, Lewis & Bockius
2000 One Logan Square
Philadelphia, PA 19103
(d) With respect to Rules 31a-1(b)(5), (6), (9) and (10) and
31a-1(f), the required books and records are maintained
at the principal offices of the Registrant's
Administrator:
Fairfield Group, Inc.
200 Gibraltar Road
Horsham, PA 19044
Item 31. Management Services
None.
Item 32. Undertakings
Not applicable.
C-7
<PAGE> 47
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and
the Investment Company Act of 1940, the Registrant has duly caused this
Post-Effective Amendment No. 12 to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Horsham and Commonwealth of
Pennsylvania on the 18th day of August, 1995 and hereby certifies that this
Amendment No. 12 meets all the requirements for effectiveness pursuant to
paragraph (b) of Rule 485.
NAVIGATOR MONEY MARKET FUND, INC.
/s/ Robert J. Walker, Jr.
-------------------------
President
ATTEST:
/s/ James W. Jennings
-----------------------
Secretary
Pursuant to the requirements of the Securities Act of 1933,
Post-Effective Amendment No. 12 to the Registration Statement of Navigator
Money Market Fund, Inc. has been signed below by the following persons in the
capacities and on the date indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Robert J. Walker, Jr. Chairman, August 17, 1995
------------------------- President and
Robert J. Walker, Jr. Director
* Director August 17, 1995
------------------------
Philip D. Croll
* Director August 17, 1995
------------------------
Richard G. Gilmore
* Director August 17, 1995
------------------------
Robert E. Keith
* Director August 17, 1995
------------------------
Jan J. Wieckowski
/s/ James R. Lesher Vice President, August 17, 1995
------------------- Treasurer and
James R. Lesher
</TABLE>
<PAGE> 48
<TABLE>
<S> <C>
Assistant Secretary
(Principal
Financial and
Accounting Officer)
*By: /s/ Robert J. Walker, Jr.
---------------------------
Robert J. Walker, Jr.
Attorney-In-Fact
</TABLE>
C-9
<PAGE> 49
NAVIGATOR MONEY MARKET FUND, INC.
EXHIBIT INDEX
<TABLE>
<CAPTION>
EDGAR
Exhibit No. Description of Exhibit
----------- ----------------------
<S> <C> <C>
Ex-99.B (11) Consent of Ernst & Young LLP.
Ex-99.B (16) Schedule for Computation of Performance Quotations provided in the
Post-Effective Amendment.
Ex-99.B (24) Powers of Attorney, dated June 27, 1995.
Ex-27 Financial Data Schedule.
</TABLE>
<PAGE> 1
Exhibit (11)
CONSENT OF INDEPENDENT AUDITORS
We consent to the references to our firm under the captions "Financial
Highlights" in the Prospectus and "Financial Statements and Independent
Auditors" in the Statement of Additional Information and to the incorporation
by reference in this Post-Effective Amendment No. 12 to the Registration
Statement (Form N-1A No. 33-2-97840) of the Navigator Money Market Fund, Inc.
of our report dated July 10, 1995, included in the 1995 Annual Report to
Shareholders of the Navigator Money Market Fund, Inc.
Philadelphia, Pennsylvania
August 14, 1995
<PAGE> 1
Exhibit (16)
Seven Day Average Yield
<TABLE>
<CAPTION>
Date Daily Dividend
---- --------------
<S> <C>
May 25 .000159737
May 26 .000159678
May 27 .000159678
May 28 .000159678
May 29 .000159678
May 30 .000160102
May 31 .000160397
----------
Total .001118948
Divided by 7 .00015984971
Multiplied by 365 .05834514415 (5.83%)
</TABLE>
Compounded Effective Yield:
365/7
[(1 + .0011189480) ] - 1 = .0600462375 (6.00%)
<PAGE> 1
Exhibit (24)
NAVIGATOR MONEY MARKET FUND, INC.
POWER OF ATTORNEY
Philip D. Croll, whose signature appears below, does hereby
constitute and appoint Robert J. Walker, Jr., his true and lawful attorney and
agent, with power of substitution or resubstitution, to do any and all acts and
things and to execute any and all instruments which said attorney and agent may
deem necessary or advisable or which may be required to enable Navigator Money
Market Fund, Inc. (the "Fund") to comply with the Securities Act of 1933, as
amended (the "1933 Act") and the Investment Company Act of 1940, as amended
(the "1940 Act"), and any rules, regulations or requirements of the Securities
and Exchange Commission in respect thereof, in connection with the Fund's
Registration Statement on Form N-1A pursuant to the 1933 Act and the 1940 Act,
together with any and all amendments thereto, including foregoing, the power
and authority to sign in the name and on behalf of the undersigned as a
President and a director of the Fund such Registration Statement and any and
all such amendments filed with the Securities and Exchange Commission under the
1933 Act and the 1940 Act, and any other instruments or documents related
thereto, and the undersigned does hereby ratify and confirm all that said
attorney and agent shall do or cause to be done by virtue hereof.
/s/ Philip D. Croll
-------------------
Philip D. Croll
Date: June 27, 1995
<PAGE> 2
NAVIGATOR MONEY MARKET FUND, INC.
POWER OF ATTORNEY
Richard G. Gilmore, whose signature appears below, does hereby
constitute and appoint Robert J. Walker, Jr., his true and lawful attorney and
agent, with power of substitution or resubstitution, to do any and all acts and
things and to execute any and all instruments which said attorney and agent may
deem necessary or advisable or which may be required to enable Navigator Money
Market Fund, Inc. (the "Fund") to comply with the Securities Act of 1933, as
amended (the "1933 Act") and the Investment Company Act of 1940, as amended
(the "1940 Act"), and any rules, regulations or requirements of the Securities
and Exchange Commission in respect thereof, in connection with the Fund's
Registration Statement on Form N-1A pursuant to the 1933 Act and the 1940 Act,
together with any and all amendments thereto, including foregoing, the power
and authority to sign in the name and on behalf of the undersigned as a
President and a director of the Fund such Registration Statement and any and
all such amendments filed with the Securities and Exchange Commission under the
1933 Act and the 1940 Act, and any other instruments or documents related
thereto, and the undersigned does hereby ratify and confirm all that said
attorney and agent shall do or cause to be done by virtue hereof.
/s/ Richard G. Gilmore
----------------------
Richard G. Gilmore
Date: June 27, 1995
<PAGE> 3
NAVIGATOR MONEY MARKET FUND, INC.
POWER OF ATTORNEY
Robert E. Keith, whose signature appears below, does hereby
constitute and appoint Robert J. Walker, Jr., his true and lawful attorney and
agent, with power of substitution or resubstitution, to do any and all acts and
things and to execute any and all instruments which said attorney and agent may
deem necessary or advisable or which may be required to enable Navigator Money
Market Fund, Inc. (the "Fund") to comply with the Securities Act of 1933, as
amended (the "1933 Act") and the Investment Company Act of 1940, as amended
(the "1940 Act"), and any rules, regulations or requirements of the Securities
and Exchange Commission in respect thereof, in connection with the Fund's
Registration Statement on Form N-1A pursuant to the 1933 Act and the 1940 Act,
together with any and all amendments thereto, including foregoing, the power
and authority to sign in the name and on behalf of the undersigned as a
President and a director of the Fund such Registration Statement and any and
all such amendments filed with the Securities and Exchange Commission under the
1933 Act and the 1940 Act, and any other instruments or documents related
thereto, and the undersigned does hereby ratify and confirm all that said
attorney and agent shall do or cause to be done by virtue hereof.
/s/ Robert E. Keith
-------------------
Robert E. Keith
Date: June 27, 1995
<PAGE> 4
NAVIGATOR MONEY MARKET FUND, INC.
POWER OF ATTORNEY
Jan J. Wieckowski, whose signature appears below, does hereby
constitute and appoint Robert J. Walker, Jr., his true and lawful attorney and
agent, with power of substitution or resubstitution, to do any and all acts and
things and to execute any and all instruments which said attorney and agent may
deem necessary or advisable or which may be required to enable Navigator Money
Market Fund, Inc. (the "Fund") to comply with the Securities Act of 1933, as
amended (the "1933 Act") and the Investment Company Act of 1940, as amended
(the "1940 Act"), and any rules, regulations or requirements of the Securities
and Exchange Commission in respect thereof, in connection with the Fund's
Registration Statement on Form N-1A pursuant to the 1933 Act and the 1940 Act,
together with any and all amendments thereto, including foregoing, the power
and authority to sign in the name and on behalf of the undersigned as a
President and a director of the Fund such Registration Statement and any and
all such amendments filed with the Securities and Exchange Commission under the
1933 Act and the 1940 Act, and any other instruments or documents related
thereto, and the undersigned does hereby ratify and confirm all that said
attorney and agent shall do or cause to be done by virtue hereof.
/s/ Jan J. Wieckowski
---------------------
Jan J. Wieckowski
Date: June 27, 1995
<TABLE> <S> <C>
<ARTICLE> 6
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> MAY-31-1995
<PERIOD-END> MAY-31-1995
<INVESTMENTS-AT-COST> 237,453,313
<INVESTMENTS-AT-VALUE> 238,898,064
<RECEIVABLES> 745,776
<ASSETS-OTHER> 63,239
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 239,707,079
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 1,598,213
<TOTAL-LIABILITIES> 1,598,213
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 0
<SHARES-COMMON-STOCK> 0
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 238,108,866
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 14,740,203
<OTHER-INCOME> 0
<EXPENSES-NET> 792,206
<NET-INVESTMENT-INCOME> 13,947,997
<REALIZED-GAINS-CURRENT> (2,706)
<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> 13,945,291
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (13,951,403)
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 876,669,817
<NUMBER-OF-SHARES-REDEEMED> (979,870,062)
<SHARES-REINVESTED> 179,501
<NET-CHANGE-IN-ASSETS> (103,020,744)
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 557,258
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 1,194,631
<AVERAGE-NET-ASSETS> 278,606,150
<PER-SHARE-NAV-BEGIN> 1
<PER-SHARE-NII> 0.050
<PER-SHARE-GAIN-APPREC> 0.000
<PER-SHARE-DIVIDEND> (0.050)
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 1
<EXPENSE-RATIO> 0.003
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
