<PAGE>
- -------------------------------------------------------------------------
------------
---------- PAINEWEBBER/
KIDDER,
PEABODY
CALIFORNIA
TAX EXEMPT
MONEY FUND
ANNUAL REPORT
JULY 31, 1995
- -------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
September 15, 1995
Dear Shareholder,
During the year ended July 31, 1995, the pace of U.S. economic growth was
perceived to have slowed in response to the Federal Reserve Board's repeated
increases in the benchmark Federal Funds rate, the rate banks charge each other
for overnight borrowing. After seven short-term interest rate hikes between
February 1994 and February 1995, the Federal Reserve Board increased the Federal
Funds rate to 6.0%, and effectively doubled short-term interest rates in twelve
months. However, on July 6, 1995, the Federal Reserve cut the benchmark Federal
Funds rate by 0.25%. This decrease, the first in nearly three years, signals
that the Federal Reserve Board believes that inflationary pressures have eased
enough to accommodate an adjustment in monetary conditions from restrictive
toward neutral.
ECONOMIC OVERVIEW
News concerning the economy during the year ended July 31, 1995 was dominated by
debate over whether inflation was likely to become a threat, discussions about
the dismal performance of the dollar and details of efforts in Washington to
implement a plan to balance the budget. Interest rates trended downward, as the
perception that the Federal Reserve would win its battle with inflation and that
the next policy action would be to lower short-term interest rates became
widespread. The U.S. bond and stock markets rallied in the first half of 1995,
and strength in corporate earnings pushed stock prices higher. Employment
reports indicated a slowing economy, with consumer spending declining
significantly from 1994 and consumer credit reports showing high ratios of
installment debt to disposable income. Side effects of higher interest rates
lingered, however. Markets for new and existing homes were sluggish until the
close of the twelve-month period, despite historically attractive mortgage
rates. Although the U.S. economy appears to have been flat in the second
quarter, the second half of 1995 should show signs of further, albeit slower,
growth.
PORTFOLIO REVIEW
Net assets of the PaineWebber/Kidder, Peabody California Tax Exempt Money Fund
totalled approximately $153.9 million on July 31, 1995. As of July 31, 1995, the
Fund offered a current 7-day annualized yield of 3.03% and an effective 7-day
annualized yield of 3.07%.
The most significant event in the State of California during the year ended July
31, 1995 was the bankruptcy filing of Orange County. The scope and magnitude of
this event roiled the California municipal market. While the conclusion is still
uncertain, one of the consequences is the credit ratings agencies' downgrade of
the County's general obligation debt. Recently, the County's short-term note
maturities were rolled into a 1996 maturity and were deemed defaulted by
Standard & Poor's ('S&P') and Moody's Investors Service, Inc. Please note, none
of our Funds owned any Orange County general obligation bonds.
The PaineWebber/Kidder, Peabody California Tax Exempt Money Fund seeks the
maximization of current income exempt from Federal and State of California
personal income taxes consistent with the preservation of capital and the
maintenance of liquidity by investing primarily in short-term California
municipal obligations. We continue to restrict our portfolio investments to
top-rated
- --------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
securities. In addition, the Fund does not invest in any securities subject to
the federal alternative minimum tax for individual taxpayers. We will continue
to balance income, safety and liquidity in the months ahead.
The board of trustees of the Fund has approved a Plan of Reorganization and
Termination ('Reorganization') for submission to the Fund's shareholders, at a
special meeting expected to be held on December 4, 1995. If the proposed
Reorganization is approved and implemented, all of the Fund's assets will be
acquired and its liabilities assumed by PaineWebber RMA California Municipal
Money Fund in a tax-free reorganization. As a result of the Reorganization, the
two funds' assets would be combined and each Fund shareholder would, on the
closing date of the transaction, receive shares of PaineWebber RMA California
Municipal Money Fund having an aggregate value equal to the value of the
shareholder's holdings in the Fund. Gregory W. Serbe and Cynthia Bow are jointly
responsible for the day-to-day portfolio management of the PaineWebber RMA
California Municipal Money Fund. There can be no assurance that the Fund's
shareholders will approve the Reorganization.
We value you as a shareholder and as a client, and thank you for your continued
support. We welcome any comments or questions you may have.
Sincerely,
<TABLE>
<S> <C>
FRANK P.L. MINARD GREGORY W. SERBE
Chairman, Managing Director,
Mitchell Hutchins Asset Management Mitchell Hutchins Asset Management
Inc. Inc.
CYNTHIA N. BOW
Portfolio Manager,
PaineWebber/Kidder, Peabody
California Tax Exempt Money Fund
</TABLE>
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2
<PAGE>
PAINEWEBBER/KIDDER, PEABODY CALIFORNIA TAX EXEMPT MONEY FUND
- --------------------------------------------------------------------------------
Statement of Net Assets
July 31, 1995
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT MATURITY INTEREST
(000) DATES RATES VALUE
- ---------- -------------------- -------------- ------------
<S> <C> <C> <C> <C>
INVESTMENTS IN MUNICIPAL
SECURITIES - 98.30%
$ 2,000 California State Revenue
Anticipation Notes.......... 04/25/96 5.750% $ 2,029,459
6,000 California Educational
Facilities Authority
Tax Exempt Commercial Paper
(Carnegie Institute of
Washington)................. 08/01/95 to 10/12/95 3.050 to 3.800 6,000,000
4,400 California Health Facilities
Financing Authority
(Kaiser Permanente)......... A 3.650 4,400,000
2,400 California Health Facilities
Finance Authority
(St. Joseph's Health
Systems).................... A 3.700 2,400,000
2,300 California Health Facilities
Financing Authority
(Sutter Health)............. A 3.700 2,300,000
5,000 California Pollution Control
Financing Authority
(Southern California
Edison)..................... A 4.150 5,000,000
7,000 California Pollution Control
Financing Authority
Tax Exempt Commercial Paper
(Pacific Gas & Electric
Company).................... 08/25/95 to 10/20/95 3.300 to 4.050 7,000,000
2,000 California Pollution Control
Financing Authority
Tax Exempt Commercial Paper
(Southern California
Edison)..................... 08/11/95 4.100 2,000,000
8,909 California State Department of
Water
Tax Exempt Commercial
Paper....................... 08/14/95 to 09/27/95 3.300 to 4.050 8,909,000
1,000 California Statewide Community
Development Authority
(House Ear Institute)....... A 3.650 1,000,000
100 Anaheim Capital Stadium
Project..................... A 3.600 100,000
2,160 City of San Francisco - Rincon
Housing..................... A 3.800 2,160,000
875 Contra Costa County
Tax and Revenue Anticipation
Notes....................... 07/03/96 4.500 881,600
7,000 Del Mar Racetrack Authority
Tax Exempt Commercial
Paper....................... 08/23/95 to 09/08/95 3.300 to 3.850 7,000,000
3,300 East Bay Municipal Utility
District
Tax Exempt Commercial
Paper....................... 08/24/95 to 09/11/95 2.750 to 3.300 3,300,000
2,500 Indio Housing Authority
(Smoketree Apartments)...... A 4.050 2,500,000
5,200 Lancaster Housing Authority
(Woodcreek Gardens)......... A 4.000 5,200,000
2,000 Loma Linda Hospital Revenue
(University Medical
Center)..................... A 3.750 2,000,000
10,700 Los Angeles County
Transportation Commission
Tax Exempt Commercial
Paper....................... 08/07/95 to 10/19/95 3.300 to 3.900 10,700,000
4,200 Los Angeles County
Tax and Revenue Anticipation
Notes....................... 07/01/96 4.500 4,226,766
3,000 Los Angeles County Unified
School District
Tax and Revenue Anticipation
Notes....................... 07/03/96 4.500 3,021,300
6,600 Los Angeles County Waste Water
System
Tax Exempt Commercial
Paper....................... 08/10/95 to 09/11/95 3.750 to 4.150 6,600,000
</TABLE>
3
<PAGE>
PAINEWEBBER/KIDDER, PEABODY CALIFORNIA TAX EXEMPT MONEY FUND
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT MATURITY INTEREST
(000) DATES RATES VALUE
- ---------- -------------------- -------------- ------------
INVESTMENTS IN MUNICIPAL SECURITIES
(CONTINUED)
<S> <C> <C> <C> <C>
$ 6,900 Los Angeles Department of
Water & Power
Tax Exempt Commercial
Paper....................... 08/24/95 to 09/13/95 3.300 to 3.850% $ 6,900,000
12,600 Newport Beach Hospital Revenue
(Hoag Memorial Hospital).... A 3.850 12,600,000
8,500 Riverside County
Transportation Commission
Tax Exempt Commercial
Paper....................... 08/14/95 to 08/22/95 3.800 to 4.150 8,500,000
8,000 Sacramento Municipal Utility
District
Tax Exempt Commercial
Paper....................... 08/21/95 to 09/20/95 3.000 to 4.150 8,000,000
2,500 San Bernardino County
Tax and Revenue Anticipation
Notes....................... 07/05/96 4.500 2,512,245
1,000 San Diego Gas and Electric
Tax Exempt Commercial
Paper....................... 09/11/95 3.050 1,000,000
4,000 Santa Barbara County
Tax and Revenue Anticipation
Notes....................... 07/05/96 4.500 4,024,795
1,700 Santa Clara Electric.......... A 3.650 1,700,000
2,200 Santa Clara County Transit
District.................... A 3.850 2,200,000
7,500 Southern California
Metropolitan Water District
Tax Exempt Commercial
Paper....................... 08/29/95 to 09/12/95 2.750 to 3.850 7,500,000
1,100 Upland Community Redevelopment
Agency
(Northwoods)................ A 4.150 1,100,000
6,500 West Basin Municipal Water
District
Tax Exempt Commercial
Paper....................... 08/15/95 to 09/13/95 2.950 to 4.050 6,500,000
------------
TOTAL INVESTMENTS (cost--$151,265,165,
which approximates cost for federal
income tax purposes) - 98.30%........... 151,265,165
Other assets in excess of liabilities
- - 1.70%................................... 2,617,252
------------
NET ASSETS (applicable to 153,898,792
shares of beneficial interest at $1.00
per share) - 100.00%.................... $153,882,417
------------
------------
</TABLE>
- ------------
A--Variable rate demand notes and variable rate certificates of participation
that are payable on demand. The interest rates shown are the current rates
as of July 31, 1995 and reset periodically.
Weighted average maturity - 54 days
See accompanying notes to financial statements
4
<PAGE>
PAINEWEBBER/KIDDER, PEABODY CALIFORNIA TAX EXEMPT MONEY FUND
- --------------------------------------------------------------------------------
Statement of Operations
For the year ended July 31, 1995
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
INVESTMENT INCOME:
Interest................................................. $5,571,004
----------
EXPENSES:
Investment advisory and administration................... 787,433
Distribution fees........................................ 188,983
Reports and notices to shareholders...................... 45,163
Transfer agency and service fees......................... 41,384
Legal and audit.......................................... 25,720
Custody and accounting................................... 22,820
Directors' fees.......................................... 10,250
Federal and state registration fees...................... 2,686
Other expenses........................................... 26,626
----------
1,151,065
----------
NET INVESTMENT INCOME....................................... 4,419,939
Net realized losses from investment transactions............ (27,632)
----------
Net increase in net assets resulting from operations........ $4,392,307
----------
----------
</TABLE>
- --------------------------------------------------------------------------------
Statement of Changes in Net Assets
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FOR THE YEAR FOR THE YEAR
ENDED ENDED
JULY 31, JULY 31,
1995 1994
------------ ------------
<S> <C> <C>
FROM OPERATIONS:
Net investment income.......................... $ 4,419,939 $ 3,686,406
Net realized losses from investment
transactions................................. (27,632) (96,966)
Net change in unrealized
appreciation/depreciation of investments..... -- 87
------------ ------------
Net increase in net assets resulting from
operations................................... 4,392,307 3,589,527
------------ ------------
DIVIDENDS TO SHAREHOLDERS FROM:
Net investment income.......................... (4,419,939) (3,686,406)
------------ ------------
FROM BENEFICIAL INTEREST SHARE TRANSACTIONS:
Net decrease in net assets from beneficial
interest transactions........................ (29,323,928) (19,453,923)
------------ ------------
Contribution to capital from predecessor
advisor......................................... 342,253 --
------------ ------------
Net decrease in net assets........................ (29,009,307) (19,550,802)
------------ ------------
NET ASSETS:
Beginning of period............................ 182,891,724 202,442,526
------------ ------------
End of period.................................. $153,882,417 $182,891,724
------------ ------------
------------ ------------
</TABLE>
See accompanying notes to financial statements
5
<PAGE>
PAINEWEBBER/KIDDER, PEABODY CALIFORNIA TAX EXEMPT MONEY FUND
- --------------------------------------------------------------------------------
Notes to Financial Statements
- --------------------------------------------------------------------------------
ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
PaineWebber/Kidder, Peabody California Tax Exempt Money Fund (the 'Fund') is
registered under the Investment Company Act of 1940, as amended ('Act') as a
non-diversified, open-end management investment company.
Valuation and Accounting for Investments--Investments are valued at
amortized cost, which has been determined by the Trustees of the Fund to
represent the fair value of the Fund's investments.
Investment transactions are recorded on a trade date basis. Interest income,
adjusted for amortization of premiums and, when appropriate, discounts on
investments, is earned from settlement date and recognized on the accrual basis.
Realized gains and losses from securities transactions are recorded on the
identified cost basis.
The Fund follows an investment policy of investing primarily in municipal
obligations of the state of California. Economic changes affecting the state and
certain of its public bodies and municipalities may affect the ability of
issuers within the state to pay interest on, or repay principal of, municipal
obligations held by the Fund.
Dividends and Distributions--It is the policy of the Fund to declare
dividends daily from net investment income. Such dividends normally are paid
monthly. Dividends from net realized capital gains, if any, are declared and
paid at least annually. To the extent that the Fund earns net realized capital
gains which can be offset by capital loss carryovers, if any, it is the policy
of the Fund not to distribute such gains.
Federal Tax Status--It is the policy of the Fund to continue to qualify as a
regulated investment company, which can distribute tax exempt dividends, by
complying with the provisions available to certain investment companies, as
defined in applicable sections of the Internal Revenue Code, and to make
distributions of income and net realized capital gain sufficient to relieve it
from all, or substantially all, Federal income and California state income
taxes.
The Fund had a net capital loss carryforward at July 31, 1995 of $16,543.
The loss carryforward is available as a reduction, to the extent provided in the
regulations, of future net realized capital gains, and will expire July 31,
2002.
INVESTMENT ADVISER AND ADMINISTRATOR
The Fund's investment adviser and administrator receives compensation from
the Fund, accrued daily and paid monthly at an annual rate of 0.50% of the
Fund's average daily net assets.
At a special meeting of shareholders that was held on April 13, 1995,
shareholders approved the appointment of PaineWebber Incorporated
('PaineWebber') as the Fund's investment adviser and administrator and Mitchell
Hutchins Asset Management Inc. ('Mitchell Hutchins') as the Fund's sub-adviser
and sub-administrator. The Fund pays the same fee for investment advisory and
administration services to PaineWebber as previously paid to Kidder Peabody
Asset Management, Inc. ('KPAM'), as described in the Fund's prospectus.
PaineWebber (not the Fund) pays Mitchell Hutchins a fee at the annual rate of
20% of the fee received by PaineWebber from the Fund. PaineWebber and Mitchell
Hutchins continue to manage the Fund in accordance with the Fund's investment
objective, policies and restrictions as stated in the Prospectus. At July 31,
1995, the Fund owed PaineWebber $64,388 for investment advisory and
administration fees.
Investment advisory functions for the Fund had been previously transferred
from KPAM to Mitchell Hutchins on an interim basis as a result of an asset
purchase transaction by and among Kidder Peabody
6
<PAGE>
PAINEWEBBER/KIDDER, PEABODY CALIFORNIA TAX EXEMPT MONEY FUND
- --------------------------------------------------------------------------------
Notes to Financial Statements -- (concluded)
- --------------------------------------------------------------------------------
Group Inc., its parent, General Electric, and Paine Webber Group Inc. The
interim period commenced January 30, 1995 and ended April 13, 1995.
In compliance with applicable state securities laws, PaineWebber will
reimburse the Fund for those operating expenses, exclusive of taxes, interest,
brokerage fees, distribution fees and extraordinary expenses, which exceed
applicable limitations in any fiscal year. Currently, the most restrictive
limitation is 2.5% on the first $30 million of average daily net assets, 2.0% of
the next $70 million and 1.5% of any excess over $100 million. For the year
ended July 31, 1995, no reimbursements were required pursuant to the above
limitation.
DISTRIBUTION PLAN
Effective January 30, 1995, PaineWebber serves as the exclusive distributor
of the Fund's shares. For its services, which include payment of sales
commissions to registered representatives and various other promotional and
sales related expenses, it receives from the Fund a distribution fee accrued
daily and paid monthly at the rate of 0.12% per annum of the Fund's average
daily net assets. The same distribution fee rate was paid to the prior
distributor. At July 31, 1995, $15,453 was payable to PaineWebber for these
services.
OTHER LIABILITIES
At July 31, 1995, the amount payable for dividends was $151,620.
SHARES OF BENEFICIAL INTEREST
The Declaration of Trust permits the Trustees to issue an unlimited number
of shares of a single class. Transactions in shares of beneficial interest, at
$1.00 per share, are summarized as follows:
<TABLE>
<CAPTION>
FOR THE YEAR
ENDED FOR THE YEAR
JULY 31, ENDED
1995 JULY 31, 1994
------------ -------------
<S> <C> <C>
Shares sold..................................... 641,776,055 886,015,887
Shares repurchased.............................. (675,247,310) (909,027,979)
Dividends reinvested in additional Fund
shares........................................ 4,147,327 3,558,169
------------ -------------
Net decrease in shares outstanding.............. (29,323,928) (19,453,923)
------------ -------------
------------ -------------
</TABLE>
On January 27, 1995, the Fund recorded a capital contribution from KPAM in
the amount of $342,253 or $0.002 per share to compensate the Fund for realized
losses incurred on the sale of certain securities to unrelated third parties.
PLAN OF REORGANIZATION
The board of trustees of the Fund has approved a Plan of Reorganization and
Termination ('Reorganization') for submission to the Fund's shareholders, at a
special meeting expected to be held on December 4, 1995. If the proposed
Reorganization is approved and implemented, all of the Fund's assets will be
acquired and its liabilities assumed by PaineWebber RMA California Municipal
Money Fund in a tax-free reorganization. As a result of the Reorganization, the
two funds' assets would be combined and each Fund shareholder would, on the
closing date of the transaction, receive shares of PaineWebber RMA California
Municipal Money Fund having an aggregate value equal to the value of the
shareholder's holdings in the Fund. Gregory W. Serbe and Cynthia Bow are jointly
responsible for the day-to-day portfolio management of the PaineWebber RMA
California Municipal Money Fund. There can be no assurance that the Fund's
shareholders will approve the Reorganization.
7
<PAGE>
PAINEWEBBER/KIDDER, PEABODY CALIFORNIA TAX EXEMPT MONEY FUND
- --------------------------------------------------------------------------------
Financial Highlights
- --------------------------------------------------------------------------------
Selected data for a share of beneficial interest throughout each year is
presented below:
<TABLE>
<CAPTION>
FOR THE YEARS ENDED JULY 31,
--------------------------------------------------------
1995 1994 1993 1992 1991
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning
of year......................................... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
-------- -------- -------- -------- --------
Net investment income............................. 0.028 0.018 0.018 0.028 0.040
Dividends from net investment income.............. (0.028) (0.018) (0.018) (0.028) (0.040)
-------- -------- -------- -------- --------
Contribution to capital from predecessor
advisor......................................... 0.002 -- -- -- --
-------- -------- -------- -------- --------
Net asset value, end of year...................... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
-------- -------- -------- -------- --------
-------- -------- -------- -------- --------
Total investment return(1)........................ 2.87% 1.81% 1.81% 2.93% 4.11%
-------- -------- -------- -------- --------
-------- -------- -------- -------- --------
Ratios/Supplemental Data:
Net assets, end of period (000's)................. $153,882 $182,892 $202,443 $202,854 $202,779
Ratio of expenses to average
net assets...................................... 0.73% 0.70% 0.71% 0.71% 0.70%
Ratio of net investment income to
average net assets.............................. 2.80% 1.80% 1.79% 2.84% 4.06%
</TABLE>
- ------------------
(1) Total return is calculated assuming a $1,000 investment on the first day
of each period reported, reinvestment of all dividends at net asset value
on the payable date, and a sale at net asset value on the last day of each
period reported.
8
<PAGE>
PAINEWEBBER/KIDDER, PEABODY CALIFORNIA TAX EXEMPT MONEY FUND
- --------------------------------------------------------------------------------
Report of Ernst & Young LLP, Independent Auditors
- --------------------------------------------------------------------------------
The Board of Trustees and Shareholders
PaineWebber/Kidder, Peabody California Tax Exempt Money Fund
We have audited the accompanying statement of net assets of
PaineWebber/Kidder, Peabody California Tax Exempt Money Fund as of July 31,
1995, and the related statements of operations, changes in net assets, and
financial highlights for the year then ended. These financial statements and
financial highlights are the responsibility of the Fund's management. Our
responsibility is to express an opinion on these financial statements and
financial highlights based on our audit. The statement of changes in net assets
for the year ended July 31, 1994 and the financial highlights for each of the
four years in the period then ended were audited by other auditors whose report
dated September 9, 1994, expressed an unqualified opinion on those statements
and financial highlights.
We have conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned at July 31,
1995, by correspondence with the custodian. An audit also includes assessing the
accounting principles used and significant estimates made by management, as well
as evaluating the overall financial statement presentation. We believe that our
audit provides a reasonable basis for our opinion.
In our opinion, the 1995 financial statements and financial highlights
referred to above present fairly, in all material respects, the financial
position of PaineWebber/Kidder, Peabody California Tax Exempt Money Fund at July
31, 1995, the results of its operations, the changes in its net assets, and the
financial highlights for the year then ended in conformity with generally
accepted accounting principles.
/s/ Ernst & Young LLP
New York, New York
September 21, 1995
9
<PAGE>
PAINEWEBBER/KIDDER, PEABODY CALIFORNIA TAX EXEMPT MONEY FUND
- --------------------------------------------------------------------------------
Tax Information
- --------------------------------------------------------------------------------
We are required by Subchapter M of the Internal Revenue Code of 1986, as
amended, to advise you within 60 days of the Fund's fiscal year end (July 31,
1995) as to the federal tax status of distributions received by shareholders
during such fiscal year. Accordingly, we are advising you that all dividends
paid during the fiscal year by PaineWebber/Kidder, Peabody California Tax Exempt
Money Fund were federally exempt interest dividends. Since the Fund did not
invest in any security which paid interest subject to the federal alternative
minimum tax for individual taxpayers during its fiscal year, none of the
dividends paid by the Fund were subject to such tax. Also, all dividends paid by
PaineWebber/Kidder, Peabody California Tax Exempt Money Fund were exempt from
California personal income tax.
Because the Fund's fiscal year is not the calendar year, another
notification will be sent in respect of calendar year 1995. The second
notification, which will reflect the amounts to be used by calendar year
taxpayers on their federal income tax returns, will be made in conjunction with
Form 1099 DIV and will be mailed in January 1996. Shareholders are advised to
consult their own tax advisers with respect to the tax consequences of their
investment in the Fund.
10
<PAGE>
PAINEWEBBER/KIDDER, PEABODY CALIFORNIA TAX EXEMPT MONEY FUND
- --------------------------------------------------------------------------------
Shareholder Information
- --------------------------------------------------------------------------------
A special meeting of shareholders of PaineWebber/Kidder, Peabody California
Tax Exempt Money Fund ('Fund') was held on April 13, 1995. At the meeting David
J. Beaubien, William W. Hewitt, Jr., Thomas R. Jordan, Frank P.L. Minard and
Carl W. Schafer were elected as trustees to serve without limit in time, subject
to resignation, retirement or removal. The selection of Deloitte & Touche LLP as
the Fund's independent accountants was ratified.
The votes were as follows:
<TABLE>
<CAPTION>
SHARES VOTED FOR SHARES WITHHOLD AUTHORITY
---------------- -------------------------
<S> <C> <C>
David J. Beaubien............................. 78,061,471 2,149,079
William W. Hewitt, Jr......................... 78,061,471 2,149,079
Thomas R. Jordan.............................. 78,061,471 2,149,079
Frank P.L. Minard............................. 78,061,471 2,149,079
Carl W. Schafer............................... 78,061,471 2,149,079
</TABLE>
<TABLE>
<CAPTION>
SHARES VOTED FOR SHARES VOTED AGAINST SHARES WITHHOLD AUTHORITY
---------------- -------------------- -------------------------
<S> <C> <C> <C>
Ratification of the selection of
Deloitte & Touche LLP.................... 77,946,760 701,046 1,562,744
</TABLE>
On July 20, 1995, The Board of Trustees appointed Ernst & Young LLP as the
Fund's independent auditors.
In addition the following agreements were approved for the Fund:
1) An interim investment advisory agreement between the Fund and Mitchell
Hutchins Asset Management Inc. ('Mitchell Hutchins') containing
substantially the same terms, conditions and fees as the previous
investment advisory agreement with Kidder Peabody Asset Management Inc.
('KPAM').
The votes were as follows:
<TABLE>
<CAPTION>
SHARES VOTED FOR SHARES VOTED AGAINST SHARES WITHHOLD AUTHORITY
---------------- -------------------- -------------------------
<S> <C> <C> <C>
77,081,043 599,102 1,530,404
</TABLE>
2) A new investment advisory agreement with PaineWebber containing
substantially the same terms, conditions and fees as its current
investment advisory agreement with KPAM to commence on the termination
of the interim agreement.
The votes were as follows:
<TABLE>
<CAPTION>
SHARES VOTED FOR SHARES VOTED AGAINST SHARES WITHHOLD AUTHORITY
---------------- -------------------- -------------------------
<S> <C> <C> <C>
77,890,882 658,381 1,661,287
</TABLE>
3) A new sub-advisory and sub-administration agreement between PaineWebber
and Mitchell Hutchins to commence on the termination of the interim
agreement for the Fund.
The votes were as follows:
<TABLE>
<CAPTION>
SHARES VOTED FOR SHARES VOTED AGAINST SHARES WITHHOLD AUTHORITY
---------------- -------------------- -------------------------
<S> <C> <C> <C>
77,420,422 866,938 1,923,191
</TABLE>
Broker non-votes and absentions are included within the 'Shares Withhold
Authority' totals.
11
<PAGE>
- ----------------------------------------------------
TRUSTEES
David J. Beaubien
William W. Hewitt, Jr.
Thomas R. Jordan
Frank P.L. Minard
Carl W. Schafer
- ----------------------------------------------------
OFFICERS
Margo N. Alexander
President
Victoria E. Schonfeld
Vice President
Dianne E. O'Donnell
Vice President and Secretary
Julian F. Sluyters
Vice President and Treasurer
- ----------------------------------------------------
INVESTMENT ADVISER, ADMINISTRATOR AND DISTRIBUTOR
PaineWebber Incorporated
1285 Avenue of the Americas
New York, New York 10019
- ----------------------------------------------------
SUB-INVESTMENT ADVISER AND
SUB-ADMINISTRATOR
Mitchell Hutchins Asset Management Inc.
1285 Avenue of the Americas
New York, New York 10019
- ----------------------------------------------------
This report is not to be used in connection with the offering of shares of the
Fund unless accompanied or preceded by an effective prospectus.
A prospectus containing more complete information can be obtained from a
PaineWebber investment executive or correspondent firm. Read the prospectus
carefully before investing.
1995 PaineWebber Incorporated
[LOGO] RECYCLED PAPER
