Registration No. 33-20827
Inv. Co. Act No. 811-5518
As filed with the Securities and Exchange Commission on February 27, 1995
===============================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 [ ]
POST-EFFECTIVE AMENDMENT NO. 25 [X]
and
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 [ ]
AMENDMENT NO. 27 [X]
----------------------------------
THE RBB FUND, INC.
(Warburg Pincus Growth & Income Fund: Warburg Pincus Class and Warburg
Pincus Series 2 Class; Warburg Pincus Balanced Portfolio: Warburg
Pincus Class and Warburg Pincus Series 2 Class; Tax-Free Portfolio:
RBB Family Class; Government Securities Portfolio: RBB Family Class;
BEA International Equity Portfolio: BEA Class; BEA Strategic Fixed
Income Portfolio: BEA Class; BEA Emerging Markets Equity Portfolio:
BEA Class; BEA U.S. Core Equity Portfolio: BEA Class; BEA U.S. Core
Fixed Income Portfolio; BEA Class; BEA Global Fixed Income Portfolio:
BEA Class; BEA Municipal Bond Fund Portfolio; BEA Class; BEA Balanced
Fund Portfolio; BEA Class; BEA Short Duration Portfolio: BEA Class;
Laffer/Canto Equity Fund: Laffer/Canto Equity Class; Money Market
Portfolio: RBB Family Class, Cash Preservation Class, Sansom Street
Class, Bedford Class, Alpha 1 Class, Beta 1 Class, Gamma 1 Class,
Delta 1 Class, Epsilon 1 Class, Zeta 1 Class, Eta 1 Class and Theta 1
Class; Municipal Money Market Portfolio: RBB Family Class, Cash
Preservation Class, Sansom Street Class, Bedford Class, Bradford
Class, Alpha 2 Class, Beta 2 Class, Gamma 2 Class, Delta 2 Class,
Epsilon 2 Class, Zeta 2 Class, Eta 2 Class and Theta 2 Class;
Government Obligations Money Market Portfolio: Sansom Street Class,
Bedford Class, Bradford Class, Alpha 3 Class, Beta 3 Class, Gamma 3
Class, Delta 3 Class, Epsilon 3 Class, Zeta 3 Class, Eta 3 Class and
Theta 3 Class; New York Municipal Money Market Portfolio: Bedford
Class, Alpha 4 Class, Beta 4 Class, Gamma 4 Class, Delta 4 Class,
Epsilon 4 Class, Zeta 4 Class, Eta 4 Class and Theta 4 Class)
----------------------------------------------------------------------
(Exact Name of Registrant as Specified in Charter)
Bellevue Park Corporate Center
400 Bellevue Parkway
Suite 100
Wilmington, DE 19809
(Address of Principal Executive Offices)
----------------------------------------
Registrant's Telephone Number: (302) 792-2555
Copies to:
GARY M. GARDNER, ESQUIRE JOHN N. AKE, ESQUIRE
PNC Bank, National Association Ballard Spahr Andrews & Ingersoll
Broad and Chestnut Streets 1735 Market Street, 51st Floor
Philadelphia, PA 19101 Philadelphia, PA 19101
(Name and Address of
Agent for Service)
Approximate Date of Proposed Public Offering: as soon as possible after
effective date of registration statement.
It is proposed that this filing will become effective
(check appropriate box)
X immediately upon filing pursuant to paragraph (b)
---
---on __________ pursuant to paragraph (b)
---60 days after filing pursuant to paragraph (a)(i)
---on _______________ pursuant to paragraph (a)(i) 75 days
---after filing pursuant to paragraph (a)(ii)
---on _______________ pursuant to paragraph (a)(ii) 485
If appropriate, check following box:
--- this post-effective amendment designates a new
effective date for a previously filed post-effective
amendment.
------------------------------
Pursuant to Rule 24f-2 under the Investment Company Act of 1940, Registrant
has elected to register an indefinite number of shares of common stock of each
of the fifty-four classes registered hereby under the Securities Act of 1933.
Registrant filed its notice pursuant to Rule 24f-2 for the fiscal year ended
August 31, 1994 on October 7, 1994.
------------------------------
This document contains a total of ___________
pages. Exhibit Index appears on page __________.
<PAGE>
THE RBB FUND, INC.
(Bedford Shares of the
Money Market Portfolio)
Cross Reference Sheet
Form N-1A Item Location
PART A PROSPECTUS
1. Cover Page............................ Cover Page
2. Synopsis.............................. Introduction
3. Financial Highlights Information...... Financial Highlights
Information
4. General Description of Registrant..... Cover Page;
The Fund;
Investment Objec-
tives and Policies;
Description of
Shares
5. Management of the Fund................ Management
6. Capital Stock and Other Securities.... Cover Page;
Dividends and
Distributions;
Description of
Shares
7. Purchase of Securities Being Offered.. Purchase and
Redemption of
Shares - Purchase
Procedures, and Net
Asset Value
8. Redemption or Repurchase.............. Purchase and
Redemption of
Shares - Redemption
of Shares, and Net
Asset Value
9. Legal Proceedings..................... Inapplicable
<PAGE>
PART B STATEMENT OF
ADDITIONAL INFORMATION
10. Cover Page............................ Cover Page
11. Table of Contents..................... Contents
12. General Information and History....... General; See
Prospectus -
"The Fund"
13. Investment Objectives and Policies.... Investment Objectives
and Policies
14. Management of the Fund................ Directors and Officers;
Investment Advisory,
Distribution and
Servicing Arrangements
15. Control Persons and Principal Holders
of Securities......................... Miscellaneous
16. Investment Advisory and Other
Services.............................. Investment Advisory,
Distribution and
Servicing Arrangements;
See Prospectus -
"Management"
17. Brokerage Allocation and Other
Practices............................. Portfolio Transactions
18. Capital Stock and Other Securities........ Additional Information
Concerning Fund Shares;
See Prospectus -
"Dividends and
Distributions" and
"Description of Shares"
19. Purchase, Redemption and Pricing of
Securities Being Offered.............. Purchase and Redemption
Information; Valuation
of Shares; See
Prospectus - "Purchase
and Redemption of
Shares" and
"Distribution of
Shares"
20. Tax Status............................ Taxes; See Prospectus -
"Taxes"
21. Underwriters.......................... Not Applicable
22. Calculation of Yield Quotations of
Money Market Funds.................... Valuation of Shares
23. Financial Statements.................. Financial Statements
<PAGE>
PART C OTHER INFORMATION
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>
[LOGO]
VALLEY FORGE CAPITAL HOLDINGS, INC.
MONEY MARKET PORTFOLIO
Prospectus and Summary
Description of the Money Market Portfolio
of The RBB Fund, Inc.
February 27, 1995
<PAGE>
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS NOT CONTAINED IN THIS PROSPECTUS OR IN THE FUND'S STATEMENT OF
ADDITIONAL INFORMATION INCORPORATED HEREIN BY REFERENCE, IN CONNECTION WITH THE
OFFERING MADE BY THIS PROSPECTUS AND, IF GIVEN OR MADE, SUCH INFORMATION OR
REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE FUND OR
ITS DISTRIBUTOR. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFERING BY THE FUND OR
BY THE DISTRIBUTOR IN ANY JURISDICTION IN WHICH SUCH OFFERING MAY NOT LAWFULLY
BE MADE.
<TABLE>
<CAPTION>
CONTENTS
Page
<S> <C>
INTRODUCTION 2
FINANCIAL HIGHLIGHTS 5
THE FUND 7
INVESTMENT OBJECTIVES AND POLICIES 7
PURCHASE AND REDEMPTION OF SHARES 14
NET ASSET VALUE 23
MANAGEMENT 24
DISTRIBUTION OF SHARES 26
DIVIDENDS AND DISTRIBUTIONS 28
TAXES 28
DESCRIPTION OF SHARES 29
OTHER INFORMATION 34
</TABLE>
Investment Adviser
PNC Institutional Management
Corporation
Wilmington, Delaware
Custodian
PNC Bank, National Association
Philadelphia, Pennsylvania
Transfer Agent
PFPC Inc.
Wilmington, Delaware
Counsel
Ballard Spahr Andrew & Ingersoll
Philadelphia, Pennsylvania
Independent Accountants
Coopers & Lybrand L.L.P.
Philadelphia, Pennsylvania
<PAGE>
MONEY MARKET PORTFOLIO
of
The RBB Fund, Inc.
The class of common stock ("Bedford Shares" or the "Shares") of The
RBB Fund, Inc. (the "Fund"), an open-end management investment company, offered
by this Prospectus represent interests in the Fund's Money Market Portfolio,
(the "Money Market Portfolio").
The investment objective of the Money Market Portfolio is to provide
as high a level of current interest income as is consistent with maintaining
liquidity and stability of principal. It seeks to achieve such objective by
investing in a diversified portfolio of U.S. dollar-denominated money market
instruments.
Shares of the Fund are not deposits or obligations of, or guaranteed
or endorsed by, PNC Bank, National Association or any other bank and Shares are
not federally insured by the Federal Deposit Insurance Corporation, the Federal
Reserve Board, or any other agency. Investment's in Shares of the Fund involve
investment risks, including the possible loss of principal. There can be no
assurance that the Money Market Portfolio will be able to maintain a stable net
asset value of $1.00 per share.
Counsellors Securities Inc. acts as distributor for the Fund. PNC
Institutional Management Corporation serves as investment adviser for the Fund,
PNC Bank, National Association serves as sub-advisor for the Money Market
Portfolio and custodian for the Fund and PFPC Inc. serves as the transfer and
dividend disbursing agent for the Fund.
This Prospectus contains concise information that a prospective
investor needs to know before investing. Please keep it for future reference. A
Statement of Additional Information, dated February 27, 1995, has been filed
with the Securities and Exchange Commission and is incorporated by reference in
this Prospectus. It may be obtained upon request free of charge from the Fund's
distributor by calling (800) 888-9723.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS
THE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
PROSPECTUS February 27, 1995
<PAGE>2
INTRODUCTION
The RBB Fund, Inc. (the "Fund") is an open-end management investment
company incorporated under the laws of the State of Maryland currently operating
or proposing to operate nineteen separate investment portfolios. Shares of the
Class of the Fund (the "Bedford Shares" or "Shares") offered by this Prospectus
represent interests in the Fund's Money Market Portfolio (the "Money Market
Portfolio").
The Money Market Portfolio's investment objective is to provide as
high a level of current interest income as is consistent with maintaining
liquidity and stability of principal. It seeks to achieve such objective by
investing in a diversified portfolio of U.S. dollar-denominated money market
instruments which meet certain ratings criteria and present minimal credit
risks. In pursuing its investment objective, the Money Market Portfolio invests
in a broad range of government, bank and commercial obligations that may be
available in the money markets.
The Money Market Portfolio seeks to maintain a net asset value of
$1.00 per share; however, there can be no assurance that the Money Market
Portfolio will be able to maintain a stable net asset value of $1.00 per share.
The Fund's investment adviser is PNC Institutional Management
Corporation ("PIMC"). PNC Bank, National Association ("PNC Bank") serves as
sub-advisor to the Money Market Portfolio and custodian to the Fund and PFPC
Inc. ("PFPC") serves as the transfer and dividend disbursing agent to the Fund.
Counsellors Securities Inc. (the "Distributor") acts as distributor of the
Fund's Shares.
An investor may purchase and redeem Shares of the Money Market
Portfolio through his broker or by direct purchases or redemptions. See
"Purchase and Redemption of Shares."
An investment in the Shares is subject to certain risks, as set forth
in detail under "Investment Objectives and Policies." The Money Market
Portfolio, to the extent set forth under "Investment Objectives and Policies,"
may engage in the following investment practices: the use of repurchase
agreements and reverse repurchase agreements, the purchase of mortgage-related
securities, the purchase of securities on a "when-issued" or "forward
commitment" basis, the purchase of stand-by commitments and the lending of
securities. All of these transactions involve certain special risks, as set
forth under "Investment Objectives and Policies."
<PAGE>3
For more detailed information of how to purchase or redeem Bedford
Shares, please refer to the section of this Prospectus entitled "Purchase and
Redemption of Shares."
Fee Table
Annual Fund Operating Expenses (Bedford Shares)
After Expense Reimbursements and Waivers
<TABLE>
<CAPTION>
Money Market
Portfolio
<S> <C>
Management fees (after waivers)*..................... .13%
12b-1 fees (after waivers)*.......................... .60
Other Expenses (after reimbursements)................ .24
---
Total Fund Operating Expenses
(Bedford Classes)............................... .97%
====
<FN>
* Management fees and 12b-1 fees are based on average daily net assets and
are calculated daily and paid monthly.
</FN>
</TABLE>
The caption "Other Expenses" does not include extraordinary expenses as
determined by use of generally accepted accounting principles.
Example*
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:
<TABLE>
<CAPTION>
1 Years 3 Years 5 Years 10 Years
------- ------- ------- --------
<S> <C> <C> <C> <C>
Money Market......................... $10 $31 $54 $119
<FN>
* Other classes of this Money Market Portfolio are sold with different
fees and expenses.
</FN>
</TABLE>
The Fee Table is designed to assist an investor in understanding the
various costs and expenses that an investor in the Bedford Shares of the Fund
will bear directly or indirectly. (For more complete descriptions of the various
costs and expenses, see "Management--Investment Adviser and Sub-Advisor," and
"Distribution of Shares" below.) The expense figures are based on actual costs
and fees charged to the Bedford Shares. The Fee Table reflects a voluntary
waiver of Management fees for the Money Market Portfolio. However, there can be
no assurance that any future waivers of Management fees will not vary from the
figure reflected in the Fee Table. To the extent that any
<PAGE>4
service providers assume additional expenses of the Money Market Portfolio, such
assumption will have the effect of lowering the Money Market Portfolio's overall
expense ratio and increasing its yield to investors. Absent fee waivers and
reimbursements, expenses for the year ended August 31, 1994, were as follows:
Annual Fund Operating Expenses (Bedford Shares)
Before Expense Reimbursements and Waivers
<TABLE>
<CAPTION>
Money Market
Portfolio
<S> <C>
Management fees......... .38%
12b-1 fees.............. .60
Other Expenses ......... .25
</TABLE>
The caption "Other Expenses" does not include extraordinary expenses
as determined by use of generally accepted accounting principles.
The Example in the Fee Table assumes that all dividends and
distributions are reinvested and that the amounts listed under "Annual Fund
Operating Expenses (Bedford Shares) After Expense Reimbursements and Waivers"
remain the same in the years shown. THE EXAMPLE SHOULD NOT BE CONSIDERED A
REPRESENTATION OF PAST OR FUTURE EXPENSES AND ACTUAL EXPENSES MAY BE GREATER OR
LESS THAN THOSE SHOWN.
From time to time the Money Market Portfolio advertises 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 Money Market
Portfolio refers to the income generated by an investment in the Money Market
Portfolio over a seven-day period (which period will be stated in the
advertisement). This income is then "annualized." That is, the amount of income
generated by the investment during that week is assumed to be generated each
week over a 52-week period and is shown as a percentage of the investment. The
"effective yield" is calculated similarly but, when annualized, the income
earned by an investment in the Money Market Portfolio is assumed to be
reinvested. The "effective yield" will be slightly higher than the "yield"
because of the compounding effect of this assumed reinvestment.
The yield of any investment is generally a function of portfolio
quality and maturity, type of investment and operating expenses. The yield on
Bedford Shares will fluctuate and is not necessarily representative of future
results. Any fees charged by broker/dealers directly to their customers in
connection with investments in Bedford Shares are not reflected in the yields of
the Bedford Shares, and such fees, if charged, will reduce the
<PAGE>5
actual return received by shareholders on their investments. The yield on Shares
of the Bedford Class may differ from yields on shares of other classes of the
Fund that also represent interests in the same Money Market Portfolio depending
on the allocation of expenses to each class of the Money Market Portfolio. See
"Expenses."
FINANCIAL HIGHLIGHTS
The table below sets forth certain information concerning the
investment results of the Bedford Shares representing interests in the Money
Market Portfolio for the years indicated. The financial data included in this
table for each of the periods ended August 31, 1990 through 1994 are a part of
the Fund's financial statement for the Money Market Portfolio which have been
audited by Coopers & Lybrand L.L.P., the Fund's independent accountants, whose
current report thereon appears in the Statement of Additional Information along
with the financial statement. The financial data for the period ending August
31, 1989 is a part of a previous financial statement audited by Coopers &
Lybrand L.L.P. The financial data included in this table should be read in
conjunction with the financial statement and related notes included in the
Statement of Additional Information.
<PAGE>6
Financial Highlights (c)
For a Share Outstanding Throughout Each Period
<TABLE>
<CAPTION>
Money Market Portfolio
For the Period
September 30, 1988
For the For the For the For the For the (Commencement of
Year Ended Year Ended Year Ended Year Ended Year Ended Operations) to
August 31, 1994 August 31, 1993 August 31, 1992 August 31, 1991 August 31, 1990 August 31, 1989
--------------- --------------- --------------- --------------- --------------- ----------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning
of period..................... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
----------- ------------ ------------ ------------ ------------ ------------
Income from investment
operations:
Net investment income........ .0278 .0243 .0375 .0629 .0765 .0779
Net gains on securities
(both realized and
unrealized)................. -- -- .0007 -- -- --
----------- ------------ ------------ ------------ ------------ -----------
Total from investment
operations............... .0278 .0243 .0382 .0629 .0765 .0779
----------- ------------ ------------ ------------ ------------ ------------
Less distributions
Dividends (from net investment
income)...................... (.0278) (.0243) (.0375) (.0629) (.0765) (.0779)
Distributions (from capital
gains)...................... -- -- (.0007) -- -- --
----------- ------------ ------------- ------------ ------------ ----------
Total distributions......... (.0278) (.0243) (.0382) (.0629) (.0765) (.0779)
----------- ------------ ------------ ------------ ------------ ------------
Net asset value, end of
period........................ $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
========== =========== =========== =========== =========== ===========
Total return................... 2.81% 2.46% 3.89% 6.48% 7.92% 8.81%(b)
Ratios/Supplemental Data
Net assets, end of period...... $710,737,481 $782,153,438 $736,841,928 $747,530,400 $709,757,157 $152,310,825
Ratios of expenses to average
net assets.................. .95%(a) .95%(a) .95%(a) .92%(a) .92%(a) .93%(a)(b)
Ratios of net investment income
to average net assets....... 2.78% 2.43% 3.75% 6.29% 7.65% 8.61%(b)
_____________________
<FN>
(a) Without the waiver of advisory and administrative fees, and without
the reimbursement of certain operating expenses, the ratios of
expenses to average net assets for the Money Market Portfolio would
have been 1.16%, 1.19%, 1.20%, 1.17% and 1.16% for the years ended
August 31, 1994, 1993, 1992, 1991 and 1990, respectively, and 1.27%
annualized for the period ended August 31, 1989.
(b) Annualized.
(c) Financial Highlights relate solely to the Bedford Class of shares
within the Money Market Portfolio.
</FN>
</TABLE>
<PAGE>7
THE FUND
The Fund is an open-end management investment company incorporated
under the laws of the State of Maryland currently operating or proposing to
operate nineteen separate investment portfolios. The Bedford Class of Shares
offered by this Prospectus represent interests in the Fund's Money Market
Portfolio. The Fund was incorporated in Maryland on February 29, 1988.
INVESTMENT OBJECTIVES AND POLICIES
Money Market Portfolio
The Money Market Portfolio's investment objective is to provide as
high a level of current interest income as is consistent with maintaining
liquidity and stability of principal. Portfolio obligations held by the Money
Market Portfolio have remaining maturities of 397 calendar days or less
(exclusive of securities subject to repurchase agreements). In pursuing its
investment objective, the Money Market Portfolio invests in a diversified
portfolio of U.S. dollar-denominated instruments, such as government, bank and
commercial obligations, that may be available in the money markets ("Money
Market Instruments") and that meet certain ratings criteria and present minimal
credit risks to the Money Market Portfolio. See "Eligible Securities." The
following descriptions illustrate the types of Money Market Instruments in which
the Money Market Portfolio invests.
Bank Obligations. The Money Market Portfolio may purchase obligations
of issuers in the banking industry, such as short-term obligations of bank
holding companies, certificates of deposit, bankers' acceptances and time
deposits, including U.S. dollar-denominated instruments issued or supported by
the credit of U.S. or foreign banks or savings institutions having total assets
at the time of purchase in excess of $1 billion. The Money Market Portfolio may
invest substantially in obligations of foreign banks or foreign branches of U.S.
banks where the investment adviser deems the instrument to present minimal
credit risks. Such investments may nevertheless entail risks that are different
from those of investments in domestic obligations of U.S. banks due to
differences in political, regulatory and economic systems and conditions. The
Money Market Portfolio may also make interest-bearing savings deposits in
commercial and savings banks in amounts not in excess of 5% of its total assets.
Commercial Paper. The Money Market Portfolio may purchase commercial
paper rated (at the time of purchase) in the two highest rating categories of a
nationally recognized
<PAGE>8
statistical rating organization ("NRSRO"). These rating categories are described
in the Appendix to the Statement of Additional Information ("SAI"). The Money
Market Portfolio may also purchase unrated commercial paper provided that such
paper is determined to be of comparable quality by the Money Market Portfolio's
investment adviser in accordance with guidelines approved by the Fund's Board of
Directors. Commercial paper issues in which the Money Market Portfolio may
invest include securities issued by corporations without registration under the
Securities Act of 1933 (the "1933 Act") in reliance on the exemption from such
registration afforded by Section 3(a)(3) thereof, and commercial paper issued in
reliance on the so-called "private placement" exemption from registration which
is afforded by Section 4(2) of the 1933 Act ("Section 4(2) paper"). Section 4(2)
paper is restricted as to disposition under the Federal securities laws in that
any resale must similarly be made in an exempt transaction. Section 4(2) paper
is normally resold to other institutional investors through or with the
assistance of investment dealers who make a market in Section 4(2) paper, thus
providing liquidity.
The Money Market Portfolio may invest in commercial paper and
short-term notes and corporate bonds that meet the Money Market Portfolio's
quality and maturity restrictions. Commercial paper purchased by the Money
Market Portfolio may include instruments issued by foreign issuers, such as
Canadian Commercial Paper ("CCP"), which is U.S. dollar-denominated commercial
paper issued by a Canadian corporation or a Canadian counterpart of a U.S.
corporation, and in Europaper, which is U.S. dollar-denominated commercial paper
of a foreign issuer, subject to the criteria stated above for other commercial
paper issuers.
Variable Rate Demand Notes. The Money Market Portfolio may purchase
variable rate demand notes, which are unsecured instruments that permit the
indebtedness thereunder to vary and provide for periodic adjustment in the
interest rate. Although the notes are not normally traded and there may be no
active secondary market in the notes, the Money Market Portfolio will be able
(at any time or during the specified periods not exceeding 397 calendar days,
depending upon the note involved) to demand payment of the principal of a note.
The notes are not typically rated by credit rating agencies, but issuers of
variable rate demand notes must satisfy the same criteria as set forth above for
issuers of commercial paper. If an issuer of a variable rate demand note
defaulted on its payment obligation, the Money Market Portfolio might be unable
to dispose of the note because of the absence of an active secondary market. For
this or other reasons, the Money Market Portfolio might suffer a loss to the
extent of the default. The Money Market Portfolio invests in variable rate
demand notes only when the Money Market Portfolio's
<PAGE>9
investment adviser deems the investment to involve minimal credit risk. The
Money Market Portfolio's investment adviser also monitors the continuing
creditworthiness of issuers of such notes to determine whether the Money Market
Portfolio should continue to hold such notes.
Repurchase Agreements. The Money Market Portfolio may agree to
purchase securities from financial institutions subject to the seller's
agreement to repurchase them at an agreed-upon time and price ("repurchase
agreements"). The securities held subject to a repurchase agreement may have
stated maturities exceeding 397 calendar days, provided the repurchase agreement
itself matures in less than 397 calendar days. The financial institutions with
whom the Money Market Portfolio may enter into repurchase agreements will be
banks which the Money Market Portfolio's investment adviser considers
creditworthy pursuant to criteria approved by the Board of Directors and
non-bank dealers of U.S. Government securities that are listed on the Federal
Reserve Bank of New York's list of reporting dealers. The Money Market
Portfolio's investment adviser will consider, among other things, whether a
repurchase obligation of a seller involves minimal credit risk to the Money
Market Portfolio in determining whether to have the Money Market Portfolio enter
into a repurchase agreement. The seller under a repurchase agreement will be
required to maintain the value of the securities subject to the agreement at not
less than the repurchase price plus accrued interest. The Money Market
Portfolio's investment adviser will mark to market daily the value of the
securities, and will, if necessary, require the seller to maintain additional
securities, to ensure that the value is not less than the repurchase price.
Default by or bankruptcy of the seller would, however, expose the Money Market
Portfolio to possible loss because of adverse market action or delays in
connection with the disposition of the underlying obligations.
U.S. Government Obligations. The Money Market Portfolio may purchase
obligations issued or guaranteed by the U.S. Government or its agencies and
instrumentalities. Obligations of certain agencies and instrumentalities of the
U.S. Government are backed by the full faith and credit of the United States.
Others are backed by the right of the issuer to borrow from the U.S. Treasury or
are backed only by the credit of the agency or instrumentality issuing the
obligation.
Asset-backed Securities. The Money Market Portfolio may invest in
asset-backed securities which are backed by mortgages, installment sales
contracts, credit card receivables or other assets and collateralized mortgage
obligations ("CMOs") issued or guaranteed by U.S. Government agencies and,
instrumentalities or issued by private companies. Asset-backed securities also
include adjustable rate securities. The
<PAGE>10
estimated life of an asset-backed security varies with the prepayment experience
with respect to the underlying debt instruments. For this and other reasons, an
asset-backed security's stated maturity may be shortened, and the security's
total return may be difficult to predict precisely. Such difficulties are not
expected, however, to have a significant effect on the Money Market Portfolio
since the remaining maturity of any asset-backed security acquired will be 397
days or less. Asset-packed securities are considered an industry for industry
concentration purposes. See "Investment Limitations."
Reverse Repurchase Agreements. The Money Market Portfolio may enter
into reverse repurchase agreements with respect to portfolio securities. At the
time the Money Market Portfolio enters into a reverse repurchase agreement, it
will place in a segregated custodial account with the Fund's custodian or a
qualified sub-custodian liquid assets such as U.S. Government securities or
other liquid debt securities having a value equal to or greater than the
repurchase price (including accrued interest) and will subsequently monitor the
account to ensure that such value is maintained. Reverse repurchase agreements
involve the risk that the market value of the securities sold by the Money
Market Portfolio may decline below the price of the securities the Money Market
Portfolio is obligated to repurchase. Reverse repurchase agreements are
considered to be borrowings by the Money Market Portfolio under the 1940 Act.
Municipal Obligations. In addition, the Money Market Portfolio may,
when deemed appropriate by its investment adviser in light of the Money Market
Portfolio's investment objective, invest without limitation in high quality,
short-term municipal obligations ("Municipal Obligations") issued by state and
local governmental issuers, the interest on which may be taxable or tax-exempt
for Federal income tax purposes, provided that such obligations carry yields
that are competitive with those of other types of Money Market Instruments of
comparable quality. For a more complete discussion of Municipal Obligations, see
"Additional Investment Objectives and Policies--Money Market Portfolio."
Guaranteed Investment Contracts. The Money Market Portfolio may make
investments in obligations, such as guaranteed investment contracts and similar
funding agreements (collectively "GICs"), issued by highly rated U.S. insurance
companies. A GIC is a general obligation of the issuing issuance company and not
a separate account. The Money Market Portfolio's investments in GICs are not
expected to exceed 5% of its total assets at the time of purchase absent unusual
market conditions. GIC investments are subject to the Fund's policy regarding
investment in illiquid securities.
<PAGE>11
Stand-by Commitments. The Money Market Portfolio may acquire "stand-by
commitments" with respect to Municipal Obligations held in its portfolio. Under
a stand-by commitment, a dealer would agree to purchase at the Money Market
Portfolio's option specified Municipal Obligations at a specified price. The
acquisition of a stand-by commitment may increase the cost, and thereby reduce
the yield, of the Municipal Obligation to which such commitment relates. The
Money Market Portfolio will acquire stand-by commitments solely to facilitate
portfolio liquidity and does not intend to exercise its rights thereunder for
trading purposes.
When-Issued Securities. The Money Market Portfolio may purchase
portfolio securities on a "when-issued" basis. When-issued securities are
securities purchased for delivery beyond the normal settlement date at a stated
price and yield. The Money Market Portfolio will generally not pay for such
securities or start earning interest on them until they are received. Securities
purchased on a when-issued basis are recorded as an asset at the time the
commitment is entered into and are subject to changes in value prior to delivery
based upon changes in the general level of interest rates. The Money Market
Portfolio expects that commitments to purchase when-issued securities will not
exceed 25% of the value of its total assets absent unusual market conditions.
The Money Market Portfolio does not intend to purchase when-issued securities
for speculative purposes but only in furtherance of its investment objective.
Eligible Securities. The Money Market Portfolio will only purchase
"eligible securities" that present minimal credit risks as determined by the
Money Market Portfolio's adviser pursuant to guidelines adopted by the Board of
Directors. Eligible securities generally include: (1) U.S. Government
securities, (2) securities that are rated at the time of purchase in the two
highest rating categories by one or more nationally recognized statistical
rating organizations ("NRSROs") (e.g. commercial paper rated "A-1" or A-2" by
S&P), (3) securities that are rated at the time of purchase by the only NRSRO
rating the security in one of its two highest rating categories for such
securities, and (4) securities that are not rated and are issued by an issuer
that does not have comparable obligations rated by an NRSRO ("Unrated
Securities"), provided that such securities are determined to be of comparable
quality to eligible rated securities. For a more complete description of
eligible securities, see "Investment Objectives and Policies" in the Statement
of Additional Information.
Illiquid Securities. The Money Market Portfolio will not invest more
than 10% of its net assets in illiquid securities, including repurchase
agreements which have a maturity
<PAGE>12
of longer than seven days, time deposits with maturities in excess of seven
days, variable rate demand notes with demand periods in excess of seven days
unless the Money Market Portfolio's investment adviser determines that such
notes are readily marketable and could be sold promptly at the prices at which
they are valued, and other securities that are illiquid by virtue of the absence
of a readily available market or legal or contractual restrictions on resale.
Repurchase agreements subject to demand are deemed to have a maturity equal to
the notice period. Securities that have legal or contractual restrictions on
resale but have a readily available market are not deemed illiquid for purposes
of this limitation. The Money Market Portfolio's investment adviser will monitor
the liquidity of such restricted securities under the supervision of the Board
of Directors. See "Investment Objectives and Policies--Illiquid Securities" in
the Statement of Additional Information.
The Money Market Portfolio's investment objective and policies
described above may be changed by the Fund's Board of Directors without the
affirmative vote of the holders of a majority of all outstanding Shares
representing interests in the Money Market Portfolio. Such changes may result in
the Money Market Portfolio having investment objectives which differ from those
an investor may have considered at the time of investment. There is no assurance
that the investment objective of the Money Market Portfolio will be achieved.
The Money Market Portfolio may not, however, change the investment limitations
summarized below without such a vote of shareholders. (A more detailed
description of the following investment limitations, together with other
investment limitations that cannot be changed without a vote of shareholders, is
contained in the Statement of Additional Information under "Investment
Objectives and Policies.")
The Money Market Portfolio may not:
1. Purchase any securities other than Money Market Instruments, some
of which may be subject to repurchase agreements, but the Money Market
Portfolio may make interest-bearing savings deposits in amounts not in
excess of 5% of the value of the Money Market Portfolio's assets and may
make time deposits.
2. Borrow money, except from banks for temporary purposes and except
for reverse repurchase agreements, and then in amounts not in excess of 10%
of the value of the Money Market Portfolio's assets at the time of such
borrowing, and only if after such borrowing there is asset coverage of at
least 300% for all borrowings of the Money Market Portfolio, or mortgage,
pledge or hypothecate any of
<PAGE>13
its assets except in connection with any such borrowing and in amounts not
in excess of 10% of the value of the Money Market Portfolio's assets at the
time of such borrowing; or purchase portfolio securities while borrowings
in excess of 5% of the Money Market Portfolio's net assets are outstanding.
(This borrowing provision is not for investment leverage, but solely to
facilitate management of the Money Market Portfolio's securities by
enabling the Money Market Portfolio to meet redemption requests where the
liquidation of portfolio securities is deemed to be disadvantageous or
inconvenient.)
3. Purchase any securities which would cause, at the time of purchase,
less than 25% of the value of the total assets of the Money Market
Portfolio to be invested in the obligations of issuers in the banking
industry, or in obligations, such as repurchase agreements, secured by such
obligations (unless the Money Market Portfolio is in a temporary defensive
position) or which would cause, at the time of purchase, more than 25% of
the value of its total assets to be invested in the obligations of issuers
in any other industry.
4. Purchase securities of any one issuer, other than securities issued
or guaranteed by the U.S. Government or its agencies and instrumentalities,
if immediately after and as a result of such purchase more than 5% of the
value of its total assets would be invested in the securities of such
issuer, or more than 10% of the outstanding voting securities of such
issuer would be owned by the Money Market Portfolio, except that up to 25%
of the value of the Money Market Portfolio's total assets may be invested
without regard to such 5% limitation.
So long as it values its portfolio securities on the basis of the
amortized cost method of valuation pursuant to Rule 2a-7 under the 1940 Act, the
Money Market Portfolio will meet the following limitations on its investments in
addition to the fundamental investment limitations described above. These
limitations may be changed without a vote of shareholders of the Money Market
Portfolio.
1. The Money Market Portfolio will limit its purchases of the
securities of any one issuer, other than issuers of U.S. Government
securities, to 5% of its total assets, except that the Money Market
Portfolio may invest more than 5% of its total assets in First Tier
Securities of one issuer for a period of up to three business days. "First
Tier Securities" include eligible securities that (i) if rated by more than
one NRSRO, are rated (at the time of purchase) by two or more NRSROs in the
highest rating
<PAGE>14
category for such securities, (ii) if rated by only one NRSRO, are rated by
such NRSRO in its highest rating category for such securities, (iii) have
no short-term rating and are comparable in priority and security to a class
of short-term obligations of the issuer of such securities that have been
rated in accordance with (i) or (ii) above, or (iv) are Unrated Securities
that are determined to be of comparable quality to such securities.
Purchases of First Tier Securities that come within categories (ii) and
(iv) above will be approved or ratified by the Board of Directors.
2. The Money Market Portfolio will limit its purchases of Second Tier
Securities, which are eligible securities other than First Tier Securities,
to 5% of its total assets.
3. The Money Market Portfolio will limit its purchases of Second Tier
Securities of one issuer to the greater of 1% of its total assets or $1
million.
PURCHASE AND REDEMPTION OF SHARES
Purchase Procedures
General. Shares are sold without a sales load on a continuous basis by
the Fund's Distributor. The Distributor is located at 466 Lexington Avenue, New
York, New York. Investors may purchase Shares through an account maintained by
the investor with his brokerage firm (the "Account") and may also purchase
Shares directly by mail or bank wire. The minimum initial investment is $1,000,
and the minimum subsequent investment is $100. The Fund in its sole discretion
may accept or reject any order for purchases of Shares.
All payments for initial and subsequent investments should be in U.S.
dollars. Purchases will be effected at the net asset value next determined after
PFPC, the Fund's transfer agent, has received a purchase order in proper form
and the Fund's custodian has Federal Funds immediately available to it. In those
cases where payment is made by check, Federal Funds will generally become
available two Business Days after the check is received. Orders which are
accompanied by Federal Funds, and received by the Fund by 12:00 noon Eastern
Time, and orders as to which payment has been converted into Federal Funds by
12:00 noon Eastern Time, will be executed as of 12:00 noon that Business Day.
Orders which are accompanied by Federal Funds and received by the Fund after
12:00 noon Eastern Time but prior to 4:00 p.m. Eastern Time, and orders as to
which payment has been converted
<PAGE>15
into Federal Funds after 12:00 noon Eastern Time but prior to 4:00 p.m. Eastern
Time on any Business Day of the Fund, will be executed as of 4:00 p.m. Eastern
Time on that Business Day but will not be entitled to receive dividends declared
on such Business Day. Orders which are accompanied by Federal Funds and received
by the Fund as of 4:00 p.m. Eastern Time or later, and orders as to which
payment has been converted to Federal Funds as of 4:00 p.m. Eastern Time or
later on a Business Day will be processed as of 12:00 noon Eastern Time on the
following Business Day. A "Business Day" is any day that both the New York Stock
Exchange (the "NYSE") and the Federal Reserve Bank of Philadelphia (the "FRB")
are open. Currently, the NYSE or the FRB are closed on weekends and New Year's
Day, Martin Luther King Day, Presidents' Day, Good Friday, Memorial Day,
Independence Day (observed), Labor Day, Columbus Day, Veterans Day, Thanksgiving
Day and Christmas Day (observed).
Purchases through an Account. Purchases of Shares may be effected
through an investor's Account with his broker through procedures established in
connection with the requirements of Accounts at such broker. In such event,
beneficial ownership of Bedford Shares will be recorded by the broker and will
be reflected in the Account statements provided by the broker to such investors.
A broker may impose minimum investor Account requirements. Although a broker
does not impose a sales charge for purchases of Shares, depending on the terms
of an investor's Account with his broker, the broker may charge an investor's
Account fees for automatic investment and other services provided to the
Account. Information concerning Account requirements, services and charges
should be obtained from an investor's broker. This Prospectus should be read in
conjunction with any information received from a broker. Shareholders whose
shares are held in the street name account of a broker/dealer and who desire to
transfer such shares to the street name account of another broker/dealer should
contact their current broker/dealer.
A broker may offer investors maintaining Accounts the ability to
purchase Shares under an automatic purchase program (a "Purchase Program")
established by a participating broker. An investor who participates in a
Purchase Program will have his "free-credit" cash balances in his Account
automatically invested in Shares of the Bedford Class designated by the investor
as the "Primary Bedford Class" for his Purchase Program. The frequency of
investments and the minimum investment requirement will be established by the
broker and the Fund. In addition, the broker may require a minimum amount of
cash and/or securities to be deposited in an Account for participants in its
Purchase Program. The description of the particular broker's Purchase Program
should be read for details, and any inquiries concerning an Account under a
Purchase Program should be directed to the broker. A participant in a Purchase
Program may change the
<PAGE>16
designation of the Primary Bedford Class at any time by so instructing his
broker.
If a broker makes special arrangements under which orders for Shares
are received by PFPC prior to 12:00 noon Eastern Time, and the broker guarantees
that payment for such Shares will be made in Federal Funds to the Fund's
custodian prior to 4:00 p.m. Eastern Time, on the same day, such purchase orders
will be effective and Shares will be purchased at the offering price in effect
as of 12:00 noon Eastern Time on the date the purchase order is received by
PFPC.
The Money Market Portfolio is also available through Valley Forge
Brokerage, Inc. ("Valley Forge Brokerage"), a registered broker-dealer that has
entered into a dealer agreement with the Fund's Distributor. For distribution
services with respect to shares of the Money Market Portfolio held by this firm,
the Fund's Distributor pays Valley Forge Brokerage up to .50% of the annual
average value of such accounts. Purchases made through this program do not
require customers to pay a transaction fee.
Direct Purchases. An investor may also make direct investments at any
time in Shares through any broker that has entered into a dealer agreement with
the Distributor (a "Dealer"). An investor may make an initial investment in
Shares by mail by fully completing and signing an application obtained from a
Dealer (the "Application"), specifying the Valley Forge Money Market Portfolio,
and mailing it, together with a check payable to "The Valley Forge Money Market
Portfolio" c/o PFPC, P.O. Box 8926, Wilmington, Delaware 19899. An Application
will be returned to the investor unless it contains the name of the Dealer from
whom it was obtained. Subsequent purchases may be made through a Dealer or by
forwarding payment to the Fund's transfer agent at the foregoing address.
Provided that the investment is at least $2,500, an investor may also
purchase Shares by having his bank or Dealer wire Federal Funds to the Fund's
Custodian, PNC Bank. An investor's bank or Dealer may impose a charge for this
service. In order to ensure prompt receipt of an investor's Federal Funds wire,
for an initial investment, it is important that an investor follows these steps:
A. Telephone the Fund's transfer agent, PFPC, toll-free (800)
797-6706, and provide it with your name, address, telephone number, Social
Security or Tax Identification Number, the Shares selected, the amount
being wired, and by which bank. PFPC will then provide an investor with a
Fund account number. (Investors with
<PAGE>17
existing accounts should also notify the Fund's transfer agent prior to
wiring funds.)
B. Instruct your bank or Dealer to wire the specified amount, together
with your assigned account number, to the Custodian:
PNC Bank, N.A.
Philadelphia, PA
ABA-031000053
FROM: (name of investor)
ACCOUNT NUMBER: (investor's account number
with the Money Market Portfolio)
FOR PURCHASE OF: (name of the portfolio)
AMOUNT: (amount to be invested)
C. Fully complete and sign the Application and mail it to the address
shown thereon. PFPC will not process redemptions until it receives a fully
completed and signed Application.
For subsequent investments, an investor should follow steps A and B above.
Retirement Plans. Shares may be purchased in conjunction with
individual retirement accounts ("IRAs") and rollover IRAs where PNC Bank acts as
custodian. For further information as to applications and annual fees, contact
the Distributor or your broker. To determine whether the benefits of an IRA are
available and/or appropriate, a shareholder should consult with a tax adviser.
Redemption Procedures
Redemption orders are effected at the net asset value per share next
determined after receipt of the order in proper form by the Fund's transfer
agent, PFPC. Investors may redeem all or some of their Shares in accordance with
one of the procedures described below.
Redemption of Shares in an Account. An investor who beneficially owns
Shares may redeem Shares in his Account in accordance with instructions and
limitations pertaining to his Account by contacting his broker. If such notice
is received by PFPC from the broker by 12:00 noon Eastern Time on any Business
Day, the redemption will be effective as of 12:00 noon Eastern Time on that day.
Payment of the redemption proceeds will be made after 12:00 noon Eastern Time on
the day the redemption is effected, provided that the Fund's custodian is open
for business. If the custodian is not open, payment will be made on the next
bank business day. If the redemption request is
<PAGE>18
received between 12:00 noon and 4:00 p.m. Eastern Time on a Business Day, the
redemption will be effective as of 4:00 p.m. Eastern Time on such Business Day
and payment will be made on the next bank business day following receipt of the
redemption request. If all shares are redeemed, all accrued but unpaid dividends
on those shares will be paid with the redemption proceeds.
An investor's brokerage firm will also redeem each day a sufficient
number of Shares of the Primary Bedford Class to cover debit balances created by
transactions in the Account or instructions for cash disbursements. Shares will
be redeemed on the same day that a transaction occurs that results in such a
debit balance or charge.
Each brokerage firm reserves the right to waive or modify criteria for
participation in an Account or to terminate participation in an Account for any
reason.
Redemption of Shares Owned Directly. A direct investor may redeem any
number of Shares by sending a written request to The Valley Forge Money Market
Portfolio c/o PFPC, P.O. Box 8926, Wilmington, Delaware 19899. Redemption
requests must be signed by each shareholder in the same manner as the Shares are
registered. Redemption requests for joint accounts require the signature of each
joint owner. On redemption requests of $5,000 or more, a signature guarantee is
required. A signature guarantee verifies the authenticity of your signature and
the guarantor must be an eligible guarantor. In order to be eligible, the
guarantor must be a participant in a STAMP program (a Securities Transfer Agents
Medallion Program). You may call the Transfer Agent at (800) 797-6706 to
determine whether the entity that will guarantee the signature is an eligible
guarantor. Guarantees must be signed by an authorized signatory of STAMP Program
and "Signature Guaranteed" must appear with the signature.
Direct investors may redeem shares without charge by telephone if they
have checked the appropriate box and supplied the necessary information on the
Application, or have filed a Telephone Authorization with the Fund's transfer
agent. An investor may obtain a Telephone Authorization from PFPC or by calling
Account Services at (800) 797-6706. The Fund will employ reasonable procedures
to confirm that instructions communicated by telephone are genuine, and if the
Fund does not employ such procedures, it may be liable for any losses due to
unauthorized or fraudulent telephone instructions. The proceeds will be mailed
by check to an investor's registered address unless he has designated in his
Application or Telephone Authorization that such proceeds are to be sent by wire
transfer to a specified checking or savings account. If proceeds are to be sent
by wire
<PAGE>19
transfer, a telephone redemption request received prior to 4:00 p.m. will result
in redemption proceeds being wired to the investor's bank account on the next
day that a wire transfer can be effected. The minimum redemption for proceeds
sent by wire transfer is $2,500. There is no maximum for proceeds sent by wire
transfer. The Fund may modify this redemption service at any time or charge a
service fee upon prior notice to shareholders. No fee is currently contemplated.
Neither PFPC nor the Fund will be liable for any loss, liability, cost or
expense for following the procedures below or for following instructions
communicated by telephone that it reasonably believes to be genuine.
The Fund's telephone transaction procedures include the following
measures: (1) requiring the appropriate telephone transaction privilege forms;
(2) requiring the caller to provide the names of the account owners, the account
social security number and name of the fund, all of which must match the Fund's
records; (3) requiring the Fund's service representative to complete a telephone
transaction form, listing all of the above caller identification information;
(4) requiring that redemption proceeds be sent only by check to the account
owners of record at the address of record, or by wire only to the owners of
record at the bank account of record; (5) sending a written confirmation for
each telephone transaction to the owners of record at the address of record
within five (5) business days of the call; and (6) maintaining tapes of
telephone transactions for six months, if the fund elects to record shareholder
telephone transactions.
For accounts held of record by a broker-dealer, trustee, custodian or
other agent, additional documentation or information regarding the scope of a
caller's authority is required. Finally, for telephone transactions in accounts
held jointly, additional information regarding other account holders is
required. Telephone transactions will not be permitted in connection with IRA or
other retirement plan accounts or by attorney-in-fact under power of attorney.
Redemption by Check. Upon request, the Fund will provide any direct
investor and any investor who does not have check writing privileges for his
Account with forms of drafts ("checks") payable through PNC Bank. These checks
may be made payable to the order of anyone. The minimum amount of a check is
$100; however, a broker/dealer may establish a higher minimum. An investor
wishing to use this check writing redemption procedure should complete specimen
signature cards, and then forward such signature cards to PFPC. PFPC will then
arrange for the checks to be honored by PNC Bank. Investors who own shares
through an Account should contact their brokers for signature cards. Investors
of joint accounts may elect to have checks honored with a single signature.
Check redemptions will be
<PAGE>20
subject to PNC Bank's rules governing checks. An investor will be able to stop
payment on a check redemption. The Fund or PNC Bank may terminate this
redemption service at any time, and neither shall incur any liability for
honoring checks, for effecting redemptions to pay checks, or for returning
checks which have not been accepted.
When a check is presented to PNC Bank for clearance, PNC Bank, as the
investor's agent, will cause the Fund to redeem a sufficient number of full and
fractional shares owned by the investor to cover the amount of the check. This
procedure enables the investor to continue to receive dividends on those Shares
equalling the amount being redeemed by check until such time as the check is
presented to PNC Bank. Checks may not be presented for cash payment at the
offices of PNC Bank because, under 1940 Act rules, redemptions may be effected
only at the redemption price next determined after the redemption request is
presented to PFPC. This limitation does not affect checks used for the payment
of bills or cash at other banks.
Additional Redemption Information. The Fund ordinarily will make
payment for all Shares redeemed within seven days after receipt by PFPC of a
redemption request in proper form. However, Shares purchased by check will not
be redeemed, for a period of up to fifteen days after their purchase, pending a
determination that the check has cleared. This procedure does not apply to
Shares purchased by wire payment. During the period prior to the time Shares are
redeemed, dividends on such Shares will accrue and be payable.
The Fund imposes no charge when Shares are redeemed. The Fund reserves
the right to redeem any account in a Bedford Class involuntarily, on thirty
days' notice, if such account falls below $500 and during such 30-day period the
amount invested in such account is not increased to at least $500. Payment for
Shares redeemed may be postponed or the right of redemption suspended as
provided by the rules of the Securities and Exchange Commission.
Exchange of Shares
Exchange Privilege. The exchange privilege enables an investor to
purchase shares of the Money Market Portfolio in exchange for shares of the
other mutual funds sponsored by Valley Forge Capital Holdings, Inc., to the
extent such shares are offered for sale in the investor's state of residence.
These funds have different investment objectives which may be of interest to
investors. To use this Privilege, investors should consult Valley Forge
Brokerage or the Transfer Agent to determine
<PAGE>21
if it is available and whether any conditions are imposed on its use. Currently,
exchanges may be made among the Money Market Portfolio with the following other
families:
Valley Forge Capital Holdings Total Return Fund
To use this Privilege, exchange instructions must be given to the
Transfer Agent in writing or by telephone. A shareholder wishing to make an
exchange may do so by sending a written request to the Transfer Agent at: PFPC
Inc., Attention: The Valley Forge Funds -- Money Market Portfolio, P.O. Box
8926, Wilmington, Delaware 19899. Shareholders are automatically provided with
telephone exchange privileges when opening an account, unless they indicate on
the account application that they do not wish to use this privilege.
Shareholders holding share certificates are not eligible to exchange shares of
the Money Market Portfolio by phone because share certificates must accompany
all exchange requests. To add this feature to an existing account that
previously did not provide for this option, a Telephone Exchange Authorization
Form must be filed with the Transfer Agent. This form is available from the
Transfer Agent. Once this election has been made, the shareholder may contact
the Transfer Agent by telephone at (800) 797-6706 to request the exchange.
During periods of substantial economic or market change, telephone exchanges may
be difficult to complete and shareholders may have to submit exchange requests
to the Transfer Agent in writing.
If the exchanging shareholder does not currently own shares of the
Money Market Portfolio or fund whose shares are being acquired, a new account
will be established with the same registration, dividend and capital gain
options and Authorized Dealer of record as the account from which shares are
exchanged, unless otherwise specified in writing by the shareholder with all
signatures guaranteed by an eligible guarantor institution as defined above. To
participate in the Systematic Investment Plan or establish automatic withdrawal
for the new account, however, an exchanging shareholder must file a specific
written request. The exchange privilege may be modified or terminated at any
time, or from time to time, by the Fund on 60 days' notice to affected portfolio
or fund shareholders. The Fund, PFPC, the Fund's Transfer Agent, Valley Forge
Brokerage and Valley Forge Capital Holdings and its affiliates will not be
liable for any loss, liability, cost or expense for acting upon telephone
instructions that are reasonably believed to be genuine. In attempting to
confirm that telephone instructions are genuine, the Fund will use such
procedures as are considered reasonable, including recording those instructions
and requesting information as to account registration (such as the name in which
an account is registered, the account number, recent transactions in the
<PAGE>22
account, and the account holder's Social Security number, address and/or bank).
Before any exchange, the investor must obtain and should review a copy
of the current prospectus of the portfolio or fund into which the exchange is
being made. Prospectuses may be obtained from Valley Forge Brokerage. Except in
the case of Personal Retirement Plans, the shares being exchanged must have a
current value of at least $250; furthermore, when establishing a new account by
exchange, the shares being exchanged must have a value of at least the minimum
initial investment required for the portfolio or fund into which the exchange is
being made; if marking an exchange to an existing account, the dollar value must
equal or exceed the applicable minimum for subsequent investments. If any amount
remains in the investment portfolio from which the exchange is being made, such
amount must not be below the minimum account value required by the portfolio or
fund.
Shares will be exchanged at the next determined net asset value plus
any applicable sales charges. Any such qualification is subject to confirmation
of the investor's holdings through a check of appropriate records. No fees
currently are charged shareholders directly in connection with exchanges,
although the Fund reserves the right, upon not less than 60 days' written
notice, to charge shareholders a $5.00 fee in accordance with rules promulgated
by the Securities and Exchange Commission. The Fund reserves the right to reject
any exchange request in whole or in part. The Exchange Privilege may be modified
or terminated at any time upon notice to shareholders.
The exchange of shares of one portfolio or fund for shares of another
is treated for Federal income tax purposes as a sale of the shares given in
exchange by the shareholder and, therefore, an exchanging shareholder may
realize a taxable gain or loss.
Redirected Dividend Option
The Redirected Dividend Option enables a shareholder to invest
automatically dividends or dividends and capital gain distributions, if any,
paid by the Money Market Portfolio in shares of another portfolio or a fund
advised or sponsored by Valley Forge Capital Holdings, Inc. of which the
shareholder is an investor. Shares of the other portfolio or fund will be
purchased at the then-current net asset value; however, a sales load may be
charged with respect to investments in shares of a portfolio or fund sold with a
sales load. If the shareholder is investing in a fund that charges a sales load,
such shareholder
<PAGE>23
may qualify for share prices which do not include the sales load or which
reflect a reduced sales load.
This Privilege is available only for existing accounts and may not be
used to open new accounts. Minimum subsequent investments do not apply. The Fund
may modify or terminate this Privilege at any time or charge a service fee. No
such fee currently is contemplated.
NET ASSET VALUE
The net asset value per share of the Money Market Portfolio for the
purpose of pricing purchase and redemption orders is determined twice each day,
once as of 12:00 noon Eastern Time and once as of 4:00 p.m. Eastern Time on each
weekday with the exception of those holidays on which either the NYSE or the FRB
is closed. Currently, the NYSE or the FRB, or both, are closed on the customary
national business holidays of New Year's Day, Martin Luther King Day,
President's Day, Good Friday, Memorial Day, Independence Day (observed), Labor
Day, Columbus Day, Veterans Day, Thanksgiving Day and Christmas Day (observed).
The Money Market Portfolio's net asset value per share is calculated by adding
the value of all securities and other assets of the Money Market Portfolio,
subtracting its liabilities and dividing the result by the number of its
outstanding shares. The net asset value per share of the Money Market Portfolio
is determined independently of any of the Fund's other investment portfolios.
The Fund seeks to maintain the Money Market Portfolio a net asset
value of $1.00 per share for purposes of purchases and redemptions and values
its portfolio securities on the basis of the amortized cost method of valuation
described in the Statement of Additional Information under the heading
"Valuation of Shares." There can be no assurance that net asset value per share
will not vary.
With the approval of the Board of Directors, the Money Market
Portfolio may use a pricing service, bank or broker-dealer experienced in such
matters to value the Money Market Portfolio's securities. A more detailed
discussion of net asset value and security valuation is contained in the
Statement of Additional Information.
<PAGE>24
MANAGEMENT
Board of Directors
The business and affairs of the Fund and each investment portfolio are
managed under the direction of the Fund's Board of Directors. The Fund currently
operates or proposes to operate nineteen separate investment portfolios. The
Bedford Class represents interests in the Fund's Money Market Portfolio.
Investment Adviser and Sub-Advisor
PIMC, a wholly owned subsidiary of PNC Bank, serves as the investment
adviser for the Money Market Portfolio. PIMC was organized in 1977 by PNC Bank
to perform advisory services for investment companies, and has its principal
offices at Bellevue Park Corporate Center, 400 Bellevue Parkway, Wilmington,
Delaware 19809. PNC Bank serves as the sub-advisor for the Money Market
Portfolio. PNC Bank and its predecessors have been in the business of managing
the investments of fiduciary and other accounts in the Philadelphia area since
1847. PNC Bank and its subsidiaries currently manage over $30 billion of assets,
of which approximately $28 billion are mutual funds. PNC Bank, a national bank
whose principal business address is Broad and Chestnut Streets, Philadelphia,
Pennsylvania 19101, is a wholly owned subsidiary of PNC Bancorp, Inc. PNC
Bancorp, Inc. is a bank holding company and a wholly owned subsidiary of PNC
Bank Corp., a multi-bank holding company.
As investment adviser to the Money Market Portfolio, PIMC manages such
Money Market Portfolio and is responsible for all purchases and sales of
portfolio securities. PIMC also assists generally in supervising the operations
of the Money Market Portfolio, and maintains the Money Market Portfolio's
financial accounts and records. PNC Bank, as sub-advisor, provides research and
credit analysis and provides PIMC with certain other services. In entering into
Money Market Portfolio transactions for the Money Market Portfolio with a
broker, PIMC may take into account the sale by such broker of shares of the
Fund, subject to the requirements of best execution.
For the services provided to and expenses assumed by it for the
benefit of the Money Market Portfolio, PIMC is entitled to receive the following
fees, computed daily and payable monthly based on the Money Market Portfolio's
average daily net assets: .45% of the first $250 million; .40% of the next $250
million; and .35% of net assets in excess of $500 million.
PIMC may in its discretion from time to time agree to waive
voluntarily all or any portion of its advisory fee for the
<PAGE>25
Money Market Portfolio. For its sub-advisory services, PNC Bank is entitled to
receive from PIMC an amount equal to 75% of the advisory fees paid by the Fund
to PIMC with respect to the Money Market Portfolio (subject to certain
adjustments). Such sub-advisory fees have no effect on the advisory fees payable
by the Money Market Portfolio to PIMC. In addition, PIMC may from time to time
enter into an agreement with one of its affiliates pursuant to which it
delegates some or all of its accounting and administrative obligations under its
advisory agreements with the Fund relating to the Money Market Portfolio. Any
such arrangement would have no effect on the advisory fees payable by the Money
Market Portfolio to PIMC.
For the Fund's fiscal year ended August 31, 1994, the Fund paid
investment advisory fees aggregating .18% of the average net assets of the Money
Market Portfolio. For that same year, PIMC waived approximately .20% of average
net assets of the Money Market Portfolio.
Transfer Agent, Dividend Disbursing Agent, and Custodian
PNC Bank also serves as the Fund's custodian and PFPC, an indirect
wholly owned subsidiary of PNC Bank Corp, serves as the Fund's transfer agent
and dividend disbursing agent. PFPC may enter into shareholder servicing
agreements with registered broker/dealers who have entered into dealer
agreements with the Distributor for the provision of certain shareholder support
services to customers of such broker/dealers who are shareholders of the Money
Market Portfolio. The services provided and the fees payable by the Fund for
these services are described in the Statement of Additional Information under
"Investment Advisory, Distribution and Servicing Arrangements."
Expenses
The expenses of the Money Market Portfolio are deducted from the total
income of the Money Market Portfolio before dividends are paid. These expenses
include, but are not limited to, organizational costs, fees paid to the
investment adviser, fees and expenses of officers and directors who are not
affiliated with the Money Market Portfolio's investment adviser or Distributor,
taxes, interest, legal fees, custodian fees, auditing fees, brokerage fees and
commissions, certain of the fees and expenses of registering and qualifying the
Money Market Portfolio and its shares for distribution under Federal and state
securities laws, expenses of preparing prospectuses and statements of additional
information and of printing and distributing prospectuses and statements of
additional information annually to existing shareholders that are not
attributable to a particular class, the expense of reports to shareholders,
shareholders' meetings and proxy solicitations that
<PAGE>26
are not attributable to a particular class, fidelity bond and directors and
officers liability insurance premiums, the expense of using independent pricing
services and other expenses which are not expressly assumed by the Money Market
Portfolio's investment adviser under its advisory agreement with the Money
Market Portfolio. Any general expenses of the Fund that are not readily
identifiable as belonging to a particular investment portfolio of the Fund will
be allocated among all investment portfolios of the Fund based upon the relative
net assets of the investment portfolios at the time such expenses were accrued.
In addition, distribution expenses, transfer agency expenses, expenses of
preparing, printing and distributing prospectuses, statements of additional
information, proxy statements and reports to shareholders, and registration fees
identified as belonging to a particular class, are allocated to the class.
The investment adviser has agreed to reimburse the Money Market
Portfolio for the amount, if any, by which the total operating and management
expenses of such Money Market Portfolio for any fiscal year exceed the most
restrictive state blue sky expense limitation in effect from time to time, to
the extent required by such limitation.
The investment adviser may assume additional expenses of the Money
Market Portfolio from time to time. In certain circumstances, it may assume such
expenses on the condition that it is reimbursed by the Money Market Portfolio
for such amounts prior to the end of a fiscal year. In such event, the
reimbursement of such amounts will have the effect of increasing the Money
Market Portfolio's expense ratio and of decreasing yield to investors.
For the Fund's fiscal year ended August 31, 1994, the Fund's total
expenses were 1.16% of the average net assets with respect to the Bedford Class
of the Money Market Portfolio (not taking into account waivers and
reimbursements of .21%).
DISTRIBUTION OF SHARES
Counsellors Securities Inc. (the "Distributor"), a wholly-owned
subsidiary of Warburg, Pincus Counsellors, Inc. (formerly E.M. Warburg, Pincus &
Co., Inc., with an address at 466 Lexington Avenue, New York, New York, acts as
distributor of the Shares of the Bedford Class of the Fund pursuant to a
distribution contract (the "Distribution Contract") with the Fund on behalf of
the Bedford Class.
The Board of Directors of the Fund approved and adopted the
Distribution Contract and separate Plan of Distribution for
<PAGE>27
the Class (the "Plan") pursuant to Rule 12b-1 under the 1940 Act. Under the
Plan, the Distributor is entitled to receive from the Bedford Class a
distribution fee, which is accrued daily and paid monthly, of up to .65% on an
annualized basis of the average daily net assets of the Bedford Class. Under the
Distribution Contract, the Distributor has agreed to accept compensation for its
services thereunder and under the Plan in the amount of .60% of the average
daily net assets of the Bedford Class on an annualized basis in any year. The
actual amount of such compensation is agreed upon from time to time by the
Fund's Board of Directors and the Distributor. Pursuant to the conditions of an
exemptive order granted by the Securities and Exchange Commission, the
Distributor has agreed to waive its fee with respect to the Bedford Class on any
day to the extent necessary to assure that the fee required to be accrued by the
Bedford Class does not exceed the income of the Bedford Class on that day. In
addition, the Distributor may, in its discretion, voluntarily waive from time to
time all or any portion of its distribution fee.
Under the Distribution Contract and the Plan, the Distributor may
reallocate an amount up to the full fee that it receives to financial
institutions, including broker/dealers, based upon the aggregate investment
amounts maintained by and services provided to shareholders of the Bedford Class
serviced by such financial institutions. The Distributor may also reimburse
broker/dealers for other expenses incurred in the promotion of the sale of Fund
shares. The Distributor and/or broker/dealers pay for the cost of printing
(excluding typesetting) and mailing to prospective investors prospectuses and
other materials relating to the Fund as well as for related direct mail,
advertising and promotional expenses.
The Plan obligates the Fund, during the period it is in effect, to
accrue and pay to the Distributor on behalf of the Bedford Class the fee agreed
to under the Distribution Contract. The Plan does not obligate the Fund to
reimburse the Distributor for the actual expenses the Distributor may incur in
fulfilling its obligations under the Plan on behalf of the Bedford Class. Thus,
under the Plan, even if the Distributor's actual expenses exceed the fee payable
to the Distributor thereunder at any given time, the Fund will not be obligated
to pay more than that fee. If the Distributor's actual expenses are less than
the fee it receives, the Distributor will retain the full amount of the fee.
The Plan has been approved by the shareholders of the Bedford Class.
Under the terms of Rule 12b-1, each will remain in effect only if approved at
least annually by the Fund's Board of Directors, including those directors who
are not "interested persons" of the Fund as that term is defined in the 1940 Act
and who have no direct or indirect financial interest in the
<PAGE>28
operation of the Plan or in any agreements related thereto ("12b-1 Directors").
The Plan may be terminated at any time by vote of a majority of the 12b-1
Directors or by vote of a majority of the Fund's outstanding voting securities
of the Bedford Class. The fee set forth above will be paid by the Fund on behalf
of the Bedford Class to the Distributor unless and until the Plan is terminated
or not renewed.
DIVIDENDS AND DISTRIBUTIONS
The Fund will distribute substantially all of the net investment
income and net realized capital gains, if any, of the Money Market Portfolio to
the Money Market Portfolio's shareholders. All distributions are reinvested in
the form of additional full and fractional Shares of the Bedford Class unless a
shareholder elects otherwise.
The net investment income (not including any net short-term capital
gains) earned by the Money Market Portfolio will be declared as a dividend on a
daily basis and paid monthly. Dividends are payable to shareholders of record
immediately prior to the determination of net asset value made as of 4:00 p.m.
Eastern Time. Net short-term capital gains, if any, will be distributed at least
annually.
TAXES
The following discussion is only a brief summary of some of the
important tax considerations generally affecting the Money Market Portfolio and
its shareholders and is not intended as a substitute for careful tax planning.
Accordingly, investors in the Money Market Portfolio should consult their tax
advisers with specific reference to their own tax situation.
The Money Market Portfolio will elect to be taxed as a regulated
investment company under Subchapter M of the Internal Revenue Code of 1986, as
amended (the "Code"). So long as the Money Market Portfolio qualifies for this
tax treatment, the Money Market Portfolio will be relieved of Federal income tax
on amounts distributed to shareholders, but shareholders, unless otherwise
exempt, will pay income or capital gains taxes on amounts so distributed (except
distributions that constitute "exempt interest dividends" or that are treated as
a return of capital) regardless of whether such distributions are paid in cash
or reinvested in additional shares. The Money Market Portfolio does not intend
to make distributions that will be eligible for the corporate dividends received
deduction.
<PAGE>29
Distributions out of the "net capital gain" (the excess of net
long-term capital gain over net short-term capital loss), if any, of the Money
Market Portfolio will be taxed to shareholders as long-term capital gain
regardless of the length of time a shareholder has held his Shares, whether such
gain was reflected in the price paid for the Shares, or whether such gain was
attributable to securities bearing tax-exempt interest. All other distributions,
to the extent they are taxable, are taxed to shareholders as ordinary income.
The maximum marginal rate on ordinary income for individuals, trusts and estates
is generally 31%, while the maximum rate imposed on net capital gain of such
taxpayers is 28%. Corporate taxpayers are taxed at the same rates on both
ordinary income and capital gains.
The Fund will send written notices to shareholders annually regarding
the tax status of distributions made by the Money Market Portfolio. Dividends
declared in October, November or December of any year payable to shareholders of
record on a specified date in such a month will be deemed to have been received
by the shareholders on December 31, provided such dividends are paid during
January of the following year. The Money Market Portfolio intend to make
sufficient actual or deemed distributions prior to the end of each calendar year
to avoid liability for Federal excise tax.
Shareholders who are nonresident alien individuals, foreign trusts or
estates, foreign corporations or foreign partnerships may be subject to
different U.S. Federal income tax treatment.
An investment in the Money Market Portfolio is not intended to
constitute a balanced investment program.
Future legislative or administrative changes or court decisions may
materially affect the tax consequences of investing in one or more portfolios of
the Fund. Shareholders are also urged to consult their tax advisers concerning
the application of state and local income taxes to investments in the Fund which
may differ from the Federal income tax consequences described above.
DESCRIPTION OF SHARES
The Fund has authorized capital of thirty billion shares of Common
Stock, $.001 par value per share, of which 10.7 billion shares are currently
classified as follows: 100 million shares are classified as Class A Common Stock
(Growth & Income), 100 million shares are classified as Class B Common Stock,
100 million shares are classified as Class C Common Stock (Balanced), 100
million shares are classified as Class D Common Stock
<PAGE>30
(Tax-Free), 500 million shares are classified as Class E Common Stock (Money),
500 million shares are classified as Class F Common Stock (Municipal Money), 1
billion shares are classified as Class G Common Stock (Money), 500 million
shares are classified as Class H Common Stock (Municipal Money), 500 million
shares are classified as Class I Common Stock (Money), 500 million shares are
classified as Class J Common Stock (Municipal Money), 500 million shares are
classified as Class K Common Stock (U.S. Government Money), 1,500 million shares
are classified as Class L Common Stock (Money), 500 million shares are
classified as Class M Common Stock (Municipal Money), 500 million shares are
classified as Class N Common Stock (U.S. Government Money), 500 million shares
are classified as Class O Common Stock (N.Y. Money), 100 million shares are
classified as Class P Common Stock (Government), 100 million shares are
classified as Class Q Common Stock, 500 million shares are classified as Class R
Common Stock (Municipal Money), 500 million shares are classified as Class S
Common Stock (U.S. Government Money), 500 million shares are classified as Class
T Common Stock (International), 500 million shares are classified as Class U
Common Stock (Strategic), 500 million shares are classified as Class V Common
Stock (Emerging), 100 million shares are classified as Class W Common Stock
(Laffer/Canto Equity), 50 million shares are classified as Class X Common Stock
(U.S. Core Equity), 50 million shares are classified as Class Y Common Stock
(U.S. Core Fixed Income), 50 million shares are classified as Class Z Common
Stock (Global Fixed Income), 50 million shares are classified as Class AA Common
Stock (Municipal Bond), 50 million shares are classified as Class Common Stock
(BEA Balanced), 50 million shares are classified as CC Common Stock (BEA-Short
Duration), 100 million shares are classified as Class DD Common Stock (Growth &
Income Series 2), 100 million shares are classified as Class EE Common Stock
(Balanced Series 2), 1 million shares are classified as Class Alpha 1 Common
Stock (Money), 1 million shares are classified as Class Alpha 2 Common Stock
(Municipal Money), 1 million shares are classified as Class Alpha 3 Common Stock
(U.S. Government Money), 1 million shares are classified as Class Alpha 4 Common
Stock (N.Y. Money), 1 million shares are classified as Class Beta 1 Common Stock
(Money), 1 million shares are classified as Class Beta 2 Common Stock (Municipal
Money), 1 million shares are classified as Class Beta 3 Common Stock (U.S.
Government Money), 1 million shares are classified as Class Beta 4 Common Stock
(N.Y. Money), 1 million shares are classified as Gamma 1 Common Stock (Money), 1
million shares are classified as Gamma 2 Common Stock (Municipal Money), 1
million shares are classified as Gamma 3 Common Stock (U.S. Government Money), 1
million shares are classified as Gamma 4 Common Stock (N.Y. Money), 1 million
shares are classified as Delta 1 Common Stock (Money), 1 million shares are
classified as Delta 2 Common Stock (Municipal Money), 1 million shares are
classified as Delta 3 Common Stock (U.S. Government Money), 1 million shares are
<PAGE>31
classified as Delta 4 Common Stock (N.Y. Money), 1 million shares are classified
as Epsilon 1 Common Stock (Money), 1 million shares are classified as Epsilon 2
Common Stock (Municipal Money), 1 million shares are classified as Epsilon 3
Common Stock (U.S. Government Money), 1 million shares are classified as Epsilon
4 Common Stock (N.Y. Money), 1 million shares are classified as Zeta 1 Common
Stock (Money), 1 million shares are classified as Zeta 2 Common Stock (Municipal
Money), 1 million shares are classified as Zeta 3 Common Stock (U.S. Government
Money), 1 million shares are classified as Zeta 4 Common Stock (N.Y. Money), 1
million shares are classified as Eta 1 Common Stock (Money), 1 million shares
are classified as Eta 2 Common Stock (Municipal Money), 1 million shares are
classified as Eta 3 Common Stock (U.S. Government Money), 1 million shares are
classified as Eta 4 Common Stock (N.Y. Money), 1 million shares are classified
as Theta 1 Common Stock (Money), 1 million shares are classified as Theta 2
Common Stock (Municipal Money), 1 million shares are classified as Theta 3
Common Stock (U.S. Government Money), and 1 million shares are classified as
Theta 4 Common Stock (N.Y. Money). Shares of Class L Common Stock, constitute
the shares offered by this Prospectus. Under the Fund's charter, the Board of
Directors has the power to classify or reclassify any unissued shares of Common
Stock from time to time.
The classes of Common Stock have been grouped into sixteen separate
"families": the RBB Family, the Warburg Pincus Family, the Cash Preservation
Family, the Sansom Street Family, the Bedford Family, the Bradford Family, the
BEA Family, the Laffer/Canto Family, the Alpha Family, the Beta Family, the
Gamma Family, the Delta Family, the Epsilon Family, the Zeta Family, the Eta
Family, the Theta Family. The RBB Family represents interests in two non-money
market portfolios as well as the Money Market and Municipal Money Market
Portfolios; the Warburg Pincus Family represents interests in the Growth &
Income Fund and the Balanced Fund Portfolios; the Cash Preservation Family
represents interests in the Money Market and Municipal Money Market Portfolios;
the Sansom Street Family represents interests in the Money Market, Municipal
Money Market and Government Obligations Money Market Portfolios; the Bedford
Family represents interests in the Money Market, Municipal Money Market and
Government Obligations Money Market Portfolios as well as the New York Municipal
Money Market Portfolio; the Bradford Family represents interests in the
Municipal Money Market and Government Obligations Money Market Portfolios; the
BEA Family represents interests in nine non-money market portfolios; The
Laffer/Canto Equity represents interests in the Laffer/Canto Equity Fund
Portfolio; and the Alpha, Beta, Gamma, Delta, Epsilon, Zeta, Eta and Theta
Families (collectively, the "Additional Families") represent interests in the
Money Market, Municipal Money Market,
<PAGE>32
Government Obligations Money Market and New York Municipal Money Market
Portfolios.
The Fund offers multiple classes of shares in each of its Money Market
Portfolio to expand its marketing alternatives and to broaden its range of
services to different investors. The expenses of the various classes within
these portfolios vary based upon the services provided. For example,
shareholders in the Sansom Street Family bear non-12b-1 shareholder servicing
fees in the amount of .10% of the daily net asset value of their shares. Each
class of Common Stock of the Fund has a separate Rule 12b-1 distribution plan.
Under the Distribution Contracts entered into with the Distributor and pursuant
to each of the distribution plans, the Distributor is entitled to receive from
the relevant Class as Compensation for distribution services provided to various
families a distribution fee based on average daily net assets in the following
amounts: The RBB Family Money Market Portfolio: .40%, Cash Preservation Family
Money Market Portfolio: .40%, Sansom Street Family, Money Market Portfolio up to
.20% and each of the Additional Families Money Market Portfolio: .60%. A
salesperson or any other person entitled to receive compensation for servicing
Fund shares may receive different compensation with respect to different classes
in a portfolio of the Fund. For the year ended August 31, 1994, the expense
ratio of each of the RBB, Cash Preservation and Sansom Street Classes in the
Money Market Portfolio, taking into account fee waivers and reimbursement of
expenses, was as follows: RBB: 1.00% (reflecting waivers of 13.62%), Cash
Preservation: .95% (reflecting waivers of 1.57%) and Sansom Street: .39%
(reflecting waivers of .21%). No expense ratio is given for the Alpha, Beta,
Gamma, Delta, Epsilon, Zeta, Eta and Theta Classes of the Money Market Portfolio
as no shares of such classes had been sold to the public during the year ended
August 31, 1994. The ratio of net investment income to average net assets for
each of the RBB, Cash Preservation and Sansom Street Classes in the Money Market
Portfolio, was as follows: RBB: 2.73%, Cash Preservation: 2.78% and Sansom
Street: 3.34%.
Shares of a class of Common Stock in the Cash Preservation Family may
be exchanged for another class of Common Stock in such Family as well as for
shares of the non-money market classes of Common Stock of the RBB Family.
Otherwise, no exchanges between Families are permitted.
THIS PROSPECTUS AND THE STATEMENT OF ADDITIONAL INFORMATION
INCORPORATED HEREIN RELATE PRIMARILY TO THE BEDFORD CLASS AND DESCRIBE ONLY THE
INVESTMENT OBJECTIVE AND POLICIES, OPERATIONS, CONTRACTS AND OTHER MATTERS
RELATING TO THE BEDFORD CLASS.
Each share that represents an interest in a portfolio has an equal
proportionate interest in the assets belonging to
<PAGE>33
such portfolio with each other share that represents an interest in such
portfolio, even where a share has a different class designation than another
share representing an interest in that portfolio. Shares of the Fund do not have
preemptive or conversion rights. When issued for payment as described in this
Prospectus, Shares of the Fund will be fully paid and non-assessable.
The Fund currently does not intend to hold annual meetings of
shareholders except as required by the 1940 Act or other applicable law. The law
under certain circumstances provides shareholders with the right to call for a
meeting of shareholders to consider the removal of one or more directors. To the
extent required by law, the Fund will assist in shareholder communication in
such matters.
Holders of shares of the Money Market Portfolio will vote in the
aggregate and not by class on all matters, except where otherwise required by
law. Further, shareholders of all investment portfolios of the Fund will vote in
the aggregate and not by portfolio except as otherwise required by law or when
the Board of Directors determines that the matter to be voted upon affects only
the interests of the shareholders of a particular investment portfolio. (See the
Statement of Additional Information under "Additional Information Concerning
Fund Shares" for examples of when the 1940 Act requires voting by investment
portfolio or by class.) Shareholders of the Fund are entitled to one vote for
each full share held (irrespective of class or portfolio) and fractional votes
for fractional shares held. Voting rights are not cumulative and, accordingly,
the holders of more than 50% of the aggregate shares of Common Stock of the Fund
may elect all of the directors.
As of January 27, 1995, to the Fund's knowledge, no person held of
record or beneficially 25% or more of the outstanding shares of all classes of
the Fund, although as of such date, Boston Financial Data Services owned more
than 25% of the outstanding shares of the Warburg Pincus Family Class
representing an interest in the Warburg Pincus Growth & Income Fund; Seymour
Fein owned more than 25% of the outstanding shares of the RBB Family Class
representing an interest in the Municipal Money Market Portfolio; Eric Levine
and Linda & Howard Levine owned more than 25% of the outstanding shares of the
RBB Family Class representing an interest in the Money Market Portfolio; Jewish
Family and Childrens Agency of Philadelphia Capital Campaign owned more than 25%
of the outstanding shares of the Cash Preservation Family Class representing an
interest in the Money Market Portfolio; Deborah C. Brown Trustee/Barbara J.C.
Curtis, Trustee, the Crowe Trust owned more than 25% of the outstanding shares
of the Cash Preservation Family Class representing an interest in the Municipal
Money Market Portfolio;
<PAGE>34
Wasner & Co. for the account of Paine Webber Managed Assets - Sundry Holdings
owned more than 25% of the outstanding shares of the Sansom Street Class
representing an interest in the Money Market Portfolio; John Hancock Clearing
Corporation owned more than 25% of the outstanding shares of the Laffer/Canto
Family Class representing an interest in the Laffer/Canto Equity Portfolio; Home
Insurance Company owned more than 25% of the outstanding shares of the RBB
Family Class representing an interest in the Government Securities Portfolio;
State of Oregon owned more than 25% of the outstanding shares of the BEA Family
Class representing an interest in the BEA Strategic Fixed Income Portfolio; Bank
of New York, Trust APU Buckeye Pipeline owned more than 25% of the outstanding
shares of the BEA Family Class representing an interest in the BEA U.S. Core
Equity Portfolio; New England UFCW & Employers Pension Fund Board of Trustees
and Bankers Trust Pechiney Corporation Pension Master Trust each owned more than
25% of the outstanding shares of the BEA Family Class representing an interest
in the BEA U.S. Core Fixed Income Portfolio and Bank of New York Eastern
Enterprises Retirement Plan Trust owned more than 25% of the outstanding shares
of the BEA Family Class representing an interest in the BEA Global Fixed Income
Portfolio.
OTHER INFORMATION
Reports and Inquiries
Shareholders will receive unaudited semi-annual reports describing the
Fund's investment operations and annual financial statements audited by
independent accountants. Shareholder inquiries should be addressed to PFPC, the
Fund's transfer agent, Bellevue Park Corporate Center, 400 Bellevue Parkway,
Wilmington, Delaware 19809, toll-free (800) 976-6706.
<PAGE>1
Money Market Portfolio,
(Investment Portfolio of The RBB Fund, Inc.)
STATEMENT OF ADDITIONAL INFORMATION
This Statement of Additional Information provides supplementary
information pertaining to shares of a class (the "Bedford Shares" or "Shares")
representing interests in the Money Market Portfolio (the "Money Market
Portfolio") of The RBB Fund, Inc. (the "Fund"). This Statement of Additional
Information is not a prospectus, and should be read only in conjunction with the
Money Market Portfolio Prospectus of the Fund, dated February 27, 1995 (the
"Prospectus"). A copy of the Prospectus may be obtained through the Fund's
distributor by calling toll-free (800) 888-9723. This Statement of Additional
Information is dated February 27, 1995.
CONTENTS
<TABLE>
<CAPTION>
Prospectus
Page Page
<S> <C> <C>
General ....................................... 2 2
Investment Objectives and Policies ............ 2 7
Directors and Officers ........................ 13 N/A
Investment Advisory, Distribution and Servicing
Arrangements ............................... 15 29
Portfolio Transactions ........................ 20 N/A
Purchase and Redemption Information ........... 21 14
Valuation of Shares ........................... 22 23
Taxes ......................................... 24 28
Additional Information Concerning Fund Shares.. 28 28
Miscellaneous ................................. 29 N/A
Financial Statements (Audited)................. F-1 N/A
Appendix ...................................... A-1 N/A
</TABLE>
No person has been authorized to give any information or to make any
representations not contained in this Statement of Additional Information in
connection with the offering made by the Prospectus and, if given or made, such
information or representations must not be relied upon as having been authorized
by the Fund or its distributor. The Prospectus does not constitute an offering
by the Fund or by the distributor in any jurisdiction in which such offering may
not lawfully be made.
<PAGE>2
GENERAL
The RBB Fund, Inc. (the "Fund") is an open-end management investment
company currently operating or proposing to operate nineteen separate investment
portfolios. This Statement of Additional Information pertains to shares of the
class of common stock of the Fund (the "Bedford Shares" or the "Shares")
representing interests in the Money Market Portfolio of the Fund. The Shares are
offered by the Prospectus dated February 27, 1995. The Fund was organized as a
Maryland corporation on February 29, 1988.
Capitalized terms used herein and not otherwise defined have the same
meanings as are given to them in the Prospectus.
INVESTMENT OBJECTIVES AND POLICIES
The following supplements the information contained in the Prospectus
concerning the investment objectives and policies of the Portfolio. A
description of ratings of municipal obligations and commercial paper is set
forth in the Appendix hereto.
Additional Information on Portfolio Investments.
Reverse Repurchase Agreements. Reverse repurchase agreements involve
the sale of securities held by the Money Market Portfolio pursuant to the Money
Market Portfolio's agreement to repurchase the securities at an agreed upon
price, date and rate of interest. Such agreements are considered to be
borrowings under the Investment Company Act of 1940 (the "1940 Act"), and may be
entered into only for temporary or emergency purposes. While reverse repurchase
transactions are outstanding, the Money Market Portfolio will maintain in a
segregated account with the Fund's custodian or a qualified sub-custodian, cash,
U.S. Government securities or other liquid, high-grade debt securities of an
amount at least equal to the market value of the securities, plus accrued
interest, subject to the agreement.
Variable Rate Demand Instruments. Variable rate demand instruments
held by the Money Market Portfolio may have maturities of more than 397 calendar
days, provided: (i) the Money Market Portfolio is entitled to the payment of
principal at any time, or during specified intervals not exceeding 397 calendar
days, upon giving the prescribed notice (which may not exceed 30 days), and (ii)
the rate of interest on such instruments is adjusted at periodic intervals which
may extend up to 397 calendar days. In determining the average weighted maturity
of the Money Market Portfolio and whether a variable rate demand instrument has
a remaining maturity of 397 calendar days or less, each instrument will be
deemed by the Money Market Portfolio to have a maturity equal to the longer of
the period remaining until its next interest rate adjustment or the period
remaining until the principal amount can be recovered through demand. In
determining whether an unrated variable rate demand instrument is an eligible
security, the Money Market
<PAGE>3
Portfolio's investment adviser will follow guidelines adopted by the Fund's
Board of Directors.
Firm Commitments. Firm commitments for securities include "when
issued" and delayed delivery securities purchased for delivery beyond the normal
settlement date at a stated price and yield. While the Money Market Portfolio
has firm commitments outstanding, the Money Market Portfolio will maintain in a
segregated account with the Fund's custodian or a qualified sub-custodian, cash,
U.S. government securities or other liquid, high grade debt securities of an
amount at least equal to the purchase price of the securities to be purchased.
Normally, the custodian for the Money Market Portfolio will set aside portfolio
securities to satisfy a purchase commitment and, in such a case, the Money
Market Portfolio may be required subsequently to place additional assets in the
separate account in order to ensure that the value of the account remains equal
to the amount of the Money Market Portfolio's commitment. It may be expected
that the Money Market Portfolio's net assets will fluctuate to a greater degree
when it sets aside portfolio securities to cover such purchase commitments than
when it sets aside cash. Because the Money Market Portfolio's liquidity and
ability to manage its portfolio might be affected when it sets aside cash or
portfolio securities to cover such purchase commitments, the Money Market
Portfolio expects that commitments to purchase "when issued" securities will not
exceed 25% of the value of its total assets absent unusual market conditions.
When the Money Market Portfolio engages in when-issued transactions, it relies
on the seller to consummate the trade. Failure of the seller to do so may result
in the Money Market Portfolio's incurring a loss or missing an opportunity to
obtain a price considered to be advantageous.
Stand-by Commitments. The Money Market Portfolio may enter into
stand-by commitments with respect to obligations issued by or on behalf of
states, territories, and possessions of the United States, the District of
Columbia, and their political subdivisions, agencies, instrumentalities and
authorities (collectively, "Municipal Obligations") held in its portfolio. Under
a stand-by commitment, a dealer would agree to purchase at the Money Market
Portfolio's option a specified Municipal Obligation at its amortized cost value
to the Money Market Portfolio plus accrued interest, if any. Stand-by
commitments may be exercisable by the Money Market Portfolio at any time before
the maturity of the underlying Municipal Obligations and may be sold,
transferred or assigned only with the instruments involved.
The Money Market Portfolio expects that stand-by commitments will
generally be available without the payment of any direct or indirect
consideration. However, if necessary or advisable, the Money Market Portfolio
may pay for a stand-by commitment either separately in cash or by paying a
higher price for portfolio securities which are acquired subject to the
commitment (thus reducing the yield to maturity otherwise available for the same
securities). The total amount paid in either manner for outstanding stand-by
commitments held by the Money Market Portfolio will not exceed 1/2 of 1% of the
value of the Money Market Portfolio's total assets calculated immediately after
each stand-by commitment is acquired.
<PAGE>4
The Money Market Portfolio intends to enter into stand-by commitments
only with dealers, banks and broker-dealers which, in the investment adviser's
opinion, present minimal credit risks. Either such Money Market Portfolio's
reliance upon the credit of these dealers, banks and broker-dealers will be
secured by the value of the underlying Municipal Obligations that are subject to
the commitment.
The Money Market Portfolio will acquire stand-by commitments solely to
facilitate portfolio liquidity and do not intend to exercise their rights
thereunder for trading purposes. The acquisition of a stand-by commitment will
not affect the valuation or assumed maturity of the underlying Municipal
Obligation which will continue to be valued in accordance with the amortized
cost method. The actual stand-by commitment will be valued at zero in
determining net asset value. Accordingly, where the Money Market Portfolio pays
directly or indirectly for a stand-by commitment, its cost will be reflected as
an unrealized loss for the period during which the commitment is held by the
Money Market Portfolio and will be reflected in realized gain or loss when the
commitment is exercised or expires.
Municipal Obligations. The Money Market Portfolio invests in
short-term Municipal Obligations which are determined by the Money Market
Portfolio's investment adviser to present minimal credit risks and that meet
certain ratings criteria pursuant to guidelines established by the Fund's Board
of Directors. The Money Market Portfolio may also purchase Unrated Securities
provided that such securities are determined to be of comparable quality to
eligible rated securities. The applicable Municipal Obligations ratings are
described in the Appendix to the Statement of Additional Information.
The Money Market Portfolio may hold uninvested cash reserves pending
investment during temporary defensive periods or if, in the opinion of the Money
Market Portfolio's investment adviser, suitable obligations bearing Tax-Exempt
Interest or AMT Interest are unavailable. There is no percentage limitation on
the amount of assets which may be held uninvested during temporary defensive
periods. Uninvested cash reserves will not earn income.
The two principal classifications of Municipal Obligations are
"general obligation" securities and "revenue" securities. General obligation
securities are secured by the issuer's pledge of its full faith, credit and
taxing power for the payment of principal and interest. Revenue securities are
payable only from the revenues derived from a particular facility or class of
facilities or, in some cases, from the proceeds of a special excise tax or other
specific excise tax or other specific revenue source such as the user of the
facility being financed. Revenue securities include private activity bonds which
are not payable from the unrestricted revenues of the issuer. Consequently, the
credit quality of private activity bonds is usually directly related to the
credit standing of the corporate user of the facility involved.
Municipal Obligations may also include "moral obligation" bonds, which
are normally issued by special purpose public authorities. If the
<PAGE>5
issuer of moral obligation bonds is unable to meet its debt service obligations
from current revenues, it may draw on a reserve fund, the restoration of which
is a moral commitment but not a legal obligation of the state or municipality
which created the issuer.
Municipal Obligations may include variable rate demand notes. Such
notes are frequently not rated by credit rating agencies, but unrated notes
purchased by the Money Market Portfolio will have been determined by the Money
Market Portfolio's investment adviser to be of comparable quality at the time of
the purchase to rated instruments purchasable by the Money Market Portfolio.
Where necessary to ensure that a note is of eligible quality, the Money Market
Portfolio will require that the issuer's obligation to pay the principal of the
note is backed by an unconditional bank letter or line of credit, guarantee or
commitment to lend. While there may be no active secondary market with respect
to a particular variable rate demand note purchased by a Money Market Portfolio,
the Money Market Portfolio may, upon the notice specified in the note, demand
payment of the principal of the note at any time or during specified periods not
exceeding 397 calendar days, depending upon the instrument involved. The absence
of such an active secondary market, however, could make it difficult for the
Money Market Portfolio to dispose of a variable rate demand note if the issuer
defaulted on its payment obligation or during the periods that the Money Market
Portfolio is not entitled to exercise its demand rights. The Money Market
Portfolio could, for this or other reasons, suffer a loss to the extent of the
default. The Money Market Portfolio invests in variable rate demand notes only
when the Money Market Portfolio's investment adviser deems the investment to
involve minimal credit risk. The Money Market Portfolio's investment adviser
also monitors the continuing creditworthiness of issuers of such notes to
determine whether the Money Market Portfolio should continue to hold such notes.
The Tax Reform Act of 1986 substantially revised provisions of prior law
affecting the issuance and use of proceeds of certain Municipal Obligations. A
new definition of private activity bonds applies to many types of bonds,
including those which were industrial development bonds under prior law.
Interest on private activity bonds issued after August 15, 1986 is tax-exempt
only if the bonds fall within certain defined categories of qualified private
activity bonds and meet the requirements specified in those respective
categories. In addition, interest on Alternative Minimum Tax Securities that is
received by taxpayers subject to alternative minimum tax is taxable. The Act has
generally not changed the tax treatment of bonds issued to finance governmental
operations. As used in this Prospectus, the term "private activity bonds" also
includes industrial development revenue bonds issued prior to the effective date
of the provisions of the Tax Reform Act of 1986. Investors should also be aware
of the possibility of state and local alternative minimum or minimum income tax
liability on interest from Alternative Minimum Tax Securities.
Obligations of Domestic Banks, Foreign Banks and Foreign Branches of
U.S. Banks. For purposes of the Money Market Portfolio's investment policies
with respect to bank obligations, the assets of a bank or savings
<PAGE>6
institution will be deemed to include the assets of its domestic and foreign
branches. Investments in bank obligations will include obligations of domestic
branches of foreign banks and foreign branches of domestic banks. Such
investments may involve risks that are different from investments in securities
of domestic branches of U.S. banks. These risks may include future unfavorable
political and economic developments, possible withholding taxes on interest
income, seizure or nationalization of foreign deposits, currency controls,
interest limitations, or other governmental restrictions which might affect the
payment of principal or interest on the securities held in the Money Market
Portfolio. Additionally, these institutions may be subject to less stringent
reserve requirements and to different accounting, auditing, reporting and
recordkeeping requirements than those applicable to domestic branches of U.S.
banks. The Money Market Portfolio will invest in obligations of domestic
branches of foreign banks and foreign branches of domestic banks only when its
investment adviser believes that the risks associated with such investment are
minimal.
U.S. Government Obligations. Examples of types of U.S. Government
obligations include U.S. Treasury Bills, Treasury Notes and Treasury Bonds and
the obligations of Federal Home Loan Banks, Federal Farm Credit Banks, Federal
Land Banks, the Federal Housing Administration, Farmers Home Administration,
Export-Import Bank of the United States, Small Business Administration, Federal
National Mortgage Association, Government National Mortgage Association, General
Services Administration, Student Loan Marketing Association, Central Bank for
Cooperatives, Federal Home Loan Mortgage Corporation, Federal Intermediate
Credit Banks, Maritime Administration, International Bank for Reconstruction and
Development (the "World Bank"), the Asian-American Development Bank and the
Inter-American Development Bank.
Section 4(2) Paper. "Section 4(2) paper" is commercial paper which is
issued in reliance on the "private placement" exemption from registration which
is afforded by Section 4(2) of the Securities Act of 1933. Section 4(2) paper is
restricted as to disposition under the Federal securities laws and is generally
sold to institutional investors such as the Fund which agree that they are
purchasing the paper for investment and not with a view to public distribution.
Any resale by the purchaser must be in an exempt transaction. Section 4(2) paper
normally is resold to other institutional investors through or with the
assistance of investment dealers who make a market in the Section 4(2) paper,
thereby providing liquidity. See "Illiquid Securities" below.
Repurchase Agreements. The repurchase price under the repurchase
agreements described in the Prospectus generally equals the price paid by the
Money Market Portfolio plus interest negotiated on the basis of current
short-term rates (which may be more or less than the rate on the securities
underlying the repurchase agreement). Securities subject to repurchase
agreements will be held by the Fund's custodian in the Federal Reserve/Treasury
book-entry system or by another authorized securities depository. Repurchase
agreements are considered to be loans by the Money Market Portfolio under the
1940 Act.
<PAGE>7
Mortgage-Related Debt Securities. Mortgage-related debt securities
represent ownership interests in individual pools of residential mortgage loans.
These securities are designed to provide monthly payments of interest and
principal to the investor. Each mortgagor's monthly payment to his lending
institution on his residential mortgage is "passed-through" to investors.
Mortgage pools consist of whole mortgage loans or participations in loans. The
terms and characteristics of the mortgage instruments are generally uniform
within a pool but may vary among pools. Lending institutions which originate
mortgages for the pools are subject to certain standards, including credit and
underwriting criteria for individual mortgages included in the pools.
Since the inception of the mortgage-related pass-through security in
1970, the market for these securities has expanded considerably. The size of the
primary issuance market, and active participation in the secondary market by
securities dealers and many types of investors, historically have made interests
in government and government-related pass-through pools highly liquid, although
no guarantee regarding future market conditions can be made. The average life of
pass-through pools varies with the maturities of the underlying mortgage
instruments. In addition, a pool's term may be shortened by unscheduled or early
payments of principal and interest on the underlying mortgages. The occurrence
of mortgage prepayments is affected by factors including the level of interest
rates, general economic conditions, the location and age of the mortgages and
various social and demographic conditions. Because prepayment rates of
individual pools vary widely, it is not possible to predict accurately the
average life of a particular pool. For pools of fixed rate 30 year mortgages,
common industry practice is to assume that prepayments will result in a 12 year
average life. Pools of mortgages with other maturities or different
characteristics will have varying assumptions concerning average life. The
assumed average life of pools of mortgages having terms of less than 30 years is
less than 12 years, but typically not less than 5 years. Yields on pass-through
securities are typically quoted by investment dealers and vendors based on the
maturity of the underlying instruments and the associated average life
assumption. In periods of falling interest rates, the rate of prepayment tends
to increase, thereby shortening the actual average life of a pool of underlying
mortgage-related securities. Conversely, in periods of rising rates the rate of
prepayment tends to decrease, thereby lengthening the actual average life of the
pool. Historically, actual average life has been consistent with the 12-year
assumption referred to above. Actual prepayment experience may cause the yield
of mortgage-related securities to differ from the assumed average life yield. In
addition, as noted in the Prospectus, reinvestment of prepayments may occur at
higher or lower interest rates than the original investment, thus affecting the
yield of the Money Market Portfolio involved.
The coupon rate of interest on mortgage-related securities is lower
than the interest rates paid on the mortgages included in the underlying pool,
but only by the amount of the fees paid to the mortgage pooler, issuer, and/or
guarantor of payment of the securities for the guarantee of the services of
passing through monthly payments to investors. Actual yield may
<PAGE>8
vary from the coupon rate, however, if mortgage-related securities are purchased
at a premium or discount, traded in the secondary market at a premium or
discount, or to the extent that mortgages in the underlying pool are prepaid as
noted above. In addition, interest on mortgage-related securities is earned
monthly, rather than semi-annually as is the case for traditional bonds, and
monthly compounding may tend to raise the effective yield earned on such
securities.
Eligible Securities. The Money Market Portfolio will only purchase
"eligible securities" that present minimal credit risks as determined by the
investment adviser pursuant to guidelines adopted by the Board of Directors.
Eligible securities generally include (1) U.S. government securities, (2)
securities that (a) are rated (at the time of purchase) by two or more
nationally recognized statistical rating organizations ("NRSROs") in the two
highest rating categories for such securities (e.g., commercial paper rated
"A-1" or "A-2" by S&P, or rated "Prime-1" or "Prime-2" by Moody's), or (b) are
rated (at the time of purchase) by the only NRSRO rating the security in one of
its two highest rating categories for such securities; (3) short-term
obligations and long-term obligations that have remaining maturities of 397
calendar days or less, provided in each instance that such obligations have no
short-term rating and are comparable in priority and security to a class of
short-term obligations of the issuer that has been rated in accordance with
(2)(a) or (b) above ("comparable obligations"); (4) securities that are not
rated and are issued by an issuer that does not have comparable obligations
rated by an NRSRO ("Unrated Securities"), provided that such securities are
determined to be of comparable quality to a security satisfying (2) or (3)
above; and (5) long-term obligations that have remaining maturities in excess of
397 calendar days that are subject to a demand feature or put (such as a
guarantee, a letter of credit or similar credit enhancement) ("demand
instrument") (a) that are unconditional (readily exercisable in the event of
default), provided that the demand feature satisfies (2), (3) or (4) above, or
(b) that are not unconditional, provided that the demand feature satisfies (2),
(3) or (4) above, and the demand instrument or long-term obligations of the
issuer satisfy (2) or (4) above for long-term debt obligations. The Board of
Directors will approve or ratify any purchases by the Money Market Portfolio of
securities that are rated by only one NRSRO or that are Unrated Securities.
Illiquid Securities. The Money Market Portfolio may not invest more
than 10% of its net assets in illiquid securities (including, repurchase
agreements which have a maturity of longer than seven days), including
securities that are illiquid by virtue of the absence of a readily available
market or legal or contractual restrictions on resale. Securities that have
legal or contractual restrictions on resale but have a readily available market
are not considered illiquid for purposes of this limitation. The Money Market
Portfolio's investment adviser will monitor the liquidity of such restricted
securities under the supervision of the Board of Directors. With respect to the
Money Market Portfolio, repurchase agreements subject to demand are deemed to
have a maturity equal to the notice period.
<PAGE>9
Historically, illiquid securities have included securities subject to
contractual or legal restrictions on resale because they have not been
registered under the Securities Act of 1933, as amended (the "Securities Act"),
securities which are otherwise not readily marketable and, repurchase agreements
having a maturity of longer than seven days. Securities which have not been
registered under the Securities Act are referred to as private placements or
restricted securities and are purchased directly from the issuer or in the
secondary market. Mutual funds do not typically hold a significant amount of
these restricted or other illiquid securities because of the potential for
delays on resale and uncertainty in valuation. Limitations on resale may have an
adverse effect on the marketability of portfolio securities and a mutual fund
might be unable to dispose of restricted or other illiquid securities promptly
or at reasonable prices and might thereby experience difficulty satisfying
redemptions within seven days. A mutual fund might also have to register such
restricted securities in order to dispose of them resulting in additional
expense and delay. Adverse market conditions could impede such a public offering
of securities.
In recent years, however, a large institutional market has developed
for certain securities that are not registered under the Securities Act
including repurchase agreements, commercial paper, foreign securities, municipal
securities and corporate bonds and notes. Institutional investors depend on an
efficient institutional market in which the unregistered security can be readily
resold or on an issuer's ability to honor a demand for repayment. The fact that
there are contractual or legal restrictions on resale to the general public or
to certain institutions may not be indicative of the liquidity of such
investments.
SEC Rule 144A allows for a broader institutional trading market for
securities otherwise subject to restriction on resale to the general public.
Rule 144A establishes a "safe harbor" from the registration requirements of the
Securities Act for resales of certain securities to qualified institutional
buyers. The investment adviser anticipates that the market for certain
restricted securities such as institutional commercial paper will expand further
as a result of this relatively new regulation and the development of automated
systems for the trading, clearance and settlement of unregistered securities of
domestic and foreign issuers, such as the PORTAL System sponsored by the NASD.
The Money Market Portfolio's investment adviser will monitor the
liquidity of restricted securities in the Money Market Portfolio under the
supervision of the Board of Directors. In reaching liquidity decisions, the
investment adviser may consider, inter alia, the following factors: (1) the
unregistered nature of the security; (2) the frequency of trades and quotes for
the security; (3) the number of dealers wishing to purchase or sell the security
and the number of other potential purchasers; (4) dealer undertakings to make a
market in the security and (5) the nature of the security and the nature of the
marketplace trades (e.g., the time needed to dispose of the security, the method
of soliciting offers and the mechanics of the transfer).
<PAGE>10
Investment Limitations.
The Money Market Portfolio may not:
(1) borrow money, except from banks for temporary purposes and
for reverse repurchase agreements and then in amounts not in excess of
10% of the value of the Money Market Portfolio's total assets at the
time of such borrowing, and only if after such borrowing there is
asset coverage of at least 300 percent for all borrowings of the Money
Market Portfolio; or mortgage, pledge, hypothecate any of its assets
except in connection with such borrowings and then, in amounts not in
excess of 10% of the value of the Money Market Portfolio's total
assets at the time of such borrowing; or purchase portfolio securities
while borrowings in excess of 5% of the Money Market Portfolio's net
assets are outstanding. (This borrowing provision is not for
investment leverage, but solely to facilitate management of the Money
Market Portfolio's securities by enabling the Money Market Portfolio
to meet redemption requests where the liquidation of portfolio
securities is deemed to be disadvantageous or inconvenient.);
(2) purchase securities of any one issuer, other than securities
issued or guaranteed by the U.S. Government or its agencies or
instrumentalities, if immediately after and as a result of such
purchase more than 5% of the Money Market Portfolio's total assets
would be invested in the securities of such issuer, or more than 10%
of the outstanding voting securities of such issuer would be owned by
the Money Market Portfolio, except that up to 25% of the value of the
Money Market Portfolio's assets may be invested without regard to this
5% limitation;
(3) purchase securities on margin, except for short-term credit
necessary for clearance of portfolio transactions;
(4) underwrite securities of other issuers, except to the extent
that, in connection with the disposition of portfolio securities, a
portfolio may be deemed an underwriter under Federal securities laws
and except to the extent that the purchase of Municipal Obligations
directly from the issuer thereof in accordance with the Money Market
Portfolio's investment objective, policies and limitations may be
deemed to be an underwriting;
(5) make short sales of securities or maintain a short position
or write or sell puts, calls, straddles, spreads or combinations
thereof;
(6) purchase or sell real estate, provided that the Money Market
Portfolio may invest in securities secured by real estate or interests
therein or issued by companies which invest in real estate or
interests therein;
<PAGE>11
(7) purchase or sell commodities or commodity contracts;
(8) invest in oil, gas or mineral exploration or development
programs;
(9) make loans except that the Money Market Portfolio may
purchase or hold debt obligations in accordance with its investment
objective, policies and limitations and may enter into repurchase
agreements;
(10) purchase any securities issued by any other investment
company except in connection with the merger, consolidation,
acquisition or reorganization of all the securities or assets of such
an issuer; or
(11) make investments for the purpose of exercising control or
management.
In addition to the foregoing enumerated investment limitations, the
Money Market Portfolio may not:
(a) Purchase any securities other than Money-Market Instruments, some
of which may be subject to repurchase agreements, but the Money Market
Portfolio may make interest-bearing savings deposits in amounts not in
excess of 5% of the value of the Money Market Portfolio's assets and may
make time deposits;
(b) Purchase any securities which would cause, at the time of
purchase, less than 25% of the value of the total assets of the Money
Market Portfolio to be invested in the obligations of issuers in the
banking industry, or in obligations, such as repurchase agreements, secured
by such obligations (unless the Money Market Portfolio is in a temporary
defensive position) or which would cause, at the time of purchase, more
than 25% of the value of its total assets to be invested in the obligations
of issuers in any other industry; and
(c) Invest more than 5% of its total assets (taken at the time of
purchase) in securities of issuers (including their predecessors) with less
than three years of continuous operations.
The foregoing investment limitations cannot be changed without the
affirmative vote of the lesser of (a) more than 50% of the outstanding shares of
the Money Market Portfolio or (b) 67% or more of the shares of the Money Market
Portfolio present at a shareholders' meeting if more than 50% of the outstanding
shares of the Money Market Portfolio are represented at the meeting in person or
by proxy.
With respect to limitation (b) above concerning industry concentration
(applicable to the Money Market Portfolio), the Money Market
<PAGE>12
Portfolio will consider wholly-owned finance companies to be in the industries
of their parents if their activities are primarily related to financing the
activities of the parents, and will divide utility companies according to their
services. For example, gas, gas transmission, electric and gas, electric and
telephone will each be considered a separate industry. The policy and practices
stated in this paragraph may be changed without the affirmative vote of the
holders of a majority of the affected Money Market Portfolio's outstanding
shares, but any such change may require the approval of the Securities and
Exchange Commission (the "SEC") and would be disclosed in the Prospectus prior
to being made.
So long as it values its portfolio securities on the basis of the
amortized cost method of valuation pursuant to Rule 2a-7 under the 1940 Act, the
Money Market Portfolio will meet the following limitations on its investments in
addition to the fundamental investment limitations described above. These
limitations may be changed without a vote of shareholders of the Money Market
Portfolio.
1. The Money Market Portfolio will limit its purchases of the
securities of any one issuer, other than issuers of U.S. Government
securities, to 5% of its total assets, except that the Money Market
Portfolio may invest more than 5% of its total assets in First Tier
Securities of one issuer for a period of up to three business days.
"First Tier Securities" include eligible securities that (i) if rated
by more than one NRSRO, are rated (at the time of purchase) by two or
more NRSROs in the highest rating category for such securities, (ii)
if rated by only one NRSRO, are rated by such NRSRO in its highest
rating category for such securities, (iii) have no short-term rating
and are comparable in priority and security to a class of short-term
obligations of the issuer of such securities that have been rated in
accordance with (i) or (ii) above, or (iv) are Unrated Securities that
are determined to be of comparable quality to such securities.
Purchases of First Tier Securities that come within categories (ii)
and (iv) above will be approved or ratified by the Board of Directors.
2. The Money Market Portfolio will limit its purchases of Second
Tier Securities, which are eligible securities other than First Tier
Securities, to 5% of its total assets.
3. The Money Market Portfolio will limit its purchases of Second
Tier Securities of one issuer to the greater of 1% of its total assets
or $1 million.
-------------------
In order to permit the sale of its shares in certain states, the Fund
may make commitments more restrictive than the investment limitations described
above. Should the Fund determine that any such commitment is no longer in its
best interest, it will revoke the commitment and terminate sales of its shares
in the state involved.
<PAGE>13
DIRECTORS AND OFFICERS
The directors and executive officers of the Fund, their business
addresses and principal occupations during the past five years are:
<TABLE>
<CAPTION>
Principal Occupation
Name and Address Position with Fund During Past Five Years
<S> <C> <C>
Arnold M. Reichman* Director Since 1986, Managing
466 Lexington Avenue Director and Assistant
New York, NY 10017 Secretary, E.M. Warburg,
Pincus & Co., Inc.; Since
1990, Chief Executive Officer
and since 1991, Secretary,
Counsellors Securities Inc.;
Officer of various investment
companies advised by Warburg,
Pincus Counsellors, Inc.
Robert Sablowsky** Director Since 1985, Executive
14 Wall Street Vice President of Gruntal
New York, NY 10005 & Co., Inc., Director,
Gruntal & Co., Inc. and
Gruntal Financial Corp.
Francis J. McKay Director Since 1963, Executive
7701 Burholme Avenue Vice President, Fox
Philadelphia, PA 19111 Chase Cancer Center
(Biomedical research and
medical care).
Marvin E. Sternberg Director Since 1974, Chairman,
937 Mt. Pleasant Road Director and President,
Bryn Mawr, PA 19010 Moyco Industries, Inc.
(manufacturer of dental
supplies and precision coated
abrasives); Since 1968,
Director and President, Mart
MMM, Inc. (formerly
Montgomeryville Merchandise
Mart, Inc.) and Mart PMM, Inc.
(formerly Pennsauken
Merchandise Mart) (shopping
centers); and Since 1975,
Director and Executive Vice
President, Cellucap Mfg. Co.,
Inc. (manufacturer of
disposable headwear).
<PAGE>14
Principal Occupation
Name and Address Position with Fund During Past Five Years
Julian A. Brodsky Director Director, and Vice Chairman
1234 Market Street, 16th Fl. 1969 to Present, Comcast
Philadelphia, PA 19107-3723 Corporation; Director, Comcast
Cablevision of Philadelphia
(cable television and
communications) and Nextel
(Wireless Communication).
Donald van Roden Director Self-employed
1200 Old Mill Lane businessman. From
Wyomissing, PA 19610 February 1980 to March 1987,
Vice Chairman, SmithKline
Beckman Corporation
(pharmaceuticals); Director,
AAA Mid-Atlantic (auto
service); Director, Keystone
Auto Insurance Co.
Edward J. Roach President and Treasurer Certified Public
Suite 152 Accountant; Vice
Bellevue Park Corporate Chairman of the Board,
Center Fox Chase Cancer
400 Bellevue Parkway Center; Trustee
Wilmington, DE 19809 Emeritus, Pennsylvania School
for the Deaf; Trustee
Emeritus, Immaculata College;
Vice President and Treasurer
of various investment
companies advised by PNC
Institutional Management
Corporation.
Morgan R. Jones Secretary Chairman of the law firm of
1100 PNB Bank Building Drinker Biddle & Reath,
Broad and Chestnut Streets Philadelphia, Pennsylvania;
Philadelphia, PA 19107 Director, Rocking Horse Child
Care Centers of America, Inc.
</TABLE>
- -------------------------
* Mr. Reichman is an "interested person" of the Fund as that term is
defined in the 1940 Act by virtue of his position with Counsellors Securities
Inc., the Fund's distributor.
<PAGE>15
** Mr. Sablowsky is an "interested person" of the Fund as that term is
defined in the 1940 Act by virtue of his position with Gruntal & Co., Inc., a
broker-dealer.
Messrs. McKay, Sternberg and Brodsky are members of the Audit
Committee of the Board of Directors. The Audit Committee, among other things,
reviews results of the annual audit and recommends to the Fund the firm to be
selected as independent auditors.
Messrs. Reichman, McKay and van Roden are members of the Executive
Committee of the Board of Directors. The Executive Committee may generally carry
on and manage the business of the Fund when the Board of Directors is not in
session.
Messrs. McKay, Sternberg, Brodsky and van Roden are members of the
Nominating Committee of the Board of Directors. The Nominating Committee
recommends to the Board annually all persons to be nominated as directors of the
Fund.
The Fund pays directors who are not "affiliated persons" (as that term
is defined in the 1940 Act) of the Fund $5,000 annually and $650 per meeting of
the Board or any committee thereof that is not held in conjunction with a Board
meeting. Directors who are not affiliated persons of the Fund are reimbursed for
any expenses incurred in attending meetings of the Board of Directors or any
committee thereof. For the year ended August 31, 1994, Directors and officers of
the Fund received compensation and reimbursement of expenses in the aggregate
amount of $35,999. On October 24, 1990 the Fund adopted, as a participating
employer, the Fund Office Retirement Profit-Sharing Plan and Trust Agreement, a
retirement plan for employees (currently Edward J. Roach) pursuant to which the
Fund will contribute on a monthly basis amounts equal to 10% of the monthly
compensation of each eligible employee. By virtue of the services performed by
PNC Institutional Management Corporation ("PIMC"), the Fund's adviser, PNC Bank,
National Association ("PNC Bank"), the Money Market Portfolios' sub-advisor and
the Fund's custodian, PFPC Inc. ("PFPC"), and the Fund's transfer and dividend
disbursing agent, and Counsellors Securities Inc. (the "Distributor"), the
Fund's distributor, the Fund itself requires only one part-time employee. No
officer, director or employee of PIMC, PNC Bank, PFPC or the Distributor
currently receives any compensation from the Fund.
For the year ended August 31, 1994, each of the following members of
the Board of Directors received compensation from the Fund for expenses incurred
in attending meetings of the Board of Directors or any other committee thereof:
Julian A. Brodsky in the aggregate amount of $6,950.00; Francis J. McKay in the
aggregate amount of $7,600.00; Marvin E. Sternberg in the aggregate amount of
$7,600.00; and Donald van Roden in the aggregate amount of $8,600.00.
INVESTMENT ADVISORY, DISTRIBUTION AND SERVICING ARRANGEMENTS
Advisory and Sub-Advisory Agreements. The advisory and sub-advisory
services provided by PIMC and PNC Bank and the fees received by PIMC and PNC
Bank for such services are described in the Prospectus. PIMC renders advisory
services to the Money Market Portfolio and also renders administrative services
to the Money Market Portfolio pursuant to separate investment advisory
agreements and PNC Bank renders sub-advisory services to the Money Market
Portfolio pursuant to separate Sub-Advisory Agreement. The
<PAGE>16
Sub-Advisory Agreement is dated August 16, 1988. The advisory agreement relating
to the Money Market Portfolio is dated August 16, 1988. Such advisory and
sub-advisory agreements are hereinafter collectively referred to as the
"Advisory Contracts."
For the year ended August 31, 1994, PIMC received (after waivers)
$1,947,768 in advisory fees with respect to the Money Market Portfolio. During
the same year, PIMC waived $2,255,986 of advisory fees with respect to the Money
Market Portfolio. For the year ended August 31, 1993, PIMC received (after
waivers) $1,461,628 in advisory fees with respect to the Money Market Portfolio
and waived all of the investment advisory fees payable to it of $978,352. During
the same year, PIMC waived $2,343,596 of advisory fees with respect to the Money
Market Portfolio. For the year ended August 31, 1992, PIMC received (after
waivers) $1,322,859 in advisory fees with respect to the Money Market Portfolio.
During that same year, PIMC waived $2,452,731 of advisory fees with respect to
the Money Market Portfolio. For the year ended August 31, 1991, PIMC received
(after waivers) $1,320,964 in advisory fees with respect to the Money Market
Portfolio. During that same year, PIMC waived $2,216,459 of advisory fees with
respect to the Money Market Portfolio. For the year ended August 31, 1990, PIMC
received (after waivers) $708,243 in advisory fees with respect to the Money
Market Portfolio. During that same period, PIMC waived $960,499 of advisory fees
with respect to the Money Market Portfolio. For the fiscal period ended August
31, 1989, PIMC received (after waivers) $140,961 in advisory fees with respect
to the Money Market Portfolio. During that same period, PIMC waived $392,226 of
advisory fees with respect to the Money Market Portfolio.
As required by various state regulations, PIMC will reimburse the Fund
or a portfolio affected (as applicable) if and to the extent that the aggregate
operating expenses of the Fund or a portfolio affected exceed applicable state
limits for the fiscal year, to the extent required by such state regulations.
Currently, the most restrictive of such applicable limits is 2.5% of the first
$30 million of average annual net assets, 2% of the next $70 million of average
annual net assets and 1 1/2% of the remaining average annual net assets. Certain
expenses, such as brokerage commissions, taxes, interest and extraordinary
items, are excluded from this limitation. Whether such expense limitations apply
to the Fund as a whole or to the Money Market Portfolio on an individual basis
depends upon the particular regulations of such states.
The Money Market Portfolio bears all of its own expenses not
specifically assumed by PIMC. General expenses of the Fund not readily
identifiable as belonging to a portfolio of the Fund are allocated among all
investment portfolios by or under the direction of the Fund's Board of Directors
in such manner as the Board determines to be fair and equitable. Expenses borne
by a portfolio include, but are not limited to, the following (or a portfolio's
share of the following): (a) the cost (including brokerage commissions) of
securities purchased or sold by a portfolio and any losses incurred in
connection therewith; (b) fees payable to and expenses incurred on behalf of a
portfolio by PIMC; (c) expenses of organizing the Fund that are
<PAGE>17
not attributable to a class of the Fund; (d) certain of the filing fees and
expenses relating to the registration and qualification of the Fund and a
portfolio's shares under Federal and/or state securities laws and maintaining
such registrations and qualifications; (e) fees and salaries payable to the
Fund's directors and officers; (f) taxes (including any income or franchise
taxes) and governmental fees; (g) costs of any liability and other insurance or
fidelity bonds; (h) any costs, expenses or losses arising out of a liability of
or claim for damages or other relief asserted against the Fund or a portfolio
for violation of any law; (i) legal, accounting and auditing expenses, including
legal fees of special counsel for the independent directors; (j) charges of
custodians and other agents; (k) expenses of setting in type and printing
prospectuses, statements of additional information and supplements thereto for
existing shareholders, reports, statements, and confirmations to shareholders
and proxy material that are not attributable to a class; (l) costs of mailing
prospectuses, statements of additional information and supplements thereto to
existing shareholders, as well as reports to shareholders and proxy material
that are not attributable to a class; (m) any extraordinary expenses; (n) fees,
voluntary assessments and other expenses incurred in connection with membership
in investment company organizations; (o) costs of mailing and tabulating proxies
and costs of shareholders' and directors' meetings; (p) costs of PIMC's use of
independent pricing services to value a portfolio's securities; and (q) the cost
of investment company literature and other publications provided by the Fund to
its directors and officers. Distribution expenses, transfer agency expenses,
expenses of preparation, printing and mailing prospectuses, statements of
additional information, proxy statements and reports to shareholders, and
organizational expenses and registration fees, identified as belonging to a
particular class of the Fund, are allocated to such class.
Under the Advisory Contracts, PIMC and PNC Bank will not be liable for
any error of judgment or mistake of law or for any loss suffered by the Fund or
a Money Market Portfolio in connection with the performance of the Advisory
Contracts, except a loss resulting from willful misfeasance, bad faith or gross
negligence on the part of PIMC or PNC Bank in the performance of their
respective duties or from reckless disregard of their duties and obligations
thereunder.
The Advisory Contracts were each most recently approved with respect
to the Money Market Portfolio on August 3, 1994 by a vote of the Fund's Board of
Directors, including a majority of those directors who are not parties to the
Advisory Contracts or "interested persons" (as defined in the 1940 Act) of such
parties. The Advisory Contracts were each approved respect to the Money Market
Portfolio by shareholders of the Money Market Portfolio at a special meeting
held December 22, 1989, as adjourned. Each Advisory Contract is terminable by
vote of the Fund's Board of Directors or by the holders of a majority of the
outstanding voting securities of the Money Market Portfolio, at any time without
penalty, on 60 days' written notice to PIMC or PNC Bank. The Advisory Contracts
may also be terminated by PIMC or PNC Bank, respectively, on 60 days' written
notice to the Fund. The Advisory Contracts terminates automatically in the event
of assignment thereof.
<PAGE>18
Custodian and Transfer Agency Agreements. PNC Bank is custodian of the
Fund's assets pursuant to a custodian agreement dated August 16, 1988, as
amended (the "Custodian Agreement"). Under the Custodian Agreement, PNC Bank (a)
maintains a separate account or accounts in the name of the Money Market
Portfolio (b) holds and transfers portfolio securities on account of the Money
Market Portfolio, (c) accepts receipts and makes disbursements of money on
behalf of the Money Market Portfolio, (d) collects and receives all income and
other payments and distributions on account of the Money Market Portfolio's
portfolio securities and (e) makes periodic reports to the Fund's Board of
Directors concerning each Money Market Portfolio's operations. PNC Bank is
authorized to select one or more banks or trust companies to serve as
sub-custodian on behalf of the Fund, provided that PNC Bank remains responsible
for the performance of all its duties under the Custodian Agreement and holds
the Fund harmless from the acts and omissions of any sub-custodian. For its
services to the Fund under the Custodian Agreement, PNC Bank receives a fee
which is calculated based upon the Money Market Portfolio's average daily gross
assets as follows: $.25 per $1,000 on the first $50 million of average daily
gross assets; $.20 per $1,000 on the next $50 million of average daily gross
assets; and $.15 per $1,000 on average daily gross assets over $100 million,
with a minimum monthly fee of $1,000, exclusive of transaction charges and
out-of-pocket expenses, which are also charged to the Fund.
PFPC, an affiliate of PNC Bank, serves as the transfer and dividend
disbursing agent for the Fund's Bedford Shares pursuant to a Transfer Agency
Agreement dated August 16, 1988 (the "Transfer Agency Agreement"), under which
PFPC (a) issues and redeems shares of the Bedford Shares, (b) addresses and
mails all communications by the Money Market Portfolio to record owners of
shares of such Bedford Class, including reports to shareholders, dividend and
distribution notices and proxy materials for its meetings of shareholders, (c)
maintains shareholder accounts and, if requested, sub-accounts and (d) makes
periodic reports to the Fund's Board of Directors concerning the operations of
the Bedford Class. PFPC may, on 30 days' notice to the Fund, assign its duties
as transfer and dividend disbursing agent to any other affiliate of PNC Bank
Corp. For its services to the Fund under the Transfer Agency Agreement, PFPC
receives a fee at the annual rate of $15.00 per account in the Money Market
Portfolio for orders which are placed by third parties and relayed
electronically to PFPC, and at an annual rate of $17.00 per account in the Money
Market Portfolio for all other orders, exclusive of out-of-pocket expenses and
also receives a fee for each redemption check cleared and reimbursement of its
out-of-pocket expenses.
PFPC has and in the future may enter into additional shareholder
servicing agreements ("Shareholder Servicing Agreements") with various dealers
("Authorized Dealers") for the provision of certain support services to
customers of such Authorized Dealers who are shareholders of the Money Market
Portfolio. Pursuant to the Shareholder Servicing Agreements, the Authorized
Dealers have agreed to prepare monthly account statements, process dividend
payments from the Fund on behalf of their customers and to provide sweep
processing for uninvested cash balances for customers participating in a cash
<PAGE>19
management account. In addition to the shareholder records maintained by PFPC,
Authorized Dealers may maintain duplicate records for their customers who are
shareholders of the Money Market Portfolio for purposes of responding to
customer inquiries and brokerage instructions. In consideration for providing
such services, Authorized Dealers may receive fees from PFPC. Such fees will
have no effect upon the fees paid by the Fund to PFPC.
Distribution Agreements. Pursuant to the terms of a distribution
contract, dated as of April 10, 1991, and supplements entered into by the
Distributor and the Fund on behalf of the Bedford Class (the "Distribution
Contract"), and the Plan of Distribution for the Bedford Class (the "Plan"),
which was adopted by the Fund in the manner prescribed by Rule 12b-1 under the
1940 Act, the Distributor will use its best efforts to distribute shares of the
Bedford Class. As compensation for its distribution services, the Distributor
will receive, pursuant to the terms of the Distribution Contract, a distribution
fee, to be calculated daily and paid monthly, at the annual rate set forth in
the Prospectus. The Distributor currently proposes to reallow up to all of its
distribution payments to broker/dealers for selling shares of the Money Market
Portfolio based on a percentage of the amounts invested by their customers.
The Plan as amended to reflect a change in the Fund's distributor in
accordance with Rule 12b-1 was most recently approved for continuation, with
respect to the Bedford Class on August 3, 1994 by the Fund's Board of Directors,
including the directors who are not "interested persons" of the Fund and who
have no direct or indirect financial interest in the operation of the Plan or
any agreements related to the Plan ("12b-1 Directors"). The Plan was approved by
shareholders of the Bedford Class at a special meeting held December 22, 1989,
as adjourned.
Among other things, the Plan provides that: (1) the Distributor shall
be required to submit quarterly reports to the directors of the Fund regarding
all amounts expended under the Plan and the purposes for which such expenditures
were made, including commissions, advertising, printing, interest, carrying
charges and any allocated overhead expenses; (2) the Plan will continue in
effect only so long as it is approved at least annually, and any material
amendment thereto is approved, by the Fund's directors, including the 12b-1
Directors, acting in person at a meeting called for said purpose; (3) the
aggregate amount to be spent by the Fund on the distribution of the Fund's
Shares of the Bedford Class under the Plan shall not be materially increased
without the affirmative vote of the holders of a majority of the Fund's Shares
in the affected Bedford Class; and (4) while the Plan remains in effect, the
selection and nomination of the Fund's directors who are not "interested
persons" of the Fund (as defined in the 1940 Act) shall be committed to the
discretion of the directors who are not interested persons of the Fund.
During the year ended August 31, 1994, the Fund paid distribution fees
to the Fund's Distributor under the Plan for the Shares of the Money Market
Portfolio, in the aggregate amount of $4,147,945 of which $4,069,861
<PAGE>20
was paid to dealers with whom the Distributor had entered into sales agreements,
and $78,054, was retained by the Distributor and used to pay certain advertising
and promotion, printing, postage, legal fees, travel and entertainment, sales
and marketing and administrative expenses. During the same period, the
Distributor waived no distribution fees for the Bedford Shares of the Money
Market Portfolio. The Fund believes that such Plan may benefit the Fund by
increasing sales of Shares. Mr. Reichman, a Director of the Fund, has an
indirect financial interest in the operation of the Plan by virtue of his
position as Chief Executive Officer and Secretary of the Distributor. Mr.
Sablowsky, a Director of the Fund, has an indirect interest in the operation of
the Plan by virtue of his position as Executive Vice President of Gruntal & Co.,
Inc., a broker-dealer which sells the Fund's shares.
MONEY MARKET PORTFOLIO TRANSACTIONS
The Money Market Portfolio intends to purchase securities with
remaining maturities of 397 calendar days or less, except for securities that
are subject to repurchase agreements (which in turn may have maturities of 397
calendar days or less), and except that the Money Market Portfolio may purchase
variable rate securities with remaining maturities of 397 calendar days or more
so long as such securities comply with conditions established by the SEC under
which they may be considered to have remaining maturities of 397 calendar days
or less. Because the Money Market Portfolio intend to purchase only securities
with remaining maturities of one year or less, their portfolio turnover rates
will be relatively high. However, because brokerage commissions will not
normally be paid with respect to investments made by the Money Market Portfolio,
the turnover rate should not adversely affect such Money Market Portfolio's net
asset value or net income. The Money Market Portfolio does not intend to seek
profits through short term trading.
Purchases of portfolio securities by the Money Market Portfolio are
made from dealers, underwriters and issuers; sales are made to dealers and
issuers. The Money Market Portfolio currently expect to incur any brokerage
commission expense on such transactions because money market instruments are
generally traded on a "net" basis with dealers acting as principal for their own
accounts without a stated commission. The price of the security, however,
usually includes a profit to the dealer. Securities purchased in underwritten
offerings include a fixed amount of compensation to the underwriter, generally
referred to as the underwriter's concession or discount. When securities are
purchased directly from or sold directly to an issuer, no commissions or
discounts are paid. It is the policy of the Money Market Portfolio to give
primary consideration to obtaining the most favorable price and efficient
execution of transactions. In seeking to implement the policies of the Money
Market Portfolio, PIMC will effect transactions with those dealers it believes
provide the most favorable prices and are capable of providing efficient
executions. In no instance will portfolio securities be purchased from or sold
to the Distributor, PIMC or PNC Bank or any affiliated person of the
<PAGE>21
foregoing entities except to the extent permitted by SEC exemptive order or by
applicable law.
PIMC may seek to obtain an undertaking from issuers of commercial
paper or dealers selling commercial paper to consider the repurchase of such
securities from the Money Market Portfolio prior to their maturity at their
original cost plus interest (sometimes adjusted to reflect the actual maturity
of the securities), if it believes that the Money Market Portfolio's anticipated
need for liquidity makes such action desirable. Any such repurchase prior to
maturity reduces the possibility that the Money Market Portfolio would incur a
capital loss in liquidating commercial paper (for which there is no established
market), especially if interest rates have risen since acquisition of the
particular commercial paper.
Investment decisions for the Money Market Portfolio and for other
investment accounts managed by PIMC or PNC Bank are made independently of each
other in the light of differing conditions. However, the same investment
decision may occasionally be made for two or more of such accounts. In such
cases, simultaneous transactions are inevitable. Purchases or sales are then
averaged as to price and allocated as to amount according to a formula deemed
equitable to each such account. While in some cases this practice could have a
detrimental effect upon the price or value of the security as far as the Money
Market Portfolio is concerned, in other cases it is believed to be beneficial to
the Money Market Portfolio. The Money Market Portfolio will not purchase
securities during the existence of any underwriting or selling group relating to
such security of which PIMC or PNC Bank or any affiliated person (as defined in
the 1940 Act) thereof is a member except pursuant to procedures adopted by the
Fund's Board of Directors pursuant to Rule 10f-3 under the 1940 Act. Among other
things, these procedures, which will be reviewed by the Fund's directors
annually, require that the commission paid in connection with such a purchase be
reasonable and fair, that the purchase be at not more than the public offering
price prior to the end of the first business day after the date of the public
offer, and that PIMC and PNC Bank not participate in or benefit from the sale to
the Money Market Portfolio.
PURCHASE AND REDEMPTION INFORMATION
The Fund reserves the right, if conditions exist which make cash
payments undesirable, to honor any request for redemption or repurchase of the
Money Market Portfolio's shares by making payment in whole or in part in
securities chosen by the Fund and valued in the same way as they would be valued
for purposes of computing the Money Market Portfolio's net asset value. If
payment is made in securities, a shareholder may incur transaction costs in
converting these securities into cash. The Fund has elected, however, to be
governed by Rule 18f-1 under the 1940 Act so that the Money Market Portfolio is
obligated to redeem its shares solely in cash up to the lesser of $250,000 or 1%
of its net asset value during any 90-day period for any one shareholder of the
Money Market Portfolio.
<PAGE>22
Under the 1940 Act, the Money Market Portfolio may suspend the right
of redemption or postpone the date of payment upon redemption for any period
during which the New York Stock Exchange (the "NYSE") is closed (other than
customary weekend and holiday closings), or during which trading on said
Exchange is restricted, or during which (as determined by the SEC by rule or
regulation) an emergency exists as a result of which disposal or valuation of
portfolio securities is not reasonably practicable, or for such other periods as
the SEC may permit. (The Money Market Portfolio may also suspend or postpone the
recordation of the transfer of its shares upon the occurrence of any of the
foregoing conditions.)
VALUATION OF SHARES
The Fund intends to use its best efforts to maintain the net asset
value of the Money Market Portfolio at $1.00 per share. Net asset value per
share, the value of an individual share in the Money Market Portfolio, is
computed by dividing the Money Market Portfolio's net assets by the number of
outstanding shares of the Money Market Portfolio. The Money Market Portfolio's
"net assets" equal the value of the Money Market Portfolio's investments and
other securities less its liabilities. The Fund's net asset value per share is
computed twice each day, as of 12:00 noon (Eastern Time) and as of 4:00 p.m.
(Eastern Time) on each Business Day. "Business Day" means each day, Monday
through Friday, when both the NYSE and the Federal Reserve Bank of Philadelphia
(the "FRB") are open. Currently, the NYSE or the FRB, or both, are closed on New
Year's Day, Martin Luther King Day, Presidents' Day, Good Friday, Memorial Day,
Independence Day (observed), Labor Day, Columbus Day, Veterans Day, Thanksgiving
Day and Christmas Day (observed).
The Fund calculates the value of the portfolio securities of the Money
Market Portfolio by using the amortized cost method of valuation. Under this
method the market value of an instrument is approximated by amortizing the
difference between the acquisition cost and value at maturity of the instrument
on a straight-line basis over the remaining life of the instrument. The effect
of changes in the market value of a security as a result of fluctuating interest
rates is not taken into account. The market value of debt securities usually
reflects yields generally available on securities of similar quality. When such
yields decline, market values can be expected to increase, and when yields
increase, market values can be expected to decline. In addition, if a large
number of redemptions take place at a time when interest rates have increased,
the Money Market Portfolio may have to sell portfolio securities prior to
maturity and at a price which might not be as desirable.
The amortized cost method of valuation may result in the value of a
security being higher or lower than its market price, the price the Money Market
Portfolio would receive if the security were sold prior to maturity. The Fund's
Board of Directors has established procedures for the purpose of maintaining a
constant net asset value of $1.00 per share for the Money Market Portfolio,
which include a review of the extent of any deviation of net asset
<PAGE>23
value per share, based on available market quotations, from the $1.00 amortized
cost per share. Should that deviation exceed 1/2 of 1% for the Money Market
Portfolio, the Board of Directors will promptly consider whether any action
should be initiated to eliminate or reduce material dilution or other unfair
results to shareholders. Such action may include redeeming shares in kind,
selling portfolio securities prior to maturity, reducing or withholding
dividends, and utilizing a net asset value per share as determined by using
available market quotations.
The Money Market Portfolio will maintain a dollar-weighted average
portfolio maturity of 90 days or less, will not purchase any instrument with a
deemed maturity under Rule 2a-7 of the 1940 Act greater than 397 calendar days
will limit portfolio investments, including repurchase agreements (where
permitted), to those United States dollar-denominated instruments that PIMC
determines present minimal credit risks pursuant to guidelines adopted by the
Board of Directors, and PIMC will comply with certain reporting and
recordkeeping procedures concerning such credit determination. There is no
assurance that constant net asset value will be maintained. In the event
amortized cost ceases to represent fair value in the judgment of the Fund's
Board of Directors, the Board will take such actions as it deems appropriate.
In determining the approximate market value of portfolio investments,
the Fund may employ outside organizations, which may use a matrix or formula
method that takes into consideration market indices, matrices, yield curves and
other specific adjustments. This may result in the securities being valued at a
price different from the price that would have been determined had the matrix or
formula method not been used. All cash, receivables and current payables are
carried on the Fund's books at their face value. Other assets, if any, are
valued at fair value as determined in good faith by the Fund's Board of
Directors.
Performance Information. The Money Market Portfolio's current and
effective yields are computed using standardized methods required by the SEC.
The annualized yields for the Money Market Portfolio are computed by: (a)
determining the net change in the value of a hypothetical account having a
balance of one share at the beginning of a seven-calendar day period; (b)
dividing the net change by the value of the account at the beginning of the
period to obtain the base period return; and (c) annualizing the results (i.e.,
multiplying the base period return by 365/7). The net change in the value of the
account reflects the value of additional shares purchased with dividends
declared and all dividends declared on both the original share and such
additional shares, but does not include realized gains and losses or unrealized
appreciation and depreciation. Compound effective yields are computed by adding
1 to the base period return (calculated as described above), raising the sum to
a power equal to 365/7 and subtracting 1.
The yield for the seven (7) day period ending August 31, 1994 for the
Bedford Shares of the Money Market Portfolio, were 3.82%. The effective yield
for the same period for the same Shares was 3.89%.
<PAGE>24
Yield may fluctuate daily and does not provide a basis for determining
future yields. Because the yields of the Money Market Portfolio will fluctuate,
they cannot be compared with yields on savings account or other investment
alternatives that provide an agreed to or guaranteed fixed yield for a stated
period of time. However, yield information may be useful to an investor
considering temporary investments in money market instruments. In comparing the
yield of one money market fund to another, consideration should be given to each
fund's investment policies, including the types of investments made, lengths of
maturities of a portfolio securities, the method used by each fund to compute
the yield (methods may differ) and whether there are any special account charges
which may reduce the effective yield.
The yields on certain obligations, including the money market
instruments in which the Money Market Portfolio invests (such as commercial
paper and bank obligations), are dependent on a variety of factors, including
general money market conditions, conditions in the particular market for the
obligation, the financial condition of the issuer, the size of the offering, the
maturity of the obligation and the ratings of the issue. The ratings of Moody's
and S&P represent their respective opinions as to the quality of the obligations
they undertake to rate. Ratings, however, are general and are not absolute
standards of quality. Consequently, obligations with the same rating, maturity
and interest rate may have different market prices. In addition, subsequent to
its purchase by the Money Market Portfolio, an issue may cease to be rated or
may have its rating reduced below the minimum required for purchase. In such an
event, PIMC will consider whether a Money Market Portfolio should continue to
hold the obligation.
From time to time, in advertisements or in reports to shareholders,
the yields of the Money Market Portfolio may be quoted and compared to those of
other mutual funds with similar investment objectives and to stock or other
relevant indices. For example, the yield of the Money Market Portfolio may be
compared to the Donoghue's Money Fund Average, which is an average compiled by
IBC/Donoghue's MONEY FUND REPORT of Holliston, MA 01746, a widely recognized
independent publication that monitors the performance of money market funds, or
to the data prepared by Lipper Analytical Services, Inc., a widely-recognized
independent service that monitors the performance of mutual funds.
TAXES
The following is only a summary of certain additional tax
considerations generally affecting the Money Market Portfolio and its
shareholders that are not described in the Fund's Prospectus. No attempt is made
to present a detailed explanation of the tax treatment of the Money Market
Portfolio or their shareholders, and the discussion here and in the Prospectus
is not intended as a substitute for careful tax planning. Investors are urged to
consult their tax advisers with specific reference to their own tax situation.
<PAGE>25
The Money Market Portfolio has elected to be taxed as a regulated
investment company under Part I of Subchapter M of the Internal Revenue Code of
1986, as amended (the "Code"). As a regulated investment company, the Money
Market Portfolio is exempt from Federal income tax on its net investment income
and realized capital gains which it distributes to shareholders, provided that
it distributes an amount equal to the sum of (a) at least 90% of its investment
company taxable income (net investment income and the excess of net short-term
capital gain over net long-term capital loss), if any, for the year and (b) at
least 90% of its net tax-exempt interest income, if any, for the year (the
"Distribution Requirement") and satisfies certain other requirements of the Code
that are described below. Distributions of investment company taxable income and
net tax-exempt interest income made during the taxable year or, under specified
circumstances, within twelve months after the close of the taxable year will
satisfy the Distribution Requirement. The Distribution Requirement for any year
may be waived if a regulated investment company establishes to the satisfaction
of the Internal Revenue Service that it is unable to satisfy the Distribution
Requirement by reason of distributions previously made for the purpose of
avoiding liability for Federal excise tax (discussed below).
In addition to satisfaction of the Distribution Requirement the Money
Market Portfolio must derive at least 90% of its gross income from dividends,
interest, certain payments with respect to securities loans and gains from the
sale or other disposition of stock or securities or foreign currencies, or from
other income derived with respect to its business of investing in such stock,
securities, or currencies (the "Income Requirement") and derive less than 30% of
its gross income from the sale or other disposition of any of the following
investments if such investments were held for less than three months: (a) stock
or securities (as defined in Section 2(a)(36) of the 1940 Act); (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) but only if such currencies (or
options, futures or forward contracts) are not directly related to the regulated
investment company's principal business of investing in stock or securities (or
options and futures with respect to stocks or securities) (the "Short-Short Gain
Test"). Interest (including original issue discount and, in the case of debt
securities bearing taxable interest income "accrued market discount") received
by the Money Market Portfolio at maturity or on disposition of a security held
for less than three months will not be treated as gross income derived from the
sale or other disposition of such security for purposes of the Short-Short Gain
Test. However, any other income which is attributable to realized market
appreciation will be treated as gross income from the sale or other disposition
of securities for this purpose.
Income derived by a regulated investment company from a partnership or
trust will satisfy the Income Requirement only to the extent such income is
attributable to items of income of the partnership or trust that would satisfy
the Income Requirement if they were realized by a regulated investment company
in the same manner as realized by the partnership or trust.
<PAGE>26
In addition to the foregoing requirements, at the close of each
quarter of its taxable year, at least 50% of the value of the Money Market
Portfolio's assets must consist of cash and cash items, U.S. Government
securities, securities of other regulated investment companies, and securities
of other issuers (as to which the Money Market Portfolio has not invested more
than 5% of the value of its total assets in securities of such issuer and as to
which the Money Market Portfolio does not hold more than 10% of the outstanding
voting securities of such issuer), and no more than 25% of the value of the
Money Market Portfolio's total assets may be invested in the securities of any
one issuer (other than U.S. Government securities and securities of other
regulated investment companies), or in two or more issuers which the Money
Market Portfolio controls and which are engaged in the same or similar trades or
businesses (the "Asset Diversification Requirement").
The Internal Revenue Service has taken the position, in informal
rulings issued to other taxpayers, that the issuer of a repurchase agreement is
the bank or dealer from which securities are purchased. The Money Market Money
Market Portfolio will not enter into repurchase agreements with any one bank or
dealer if entering into such agreements would, under the informal position
expressed by the Internal Revenue Service, cause either one of them to fail to
satisfy the Asset Diversification Requirement.
All shareholders required to file a Federal income tax return are
required to report the receipt of exempt interest dividends and other exempt
interest on their returns. Moreover, while such dividends and interest are
exempt from regular Federal income tax, they may be subject to alternative
minimum tax as described in the Prospectus. By operation of the adjusted current
earnings alternative minimum tax adjustment, exempt interest income received by
certain corporations may be taxed at an effective rate of 15%. In addition,
corporate investors should note that, under the Superfund Amendments and
Reauthorization Act of 1986, an environmental tax is imposed for taxable years
beginning after 1986 and before 1996 at the rate of 0.12% on the excess of the
modified alternative minimum taxable income of corporate taxpayers over $2
million, regardless of whether such taxpayers are liable for alternative minimum
tax. Receipt of exempt interest dividends may result in collateral Federal
income tax consequences to certain other taxpayers, including financial
institutions, property and casualty insurance companies, individual recipients
of Social Security or Railroad Retirement benefits, and foreign corporations
engaged in a trade or business in the United States. Prospective investors
should consult their own tax advisors as to such consequences.
The Money Market Portfolio may acquire standby commitments with
respect to Municipal Obligations held in its portfolio and will treat any
interest received on Municipal Obligations subject to such standby commitments
as tax-exempt income. In Rev. Rul. 82-144, 1982-2 C.B. 34, the Internal Revenue
Service held that a mutual fund acquired ownership of municipal obligations for
Federal income tax purposes, even though the fund simultaneously purchased "put"
agreements with respect to the same municipal obligations from the seller of the
obligations. The Fund will not engage in transactions involving the use of
standby commitments that differ materially
<PAGE>27
from the transaction described in Rev. Rul. 82-144 without first obtaining a
private letter ruling from the Internal Revenue Service or the opinion of
counsel.
Distributions of net investment income received by the Money Market
Portfolio from investments in debt securities (other than interest on tax-exempt
Municipal Obligations that is distributed as exempt interest dividends) and any
net realized short-term capital gains distributed by the Money Market Portfolio
will be taxable to shareholders as ordinary income and will not be eligible for
the dividends received deduction for corporations.
While the Money Market Portfolio expect to realize long-term capital
gains, any net realized long-term capital gains, such as gains from the sale of
debt securities and realized market discount on tax-exempt Municipal
Obligations, will be distributed annually. The Money Market Portfolio will not
have tax liability with respect to such gains and the distributions will be
taxable to Money Market Portfolio shareholders as long-term capital gains,
regardless of how long a shareholder has held Money Market Portfolio shares. The
aggregate amount of distributions designated by the Money Market Portfolio as
capital gain dividends may not exceed the net capital gain of the Money Market
Portfolio for any taxable year, determined by excluding any net capital loss or
any net long-term capital loss attributable to transactions occurring after
October 31 of such year and by treating any such loss as if it arose on the
first day of the following taxable year. Such distributions will be designated
as a capital gains dividend in a written notice mailed by the Fund to
shareholders not later than 60 days after the close of the Money Market
Portfolio's respective taxable year.
Investors should note that changes made to the Code by the Tax Reform
Act of 1986 and subsequent legislation have not entirely eliminated the
distinction between the tax treatment of capital gain and ordinary income
distributions. The nominal maximum marginal rate on ordinary income for
individuals, trusts and estates is currently 31%, but for individual taxpayers
whose adjusted gross income exceeds certain threshold amounts (that differ
depending on the taxpayer's filing status) in taxable years beginning before
1996, provisions phasing out personal exemptions and limiting itemized
deductions may cause the actual maximum marginal tax rate to exceed 31%. The
maximum rate on the net capital gain of individuals, trusts and estates,
however, is in all cases 28%. Capital gains and ordinary income of corporate
taxpayers are taxed a nominal maximum rate of 34% (an effective marginal rate of
39% applies in the case of corporations having taxable income between $100,000
and $335,000).
If for any taxable year the Money Market Portfolio does not qualify as
a regulated investment company, all of its taxable income will be subject to tax
at regular corporate rates without any deduction for distributions to
shareholders, and all distributions will be taxable as ordinary dividends
(including amounts derived from interest on municipal obligations) to the extent
of the Money Market Portfolio's current and
<PAGE>28
accumulated earning and profits. Such distributions will be eligible for the
dividends received deduction in the case of corporate shareholders.
The Code imposes a non-deductible 4% excise tax on regulated
investment companies that do not distribute with respect to each calendar year
an amount equal to 98 percent of their ordinary income for the calendar year
plus 98 percent of their capital gain net income for the 1-year period ending on
October 31 of such calendar year. The balance of such income must be distributed
during the next calendar year. For the foregoing purposes, a company is treated
as having distributed any amount on which it is subject to income tax for any
taxable year ending in such calendar year. Because the Money Market Portfolio
intends to distribute all of its taxable income currently, it does not
anticipate incurring any liability for this excise tax.
The Fund will be required in certain cases to withhold and remit to
the United States Treasury 31% of dividends (other than exempt interest
dividends) paid to any shareholder (1) who has provided either an incorrect tax
identification number or no number at all, (2) who is subject to backup
withholding by the Internal Revenue Service for failure to report the receipt of
interest or dividend income properly, or (3) who has failed to certify to the
Fund that he is not subject to backup withholding or that he is an "exempt
recipient."
The foregoing general discussion of Federal income tax consequences is
based on the Code and the regulations issued thereunder as in effect on the date
of this Statement of Additional Information. Future legislative or
administrative changes or court decisions may significantly change the
conclusions expressed herein, and any such changes or decisions may have a
retroactive effect with respect to the transactions contemplated herein.
Although the Money Market Portfolio expects to qualify as a "regulated
investment company" and to 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 Money Market Portfolio may be subject to the tax laws
of such states or localities.
ADDITIONAL INFORMATION CONCERNING FUND SHARES
The Fund does not currently intend to hold annual meetings of
shareholders except as required by the 1940 Act or other applicable law. The
Fund's amended By-Laws provide that shareholders owning at least ten percent of
the outstanding shares of all classes of Common Stock of the Fund have the right
to call for a meeting of shareholders to consider the removal of one or more
directors. To the extent required by law, the Fund will assist in shareholder
communication in such matters.
<PAGE>29
As stated in the Prospectus, holders of shares of each class of the
Fund will vote in the aggregate and not by class on all matters, except where
otherwise required by law. Further, shareholders of the Fund will vote in the
aggregate and not by portfolio except as otherwise required by law or when the
Board of Directors determines that the matter to be voted upon affects only the
interests of the shareholders of a particular portfolio. Rule 18f-2 under the
1940 Act provides that any matter required to be submitted by the provisions of
such Act or applicable state law, or otherwise, to the holders of the
outstanding securities of an investment company such as the Fund shall not be
deemed to have been effectively acted upon unless approved by the holders of a
majority of the outstanding shares of each portfolio affected by the matter.
Rule 18f-2 further provides that a portfolio shall be deemed to be 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 the Rule the approval of an investment advisory agreement or any change in
a fundamental investment policy would be effectively acted upon with respect to
a portfolio only if approved by the holders of a majority of the outstanding
voting securities of such portfolio. However, the Rule also provides that the
ratification of the selection of independent public accountants, the approval of
principal underwriting contracts and the election of directors are not subject
to the separate voting requirements and may be effectively acted upon by
shareholders of an investment company voting without regard to portfolio.
Notwithstanding any provision of Maryland law requiring a greater vote
of shares of the Fund's common stock (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 discussed above), or by the Fund's Articles of
Incorporation, the Fund may take or authorize such action upon the favorable
vote of the holders of more than 50% of all of the outstanding shares of Common
Stock voting without regard to class (or portfolio).
MISCELLANEOUS
Counsel. The law firm of Ballard Spahr Andrews & Ingersoll, 1735
Market Street, 51st Floor, Philadelphia, Pennsylvania 19103, serves as counsel
to the Fund, PIMC, PNC Bank and PFPC. The law firm of Drinker Biddle & Reath,
1100 Philadelphia National Bank Building, Broad and Chestnut Streets,
Philadelphia, Pennsylvania 19107, serves as counsel to the Fund's independent
directors.
Independent Accountants. Coopers & Lybrand L.L.P., 2400 Eleven Penn
Center, Philadelphia, Pennsylvania 19103, serves as the Fund's independent
accountants. The Fund's financial statements which appear in this Statement of
Additional Information have been audited by Coopers & Lybrand L.L.P., as set
forth in their report, which also appears in this Statement of Additional
Information, and have been included herein in reliance upon the report of such
firm given upon their authority as experts in accounting and auditing.
<PAGE>30
Control Persons. As of January 27, 1995, to the Fund's knowledge, the
following named persons at the addresses shown below owned of record
approximately 5% or more of the total outstanding shares of the class of the
Fund indicated below. Such classes are described in the Prospectus. The Fund
does not know whether such persons also beneficially own such shares.
<PAGE>31
<TABLE>
<CAPTION>
Percent of
Outstanding
Names and Addresses Shares of
Class of Common Stock of Record Owners Class Owned
<S> <C> <C>
Class A Boston Financial Data Services 99%
(Growth & Income) Omnibus Account
Attn.: Warburg Pincus, 3rd Fl.
2 Heritage Drive
Quincy, MA 02171
Class D Gruntal Co. 8%
(Tax-Free) FBO 955-16852-14
14 Wall Street
New York, NY 10005
Class D Gruntal Co. 9%
(Tax-Free) FBO 955-10773-13
14 Wall Street
New York, NY 10005
Class D Gruntal Co. 9%
(Tax-Free) FBO 955-10702-19
14 Wall Street
New York, NY 10005
Class D Gruntal Co 5%
Tax-Free FBO 541-75585-16
14 Wall Street
New York, NY 10005
Class E PNC Bank, NA Custodian FBO 14%
(Money) Harold T. Erfer
414 Charles Lane
Wynnewood, PA 19096
</TABLE>
<PAGE>32
<TABLE>
<CAPTION>
Percent of
Outstanding
Names and Addresses Shares of
Class of Common Stock of Record Owners Class Owned
<S> <C> <C>
Class E PNC Bank, NA 18%
(Money) Custodian FBO
Karen M. McElhinny
and Contribution Acct.
4943 King Arthur Drive
Erie, PA 16506
Class E E. L. Haines Jr. and 8%
(Money) Betty J. Haines
2341 Pinebluff Drive
Dallas, TX 75228
Class E John Robert Estrada and 16%
(Money) Shirley Ann Estrada
3700 Raton Drive
Arlington, TX 76018
Class E Eric Levine and 31%
(Money) Linda & Howard Levine
J T Ten WROS
67 Lanes Pond Road
Howell, NJ 07731
Class F SEYMOUR FEIN 91%
(Municipal) P.O. 486 Tremont Post Office
Bronx, NY 10457-0848
Class F William B. Pettus & Augustine W. 9%
(Municipal) Pettus Trust
827 Winding Path Lane
St. Louis, MO 63021-6635
Class G Saver's Marketing Inc. 21%
(Money) c/o Planco
16 Industrial Blvd.
Paoli, PA 19301
Class G
(Money) Lynda R. Campbell Succ. Trustee 7%
For IN TR Under the Lynda R. Campbell
Caring Trust dtd. 10/19/92
935 Rutger Street
St. Louis, MO 63104
Class G
(Money) Jewish Family and Childrens Agency 42%
of Philadelphia Capital Campaign
1610 Spruce Street
Philadelphia, PA 19103
Attn: S. Ramm
Class H
(Municipal) Deborah C. Brown, Trustee 27%
Barbara J, C, Curtis, Trustee
The Crowe Trust dtd 11/23/88
9921 West 128th Terr
Overlond Dale, KS 662133
Class H
(Municipal) Kelly H. Vandelight 7%
Crystal C. Vandelight
P.O. Box 296
Belle, MO 65013
</TABLE>
<PAGE>33
<TABLE>
<CAPTION>
Percent of
Outstanding
Names and Addresses Shares of
Class of Common Stock of Record Owners Class Owned
<S> <C> <C>
Class H
(Municipal) Kenneth Farnell and 5%
Valerie Farnell
3854 Sullivan
St. Louis, MO 63107
Class H
(Municipal) Gary L. Lange 8%
Susan D. Lange
13 Muirfield Court North
St. Charles, MO 63304
Class H
(Municipal) Marcella L. Haugh 7%
Caring TR
DTD 8/12/91
40 Plaza Sq. Apt. 202
St. Louis, MO 63103
Class H
(Municipal) Larnie Johnson 8%
Mary Alice Johnson
4927 Lee Avenue
St. Louis, MO 63115-1726
Class I
(Money) Wasner & Co. 83%
For Account of Paine Webber
Managed Assets-Sundry
Holdings
Attn: Judy Guille 01-04-01
1632 Chestnut St.
Philadelphia, PA 19103
Class I
(Municipal) Wasner & Co. 13%
For Account of Paine Webber
Managed Assets - Sundry Holdings
Attn: Joe Domizio
200 Stevens Drive
Lester, PA 19113
Class P
(Government) Home Insurance Company 73%
Att. Edward F. Linekin
59 Maiden Lane
21st Floor
New York, NY 10038
Class P
(Government) Home Indemnity Company 6%
Att. Edward F. Linekin
59 Maiden Lane
21st Floor
New York, NY 10038
</TABLE>
<PAGE>34
<TABLE>
<CAPTION>
Percent of
Outstanding
Names and Addresses Shares of
Class of Common Stock of Record Owners Class Owned
<S> <C> <C>
Class U
(Strategic) State of Oregon 43%
Treasury Department
159 State Capital Building
Salem, Oregon 97310
Class U
(Strategic) The Chase Manhattan Bankers Trust 14%
For Kendale Company Master
Pension Plan
Attn: Mark Tesoriero
3 Metrotech Ctr. 6th Fl.
Brooklyn, NY 11245
Class V
(Emerging) Amherst H. Wilder Foundation 5%
919 Lafond Avenue
Saint Paul, MN 55104
Class V
(Emerging) Northern Trust Company TTEE 21%
Texas Instruments Employee Plan
P.O. Box 92956
AC 22-69966/2-059328
Chicago, IL 60675-2956
Class V
(Emerging) Wachovia Bank North Carolina 5%
Fleming Companies Inc.
Noster Pension Trust
307 North Hain St.
P. O. Box 3099
Winston Salem, NC 27150
Class V
(Emerging) Bryn Mawr College 11%
101 North Merion Avenue
Bryn Mawr, PA 19010-2899
Class V
(Emerging) Wachovia Bank North Carolina 9%
Carolina Power & Light Co.
Supplemental Retirement Trust
301 Main St.
Winston Salem, NC 27150
Class V
(Emerging) Northern Trust 7%
TRUST PILLSBURY
P O Box 92956
Chicago, IL 60675
Class W
(Equity) PNC Bank, N.A.Cust. FBO Victor 9%
A. Canto
P. O. Box 1471
Ranclo Santa Fe, CA
</TABLE>
<PAGE>35
<TABLE>
<CAPTION>
Percent of
Outstanding
Names and Addresses Shares of
Class of Common Stock of Record Owners Class Owned
<S> <C> <C>
Class W
(Equity) John Hancock Clearing 29%
Corporation
Special Custody Acct. and the
Exclusive Benefit of Customers
One WFC 200 Liberty St.
New York, NY 10281
Class W
Equity Lois G. Smith FBO 7%
Lois G. Smith Trust
12035 Hooiser CRT Apt. 103
Bayonne Point, FL 34667-3143
Class W
(Equity) Rauscher Pierce Refsnes 7%
FBO Charles Wright
Special Account
Route 1 Box 138
Coleman, TX 76834
Class X
(Core Equity) Bank of New York 87%
Trust APU Buckeye Pipeline
One Wall Street
New York, NY 10286
Class X
(Core Equity) Werner & Pfleiderer 9%
Pension Plan Employees
663 E. Crescent Avenue
Romsey, NU 07466
Class Y
(Core Fixed Income) New England UFCW & Employers 40%
Pension Fund Board of Trustees
161 Forbes Rd., Suite 201
Braintree, MA 02184
Class Y
(Core Fixed Income) Bankers Trust 35%
Pechiney Corporation Pension
Master Trust
34 Exchange Place, 4th Fl.
Jersey City, NJ 07302
Class Y
(Core Fixed Income) Kollhorgen Corporation Pension Trust 8%
1601 Thapelco Road
Waltham, MA 02154
Class Z
(Global Fixed Income) Bank of New York 36%
Eastern Enterprises
Retirement Plain Trust
One Wall Street, 8th Fl.
New York, NY 10286
</TABLE>
<PAGE>36
<TABLE>
<CAPTION>
Percent of
Outstanding
Names and Addresses Shares of
Class of Common Stock of Record Owners Class Owned
<S> <C> <C>
Class Z
(Global Fixed Income) Sunkist Master Trust 64%
14130 Riverside Drive
Sherman Oaks, CA 91423
Class AA
(Municipal Bond) William A. Marquard 13%
2199 Maysville Road
Carlisle, KY 40311
Class AA
(Municipal Bond) John C. Cahill 6%
c/o David Holmgren
30 White Birch Lane
Coss Cot, CT 06870
</TABLE>
<PAGE>1
Appendix
Description of Bond Ratings
The following summarizes the highest two ratings used by Standard &
Poor's Corporation for bonds:
AAA-Debt rated AAA has the highest rating assigned by Standard &
Poor's. Capacity to pay interest and repay principal is extremely
strong.
AA-Debt rated AA has a very strong capacity to pay interest and
repay principal and differs from AAA issues only in small degree. The
"AA" rating may be modified by the addition of a plus or minus sign to
show relative standing within the AA rating category.
The following summarizes the highest two ratings used by Moody's
Investors Service, Inc. for bonds:
Aaa-Bonds that are rated Aaa are judged to be of the best
quality. They carry the smallest degree of investment risk and are
generally referred to as "gilt edge." Interest payments are protected
by a large or by an exceptionally stable margin and principal is
secure. While the various protective elements are likely to change,
such changes as can be visualized are most unlikely to impair the
fundamentally strong position of such issues.
Aa-Bonds that are rated Aa are judged to be of high quality by
all standards. Together with the Aaa group they comprise what are
generally known as high grade bonds. They are rated lower than the
best bonds because margins of protection may not be as large as in Aaa
securities or fluctuation of protective elements may be of greater
amplitude or there may be other elements present which make the
long-term risks appear somewhat larger than in Aaa securities.
Moody's applies numerical modifiers (1, 2 and 3) with respect to bonds rated Aa.
The modifier 1 indicates that the bond being rated ranks in the higher end of
its generic rating category; the modifier 2 indicates a mid-range ranking; and
the modifier 3 indicates that the bond ranks in the lower end of its generic
rating category.
The rating SP-1 is the highest rating assigned by Standard & Poor's to
municipal notes and indicates very strong or strong capacity to pay principal
and interest. Those issues determined to possess overwhelming safety
characteristics are given a plus (+) designation.
<PAGE>A-2
The following summarizes the two highest ratings used by Moody's for
short-term notes and variable rate demand obligations:
MIG-1/VMIG-1. Obligations bearing these designations are of the best
quality, enjoying strong protection by established cash flows, superior
liquidity support or demonstrated broad-based access to the market for
refinancing.
MIG-2/VMIG-2. Obligations bearing these designations are of high
quality with margins of protection ample although not as large as in the
preceding group.
Description of Commercial Paper Ratings
Commercial paper rated A-1 by Standard & Poor's indicates that the
degree of safety regarding timely payment is either overwhelming or very strong.
Those issues determined to possess overwhelming safety characteristics are
designated A-1+. Capacity for timely payment on commercial paper rated A-2 is
strong, but the relative degree of safety is not as high as for issues
designated A-1.
The rating Prime-1 is the highest commercial paper rating assigned by
Moody's. Issuers rated Prime-1 (or related supporting institutions) are
considered to have a superior capacity for repayment of short-term promissory
obligations. Issuers rated Prime-2 (or related supporting institutions) are
considered to have strong capacity for repayment of short-term promissory
obligations. This will normally be evidenced by many of the characteristics of
issuers rated Prime-1 but to a lesser degree. Earnings trends and coverage
ratios, while sound, will be more subject to variation. Capitalization
characteristics, while still appropriate, may be more affected by external
conditions. Ample alternate liquidity is maintained.
<PAGE>F-1
THE Bedford Family
The RBB Fund, Inc.
Annual Investment Adviser's Report
What a difference a year makes. One year ago, the nation's economy was
demonstrating only faint signs of a recovery and short-term interest rates, the
Federal Reserve's tool to govern the rate of economic growth, were being
maintained at a very stimulative level of 3%. Inflation was a mild 2.5%. In the
four quarters since last summer, the financial markets have witnessed a pick up
in all three areas the economy, interest rates and inflation. In the first two
quarters of 1994, real gross domestic product (GDP) grew by 3.3% and 3.8%,
versus 1.2% and 2.4% in 1993. Short-term interest rates jumped to 4.75%, an
increase of 175 basis points, as the Federal Reserve took preemptive actions
against inflation and raised the federal funds rate on five separate occasions.
Presently, it's too early to determine the effect of this more restrictive
monetary policy, however, inflation has shown signs of escalating and is
averaging about 3.0-3.5%. Pressure on consumer and producer prices has been
evidenced by large jumps in commodity prices and capacity utilization, the
latter hitting a five-year high in August at 84.7%.
In the taxable money markets, the key event was a series of Fed
tightenings, in February, March, April, May and August, that increased
short-term interest rates by 175 basis points. Each move was targeted to keep
inflation from rekindling. For much of the period, the actual news on inflation
remained quite mild, and the Fed's actions were viewed with a degree of
skepticism by investors. The reality of the dramatic change in policy, however,
encouraged even the most bullish investor to shorten the maturities of
investments and increase holdings in variable rate obligations.
Municipal bond prices tumbled in the aftermath of the five Federal Reserve
tightenings. Tax-exempt bonds fell in tandem with prices in the U.S. Treasury
market amid concerns that the economy would begin generating inflation.
Investors shifted their municipal investments out of longer-term municipal bond
funds, causing the tax-exempt money market sector to experience tremendous asset
growth during the period. Total tax-exempt assets grew almost $10 billion during
the period and peaked out at $118.8 billion during April, according to
IBC/Donoghue's Money Fund Report. This increase in assets, coupled with a
general lack of supply and portfolio managers' concerns over future rate
increases caused variable rate demand instruments to remain below 2% for much of
the period. During the summer, investors began feeling comfortable that further
tightening would be put on hold for the near-term and assets began moving back
into longer-term, higher yielding instruments.
PNC Institutional Management Corporation
(Please dial toll-free 800-533-7719 for questions
regarding your account or contact your broker.)
<PAGE>F-2
Report of Indepenent Accountants
To the Shareholders and Board of Directors of the RBB Fund, Inc.:
We have audited the accompanying statements of net assets of the Money
Market, Municipal Money Market and Government Obligations Money Market
Portfolios of The RBB Fund, Inc., as of August 31, 1994, and the related
statements of operations for the year then ended, the statements of changes in
net assets for each of two years in the period then ended, and the financial
highlights for each of the periods presented. These financial statements and
financial highlights are the responsibility of the Fund's management. Our
responsibility is to express an opinion on these financial statements and
financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included physical inspection and confirmation of
investments held by the custodians and others as of August 31, 1994. An audit
also included assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements and financial highlights referred
to above present fairly, in all material respects, the financial position of the
Money Market, Municipal Money Market and Government Obligations Money Market
Portfolios of The RBB Fund, Inc., as of August 31, 1994, the results of their
operations for the year then ended, the changes in their net assets for each of
the two years in the period then ended, and the financial highlights for each of
the periods presented, in conformity with generally accepted accounting
principles.
COOPERS & LYBRAND L.L.P.
2400 Eleven Penn Center
Philadelphia, Pennsylvania
October 14, 1994
<PAGE>F-3
THE BEDFORD FAMILY
THE RBB FUND, INC.
Money Market Portfolio
Statement of Net Assets
August 31, 1994
Par
(000) Value
----- -------
AGENCY OBLIGATIONS -- 9.7%
Federal National Mortgage Association -- 4.6%
3.23% 09/26/94 $25,000 $24,943,924
3.34% 09/27/94 25,000 24,939,694
------ ----------
49,883,618
----------
Student Loan Marketing Association Variable
Rate Notes -- 5.1%+
4.93% 09/06/94 10,000 10,000,000
4.88% 09/06/94 25,000 25,000,000
4.92% 09/06/94 20,000 20,000,000
----------
55,000,000
----------
TOTAL AGENCY OBLIGATIONS
(Cost $104,883,618) 104,883,618
-----------
BANK NOTES -- 8.8%
Bank of New York
5.03% 09/06/94 50,000 50,000,000
NationsBank North Carolina
3.37% 09/30/94 25,000 24,997,957
5.35% 06/07/95 5,000 4,999,825
Northern Trust Bank
5.25% 06/16/95 15,000 14,992,070
----------
TOTAL BANK NOTES
(Cost $94,989,852) 94,989,852
----------
CERTIFICATES OF DEPOSIT -- 9.3%
Banks -- 5.1%
First National Bank of Chicago
4.82% 09/01/94 55,000 54,979,432
Yankee Certificates of Deposit -- 4.2%
RaboBank Nederland
4.70% 12/12/94 25,000 25,000,000
Sanwa Bank Ltd. Japan
4.54% 09/12/94 20,000 19,998,398
----------
44,998,398
----------
TOTAL CERTIFICATES OF DEPOSIT
(Cost $99,977,830) 99,977,830
----------
Par
(000) Value
----- -------
COMMERCIAL PAPER -- 23.3%
Banks -- 8.6%
AMRO N.A. Finance, Inc.
4.45% 09/19/94 $20,000 $19,955,500
National City Corp.
4.75% 12/12/94 10,000 9,865,417
4.80% 11/28/94 20,000 19,765,333
4.80% 12/19/94 5,000 4,927,333
5.10% 02/08/95 10,000 9,773,333
Republic National Bank New York
4.85% 01/04/95 15,000 14,747,396
Toronton Dominion Holdings Corp.
4.95% 02/06/95 15,000 14,674,125
----------
93,708,437
----------
Finance -- 2.3%
Preferred Receivables Funding Corp.
4.45% 09/13/94 25,000 24,962,917
----------
Finance Lessors -- 2.3%
General Electric Capital Corp.
4.75% 10/21/94 25,000 25,000,000
----------
Life Insurance -- 0.9%
Lincoln National Corp.
4.80% 11/08/94 10,000 9,909,333
----------
Personal Credit Institutions -- 5.5%
Ford Motor Credit Corp.
4.67% 09/30/94 30,000 29,887,142
Household Finance Corp.
4.57% 10/12/94 20,000 19,895,906
4.75% 10/04/94 10,000 9,956,458
----------
59,739,506
----------
Short-Term Business Credit Institutions -- 3.7%
Asset Securitization Cooperative Corp.
4.65% 10/24/94 15,000 14,897,313
Sears Roebuck Acceptance Corp.
4.88% 11/15/94 25,000 24,745,833
----------
39,643,146
----------
TOTAL COMMERCIAL PAPER
(Cost $252,963,339) 252,963,339
-----------
See Accompanying Notes to Financial Statements
<PAGE>F-4
THE BEDFORD FAMILY
THE RBB FUND, INC.
Money Market Portfolio
Statement of Net Assets (Concluded)
August 31, 1994
Par
(000) Value
----- -------
TIME DEPOSITS -- 2.3%
Bank of Tokyo
4.84% 10/03/94 $25,000 $25,000,000
-----------
TOTAL TIME DEPOSITS
(Cost $25,000,000) 25,000,000
-----------
UNITED STATES TREASURY OBLIGATIONS -- 2.3%
U.S. Treasury Notes -- 2.3%
6.00% 11/15/94 25,000 25,128,921
-----------
TOTAL U.S. TREASURY
OBLIGATIONS
(Cost $25,128,921) 25,128,921
-----------
CORPORATE OBLIGATIONS -- 24.8%
Bear Stearns Treasury Rate Note
4.94% 09/06/94 15,000 15,000,000
Bear Stearns & Co., Inc+
5.10% 09/06/94 40,000 40,000,000
Goldman Sachs Group L.P.+
5.12% 10/11/94 53,000 53,000,000
International Lease &
Finance Corporation
7.20% 10/26/94 10,000 10,052,659
J.P. Morgan Securities, Inc.+
5.00% 11/11/94 55,000 55,000,000
Lehman Brothers Holdings, Inc.+
4.75% 09/07/94 48,000 48,000,000
Morgan Stanley Group+
4.78% 01/18/95 15,000 15,000,000
4.98% 09/06/94 33,500 33,497,447
-----------
TOTAL CORPORATE OBLIGATIONS
(Cost $269,550,106) 269,550,106
-----------
REPURCHASE AGREEMENTS - 21.5%
Kidder, Peabody & Co.
4.95% 09/01/94 23,720 23,720,000
5.02% 09/01/94 100,000 100,000,000
(Agreements dated 08/31/94 to be
repurchased at $123,737,206,
collateralized by $56,672,591
Federal National Mortgage
Par
(000) Value
----- -------
REPURCHASE AGREEMENTS (continued)
Kidder, Peabody & Co. (continued)
Assoc. 6.52% due 12/01/23 to
07/01/24, $111,702,857 Federal
National Mortgage Corp. 5.90% to
6.00% due 06/01/20 to 05/01/24. Market
value of collateral is $127,431,601).
Morgan Stanley & Co.
4.95% 09/01/94 $110,000 $110,000,000
(Agreement dated 08/31/94 to be
repurchased at $110,015,125,
collateralized by $41,988,000
Federal Home Loan Mortgage
Corp. due 09/16/94 to 10/24/94,
$69,040,000 Federal National
Mortgage Assoc. 5.18% to 8.80%
due 11/23/94 to 02/01/99. Market
Value of collateral is $112,306,235).
-----------
TOTAL REPURCHASE AGREEMENTS
(Cost $233,720,000) 233,720,000
-----------
TOTAL INVESTMENTS AT VALUE
(Cost $1,106,213,666*)-- 102.0% $1,106,213,666
LIABILITIES IN EXCESS
OF OTHER ASSETS--(2.0%) (21,453,713)
-----------
NET ASSETS (Applicable to
710,738,832 Bedford Shares,
231,180 Cash Preservation shares,
45,314 RBB shares, 373,745,889
Sansom Street shares and 800
other shares) -- 100.0% $1,084,759,953
==============
NET ASSET VALUE, offering and
redemption price per share
($1,084,759,953 / 1,084,762,015) $1.00
=====
* Also cost for Federal income tax
purposes.
+ Variable Rate Obligations The
interest rate shown is the rate as
of August 31, 1994 and the maturity
date shown is the longer of the
next interest readjustment date or
the date the principal amount shown
can be recovered through demand.
See Accompanying Notes to Financial Statements.
<PAGE>F-5
THE BEDFORD FAMILY
THE RBB FUND, INC.
Money Market Portfolio
Statement of Operations
For the Year Ended
August 31, 1994
Investment Income
Interest $40,811,764
-----------
Expenses
Investment advisory fees 4,203,754
Distribution fees 4,308,983
Service organization fees 311,525
Directors' fees 15,213
Custodian fees 192,965
Transfer agent fees 1,408,929
Legal fees 60,110
Audit fees 75,056
Registration fees 79,005
Amortization expense 3,565
Insurance expense 33,413
Printing fees 212,520
Miscellaneous 14,594
-----------
10,919,632
Less fees waived (2,268,713)
Less expense reimbursement by advisor (8,339)
-----------
TOTAL EXPENSES 8,642,580
-----------
NET INVESTMENT INCOME 32,169,184
-----------
NET REALIZED LOSS ON INVESTMENTS (2,062)
-----------
NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS $32,167,122
===========
Statement of Changes in Net Assets
For the For the
Year Ended Year Ended
August 31, 1994 August 31, 1993
Increase (decrease) in
net assets:
Operations:
Net investment income $32,169,184 $25,122,063
Net gain (loss)
on investments (2,062) 63,647
------ ------
Net increase in net assets
resulting from
operations 32,167,122 25,185,710
---------- ----------
Distributions to shareholders:
Dividends to shareholders from
net investment income:
Bedford shares ($.0278 and
$.0243, respectively,
per share) (21,525,364) (18,722,273)
Cash Preservation shares
($.0278 and $.0243,
respectively, per share) (26,296) (25,171)
RBB shares ($.0273 and
$.0238, respectively,
per share) (1,576) (2,107)
Sansom Street shares
($.0334 and $.0304,
respectively, per share) (10,615,948) (6,372,512)
Distributions to shareholders from
net realized short-term gains:
Bedford shares (48,280) (8,127)
Cash Preservation shares (40) (6)
RBB shares (5) (7)
Sansom Street shares (15,323) (2,727)
------- ------
Total distributions to
shareholders (32,232,832) (25,132,930)
----------- -----------
Net capital share
transactions 110,590,287 7,953,674
----------- ---------
Total increase in net assets 110,524,577 8,006,454
Net Assets:
Beginning of year 974,235,376 966,228,922
----------- -----------
End of year $1,084,759,953 $974,235,376
============== ============
See Accompanying Notes to Financial Statements.
<PAGE>F-6
THE BEDFORD FAMILY
THE RBB FUND, INC.
Municipal Money Market Portfolio
Statement of Net Assets
August 31, 1994
Par
(000) Value
----- -------
ALABAMA -- 2.0%
Alabama Housing Finance Authority DN
(Heatherbrooke Apartments Projects)
(Series O) / (Amsouth LOC) + (A-1)
3.25% 09/07/94 $1,600 $1,600,000
Demopolis DN / (Banque Nationale
de Paris LOC) + (A-1+)
3.30% 09/07/94 3,000 3,000,000
Livingston Alabama IDR DN (Toin Corp.
USA Project) / (Industrial Bank of
Japan LOC) + (A-1+)
3.45% 09/07/94 1,000 1,000,000
-----------
5,600,000
-----------
ARIZONA -- 3.1%
Apache County DN / (Chemical Bank
LOC) + (A-1)
2.90% 09/07/94 1,000 1,000,000
Flagstaff IDA DN / (FGIC Insurance)+
(A-1) 3.25% 09/07/94 5,855 5,855,000
Pima County IDA PCR DN (Tucson
Electric Power Project)/(Barclays
Bank LOC)+
3.10% 09/07/94 2,000 2,000,000
-----------
8,855,000
-----------
ARKANSAS -- 0.4%
Warren Park Solid Waste DN / (Credit
Suisse LOC)+ (A-1+)
3.15% 09/07/94 1,000 1,000,000
-----------
CALIFORNIA -- 19.8%
ABAG Finance Authority for Non-Profit
Organizations Series 1993 DN /
(AMBAC Insurance)+ (A-1+)
2.85% 09/07/94 1,100 1,100,000
California Higher Education
Loan Authority Student Loan Revenue
Refunding Series 1987a /
(National Westminster LOC)++
(VMG1) 3.60% 09/07/94 3,000 3,000,000
Par
(000) Value
----- -------
CALIFORNIA - (continued)
Eastern Municipal Water District DN
Co-op Series 1993B /(FGIC
Insurance)+ (A-1+)
2.85% 09/07/94 $900 $900,000
Irvine Calif. Assessment Distict 89-10
DN / (National Westminster LOC)+
(A-1+) 2.80% 09/07/94 2,000 2,000,000
Irvine Ranch Water District DN /
(Bank of America LOC)+(A-1)
2.85% 09/01/94 4,300 4,300,000
Irvine Ranch Water District DN /
(Morgan Guaranty LOC) +
(A-1+) 3.05% 09/01/94 1,600 1,600,000
Irvine Ranch Water District
Orange County Sewer Bonds DN
Series 1988 A / (Sumitomo Bank
LOC)+ (A-1+) 2.85% 09/01/94 2,100 2,100,000
Irvine Ranch Water District
Orange County DN Series 1985 +
(A-1) 3.10% 09/01/94 1,600 1,600,000
Loma Linda DN / (Industrial Bank
of Japan LOC)+ (A-1+) 2.75% 09/07/94 1,100 1,100,000
Los Angeles County Transportation
MB (SP-1) 4.50% 06/30/95 4,000 4,020,709
Los Angeles Unified School District
TRAN MB (SP-1)
4.50% 07/10/95 5,000 5,039,169
4.50% 07/10/95 4,000 4,029,682
Orange County Sanitation
District DN / (AMBAC Insurance LOC)+
(A-1+) 2.80% 09/01/94 2,100 2,100,000
San Francisco City & County Agency
DN Redevelopment Agency Multi-family
Housing Revenues Bonds (Bayside Village
Project) Series B / (Industrial Bank of
Japan LOC)+ (A-1+) 3.05% 09/07/94 8,100 8,100,000
See Accompanying Notes to Financial Statements.
<PAGE>F-7
THE BEDFORD FAMILY
THE RBB FUND, INC.
Municipal Money Market Portfolio
Statement of Net Assets (Continued)
August 31, 1994
Par
(000) Value
----- -------
CALIFORNIA -- (continued)
Santa Clara TRAN MB (SP-1)
4.25% 07/07/95 $5,000 $5,031,489
State of California 1994-95 RAN DN
Series B + (A-1)
3.24% 09/30/94 10,000 10,000,000
----------
56,021,049
----------
COLORADO -- 1.2%
Moffat County DN + (A-1+)
3.15% 09/07/94 3,400 3,400,000
----------
CONNECTICUT -- 2.1%
New Hampshire Housing Finance
Authority DN Series 1994 + (VMIG1)
3.15% 09/07/94 6,000 6,000,000
----------
DISTRICT OF COLUMBIA -- 1.7%
District of Columbia Hospital for Women DN
Series 88A / (Mitsubishi Bank LOC) +
(VMIG1) 3.15% 09/07/94 2,900 2,900,000
District of Columbia Catholic University
of America DN / (Sanwa Bank LOC)+
3.15% 09/07/94 1,900 1,900,000
----------
4,800,000
----------
FLORIDA -- 3.9%
Florida Housing Finance Agency DN /
(Wells Fargo Bank LOC)+ (A-1)
3.10% 09/30/94 3,000 3,000,000
Hillborough County IDR DN + (A-1+) 3.20%
09/01/94 2,200 2,200,000
Orange County DN Health Facilities
Authority Refunding Program
Revenue Bonds Pooled Hospital
Loan Program / (Banque Nationale
de Paris LOC)+ (VMIG1)
3.15% 09/01/94 5,850 5,850,000
----------
11,050,000
----------
Par
(000) Value
----- -------
GEORGIA -- 2.8%
Municipal Electric Authority of Georgia
MB Variable Rate Subordinated
Bonds++ (A-1)
3.05% 02/28/95 $8,000 $8,000,000
----------
ILLINOIS -- 8.5%
City of Chicago GO DN /
(Sanwa Bank LOC)+
2.90% 09/07/94 5,640 5,640,000
Illinois Development Facility Harris
DN / (FNMA LOC)+ (A-1+) 3.50%
09/07/94 7,500 7,500,000
Health Facility Authority DN (Revolving
Fund Pooled Finance) / (Swiss Bank
LOC)+ (A-1+)
3.05% 09/07/94 1,400 1,400,000
Chicago Illinois Supply Revenue Peoples
Gas Light & Coke MB++ (A-1+)
2.55% 12/01/94 6,000 6,000,000
Illinios Health Facility Highland Park /
(FGIC Insurance)++
3.75% 06/01/95 3,500 3,500,000
----------
24,040,000
----------
INDIANA -- 2.5%
Tippencanoe DN / (Bank of
New York LOC)+
3.25% 09/07/94 7,000 7,000,000
----------
IOWA -- 0.8%
Polk County Hospital Equipment
Authority DN / (MBIA Insurance)+
(A-1+)
3.10% 09/07/94 2,200 2,200,000
----------
KENTUCKY -- 1.5%
Bowling Green Twin Fastner DN /
(Industrial Bank of Japan LOC)+
(A-1+)
3.45% 09/07/94 1,100 1,100,000
Ohio County PCR DN (Big Rivers) /
(Bank of New York LOC)+ (A-1+)
3.25% 09/07/94 3,000 3,000,000
----------
4,100,000
----------
See Accompanying Notes to Financial Statements.
<PAGE>F-8
THE BEDFORD FAMILY
THE RBB FUND, INC.
Municipal Money Market Portfolio
Statement of Net Assets (Continued)
August 31, 1994
Par
(000) Value
----- -------
LOUISIANA -- 1.8%
Louisiana Health Public Facilities
Authority DN / (Sumitomo Bank
LOC)+ (A-1+)
3.30% 09/07/94 $1,000 $1,000,000
Plaquesmines Louisiana Port Harbor
Terminal District Revenue
Series A MB / (Morgan
Guaranty LOC)++ (P-1)
3.40% 03/15/95 4,000 4,000,000
-----------
5,000,000
-----------
MAINE -- 2.7%
Jay Maine Solid Waste Disposal
Revenue MB++
3.95% 06/01/95 7,500 7,500,000
-----------
MARYLAND -- 6.7%
Baltimore County Putters 20 DN Series 20,
Tender Agreement Morgan Guaranty /
(Morgan Guaranty LOC)+ (VMIG1)
3.20% 09/01/94 4,500 4,500,000
City Council of Baltimore IDA DN (capital
Acquisition Program) Series 86 /
(Dai-Ichi Kangyo LOC)+ (A-1)
3.15% 09/07/94 3,500 3,500,000
Health and Higher Education Facility
(Johns Hopkins Hospital) DN
(Parking Facility)+
3.50% 09/01/94 2,200 2,200,000
Health and Higher Education Facility
(Pooled Loan) DN Series A /
(Dai-Ichi Kangyo LOC)+ (VMIG1)
3.25% 09/07/94 6,800 6,800,000
Montgomery County Single Family
Housing Mortgage Revenue Bonds
Series 1993B MB (VMIG1)
2.85% 09/07/94 2,000 2,000,000
-----------
19,000,000
-----------
MICHIGAN -- 2.2%
Detroit Downtown Development
Authority DN (Millender Project) /
(Sumitomo Bank LOC)+
3.20% 09/07/94 5,300 5,300,000
Par
(000) Value
----- -------
MICHIGAN -- (continued)
Northville IDA DN (Thrifty Northville
Project) / (Westpac Banking Corp
LOC)+ (P-1)
3.52% 09/07/94 $1,000 $1,000,000
-----------
6,300,000
-----------
MISSISSIPPI -- 0.3%
Jackson County Chevron DN+ (A-1+)
3.00% 09/01/94 900 900,000
-----------
MISSOURI -- 3.7%
Kansas City IDA DN (Mid-America
Health) / (Bank of New York LOC)+
(A-1)
3.35% 09/07/94 700 700,000
Missouri Higher Education Student
Loan Authority DN / (Dai-Ichi
Kangyo LOC)+ (A-1)
3.20% 09/07/94 3,700 3,700,000
Missouri Higher Education DN /
(National Westminster LOC)+ (A-1+)
3.20% 09/07/94 4,000 4,000,000
Missouri Custodial Receipts GO DN
Series 1992A+
3.35% 09/07/94 2,000 2,000,000
-----------
10,400,000
-----------
NEBRASKA -- 2.0%
Lancaster Nebraska DN Sun-Husker
Foods Inc. Project / (Bank of Tokyo
LOC)+ (A-1+)
3.30% 09/07/94 3,800 3,800,000
Nebraska Investment Finance Authority
Multifamily DN (Applecreek
Associates) / (Citibank LOC)+ (A-1)
3.50% 09/30/94 1,900 1,900,000
-----------
5,700,000
-----------
NEVADA -- 0.4%
Clark County Nevada IDR DN Nevada
Cogeneration Association / (Swiss
Bank LOC)+ (A-1+)
3.25% 09/07/94 1,200 1,200,000
-----------
See Accompanying Notes to Financial Statements.
<PAGE>F-9
THE BEDFORD FAMILY
THE RBB FUND, INC.
Municipal Money Market Portfolio
Statement of Net Assets (Continued)
August 31, 1994
Par
(000) Value
----- -------
NEW YORK -- 2.1%
Triborough Bridge and Tunnel Authority
DN / (FGIC Insurance)+ (A-1+)
3.00% 09/07/94 $6,000 $6,000,000
-----------
OREGON -- 1.0%
State of Oregon DN GO
Veterans Welfare Series 73-E /
(Dai-Ichi Kangyo LOC) (VMIG1)
3.25% 09/07/94 2,900 2,900,000
-----------
PENNSYLVANIA -- 1.6%
Clinton County Solid Waste MB++
2.90% 01/15/95 4,500 4,500,000
-----------
PUERTO RICO -- 0.6%
Puerto Rico Government Development
Bank Series 85 DN / (Credit
Suisse LOC)+ (A-1+)
2.90% 09/07/94 1,800 1,800,000
-----------
RHODE ISLAND -- 0.1%
Rhode Island Housing & Mortgage
Finance Corp DN Homeownership
Opportunity Bonds Series 9-B+ (A-1+)
3.25% 09/07/94 200 200,000
-----------
SOUTH DAKOTA -- 2.5%
Lawrence County DN Homestake Mining Company /
(Westpac Banking
Corp LOC)+ (A-1)
3.30% 09/07/94 6,900 6,900,000
-----------
TEXAS -- 8.5%
Capital Health Facilities Texas DN (Island
Lake Travis Project) / (Algemene LOC)+
(A-1+)
3.30% 09/07/94 2,500 2,500,000
City of Houston Health Facilities
Development Corp. DN (Methodist
Hospital Project)+ (A-1+)
3.75% 09/01/94 5,000 5,000,000
Par
(000) Value
----- -------
TEXAS -- (continued)
North Texas Higher Education
Authority Inc. DN Student Loan
Revenue Senior Series 87 /
(Fuji Bank LOC)+ (VMIG1)
3.40% 09/07/94 $4,900 $4,900,000
Port of Port Arthur Navigation District
Jefferson Texas PCR 94
Texaco for State Enterprises DN /
(Swiss Bank LOC)+ (A-1+)
3.15% 09/07/94 5,000 5,000,000
Panhandle Plains Higher Education
Authority Student Loan Revenue
Bonds Series A MB / (Student Loan
Marketing Assoc. LOC)++ (VMIG1)
3.35% 03/31/95 1,500 1,500,000
Texas State Public Facilities Authority
Series GG1 MB++ (A-1+) 3.50%
10/04/94 4,000 4,000,000
West Side Calhoun County Development
Authority British Petroleum MB
3.20% 10/03/94 1,200 1,200,000
-----------
24,100,000
-----------
UTAH -- 3.5%
Intermountain Power Agency MB (A-1)
3.55% 06/15/95 5,000 5,000,000
Salt Lake Airport Revenue DN+ (A-1+)
3.25% 09/07/94 3,000 3,000,000
Intermountain Power Agency Series
85E MB++ (A-1+)
3.00% 09/15/94 2,000 2,000,000
-----------
10,000,000
-----------
VIRGINIA -- 1.3%
Lynchburg Variable Rate Hospital
Revenue Bonds DN Health Facilities
Authority MidAtlantic Series 1985E /
(AMBAC Insurance LOC)+ (A-1)
3.15% 09/07/94 1,000 1,000,000
Virginia Housing Development Series
1993B MB++ (A-1+)
2.90% 11/04/94 2,500 2,500,000
See Accompanying Notes to Financial Statements.
<PAGE>F-10
THE BEDFORD FAMILY
THE RBB FUND, INC.
Municipal Money Market Portfolio
Statement of Net Assets (Continued)
August 31, 1994
Par
(000) Value
----- -------
VIRGINIA-- (continued)
York County IDA PCR Series 1985
MB Virginia Electric Power Company++
(A-1)
2.85% 09/06/94 $200 $200,000
-----------
3,700,000
-----------
WASHINGTON -- 6.5%
Port of Seattle Industrial Development
Corp. DN (Alaska Airlines Project) /
(Bank of New York LOC)+ (A-1)
3.50% 09/07/94 5,300 5,300,000
Washington State Public Power MB++
2.65% 11/01/94 9,905 9,905,000
Washington State Housing Finance
Commission Single Family Mortgage
Series 94D MB / (FGIC Insurance)++
(A-1+)
3.90% 06/01/95 3,000 3,000,000
-----------
18,205,000
-----------
WEST VIRGINIA --1.8%
Marion County Solid Waste DN /
(National Westminster LOC)+ (A-1+)
3.25% 09/07/94 1,800 1,800,000
Marion County DN / (National
Westminster LOC)+ (A-1+)
3.25% 09/07/94 3,300 3,300,000
-----------
5,100,000
-----------
WYOMING
Wyoming Community Development
Authority MB++ (A-1+)
2.80% 10/27/94 110 110,000
-----------
TOTAL INVESTMENTS AT VALUE -- 99.6%
(Cost $281,581,049*) 281,581,049
OTHER ASSETS IN EXCESS
OF LIABILITIES-- 0.4% 1,122,702
-----------
Value
-----
NET ASSETS (Applicable to
182,480,840 Bedford shares,
100,090,465 Bradford shares,
200,846 Cash Preservation
shares, 4,861 RBB shares and
800 other shares)-- 100.0% $282,703,751
============
NET ASSETS VALUE offering and
redemption price per share
($282,703,751 / 282,777,812) $1.00
=====
* Also cost for Federal Income tax purposes.
+ Variable Rate Demand Notes -- The interest rate shown is the rate as of
August 31, 1994 and the maturity shown is the longer of the next interest
readjustment date or the date the principal amount shown can be recovered
through demand.
++ PutBonds -- maturity date is the put date.
The Moody's Investors Service, Inc. and Standard & Poor's Corporation's ratings
indicated are the most recent ratings available at August 31, 1994. These
ratings have not been audited by the Independent Accountants, and, therefore,
are not covered by the Report of Independent Accountants.
INVESTMENT ABBREVIATIONS
BAN ..........................Bond Anticipation Note
DN ...........................Demand Note
GO ...........................General Obligations
LOC ..........................Letter of Credit
IDA ..........................Industrial Development Authority
MB ...........................Municipal Bond
PCR ..........................Pollution Control Revenue
RAN ..........................Revenue Anticipation Note
RAW ..........................Revenue Anticipation Warrants
RB ...........................Revenue Bond
TAN ..........................Tax Anticipation Note
TECP .........................Tax Exempt Commercial Paper
TRAN .........................Tax and Revenue Anticipation Note
See Accompanying Notes to Financial Statements.
<PAGE>F-11
THE BEDFORD FAMILY
THE RBB FUND, INC.
Municipal Money Market Portfolio
Statement of Operations
For the Year Ended
August 31, 1994
Investment Income
Interest $8,803,458
----------
Expenses
Investment advisory fees 1,099,379
Administration fees 324,791
Distribution fees 1,717,912
Directors' fees 4,538
Custodian fees 70,948
Transfer agent fees 186,844
Legal fees 17,914
Audit fees 22,427
Registration fees 114,612
Amortization expense 13,870
Insurance expense 9,946
Printing expense 67,919
Miscellaneous 315
---
3,651,415
Less fees waived (1,141,196)
Less expense reimbursement (8,481)
------
Total Expenses 2,501,738
NET INVESTMENT INCOME 6,301,720
---------
REALIZED LOSS ON INVESTMENTS
Net realized loss on investments (9,789)
Amortized market discount (1,044)
------
NET LOSS ON INVESTMENTS (10,833)
-------
NET INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS $6,290,887
----------
Statement of Changes in Net Assets
For the For the
Year Ended Year Ended
August 31, 1994 August 31, 1993
--------------- ---------------
Increase (decrease) in net
assets:
Operations:
Net investment income $6,301,720 $5,507,026
Net loss on investments (10,833) (13)
------- ---
Net increase in net assets
resulting from operations 6,290,887 5,507,013
--------- ---------
Dividends to shareholders from
net investment income:
Bedford shares ($.0195 and
$.0195, respectively,
per share) (4,374,300) (3,841,547)
Bradford shares ($.0195 and
$.0195, respectively,
per share) (1,924,607) (1,628,082)
Cash Preservation shares
($.0174 and $.0174,
respectively, per share) (2,703) (3,216)
RBB shares ($.0172 and
$.0172, respectively,
per share) (90) (76)
Sansom Street shares ($.0185
and $.0233, respectively,
per share) (20) (34,105)
--- -------
Total dividends to
shareholders (6,301,720) (5,507,026)
---------- ----------
Net capital share transactions (10,002,056) 42,935,584
----------- ----------
Total increase in net assets (10,012,889) 42,935,571
Net Assets:
Beginning of year 292,716,640 249,781,069
----------- -----------
End of year $282,703,751 $292,716,640
============ ============
See Accompanying Notes to Financial Statements.
<PAGE>F-12
THE BEDFORD FAMILY
THE RBB FUND, INC.
Government Obligations Money Market Portfolio
Statement of Net Assets
August 31, 1994
Par
(000) Value
----- -----
AGENCY OBLIGATIONS -- 88.5%
Federal Farm Credit Bank
Discount Notes
4.95% 11/07/94 $3,000 $2,972,363
Federal Home Loan Bank Note
4.65% 11/02/94+ 10,000 9,990,080
4.30% 09/27/94 7,000 6,978,261
4.69% 01/11/95 8,000 7,862,427
4.66% 12/20/94 5,000 4,928,806
4.66% 10/11/94 10,000 9,948,222
Federal Home Loan Mortgage
Corporation Discount Note
3.24% 09/22/94 6,500 6,487,715
3.34% 09/19/94 5,000 4,991,650
4.00% 09/16/94 5,000 4,991,667
3.95% 09/16/94 7,000 6,988,479
3.96% 09/01/94 5,000 5,000,000
4.60% 11/01/94 5,000 4,961,028
4.89% 11/07/94 4,000 3,963,597
4.75% 11/29/94 5,000 4,941,285
4.75% 11/29/94 5,000 4,941,285
4.64% 10/27/94 10,000 9,927,822
4.62% 10/27/94 10,000 9,928,133
5.00% 02/03/95 5,000 4,892,361
5.09% 02/17/95 4,000 3,904,421
Federal Home Loan Mortgage
Corporation
4.53% 10/24/94 5,000 4,966,654
Federal National Mortgage
Association Note
5.13% 09/06/94 10,000 10,000,000
Student Loan Marketing Association
Variable Rate Notes +
5.03% 09/06/94 10,000 10,007,311
5.08% 09/06/94 10,000 10,013,437
4.91% 09/06/94 15,000 15,000,000
4.92% 09/06/94 9,000 8,997,614
4.93% 09/06/94 5,000 5,000,000
----------
TOTAL AGENCY OBLIGATIONS
(Cost $182,584,618) 182,584,618
-----------
Par
(000) Value
----- -----
United States TREASURY OBLIGATIONS -- 2.0%
U.S. Treasury Notes
7.62% 12/31/94 $4,000 $4,033,950
----------
TOTAL U.S. TREASURY
OBLIGATIONS
(Cost $4,033,950) 4,033,950
----------
REPURCHASE AGREEMENTS -- 9.5%
Kidder, Peabody & Co.
4.95% 09/01/94 19,513 19,513,000
(Agreement dated 08/31/94 to be
repurchased at $19,515,686,
collateralized by $21,156,200
Federal National Mortgage Corp.
due 09/01/24. Market Value of
collateral is $20,098,390)
----------
TOTAL REPURCHASE AGREEMENTS
(Cost $19,513,000) 19,513,000
----------
TOTAL INVESTMENTS AT VALUE -- 100.0%
(Cost $206,131,568*) 206,131,568
OTHER ASSETS IN EXCESS
OF LIABILITIES 19,439
----------
NET ASSETS (Applicable to 166,424,677
Bedford Shares, 39,733,996
Bradford Shares and 800 other
shares) -- 100.0% $206,151,007
============
NET ASSET VALUE, offering and
redemption price per share
($206,151,007 / 206,159,473) $1.00
=====
* Also cost for Federal income tax purposes.
+ Variable Rate Obligations -- The interest rate is the rate as of August 31,
1994 and the maturity shown is the longer of the next interest readjustment
date or the date the principal amount shown can be recovered through
demand.
See Accompanying Notes to Financial Statements.
<PAGE>F-13
THE BEDFORD FAMILY
THE RBB FUND, INC.
Government Obligations Money Market Portfolio
Statement of Operations
For the Year Ended
August 31, 1994
Investment Income
Interest $8,446,567
----------
Expenses
Investment advisory fees 1,042,373
Distribution fees 1,270,581
Directors' fees 3,268
Custodian fees 52,033
Transfer agent fees 179,217
Legal fees 12,943
Audit fees 16,205
Registration fees 96,930
Amortization expense 7,878
Insurance expense 7,223
Printing expense 32,475
Miscellaneous 179
---------
2,721,305
Less fees waived (461,938)
---------
Total Expenses 2,259,367
---------
NET INVESTMENT INCOME 6,187,200
---------
NET REALIZED GAIN ON INVESTEMENTS 23,663
---------
NET INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS $6,210,863
==========
Statements of Changes in Net Assets
For the For the
Year Ended Year Ended
August 31, 1994 August 31, 1993
Increase (decrease) in net assets:
Operations:
Net investment income $6,187,200 $6,102,160
Net gain (loss) on investments 23,663 (32,129)
------ -------
Net increase in net assets
resulting from operations 6,210,863 6,070,031
--------- ---------
Dividends to shareholders from
net investment income:
Bedford shares ($.0270 and
$.0231, respectively,
per share) (5,073,158) (5,061,061)
Bradford shares ($.0270 and
$.0231, respectively,
per share) (1,114,042) (1,041,099)
---------- ----------
Total dividends to
shareholders (6,187,200) (6,102,160)
---------- ----------
Net capital share transactions (58,137,875) (3,281,398)
----------- ----------
Total decrease in net assets (58,114,212) (3,313,527)
Net Assets:
Beginning of year 264,265,219 267,578,746
----------- -----------
End of year $206,151,007 $264,265,219
============ ============
See Accompanying Notes to Financial Statements.
<PAGE>F-14
THE BEDFORD FAMILY
THE RBB FUND, INC.
Financial Highlights (b)
(For a Share Outstanding Throughout each Period)
<TABLE>
<CAPTION>
Money Market Portfolio
--------------------------------------------------------------------------------------
For the For the For the For the For the
Year Ended Year Ended Year Ended Year Ended Year Ended
August 31, 1994 August 31, 1993 August 31, 1992 August 31, 1991 August 31, 1990
--------------- --------------- --------------- --------------- ---------------
<S> <C> <C> <C> <C> <C>
Net asset value,
beginning of year $1.00 $1.00 $1.00 $1.00 $1.00
------ ------ ------ ------ ------
Income from investment
operations:
Net investment income .0278 .0243 .0375 .0629 .0765
Net gains on securities
(both realized
and unrealized) -- -- .0007 -- --
------ ------ ------ ------ ------
Total from investment
operations .0278 .0243 .0382 .0629 .0765
------ ------ ------ ------ ------
Less distributions
Dividends (from net
investment income) (.0278) (.0243) (.0375) (.0629) (.0765)
Distributions (from
capital gains) -- -- (.0007) -- --
------ ------ ------ ------ ------
Total distributions (.0278) (.0243) (.0382) (.0629) (.0765)
------ ------ ------ ------ ------
Net asset value,
end of year $1.00 $1.00 $1.00 $1.00 $1.00
===== ===== ===== ===== =====
Total Return 2.81% 2.46% 3.89% 6.48% 7.92%
Ratios /Supplemental Data
Net assets, end of year $710,737,481 $782,153,438 $736,841,928 $747,530,400 $709,757,157
Ratios of expenses to
average net assets .95%(a) .95%(a) .95%(a) .92%(a) .92%(a)
Ratios of net investment
income to average net
assets 2.78% 2.43% 3.75% 6.29% 7.65%
</TABLE>
<TABLE>
<CAPTION>
Municipal Money Market Portfolio
--------------------------------------------------------------------------------------
For the For the For the For the For the
Year Ended Year Ended Year Ended Year Ended Year Ended
August 31, 1994 August 31, 1993 August 31, 1992 August 31, 1991 August 31, 1990
--------------- --------------- --------------- --------------- ---------------
<S> <C> <C> <C> <C> <C>
Net asset value,
beginning of year $1.00 $1.00 $1.00 $1.00 $1.00
------ ------ ------ ------ ------
Income from investment
operations:
Net investment income .0195 .0195 .0287 .0431 .0522
Net gains on securities
(both realized
and unrealized) -- -- -- -- --
----- ----- ----- ----- -----
Total from investment
operations .0195 .0195 .0287 .0431 .0522
----- ----- ----- ----- -----
Less distributions
Dividends (from net
investment income) (.0195) (.0195) (.0287) (.0431) (.0522)
Distributions (from
capital gains) -- -- -- -- --
----- ----- ----- ----- -----
Total distributions (.0195) (.0195) (.0287) (.0431) (.0522)
------ ------ ------ ------ ------
Net asset value, end of year $1.00 $1.00 $1.00 $1.00 $1.00
===== ===== ===== ===== =====
Total Return 1.97% 1.96% 2.90% 4.40% 5.35%
Ratios /Supplemental Data
Net assets, end of year $182,408,069 $215,577,193 $176,949,886 $215,139,746 $195,565,829
Ratios of expenses to
average net assets .77%(a) .77%(a) .77%(a) .74%(a) .75%(a)
Ratios of net investment
income to average
net assets 1.95% 1.95% 2.87% 4.31% 5.22%
<FN>
(a) Without the waiver of advisory and administration fees and without the
reimbursement of certain operating expenses, the ratios of expenses to
average net assets for the Money Market Portfolio would have been 1.16%,
1.19%, 1.20%, 1.17% and 1.16% for the years ended August 31, 1994, 1993,
1992, 1991 and 1990, respectively. For the Municipal Money Market
Portfolio, the ratios of expenses to average net assets would have been
1.12%, 1.16%, 1.15%, 1.13% and 1.14% for the years ended August 31, 1994,
1993, 1992, 1991 and 1990, respectively.
(b) Financial Highlights relate solely to the Bedford Class of shares within
each portfolio.
</FN>
</TABLE>
See Accompanying Notes to Financial Statements.
<PAGE>F-15
THE BEDFORD FAMILY
THE RBB FUND, INC.
Financial Highlights (b)
(For a Share Outstanding Throughout each Period)
<TABLE>
<CAPTION>
Government Obligations Money Market Portfolio
--------------------------------------------------------------------------------------
For the For the For the For the For the
Year Ended Year Ended Year Ended Year Ended Year Ended
August 31, 1994 August 31, 1993 August 31, 1992 August 31, 1991 August 31, 1990
<S> <C> <C> <C> <C> <C>
--------------- --------------- --------------- --------------- ---------------
Net asset value,
beginning of year $1.00 $1.00 $1.00 $1.00 $1.00
------ ------ ------ ------ ------
Income from investment
operations:
Net investment income .0270 .0231 .0375 .0604 .0748
Net gains on securities
(both realized and
unrealized) -- -- .0009 -- --
------ ------ ------ ------ ------
Total from investment
operations .0270 .0231 .0384 .0604 .0748
------ ------ ------ ------ ------
Less distributions
Dividends (from net
investment income) (.0270) (.0231) (.0375) (.0604) (.0748)
Distributions (from
capital gains) -- -- (.0009) -- --
Total distributions (.0270) (.0231) (.0384) (.0604) (.0748)
------ ------ ------ ------ ------
Net asset value, end of year $1.00 $1.00 $1.00 $1.00 $1.00
===== ===== ===== ===== =====
Total Return 2.73% 2.33% 3.91% 6.21% 7.74%
Ratios /Supplemental Data
Net assets, end of year $166,417,793 $213,741,440 $225,100,981 $368,898,941 $209,377,724
Ratios of expenses to
average net assets .975%(a) .975%(a) .975%(a) .95%(a) .95%(a)
Ratios of net investment
income to average net
assets 2.70% 2.31% 3.75% 6.04% 7.48%
<FN>
(a) Without the waiver of advisory fees and without the reimbursement of
certain operating expenses, the ratios of expenses to average net assets
for Government Obligations Money Market Portfolio would have been 1.17%,
1.18%, 1.12%, 1.13% and 1.17% for the years ended August 31, 1994, 1993,
1992, 1991 and 1990, respectively.
(b) Financial Highlights relate solely to the Bedford Class of shares within
each portfolio.
</FN>
</TABLE>
See Accompanying Notes to Financial Statements.
<PAGE>F-16
THE BEDFORD FAMILY
THE RBB FUND, INC.
Notes to Financial Statements
August 31, 1994
Note 1. Summary of Significant Accounting Policies
The RBB Fund, Inc. (the Fund ) is registered under the Investment Company
Act of 1940, as amended, as an open-end management investment company. The Fund
was incorporated in Maryland on February 29, 1988.
The Fund has authorized capital of thirty billion shares of common stock of
which 25.9 billion shares are currently classified into fifty-five classes. Each
class represents an interest in one of seventeen investment portfolios of the
Fund, sixteen of which are currently in operation. The classes have been grouped
into fifteen separate families , seven of which have begun investment
operations: the RBB Family, the BEA Family, the Sansom Street Family, the
Bedford Family, the Cash Preservation Family, Laffer/Canto Equity Portfolio and
the Bradford Family. The Bedford Family represents interests in four portfolios,
three of which are covered in this report.
A) SECURITY VALUATION Portfolio securities are valued under the
amortized cost method, which approximates current market value. Under this
method, securities are valued at cost when purchased and thereafter a
constant proportionate amortization of any discount or premium is recorded
until maturity of the security. Regular review and monitoring of the
valuation is performed in an attempt to avoid dilution or other unfair
results to shareholders. The Fund seeks to maintain net asset value per
share at $1.00 for these portfolios.
B) SECURITY TRANSACTIONS AND INVESTMENT INCOME Security transactions
are accounted for on the trade date. The cost of investments sold is
determined by use of the specific identification method for both financial
reporting and income tax purposes. Interest income is recorded on the
accrual basis. Certain expenses, principally distribution, transfer agency
and printing, are class specific expenses and vary by class. Expenses not
directly attributable to a specific portfolio or class are allocated based
on relative net assets of each portfolio and class, respectively.
C) DISTRIBUTIONS TO SHAREHOLDERS Dividends from net investment income
are declared daily and paid monthly. Any net realized capital gains will be
distributed at least annually.
D) FEDERAL INCOME TAXES No provision is made for Federal taxes as it
is the Fund's intention to have each portfolio and to continue to qualify
for and elect the tax treatment applicable to regulated investment
companies under the Internal Revenue Code and make the requisite
distributions to its shareholders which will be sufficient to relieve it
from Federal income and excise taxes.
E) ORGANIZATION COSTS Costs incurred by the Fund in connection with
its organization and initial registration and public offering of shares
have been deferred by the Fund. Organization costs are being amortized on a
straight-line basis for a five-year period which began upon the
commencement of operations of the Fund.
F) REPURCHASE AGREEMENTS Money market instruments may be purchased
subject to the seller's agreement to repurchase them at an agreed upon date
and price. The seller will be required on a daily basis to maintain the
value of the securities subject to the agreement at not less than the
repurchase price. The agreements are conditioned upon the collateral being
deposited under the Federal Reserve book-entry system or with the Fund's
custodian or a third party sub-custodian.
<PAGE>F-17
THE BEDFORD FAMILY
THE RBB FUND, INC.
Notes to Financial Statements (Continued)
August 31, 1994
Note 2. Transactions with Affiliates and Related Parties
Pursuant to Investment Advisory Agreements, PNC Institutional Management
Corporation ( PIMC ), a wholly owned subsidiary of PNC Bank, National
Association ( PNC Bank ), serves as investment advisor for the three portfolios
described herein. PNC Bank serves as the sub-advisor for the Money Market, the
Municipal Money Market and the Government Obligations Money Market Portfolios.
For its advisory services, PIMC is entitled to receive the following fees,
computed daily and payable monthly based on each of the three portfolio's
average daily net assets:
<TABLE>
<CAPTION>
Portfolio Annual Rate
--------- -----------
<S> <C>
Money Market and Government .45% of first $250 million of net assets;
Obligations Money Market Portfolios .40% of next $250 million of net assets;
.35% of net assets in excess of $500 million.
Municipal Money Market .35% of first $250 million of net assets;
Portfolio .30% of next $250 million of net assets;
.25% of net assets in excess of $500 million.
</TABLE>
PIMC may, at its discretion, voluntarily waive all or any portion of its
advisory fee for these portfolios. For each class of shares within a respective
portfolio, the net advisory fee charged to each class is the same on a relative
basis. For the year ended August 31, 1994, advisory fees and waivers for the
three investment portfolios were as follows:
<TABLE>
<CAPTION>
Gross Net
Advisory Advisory
Fee Waiver Fee
--------- ------ --------
<S> <C> <C> <C>
Money Market Portfolio $4,203,754 $(2,255,986) $1,947,768
Municipal Money Market Portfolio 1,099,379 (1,091,646) 7,733
Government Obligations Money Market Portfolio 1,042,373 (461,938) 580,435
</TABLE>
PNC Bank, as sub-advisor, receives a fee directly from PIMC, not the
portfolios. In addition, PNC Bank serves as custodian for each of the Fund's
portfolios. PFPC Inc. ( PFPC ), an indirect wholly owned subsidiary of PNC Bank
Corp., serves as each class's transfer and dividend disbursing agent.
<PAGE>F-18
THE BEDFORD FAMILY
THE RBB FUND, INC.
Notes to Financial Statements (Continued)
August 31, 1994
Note 2. Transactions with Affiliates and Related Parties (continued)
PFPC may, at its discretion, voluntarily waive all or any portion of its
transfer agency fee for any class of shares. For the year ended August 31, 1994,
transfer agency fees and waivers for each class of shares within the three
investment portfolios were as follows:
<TABLE>
<CAPTION>
Gross Net
Transfer Agency Transfer Agency
Fee Waiver Fee
--------------- ------ ---------------
<S> <C> <C> <C>
Money Market Portfolio
Bedford Class $1,385,000 $ -- $1,385,000
Cash Preservation Class 8,249 (5,071) 3,178
RBB Class 7,880 (7,656) 224
Sansom Street Class 7,800 -- 7,800
---------- ----------- ----------
Total Money Market Portfolio $1,408,929 $(12,727) $1,396,202
========== ======== ==========
Municipal Money Market Portfolio
Bedford Class $116,500 $ -- $116,500
Bradford Class 47,800 -- 47,800
Cash Preservation Class 8,340 (7,705) 635
RBB Class 7,855 (7,830) 25
Sansom Street Class 6,349 (6,349) --
---------- ----------- ----------
Total Municipal Money Market Portfolio $186,844 $(21,884) $164,960
======== ======== ========
Government Obligations
Money Market Portfolio
Bedford Class $140,393 $ -- $140,393
Bradford Class 38,824 -- 38,824
---------- ----------- ----------
Total Government Obligations Money
Market Portfolio $179,217 $ -- $179,217
======== =========== ========
</TABLE>
In addition, PFPC serves as administrator for the Municipal Money Market
Portfolio. The administration fee is computed daily and payable monthly at an
annual rate of .10% of the Portfolio's average daily assets. PFPC may, at its
discretion, voluntarily waive all or any portion of its administration fee for
the portfolio. For the year ended August 31, 1994, the administration fees and
waivers for the Municipal Money Market Portfolio were as follows:
<TABLE>
<CAPTION>
Gross Net
Administration Administration
Fee Waiver Fee
-------------- ------ -------------
<S> <C> <C> <C>
Municipal Money Market Portfolio $324,791 $(27,666) $297,125
</TABLE>
The Fund, on behalf of each class of shares within the three investment
portfolios, has adopted Distribution Plans pursuant to Rule 12b-1 under the
Investment Company Act of 1940, as amended, and has entered into Distribution
Contracts with Counsellors Securities Inc. ( Counsellors ), which provide for
each class to make monthly payments, based on average net assets, to Counsellors
of up to .65% on an annualized basis for the Bedford, Bradford, Cash
Preservation and RBB Classes and up to .20% on an annualized basis for the
Sansom Street Class.
<PAGE>F-19
THE BEDFORD FAMILY
THE RBB FUND, INC.
Notes to Financial Statements (Continued)
August 31, 1994
Note 2. Transactions with Affiliates and Related Parties (continued)
Counsellors may, at its discretion, voluntarily waive all or any portion of
its distribution fee. For the year ended August 31, 1994, distribution fees for
each class were as follows:
<TABLE>
<CAPTION>
Distribution
Fee
------------
<S> <C>
Money Market Portfolio
Bedford Class $4,147,915
Cash Preservation Class 3,860
RBB Class 236
Sansom Street Class 156,972
-------
Total Money Market Portfolio $4,308,983
==========
Municipal Money Market Portfolio
Bedford Class $1,214,361
Bradford Class 502,911
Cash Preservation Class 619
RBB Class 21
Sansom Street Class --
-------
Total Municipal Money Market
Portfolio $1,717,912
==========
Government Obligations
Money Market Portfolio
Bedford Class $1,057,684
Bradford Class 212,897
-------
Total Government Obligations Money
Market Portfolio $1,270,581
==========
</TABLE>
The Fund has entered into service agreements with banks affiliated with PNC
Bank who render support services to customers who are the beneficial owners of
the Sansom Street Class in consideration of the payment of .10% of the daily net
asset value of such shares. For the year ended August 31, 1994, service
organization fees were $311,525 for the Money Market Portfolio and $0 for the
Municipal Money Market Portfolio.
<PAGE>F-20
THE BEDFORD FAMILY
THE RBB FUND, INC.
Notes to Financial Statements (Continued)
August 31, 1994
Note 3. Capital Shares
Transactions in capital shares (at $1 per capital share) for each year were as
follows:
<TABLE>
<CAPTION>
Government Obligations
Money Market Portfolio Municipal Money Market Portfolio Money Market Portfolio
---------------------------------------------------------------------------------------------------
For the For the For the For the For the For the
Year Ended Year Ended Year Ended Year Ended Year Ended Year Ended
August 31, 1994 August 31, 1993 August 31, 1994 August 31, 1993 August 31, 1994 August 31, 1993
Value Value Value Value Value Value
--------------- ---------------- --------------- --------------- --------------- ----------------
<S> <C> <C> <C> <C> <C> <C>
Shares sold:
Bedford Class $2,789,452,640 $3,260,332,995 $1,292,822,671 $1,268,126,995 $490,275,372 $808,097,046
Bradford Class -- -- 448,473,166 490,456,810 160,520,309 195,275,749
Cash Preservation Class 908,824 1,036,351 271,085 182,748 -- --
RBB Class 43,426 629,425 1,400 1,131 -- --
Sansom Street Class 1,517,145,765 772,020,393 15,321 5,325,603 -- --
Shares issued in
reinvestment
of dividends:
Bedford Class 20,973,730 18,611,248 4,271,511 3,764,226 4,963,642 5,073,564
Bradford Class -- -- 1,855,281 1,568,176 1.078,122 1,025,990
Cash Preservation Class 26,123 26,103 2,566 3,169 -- --
RBB Class 1,551 1,520 90 76 -- --
Sansom Street Class 7,714,640 4,579,385 20 36,460 -- --
Shares repurchased:
Bedford Class (2,881,789,878) (3,233,675,544) (1,330,256,087) (1,233,263,905) (542,581,763) (824,504,163)
Bradford Class -- -- (427,210,857) (484,635,870) (172,393,557) (188,249,584)
Cash Preservation Class (1,932,859) (1,066,600) (229,848) (243,019) -- --
RBB Class (57,526) (647,258) (1,902) (100) -- --
Sansom Street Class (1,341,896,149) (813,894,344) (16,473) (8,386,916) -- --
-------------- ------------ ------- ---------- ------------ ------------
Net increase (decrease) $110,590,287 $7,953,674 $(10,002,056) $42,935,584 $(58,137,875) $(3,281,398)
============ ========== ============ =========== ============ ===========
Bedford Shares authorized 1,500,000,000 1,500,000,000 500,000,000 500,000,000 500,000,000 500,000,000
============= ============= =========== =========== =========== ===========
</TABLE>
<PAGE>F-21
THE BEDFORD FAMILY
THE RBB FUND, INC.
Notes to Financial Statements (Continued)
August 31, 1994
Note 4. Net Assets
At August 31, 1994, net assets consisted of the following:
<TABLE>
<CAPTION>
Government
Municipal Obligations
Money Market Money Market Money Market
Portfolio Portfolio Portfolio
------------ ------------ -----------
<S> <C> <C> <C>
Capital paid-in
Bedford Class $710,738,832 $182,480,840 $166,424,677
Bradford Class -- 100,090,465 39,733,996
Cash Preservation Class 231,180 200,846 --
RBB Class 45,314 4,861 --
Sansom Street Class 373,745,889 -- --
Other Classes 800 800 800
Accumulated net realized
gain (loss) on investments
Bedford Class (1,351) (72,771) (6,884)
Bradford Class -- (1,293) (1,582)
Cash Preservation Class -- 3 --
RBB Class -- -- --
Sansom Street Class (711) -- --
------------- ------------ ------------
$1,084,759,953 $282,703,751 $206,151,007
============== ============ ============
</TABLE>
<PAGE>F-22
THE BEDFORD FAMILY
THE RBB FUND, INC.
Notes to Financial Statements (Continued)
August 31, 1994
Note 5. Capital Loss Carryovers
At August 31, 1994, capital loss carryovers were available to offset future
realized gains as follows: $2,062 in the Money Market Portfolio which expires in
2002; $56,544 in the Municipal Money Market Portfolio of which $55,042 expires
in 1998, $444 expires in 1999, $1,058 expires in 2001, and $8,466 in the
Government Obligations Money Market Portfolio which expires in 2001.
Note 6. Other Financial Highlights
The Fund currently offers three other classes of shares representing
interests in the Money Market Portfolio: Cash Preservation, RBB and Sansom
Street. The Fund currently offers four other classes of shares representing
interests in the Municipal Money Market Portfolio: Bradford, Cash Preservation,
RBB and Sansom Street. The Fund currently offers one other class of shares
representing an interest in the Government Obligations Money Market Portfolio:
Bradford. Each class is marketed to different types of investors. Financial
Highlights of the RBB and Cash Preservation Classes are not presented in this
report due to their immateriality. Such information is available in the annual
reports of each respective family. The financial highlights of certain of the
other classes are as follows:
Bradford Government Obligations Money Market Shares
<TABLE>
<CAPTION>
For the Period
For the For the January 10, 1992
Year Year (Commencement of
Ended Ended Operations) to
August 31, 1994 August 31, 1993 August 31,1992
--------------- --------------- -----------------
<S> <C> <C> <C>
Net asset value, beginning of period $1.00 $1.00 $1.00
----- ----- -----
Income from investment operations:
Net investment income .0270 .0231 .0208
Net gains on securities (both realized
and unrealized) -- -- .0009
------ ------ ------
Total from investment operations .0270 .0231 .0217
------ ------ ------
Less distributions
Dividends (from net investment income) (.0270) (.0231) (.0208)
Distributions (from capital gains) -- -- (.0009)
------ ------ ------
Total distributions (.0270) (.0231) (.0217)
------ ------ ------
Net asset value, end of period $1.00 $1.00 $1.00
===== ===== =====
Total Return 2.73% 2.33% 3.42%(b)
Ratios /Supplemental Data
Net assets, end of period $39,732,414 $50,522,979 $42,476,965
Ratios of expenses to average net assets 975%(a) .975%(a) .975%(a)(b)
Ratios of net investment income to
average net assets 2.70% 2.31% 3.23%(b)
<FN>
(a) Without the waiver of advisory fees and without the reimbursement of
certain operating expenses, the ratios of expenses to average net assets
would have been 1.18% and 1.18% for the years ended August 31, 1994 and
1993, respectively, and 1.15% annualized for the period ended August 31,
1992.
(b) Annualized.
</FN>
</TABLE>
<PAGE>F-23
THE BEDFORD FAMILY
THE RBB FUND, INC.
Notes to Financial Statements (Continued)
August 31, 1994
Note 6. Other (continued)
Bradford Municipal Money Market Shares
<TABLE>
<CAPTION>
For the Period
For the For the January 10, 1992
Year Year (Commencement of
Ended Ended Operations) to
August 31, 1994 August 31, 1993 August 31,1992
--------------- --------------- --------------
<S> <C> <C> <C>
Net asset value, beginning of period $1.00 $1.00 $1.00
----- ----- -----
Income from investment operations:
Net investment income .0195 .0195 .0154
----- ----- -----
Total from investment operations .0195 .0195 .0154
----- ----- -----
Less distributions
Dividends (from net investment income) (.0195) (.0195) (.0154)
------ ------ ------
Total distributions (.0195) (.0195) (.0154)
------ ------ ------
Net asset value, end of period $1.00 $1.00 $1.00
===== ===== =====
Total Return 1.97% 1.96% 2.42%(b)
Ratios /Supplemental Data
Net assets, end of period $100,089,172 $76,975,393 $69,586,281
Ratios of expenses to average net assets .77%(a) .77%(a) .77%(a)(b)
Ratios of net investment income to
average net assets 1.95% 1.95% 2.40%(b)
<FN>
(a) Without the waiver of advisory, transfer agency and administration fees and
without the reimbursement of certain operating expenses, the ratios of
expenses to average net assets would have been 1.11% and 1.16% for the
years ended August 31, 1994 and 1993, respectively, and 1.16% annualized
for the period ended August 31, 1992.
(b) Annualized.
</FN>
</TABLE>
<PAGE>F-24
THE BEDFORD FAMILY
THE RBB FUND, INC.
Notes to Financial Statements (Concluded)
August 31, 1994
Note 6. Other (continued)
The Sansom Street Family
<TABLE>
<CAPTION>
Money Market Portfolio
---------------------------------------------------------------------------------------
For the For the For the For the For the
Year Ended Year Ended Year Ended Year Ended Year Ended
August 31, 1994 August 31, 1993 August 31, 1992 August 31, 1991 August 31, 1990
--------------- --------------- --------------- --------------- ---------------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of year $1.00 $1.00 $1.00 $1.00 $1.00
----- ----- ----- ----- -----
Income from investment operations:
Net investment income .0334 .0304 .0435 .0684 .0810
Net gains on securities
(both realized and unrealized) -- -- .0007 -- --
----- ----- ----- ----- -----
Total from investment operations .0334 .0304 .0442 .0684 .0810
----- ----- ----- ----- -----
Less distributions
Dividends (from net investment income) (.0334) (.0304) (.0435) (.0684) (.0810)
Distributions (from capital gains) -- -- (.0007) -- --
----- ----- ----- ----- -----
Total distributions (.0334) (.0304) (.0442) (.0684) (.0810)
----- ----- ----- ----- -----
Net asset value, end of year $1.00 $1.00 $1.00 $1.00 $1.00
===== ===== ===== ===== =====
Total Return 3.39% 3.08% 4.51% 7.06% 8.40%
Ratios /Supplemental Data
Net assets, end of year $373,745,178 $190,794,098 $228,078,764 $138,417,995 $106,743,389
Ratios of expenses to average net assets .39%(a) .34%(a) .35%(a) .37%(a) .47%(a)
Ratios of net investment income to
average net assets 3.34% 3.04% 4.35% 6.84% 8.10%
<FN>
(a) Without the waiver of advisory fees and without the reimbursement of
certain operating expenses, the ratios of expenses to average net assets
for the Money Market Portfolio would have been .60%, .60%, .61%, .61% and
.73% for the years ended August 31, 1994, 1993, 1992, 1991 and 1990,
respectively.
</FN>
</TABLE>
<PAGE>1
PART C
OTHER INFORMATION
<TABLE>
<CAPTION>
See
Item 24. Financial Statements and Exhibits Note #
<S> <C>
(a) Financial Statements:
(1) Included in Part A of the Registration Statement:
Per Share Data and Ratios for the periods ended August 31, 1989
through August 31, 1994 for the Bedford Class of the Money Market
Portfolio
Included in Part B of the Registration Statement:
Financial Statements for the Bedford Class of the Money Market
Portfolio as of August 31, 1994.
(b) Exhibits:
(1) (a) Articles of Incorporation of Registrant. 1
(b) Articles Supplementary of Registrant. 1
(c) Articles of Amendment to Articles of Incorporation of Registrant. 2
(d) Articles Supplementary of Registrant. 2
(e) Articles Supplementary of Registrant. 5
(f) Articles Supplementary of Registrant. 6
(g) Articles Supplementary of Registrant. 9
(h) Articles Supplementary of Registrant. 10
(i) Articles Supplementary of Registrant. 14
(j) Articles Supplementary of Registrant. 14
(k) Articles Supplementary of Registrant. 19
(l) Articles Supplementary of Registrant. 19
(m) Articles Supplementary of Registrant. 19
(n) Articles Supplementary of Registrant. 19
<PAGE>2
(2) Amended By-Laws adopted August 16, 1988. 3
(a) Amendment to By-Laws adopted July 25, 1989. 4
(b) By-Laws amended through October 24, 1989. 5
(3) None.
(4) Specimen Certificates
a) SafeGuard Equity Growth and Income Shares 3
b) SafeGuard Fixed Income Shares 3
c) SafeGuard Balanced Shares 3
d) SafeGuard Tax-Free Shares 3
e) SafeGuard Money Market Shares 3
f) SafeGuard Tax-Free Money Market Shares 3
g) Cash Preservation Money Market Shares 3
h) Cash Preservation Tax-Free Money Market Shares 3
i) Sansom Street Money Market Shares 3
j) Sansom Street Tax-Free Money Market Shares 3
k) Sansom Street Government Obligations Money Market Shares 3
l) Bedford Money Market Shares 3
m) Bedford Tax-Free Money Market Shares 3
n) Bedford Government Obligations Money Market Shares 3
o) Bedford New York Municipal Money Market Shares 5
p) SafeGuard Government Securities Shares 5
q) Income Opportunities High Yield Bond Shares 6
r) Bradford Tax-Free Money Market Shares 8
s) Bradford Government Obligations Money Market Shares 8
t) Alpha 1 Money Market Shares 8
u) Alpha 2 Tax-Free Money Market Shares 8
v) Alpha 3 Government Obligations Money Market Shares 8
w) Alpha 4 New York Municipal Money Market Shares 8
x) Beta 1 Money Market Shares 8
y) Beta 2 Tax-Free Money Market Shares 8
z) Beta 3 Government Obligations Money Market Shares 8
aa) Beta 4 New York Municipal Money Market Shares 8
bb) Gamma 1 Money Market Shares 8
cc) Gamma 2 Tax-Free Money Market Shares 8
dd) Gamma 3 Government Obligations Money Market Shares 8
ee) Gamma 4 New York Municipal Money Market Shares 8
ff) Delta 1 Money Market Shares 8
gg) Delta 2 Tax-Free Money Market Shares 8
hh) Delta 3 Government Obligations Money Market Shares 8
<PAGE>3
ii) Delta 4 New York Municipal Money Market Shares 8
jj) Epsilon 1 Money Market Shares 8
kk) Epsilon 2 Tax-Free Money Market Shares 8
ll) Epsilon 3 Government Obligations Money Market Shares 8
mm) Epsilon 4 New York Municipal Money Market Shares 8
nn) Zeta 1 Money Market Shares 8
oo) Zeta 2 Tax-Free Money Market Shares 8
pp) Zeta 3 Government Obligations Money Market Shares 8
qq) Zeta 4 New York Municipal Money Market Shares 8
rr) Eta 1 Money Market Shares 8
ss) Eta 2 Tax-Free Money Market Shares 8
tt) Eta 3 Government Obligations Money Market Shares 8
uu) Eta 4 New York Municipal Money Market Shares 8
vv) Theta 1 Money Market Shares 8
ww) Theta 2 Tax-Free Money Market Shares 8
xx) Theta 3 Government Obligations Money Market Shares 8
yy) Theta 4 New York Municipal Money Market Shares 8
zz) BEA International Equity Shares 9
a1) BEA Strategic Fixed Income Shares 9
a2) BEA Emerging Markets Equity Shares 9
a3) Laffer/Canto Equity Shares 12
a4) BEA U.S. Core Equity Shares 13
a5) BEA U.S. Core Fixed Income Shares 13
a6) BEA Global Fixed Income Shares 13
a7) BEA Municipal Bond Shares 13
a8) BEA Balanced Shares 16
a9) BEA Short Duration Shares 16
a10) Form of Warburg Growth & Income Shares 18
a11) Form of Warburg Balanced Shares 18
(5) (a) Investment Advisory Agreement (Money) between Registrant and
Provident Institutional Management Corporation, dated as of
August 16, 1988. 3
(b) Sub-Advisory Agreement (Money) between Provident
Institutional Management Corporation and Provident National
Bank, dated as of August 16, 1988. 3
(c) Investment Advisory Agreement (Tax-Free Money) between
Registrant and Provident Institutional Management
Corporation, dated as of August 16, 1988. 3
(d) Sub-Advisory Agreement (Tax-Free Money) between Provident
Institutional Management Corporation
<PAGE>4
and Provident National Bank, dated as of August 16, 1988. 3
(e) Investment Advisory Agreement (Government Money) between
Registrant and Provident Institutional Management
Corporation, dated as of August 16, 1988. 3
(f) Sub-Advisory Agreement (Government Money) between Provident
Institutional Management Corporation and Provident National
Bank, dated as of August 16, 1988. 3
(k) Investment Advisory Agreement (Balanced) between Registrant
and Provident Institutional Management Corporation, dated as
of August 16, 1988. 3
(l) Sub-Advisory Agreement (Balanced) between Provident
Institutional Management Corporation and Provident National
Bank, dated as of August 16, 1988. 3
(m) Investment Advisory Agreement (Tax-Free) between Registrant
and Provident Institutional Management Corporation, dated as
of August 16, 1988. 3
(n) Sub-Advisory Agreement (Tax-Free) between Provident
Institutional Management Corporation and Provident National
Bank, dated as of August 16, 1988. 3
(s) Investment Advisory Agreement (Government Securities)
between Registrant and Provident Institutional Management
Corporation dated as of April 8, 1991. 8
(t) Investment Advisory Agreement (High Yield Bond) between
Registrant and Provident Institutional Management
Corporation dated as of April 8, 1991. 8
(u) Sub-Advisory Agreement (High Yield Bond) between Registrant
and Warburg, Pincus Counsellors, Inc. dated as of April 8,
1991. 8
(v) Investment Advisory Agreement (New York Municipal Money
Market) between Registrant and Provident Institutional
Management Corporation dated November 5, 1991. 9
<PAGE>5
(w) Investment Advisory Agreement (Equity) between Registrant
and Provident Institutional Management Corporation dated
November 5, 1991. 10
(x) Sub-Advisory Agreement (Equity) between Registrant,
Provident Institutional Management Corporation and Warburg,
Pincus Counsellors, Inc. dated November 5, 1991. 10
(y) Investment Advisory Agreement (Tax-Free Money Market)
between Registrant and Provident Institutional Management
Corporation dated April 21, 1992. 10
(z) Investment Advisory Agreement (BEA International Equity
Portfolio) between Registrant and BEA Associates. 11
(aa) Investment Advisory Agreement (BEA Strategic Fixed Income
Portfolio) between Registrant and BEA Associates. 11
(bb) Investment Advisory Agreement (BEA Emerging Markets Equity
Portfolio) between Registrant and BEA Associates. 11
(cc) Investment Advisory Agreement (Laffer/Canto Equity
Portfolio) between Registrant and Laffer Advisors
Incorporated, dated as of July 21, 1993. 14
(dd) Sub-Advisory Agreement (Laffer/Canto Sector Equity
Portfolio) between PNC Institutional Management Corporation
and Laffer Advisors Incorporated, dated as of July 21, 1993. 12
(ee) Investment Advisory Agreement (BEA U.S. Core Equity
Portfolio) between Registrant and BEA Associates, dated as
of October 27, 1993. 15
(ff) Investment Advisory Agreement (BEA U.S. Core Fixed Income
Portfolio) between Registrant and BEA Associates, dated as
of October 27, 1993. 15
(gg) Investment Advisory Agreement (BEA Global Fixed Income
Portfolio) between Registrant and BEA Associates, dated as
of October 27, 1993. 15
(hh) Investment Advisory Agreement (BEA Municipal Bond Fund
Portfolio) between Registrant and BEA Associates, dated as
of October 27, 1993. 15
<PAGE>6
(ii) Investment Advisory Agreement (Warburg Pincus Growth and Income
Fund) between Registrant and Warburg, Pincus Counsellors, Inc. 14
(jj) Investment Advisory Agreement (Warburg Pincus Balanced Fund)
between Registrant and Warburg, Pincus Counsellors, Inc. 16
(kk) Form of Investment Advisory Agreement (BEA Balanced) between
Registrant and BEA Associates. 16
(ll) Form of Investment Advisory Agreement (BEA Short Duration
Portfolio) between Registrant and BEA Associates. 16
(6) (r) Distribution Agreement and Supplements (Classes A through Q)
between the Registrant and Counsellors Securities Inc. dated as
of April 10, 1991. 8
(s) Distribution Agreement Supplement (Classes L, M, N and O) between
the Registrant and Counsellors Securities Inc. dated as of
November 5, 1991. 9
(t) Distribution Agreement Supplements (Classes R, S, and Alpha 1
through Theta 4) between the Registrant and Counsellors
Securities Inc. dated as of November 5, 1991. 9
(u) Distribution Agreement Supplement (Classes T, U and V) between
the Registrant and Counsellors Securities Inc. dated as of
September 18, 1992. 10
(v) Distribution Agreement Supplement (Class W) between the
Registrant and Counsellors Securities Inc. dated as of July 21,
1993. 14
(w) Distribution Agreement Supplement (Classes X, Y, Z and AA)
between the Registrant and Counselors Securities Inc. 14
(x) Distribution Agreement Supplement (Classes BB and CC) between
Registrant and Counsellor's Securities Inc. dated as of October
26, 1994. 18
(y) Distribution Agreement Supplement (Classes DD and EE) between
Registrant and Counsellor's Securities Inc. dated as of October
26, 1994. 18
<PAGE>7
(z) Form of Distribution Agreement Supplement (Classes L, M, N and O)
between the Registrant and Counsellor's Securities Inc. 19
(aa) Form of Distribution Agreement Supplement (Classes R, S) between
the Registrant and Counsellor's Securities Inc. 19
(bb) Form of Distribution Agreement Supplements (Classes Alpha 1
through Theta 4) between the Registrant and Counsellor's
Securities Inc. 19
(7) Fund Office Retirement Profit-Sharing and Trust Agreement, dated as of
October 24, 1990. 7
(8) (a) Custodian Agreement between Registrant and Provident National
Bank dated as of August 16, 1988. 3
(b) Sub-Custodian Agreement among The Chase Manhattan Bank, N.A., the
Registrant and Provident National Bank, dated as of July 13,
1992, relating to custody of Registrant's foreign securities. 10
(e) Amendment No. 1 to Custodian Agreement dated August 16, 1988. 9
(f) Agreement between Brown Brothers Harriman & Co. and Registrant on
behalf of BEA International Equity Portfolio, dated September 18,
1992. 10
(g) Agreement between Brown Brothers Harriman & Co. and Registrant on
behalf of BEA Strategic Fixed Income Portfolio, dated September
18, 1992. 10
(h) Agreement between Brown Brothers Harriman & Co. and Registrant on
behalf of BEA Emerging Markets Equity Portfolio, dated September
18, 1992. 10
(i) Agreement between Brown Brothers Harriman & Co. and Registrant on
behalf of BEA Emerging Markets Equity, BEA International Equity,
BEA Strategic Fixed Income and BEA Global Fixed Income
Portfolios, dated as of November 29, 1993. 15
(j) Agreement between Brown Brothers Harriman & Co. and Registrant on
behalf of BEA U.S. Core Equity and BEA U.S. Core Fixed Income
Portfolio dated as of November 29, 1993. 15
<PAGE>8
(k) Form of Custodian Contract between Registrant and State Street
Bank and Trust Company. 18
(9) (a) Transfer Agency Agreement (Sansom Street) between Registrant and
Provident Financial Processing Corporation, dated as of August
16, 1988. 3
(b) Transfer Agency Agreement (Cash Preservation) between Registrant
and Provident Financial Processing Corporation, dated as of
August 16, 1988. 3
(c) Shareholder Servicing Agreement (Sansom Street Money). 3
(d) Shareholder Servicing Agreement (Sansom Street Tax-Free Money). 3
(e) Shareholder Servicing Agreement (Sansom Street Government Money). 3
(f) Shareholder Services Plan (Sansom Street Money). 3
(g) Shareholder Services Plan (Sansom Street Tax-Free Money). 3
(h) Shareholder Services Plan (Sansom Street Government Money). 3
(i) Transfer Agency Agreement (SafeGuard) between Registrant and
Provident Financial Processing Corporation, dated as of August
16, 1988. 3
(j) Transfer Agency Agreement (Bedford) between Registrant and
Provident Financial Processing Corporation, dated as of August
16, 1988. 3
(k) Transfer Agency Agreement (Income Opportunities) between
Registrant and Provident Financial Processing Corporation dated
June 25, 1990. 7
(l) Administration and Accounting Services Agreement between
Registrant and Provident Financial Processing Corporation,
relating to Government Securities Portfolio, dated as of April
10, 1991. 8
(m) Administration and Accounting Services Agreement between
Registrant and Provident Financial Processing Corporation,
relating to New York
<PAGE>9
Municipal Money Market Portfolio dated as of November 5, 1991. 9
(n) Administration and Accounting Services Agreement between
Registrant and Provident Financial Processing Corporation,
relating to Equity Portfolio dated as of November 5, 1991. 9
(o) Administration and Accounting Services Agreement between
Registrant and Provident Financial Processing Corporation,
relating to High Yield Bond Portfolio, dated as of April 10,
1991. 9
(p) Administration and Accounting Services Agreement between
Registrant and Provident Financial Processing Corporation
(International) dated September 18, 1992. 10
(q) Administration and Accounting Services Agreement between
Registrant and Provident Financial Processing Corporation
(Strategic) dated September 18, 1992; 10
(r) Administration and Accounting Services Agreement between
Registrant and Provident Financial Processing Corporation
(Emerging) dated September 18, 1992. 10
(s) Transfer Agency Agreement and Supplements (Bradford, Alpha, Beta,
Gamma, Delta, Epsilon, Zeta, Eta and Theta) between Registrant
and Provident Financial Processing Corporation dated as of
November 5, 1991. 9
(t) Transfer Agency Agreement Supplement (BEA) between Registrant and
Provident Financial Processing Corporation dated as of September
18, 1992. 10
(u) Administrative Services Agreement between Registrant and
Counsellor's Fund Services, Inc. (BEA Portfolios) dated September
18, 1992. 10
(v) Administration and Accounting Services Agreement between
Registrant and Provident Financial Processing Corporation,
relating to Tax-Free Money Market Portfolio, dated as of April
21, 1992. 10
<PAGE>10
(w) Transfer Agency Agreement Supplement (Laffer) between Registrant
and PFPC Inc. dated as of July 21, 1993. 12
(x) Administration and Accounting Services Agreement between
Registrant and PFPC Inc., relating to Laffer/Canto Equity Fund,
dated July 21, 1993. 12
(y) Transfer Agency Agreement Supplement (BEA U.S. Core Equity, BEA
U.S. Core Fixed Income, BEA Global Fixed Income and BEA Municipal
Bond Fund) between Registrant and PFPC Inc. dated as of October
27, 1993. 15
(z) Administration and Accounting Services Agreement between
Registrant and PFPC Inc. relating to (Core Equity) dated as of
October 27, 1993. 15
(aa) Administration and Accounting Services Agreement between
Registrant and PFPC Inc. (Core Fixed Income) dated October 27,
1993. 15
(bb) Administration and Accounting Services Agreement between
Registrant and PFPC Inc. (International Fixed Income) dated
October 27, 1993 15
(cc) Administration and Accounting Services Agreement between
Registrant and PFPC Inc. (Municipal Bond) dated October 27, 1993. 15
(dd) Transfer Agency Agreement Supplement (BEA Balanced and Short
Duration) between Registrant and PFPC Inc. dated October 26,
1994. 18
(ee) Administration and Accounting Services Agreement between
Registrant and PFPC Inc. (BEA Balanced) dated October 26, 1994. 18
(ff) Administration and Accounting Services Agreement between
Registrant and PFPC Inc. (BEA Short Duration) dated October 26,
1994. 18
(gg) Co-Administration Agreement between Registrant and PFPC Inc.
(Warburg Pincus Growth & Income Fund) dated August 4, 1994. 18
(hh) Co-Administration Agreement between Registrant and PFPC Inc.
(Warburg Pincus Balanced Fund) dated August 4, 1994. 18
<PAGE>11
(ii) Co-Administration Agreement between Registrant and Counsellors
Funds Services, Inc. (Warburg Pincus Growth & Income Fund) dated
August 4, 1994. 18
(jj) Co-Administration Agreement between Registrant and Counsellors
Funds Services, Inc. (Warburg Pincus Balanced Fund) dated August
4, 1994. 18
(kk) Administrative Services Agreement Supplement between Registrant
and Counsellor's Fund Services, Inc. (BEA Classes) dated October
26, 1994. 18
(10) (a) Opinion of Counsel.
Incorporated by reference herein to Registrant's 24f-2 Notice for
the fiscal year ending August 31, 1994 filed on October 7, 1994.
(b) Consent of Counsel.
(11) Consent of Independent Accountants.
(12) None.
(13) (a) Subscription Agreement (relating to Classes A through N). 2
(b) Subscription Agreement between Registrant and Planco Financial
Services, Inc., relating to Classes O and P. 7
(c) Subscription Agreement between Registrant and Planco Financial
Services, Inc., relating to Class Q. 7
(d) Subscription Agreement between Registrant and Counsellors
Securities Inc. relating to Classes R, S, and Alpha 1 through
Theta 4. 9
(e) Subscription Agreement between Registrant and Counsellors
Securities Inc. relating to Classes T, U and V. 10
(f) Subscription Agreement between Registrant and Counsellor's
Securities Inc. relating to Classes BB and CC. 18
<PAGE>12
(g) Purchase Agreement between Registrant and Counsellors Securities
Inc. relating to Classes DD and EE. 18
(14) None.
(15) (a) Plan of Distribution (Sansom Street Money). 3
(b) Plan of Distribution (Sansom Street Tax-Free Money). 3
(c) Plan of Distribution (Sansom Street Government Money). 3
(d) Plan of Distribution (Cash Preservation Money). 3
(e) Plan of Distribution (Cash Preservation Tax-Free Money). 3
(f) Plan of Distribution (SafeGuard Equity). 3
(g) Plan of Distribution (SafeGuard Fixed Income). 3
(h) Plan of Distribution (SafeGuard Balanced). 3
(i) Plan of Distribution (SafeGuard Tax-Free). 3
(j) Plan of Distribution (SafeGuard Money). 3
(k) Plan of Distribution (SafeGuard Tax-Free Money). 3
(l) Plan of Distribution (Bedford Money). 3
(m) Plan of Distribution (Bedford Tax-Free Money). 3
(n) Plan of Distribution (Bedford Government Money). 3
(o) Plan of Distribution (Bedford New York Municipal Money). 7
(p) Plan of Distribution (SafeGuard Government Securities). 7
<PAGE>13
(q) Plan of Distribution (Income Opportunities High Yield). 7
(r) Amendment No. 1 to Plans of Distribution (Classes A through Q). 8
(s) Plan of Distribution (Bradford Tax-Free Money). 9
(t) Plan of Distribution (Bradford Government Money). 9
(u) Plan of Distribution (Alpha Money). 9
(v) Plan of Distribution (Alpha Tax-Free Money). 9
(w) Plan of Distribution (Alpha Government Money). 9
(x) Plan of Distribution (Alpha New York Money). 9
(y) Plan of Distribution (Beta Money). 9
(z) Plan of Distribution (Beta Tax-Free Money). 9
(aa) Plan of Distribution (Beta Government Money). 9
(bb) Plan of Distribution (Beta New York Money). 9
(cc) Plan of Distribution (Gamma Money). 9
(dd) Plan of Distribution (Gamma Tax-Free Money). 9
(ee) Plan of Distribution (Gamma Government Money). 9
(ff) Plan of Distribution (Gamma New York Money). 9
(gg) Plan of Distribution (Delta Money). 9
(hh) Plan of Distribution (Delta Tax-Free Money). 9
(ii) Plan of Distribution (Delta Government Money). 9
(jj) Plan of Distribution (Delta New York Money). 9
(kk) Plan of Distribution (Epsilon Money). 9
(ll) Plan of Distribution (Epsilon Tax-Free Money). 9
(mm) Plan of Distribution (Epsilon Government Money). 9
(nn) Plan of Distribution (Epsilon New York Money). 9
<PAGE>14
(oo) Plan of Distribution (Zeta Money). 9
(pp) Plan of Distribution (Zeta Tax-Free Money). 9
(qq) Plan of Distribution (Zeta Government Money). 9
(rr) Plan of Distribution (Zeta New York Money). 9
(ss) Plan of Distribution (Eta Money). 9
(tt) Plan of Distribution (Eta Tax-Free Money). 9
(uu) Plan of Distribution (Eta Government Money). 9
(vv) Plan of Distribution (Eta New York Money). 9
(ww) Plan of Distribution (Theta Money). 9
(xx) Plan of Distribution (Theta Tax-Free Money). 9
(yy) Plan of Distribution (Theta Government Money). 9
(zz) Plan of Distribution (Theta New York Money). 9
(aaa) Plan of Distribution (Laffer Equity). 12
(bbb) Plan Distribution (Warburg Pincus Growth & Income Series 2). 18
(ccc) Plan of Distribution (Warburg Pincus Balanced Series 2). 18
(16) Schedule of Computation of Performance Quotations. 3
(17) Representation of Ballard Spahr Andrews & Ingersoll pursuant to Rule
485(b) under the Securities Act of 1933.
- -----------------
<FN>
1 Incorporated herein by reference to the same exhibit number of
Registrant's Registration Statement (No. 33-20827) filed on March 24,
1988.
2 Incorporated herein by reference to the same exhibit number of
Pre-Effective Amendment No. 2 to Registrant's Registration Statement (No.
33-20827) filed on July 12, 1988.
<PAGE>15
3 Incorporated herein by reference to the same exhibit number of
Post-Effective Amendment No. 1 to Registrant's Registration Statement
(No. 33-20827) filed on March 23, 1989.
4 Incorporated herein by reference to the same exhibit number of
Post-Effective Amendment No. 2 to Registrant's Registration Statement
(No. 33-20827) filed on October 25, 1989.
5 Incorporated herein by reference to the same exhibit number of
Post-Effective Amendment No. 3 to the Registrant's Registration Statement
(No. 33-20827) filed on April 27, 1990.
6 Incorporated herein by reference to the same exhibit number of
Post-Effective Amendment No. 4 to the Registrant's Registration Statement
(No. 33-20827) filed on May 1, 1990.
7 Incorporated herein by reference to the same exhibit number of
Post-Effective Amendment No. 5 to the Registrant's Registration Statement
(No. 33-20827) filed on December 14, 1990.
8 Incorporated herein by reference to the same exhibit number of
Post-Effective Amendment No. 6 to the Registrant's Registration Statement
(No. 33-20827) filed on October 24, 1991.
9 Incorporated herein by reference to the same exhibit number of
Post-Effective Amendment No. 7 to the Registrant's Registration Statement
(No. 33-20827) filed on July 15, 1992.
10 Incorporated herein by reference to the same exhibit number of
Post-Effective Amendment No. 8 to the Registrant's Registration Statement
(No. 33-20827) filed on October 22, 1992.
11 Incorporated herein by reference to the same exhibit number of
Post-Effective Amendment No. 9 to the Registrant's Registration Statement
(No. 33-20827) filed on December 16, 1992.
12 Incorporated herein by reference to the same exhibit number of
Post-Effective Amendment No. 11 to the Registrant's Registrant Statement
(No. 33-20827) filed on June 21, 1993.
13 Incorporated herein by reference to the same exhibit number
Post-Effective Amendment No. 12 to the Registrant's Registration
Statement (No. 33-20827) filed on July 27, 1993.
14 Incorporated herein by reference to the same exhibit number of
Post-Effective Amendment No. 13 to the Registrant's Registration
Statement (No. 33-20827) filed on October 29, 1993.
15 Incorporated herein by reference to the same exhibit number of
Post-Effective Amendment No. 14 to the Registrant's Registration
Statement No. 33-20827 filed on December 21, 1993.
<PAGE>16
16 Incorporated herein by reference to the same exhibit number of
Post-Effective Amendment No. 19 to the Registrant's Registration
Statement (No. 33-20827) filed on October 14, 1994.
17 Incorporated herein by reference to the same exhibit number of
Post-Effective Amendment No. 20 to the Registrant's Registration
Statement No. 33-20827 filed on October 21, 1994.
18 Incorporated herein by reference to the same exhibit number of
Post-Effective Amendment No. 21 to the Registrant's Registration
Statement No. 33-20827 filed on October 28, 1994.
19 Incorporated herein by reference to the same exhibit number of
Post-Effective Amendment No. 22 to the Registrant's Registration
Statement No. 33-20827 filed on December 19, 1994.
</FN>
</TABLE>
Item 25. Persons Controlled by or under Common Control with Registrant
None.
Item 26. Number of Holders of Securities
The following information is given as of January 27, 1995.
<TABLE>
<CAPTION>
Title of Class of Common Stock Number of Record Holders
<S> <C>
a) Warburg Pincus Growth & Income 312
b) Warburg Pincus Balanced 17
c) RBB Tax-Free 170
d) RBB Money Market 13
e) RBB Municipal Money Market 2
f) Cash Preservation Money Market 40
g) Cash Preservation Municipal Money Market 78
h) Sansom Street Money Market 3
i) Sansom Street Municipal Money Market 0
j) Sansom Street Government Obligations
Money Market 0
k) Bedford Money Market 81,359
l) Bedford Municipal Money Market 5,813
m) Bedford Government Obligations Money
Market 3,684
n) Bedford New York Municipal Money Market 2,787
o) RBB Government Securities 810
p) Bradford Municipal Money Market 3,295
q) Bradford Government Obligations Money
Market 1,496
r) BEA International Equity 227
s) BEA Strategic Fixed Income 206
t) BEA Emerging Markets Equity 140
u) Laffer/Canto Equity 51
v) BEA U.S. Core Equity 105
<PAGE>17
w) BEA U.S. Core Fixed Income 114
x) BEA U.S. Global Fixed Income 105
y) BEA Municipal Bond fund 150
</TABLE>
Item 27. Indemnification
Sections 1, 2, 3 and 4 of Article VIII of Registrant's Articles of
Incorporation, as amended, incorporated herein by reference as Exhibits 1(a) and
1(c), provide as follows:
Section 1. To the fullest extent that limitations on the
liability of directors and officers are permitted by the Maryland
General Corporation Law, no director or officer of the Corporation
shall have any liability to the Corporation or its shareholders for
damages. This limitation on liability applies to events occurring at
the time a person serves as a director or officer of the Corporation
whether or not such person is a director or officer at the time of any
proceeding in which liability is asserted.
Section 2. The Corporation shall indemnify and advance expenses
to its currently acting and its former directors to the fullest extent
that indemnification of directors is permitted by the Maryland General
Corporation Law. The Corporation shall indemnify and advance expenses
to its officers to the same extent as its directors and to such
further extent as is consistent with law. The Board of Directors may
by By-law, resolution or agreement make further provision for
indemnification of directors, officers, employees and agents to the
fullest extent permitted by the Maryland General Corporation Law.
Section 3. No provision of this Article shall be effective to
protect or purport to protect any director or officer of the
Corporation against any liability to the Corporation or its security
holders to which he would otherwise be subject by reason of willful
misfeasance, bad faith, gross negligence or reckless disregard of the
duties involved in the conduct of his office.
Section 4. References to the Maryland General Corporation Law in
this Article are to the law as from time to time amended. No further
amendment to the Articles of Incorporation of the Corporation shall
decrease, but may expand, any right of any person under this Article
based on any event, omission or proceeding prior to such amendment.
Insofar as indemnification for liability arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
Registrant pursuant to the foregoing provisions, or otherwise, Registrant has
been advised that in the opinion of the Securities and Exchange
<PAGE>18
Commission such indemnification is against public policy as expressed in the Act
and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by Registrant of expenses
incurred or paid by a director, officer or controlling person of Registrant in
the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, Registrant will, unless in the opinion of its counsel the matter has
been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.
Item 28. Business and Other Connections of Investment Adviser
Information as to any other business, profession, vocation or
employment of a substantial nature in which any directors and officers of PIMC,
BEA, Laffer Advisors and Warburg are, or at any time during the past two (2)
years have been, engaged for their own accounts or in the capacity of director,
officer, employee, partner or trustee is incorporated herein by reference to
Schedules A and D of PIMC's Form ADV (File No. 801-13304) filed on March 28,
1993, Schedules B and D of BEA's Form ADV (File No. 801-37170) filed on March
30, 1993, Schedules A and D of Laffer Advisors Form ADV (File No. 801-16816)
filed on March 22, 1993 and Schedules A and D of Warburg's Form ADV (File No.
801-07321) filed on August 28, 1992, respectively.
There is set forth below information as to any other business,
profession, vocation or employment of a substantial nature in which each
director or officer of PNC Bank, National Association (successor by merger to
Provident National Bank) ("PNC Bank"), is, or at any time during the past two
years has been, engaged for his own account or in the capacity of director,
officer, employee, partner or trustee.
PNC BANK, NATIONAL ASSOCIATION
Directors and Officers
To the knowledge of Registrant, none of the directors or officers of
PNC except those set forth below, is or has been, at any time during the past
two years, engaged in any other business, profession, vocation or employment of
a substantial nature, except that certain directors and officers of PNC Bank
also hold various positions with, and engage in business for, PNC Bank Corp.
(formerly PNC Financial Corp), which owns all the outstanding stock of PNC Bank,
or other subsidiaries of PNC Bank Corp. Set forth below are the names and
principal businesses of the directors and certain of the senior executive
officers of PNC Bank who are engaged in any other business, profession, vocation
or employment of substantial nature.
<PAGE>19
PNC BANK, NATIONAL ASSOCIATION
<TABLE>
<CAPTION>
Position with
PNC Bank,
National Other Business Type of
Association Name Connections Business
<S> <C> <C> <C>
Director B.R. Brown President and C.E.O. of Coal
Consol, Inc.
Pittsburgh, PA (22)
Director Constance E. Clayton Superintendent of Schools Educator
The School District of
Philadelphia
Philadelphia, PA (23)
Director F. Eugene Dixon, Jr. Private Trustee Trustee
Lafayette Hill, PA (24)
Director A. James Freeman Vice Chairman and C.E.O. Manufacturing
Lord Corporation
Erie, PA (25)
Director Banking
Marine Bank
Erie, PA (26)
Director Dr. Stuart Heydt President and C.E.O. Medical
Geisinger Foundation
Danville, PA (27)
Director Edward P. Junker, III Chairman and C.E.O. Banking
Marine Bank
Erie, PA (26)
Director Thomas A. McConomy President, C.E.O. and Manufacturing
Chairman, Calgon Carbon
Corporation
Pittsburgh, PA (28)
Director Robert C. Milsom Retired
Pittsburgh, PA*
Director Thomas H. O'Brien Chairman and C.E.O. Bank Holding
PNC Bank Corp. (14)
Director Dr. J. Dennis O'Connor Chancellor Education
University of Pittsburgh
Pittsburgh, PA (29)
<PAGE>20
Position with
PNC Bank,
National Other Business Type of
Association Name Connections Business
Director Rocco A. Ortenzio Chairman and C.E.O. Medical
Continental Medical Systems,
Inc.
Mechanicsburg, PA (30)
Director Robert C. Robb, Jr. Partner Financial and
Lewis, Eckert, Robb & Management
Company Consultants
Plymouth Meeting, PA (31)
Director Daniel M. Rooney President, Pittsburgh Football
Steelers Football Club
of the National Football
League
Pittsburgh, PA (32)
Director Seth E. Schofield Chairman, President and Airline
C.E.O.
USAir Group, Inc. and
USAir, Inc.
Arlington, VA (33)
Director Robert M. Valentini President and C.E.O. Bell of Communica-
Pennsylvania and Chairman tions
Network Policy Council of Bell
Atlantic Corporation
Philadelphia, PA (34)
President and James E. Rohr President Bank
Chief Executive PNC Bank Corp. Holding
Officer (14) Company
President and Bruce E. Robbins None.
Chief Executive
Officer of PNC
Bank, National
Association,
Pittsburgh
Senior Executive Edward V. Randall, Jr. None.
Vice President
Executive J. Richard Carnall Director Banking
Vice President PNC National Bank (2)
Chairman and Director Financial-
PFPC Inc. (3) Related
Services
<PAGE>21
Position with
PNC Bank,
National Other Business Type of
Association Name Connections Business
Director
PNC Trust Company Fiduciary
of New York (11) Activities
Director Equipment
Hayden Bolts, Inc.* Leasing
Director, Real Estate
Parkway Real Estate
Company*
Director Investment
Provident Capital Advisory
Management, Inc. (5)
Director Investment
Advanced Investment Advisory
Management, Inc. (15)
Executive Richard C. Caldwell Director Banking
Vice President PNC National Bank (2)
Director Investment
Provident Capital Advisory
Management, Inc. (5)
Director Fiduciary
PNC Trust Company Activities
of New York (11)
Executive Vice President Bank Holding
PNC Bank Corp. (14) Company
Director Investment
Advanced Investment Advisory
Management, Inc. (15)
Director Banking
PNC Bank, New Jersey,
New Jersey, National
Association (16)
Director Financial-
PFPC Inc. (3) Related
Services
Executive Vice Herbert G. None.
President Summerfield, Jr.
<PAGE>22
Position with
PNC Bank,
National Other Business Type of
Association Name Connections Business
Executive Vice Joe R. Irwin None.
President
President and Richard L. Smoot Senior Vice President Banking
Chief Executive Operations
Officer of PNC PNC Bank Corp. (20)
Bank, National
Association, Director Fiduciary
Philadelphia PNC Trust Company of Activities
New York (11)
Director Investment
PNC Institutional Advisory
Management Corporation (28)
Director Financial
PFPC Inc. (3) Related
Services
Executive Vice W. Herbert Crowder, III None.
President
Executive Vice Walter L. West None.
President
Senior Vice George Lula None.
President
Secretary William F. Strome Director International
PNC Bank International (35) Banking
Services
Managing General Counsel Bank Holding
and Senior Vice President Company
PNC Bank Corp.
Senior Vice James P. Conley None.
President/
Credit Policy
- --------------------
<FN>
* For more information, contact William F. Strome, PNC Bank, National
Association, Broad and Chestnut Streets, Philadelphia, PA 19101.
(1) PNC Bank, National Association, 120 S. 17th Street, Philadelphia, PA
19103.
(2) PNC National Bank, 103 Bellevue Parkway, Wilmington, DE 19809.
(3) PFPC Inc., 400 Bellevue Parkway, Wilmington, DE 19809.
(4) PNC Service Corp, 103 Bellevue Parkway, Wilmington, DE 19809.
<PAGE>23
(5) Provident Capital Management, Inc., 30 S. 17th Street, Site 1500,
Philadelphia, PA 19103.
(6) PNC National Investment Corporation, Broad and Chestnut Streets,
Philadelphia, PA 19101.
(7) Provident Realty Management, Inc., Broad and Chestnut Streets,
Philadelphia, PA 19101.
(8) Provident Realty, Inc., Broad and Chestnut Streets, Philadelphia, PA
19101.
(9) PNC Bancorp, Inc. 3411 Silverside Park, Wilmington, DE 19810
(10) PNC New Jersey Credit Corp, 1415 Route 70 East, Suite 604, Cherry
Hill, NJ 08034.
(11) PNC Trust Company of New York, 40 Broad Street, New York, NY 10084.
(12) Provcor Properties, Inc., Broad and Chestnut Streets, Philadelphia, PA
19101.
(13) PNC Credit Corp, 103 Bellevue Parkway, Wilmington, DE 19809.
(14) PNC Bank Corp., 5th Avenue and Wood Streets, Pittsburgh, PA 15265.
(15) Advanced Investment Management, Inc., 27th Floor, One Oliver Plaza,
Pittsburgh, PA 15265.
(16) PNC Bank of New Jersey, National Association, Woodland Falls Corporate
Park, 210 Lake Drive East, Cherry Hill, NJ 08002.
(17) PNC Institutional Management Corporation, 400 Bellevue Parkway,
Wilmington, DE 19809.
(18) Provident National Leasing Corporation, Broad and Chestnut Streets,
Philadelphia, PA 19101
(19) Provident National Bank Corp. New Jersey, 1 Centennial Square,
Haddonfield, NJ 08033
(20) The Clayton Bank and Trust Company, Clayton, DE 19938
(21) Keystone Life Insurance Company, 1207 Chestnut Street, Philadelphia,
PA 19107-4101
(22) Consol, Inc., Consol Plaza, Pittsburgh, PA 15241
(23) School District of Philadelphia, 21 Street and The Parkway,
Philadelphia, PA 19103-1099
(24) F. Eugene Dixon, Jr., Private Trustee, 665 Thomas Road, Lafayette
Hill, PA 19444-0178
(25) Lord Corporation, 2000 W. Grandview Boulevard, Erie, PA 16514
(26) Marine Bank, Ninth and State Streets, Erie, PA 16553
(27) Geisinger Foundation, 100 N. Academy Avenue, Danville, PA 17822
(28) Calgon Carbon Corporation, P.O. Box 717, Pittsburgh, PA 15230-0717
(29) University of Pittsburgh, 107 Cathedral of Learning, Pittsburgh, PA
15260
(30) Continental Medical Systems, Inc., P.O. Box 715, Mechanicsburg, PA
17055
(31) Lewis, Eckert, Robb & Company, 425 One Plymouth Meeting, Plymouth
Meeting, PA 19462
(32) Football Club of the National Football League, 300 Stadium Circle,
Pittsburgh, PA 15212
(33) USAir Group, Inc. and USAir, Inc., 2345 Crystal Drive, Arlington, VA
22227
(34) Bell of Pennsylvania, One Parkway, Philadelphia, PA 19102
(35) PNC Bank International, 5th and Wood Streets, Pittsburgh, PA 15222
</FN>
</TABLE>
<PAGE>24
Item. 29. Principal Underwriter
(a) Counsellors Securities Inc. (the "Distributor") acts as
distributor for the following investment companies:
Warburg, Pincus Cash Reserve Fund
Warburg, Pincus New York Tax Exempt Fund
Warburg, Pincus New York Municipal Bond Fund
Warburg, Pincus Intermediate Maturity Government Fund
Warburg, Pincus Fixed Income Fund
Warburg, Pincus Global Fixed Income Fund
Warburg, Pincus Capital Appreciation Fund
Warburg, Pincus Emerging Growth Fund
Warburg, Pincus International Equity Fund
Warburg, Pincus Japan OTC Fund
Counsellors Tandem Securities Fund
Warburg Pincus Growth & Income Fund
Warburg Pincus Balanced Fund
The Distributor acts as a principal underwriter, depositor or investment adviser
for the following investment companies: None other than Registrant and companies
listed above.
(b) Information for each director or officer of the Distributor is set
forth below:
<TABLE>
<CAPTION>
Name and Principal Positions and Offices Positions and Offices
Business Address with the Distributor with Registrant
<S> <C> <C>
John L. Vogelstein Director
466 Lexington Avenue
New York, New York 10017
Lionel I. Pincus Director
466 Lexington Avenue
New York, New York 10017
Reuben S. Leibowitz Director,
466 Lexington Avenue President and Chief
New York, New York 10017 Financial Officer
John L. Furth Director
466 Lexington Avenue
New York, New York 10017
Arnold M. Reichman Vice President, Director
466 Lexington Avenue Secretary and
New York, New York 10017 Chief Operating Officer
Roger Reinlieb Vice President
466 Lexington Avenue
<PAGE>25
New York, New York 10017
Karen Amato Assistant Secretary
466 Lexington Avenue
New York, New York 10017
Stephen Distler Treasurer
466 Lexington Avenue
New York, New York 10017
</TABLE>
(c) Information as to commissions and other compensation received by
the principal underwriter is set forth below.
<TABLE>
<CAPTION>
Net
Name of Underwriting Compensation
Principal Discounts and on Redemption Brokerage Other
Underwriter Commissions and Repurchase Commissions Compensation
<S> <C> <C> <C> <C>
Counsellors $ 0 $ 0 $ 0 $ 0
Securities
Inc.
</TABLE>
Item 30. Location of Accounts and Records
(1) PNC Bank, National Association (successor by merger to Provident
National Bank), Broad and Chestnut Street, Philadelphia, PA 19101
(records relating to its functions as sub-adviser and custodian).
(2) Counsellors Securities Inc., 466 Lexington Avenue, New York, New York
10017 (records relating to its functions as distributor).
(3) PNC Institutional Management Corporation (formerly Provident
Institutional Management Corporation), Bellevue Corporate Center, 103
Bellevue Parkway, Wilmington, Delaware 19809 (records relating to its
functions as investment adviser, sub-adviser and administrator).
(4) PFPC Inc. (formerly Provident Financial Processing Corporation),
Bellevue Corporate Center, 400 Bellevue Parkway, Wilmington, Delaware
19809 (records relating to its functions as transfer agent and
dividend disbursing agent).
(5) Ballard Spahr Andrews & Ingersoll, 1735 Market Street - 51st Floor,
Philadelphia, Pennsylvania 19103 (Registrant's Articles of
Incorporation, By-Laws and Minute Books).
(6) BEA Associates, One Citicorp Center, 153 East 53rd Street, New York,
New York 10022 (records relating to its function as investment
adviser).
<PAGE>26
(7) Laffer Advisors Incorporated, 4275 Executive Square #330, La Jolla,
California 92037 (records relating to its function as investment
adviser).
(8) Warburg, Pincus Counsellors, Inc., 466 Lexington Avenue, New York, New
York 10017-3147.
Item 31. Management Services
None.
Item 32. Undertakings
(a) Registrant hereby undertakes to hold a meeting of shareholders
for the purpose of considering the removal of directors in the
event the requisite number of shareholders so request.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the Investment
Company Act of 1940, the Registrant certifies that it meets all of the
requirements for effectiveness of this Registration Statement pursuant to Rule
485(b) under the Securities Act of 1993 and has duly caused this Post-Effective
Amendment to its Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Wilmington, and State of
Delaware, on February 6, 1995.
THE RBB FUND, INC.
By: /s/ Edward J. Roach
--------------------
Edward J. Roach
President and
Treasurer
Pursuant to the requirements of the Securities Act of 1933, this
Post-Effective Amendment to Registrant's Registration Statement 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/ Edward J. Roach President (Principal February 6, 1995
- ----------------------
Edward J. Roach Executive Officer) and
Treasurer (Principal
Financial and Accounting
Officer)
/s/ Donald van Roden Director February 6, 1995
- -----------------------
Donald van Roden
/s/ Francis J. McKay Director February 6, 1995
- -----------------------
Francis J. McKay
/s/ Marvin E. Sternberg Director February 6, 1995
- -----------------------
Marvin E. Sternberg
/s/ Julian A. Brodsky Director February 6, 1995
- -----------------------
Julian A. Brodsky
/s/ Arnold M. Reichman Director February 6, 1995
- -----------------------
Arnold M. Reichman
/s/ Robert Sablowsky Director February 6, 1995
- -----------------------
Robert Sablowsky
</TABLE>
<PAGE>i
THE RBB FUND, INC.
RBB CLASSES
WARBURG PINCUS CLASSES
WARBURG PINCUS SERIES 2 CLASSES
CASH PRESERVATION CLASSES
SANSOM STREET CLASSES
BEDFORD CLASSES
BRADFORD CLASSES
BEA CLASSES
LAFFER/CANTO EQUITY CLASS
ALPHA CLASSES
BETA CLASSES
GAMMA CLASSES
DELTA CLASSES
EPSILON CLASSES
ZETA CLASSES
ETA CLASSES
THETA CLASSES
EXHIBIT INDEX
<TABLE>
<CAPTION>
See
Exhibit Page Note #
<S> <C>
(1) (a) Articles of Incorporation of Registrant 1
(b) Articles Supplementary of Registrant. 1
(c) Articles of Amendment to Articles of
Incorporation of Registrant. 2
(d) Articles Supplementary of Registrant. 2
(e) Articles Supplementary of Registrant. 5
(f) Articles Supplementary of Registrant. 6
(g) Articles Supplementary of Registrant. 9
(h) Articles Supplementary of Registrant. 10
(i) Articles Supplementary of Registrant. 14
(j) Articles Supplementary of Registrant. 14
(k) Articles Supplementary of Registrant. 19
(l) Articles Supplementary of Registrant. 19
(m) Articles Supplementary of Registrant. 19
<PAGE>ii
See
Exhibit Page Note #
(n) Articles Supplementary of Registrant. 19
(2) Amended By-Laws adopted August 16, 1988. 3
(a) Amendment to By-Laws adopted July 25, 1989. 4
(b) By-Laws amended through October 24, 1989. 5
(3) None.
(4) Specimen Certificates
a) SafeGuard Equity Growth and Income Shares 3
b) SafeGuard Fixed Income Shares 3
c) SafeGuard Balanced Shares 3
d) SafeGuard Tax-Free Shares 3
e) SafeGuard Money Market Shares 3
f) SafeGuard Tax-Free Money Market Shares 3
g) Cash Preservation Money Market Shares 3
h) Cash Preservation Tax-Free Money Market Shares 3
i) Sansom Street Money Market Shares 3
j) Sansom Street Tax-Free Money Market Shares 3
k) Sansom Street Government Obligations Money Market Shares 3
l) Bedford Money Market Shares 3
m) Bedford Tax-Free Money Market Shares 3
n) Bedford Government Obligations Money Market Shares 3
o) Bedford New York Municipal Money Market Shares 5
p) SafeGuard Government Securities Shares 5
q) Income Opportunities High Yield Bond Shares 6
r) Bradford Tax-Free Money Market Shares 8
s) Bradford Government Obligations Money Market Shares 8
<PAGE>iii
See
Exhibit Page Note #
t) Alpha 1 Money Market Shares 8
u) Alpha 2 Tax-Free Money Market Shares 8
v) Alpha 3 Government Obligations Money Market Shares 8
w) Alpha 4 New York Municipal Money Market Shares 8
x) Beta 1 Money Market Shares 8
y) Beta 2 Tax-Free Money Market Shares 8
z) Beta 3 Government Obligations Money Market Shares 8
aa) Beta 4 New York Municipal Money Market Shares 8
bb) Gamma 1 Money Market Shares 8
cc) Gamma 2 Tax-Free Money Market Shares 8
dd) Gamma 3 Government Obligations Money Market Shares 8
ee) Gamma 4 New York Municipal Money Market Shares 8
ff) Delta 1 Money Market Shares 8
gg) Delta 2 Tax-Free Money Market Shares 8
hh) Delta 3 Government Obligations Money Market Shares 8
ii) Delta 4 New York Municipal Money Market Shares 8
jj) Epsilon 1 Money Market Shares 8
kk) Epsilon 2 Tax-Free Money Market Shares 8
ll) Epsilon 3 Government Obligations Money Market Shares 8
mm) Epsilon 4 New York Municipal Money Market Shares 8
nn) Zeta 1 Money Market Shares 8
oo) Zeta 2 Tax-Free Money Market Shares 8
pp) Zeta 3 Government Obligations Money Market Shares 8
qq) Zeta 4 New York Municipal Money Market Shares 8
rr) Eta 1 Money Market Shares 8
<PAGE>iv
See
Exhibit Page Note #
ss) Eta 2 Tax-Free Money Market Shares 8
tt) Eta 3 Government Obligations Money Market Shares 8
uu) Eta 4 New York Municipal Money Market Shares 8
vv) Theta 1 Money Market Shares 8
ww) Theta 2 Tax-Free Money Market Shares 8
xx) Theta 3 Government Obligations Money Market Shares 8
yy) Theta 4 New York Municipal Money Market Shares 8
zz) BEA International Equity Shares 9
a1) BEA Strategic Fixed Income Shares 9
a2) BEA Emerging Markets Equity Shares 9
a3) Laffer/Canto Equity Shares 12
a4) BEA U.S. Core Equity Shares 13
a5) BEA U.S. Core Fixed Income Shares 13
a6) BEA Global Fixed Income Shares 13
a7) BEA Municipal Bond Fund Shares 13
a8) BEA Balanced Shares 16
a9) BEA Short Duration Shares 16
a10) Form of Warburg Growth & Income Shares 18
a11) Form of Warburg Balanced Shares 18
(5) (a) Investment Advisory Agreement (Money) between Registrant and
Provident Institutional Management Corporation, dated as of
August 16, 1988. 3
(b) Sub-Advisory Agreement (Money) between Provident Institutional
Management Corporation and Provident National Bank, dated as of
August 16, 1988. 3
(c) Investment Advisory Agreement (Tax-Free Money) between Registrant
and Provident Institutional Management Corporation, dated as of
August 16, 1988. 3
<PAGE>v
See
Exhibit Page Note #
(d) Sub-Advisory Agreement (Tax-Free Money) between Provident
Institutional Management Corporation and Provident National Bank,
dated as of August 16, 1988. 3
(e) Investment Advisory Agreement (Government Money) between
Registrant and Provident Institutional Management Corporation,
dated as of August 16, 1988. 3
(f) Sub-Advisory Agreement (Government Money) between Provident
Institutional Management Corporation and Provident National Bank,
dated as of August 16, 1988. 3
(k) Investment Advisory Agreement (Balanced) between Registrant and
Provident Institutional Management Corporation, dated as of
August 16, 1988. 3
(l) Sub-Advisory Agreement (Balanced) between Provident Institutional
Management Corporation and Provident National Bank, dated as of
August 16, 1988. 3
(m) Investment Advisory Agreement (Tax-Free) between Registrant and
Provident Institutional Management Corporation, dated as of
August 16, 1988. 3
(n) Sub-Advisory Agreement (Tax-Free) between Provident Institutional
Management Corporation and Provident National Bank, dated as of
August 16, 1988. 3
(s) Investment Advisory Agreement (Government Securities) between
Registrant and Provident Institutional Management Corporation
dated as of April 8, 1991. 8
(t) Investment Advisory Agreement (High Yield Bond) between
Registrant and Provident Institutional Management Corporation
dated as of April 8, 1991. 8
(u) Sub-Advisory Agreement (High Yield Bond) between Registrant and
Warburg, Pincus Counsellors, Inc. dated as of April 8, 1991. 8
(v) Investment Advisory Agreement (New York Municipal Money Market)
between Registrant and Provident Institutional Management
Corporation dated November 5, 1991. 9
<PAGE>vi
See
Exhibit Page Note #
(w) Investment Advisory Agreement (Equity) between Registrant and
Provident Institutional Management Corporation dated November 5,
1991. 10
(x) Sub-Advisory Agreement (Equity) between Registrant, Provident
Institutional Management Corporation and Warburg, Pincus
Counsellors, Inc. dated November 5, 1991. 10
(y) Investment Advisory Agreement (Tax-Free Money Market) between
Registrant and Provident Institutional Management Corporation
dated April 21, 1992. 10
(z) Investment Advisory Agreement (BEA International Equity
Portfolio) between Registrant and BEA Associates. 11
(aa) Investment Advisory Agreement (BEA Strategic Fixed Income
Portfolio) between Registrant and BEA Associates. 11
(bb) Investment Advisory Agreement (BEA Emerging Markets Equity
Portfolio) between Registrant and BEA Associates. 11
(cc) Investment Advisory Agreement (Laffer/Canto Equity Portfolio)
between Registrant and Laffer Advisors, Incorporated, dated as of
July 21, 1993. 14
(dd) Sub-Advisory Agreement (Laffer/Canto Portfolio) between PNC
Institutional Management Corporation and Laffer Advisors,
Incorporated, dated as of July 21, 1993. 12
(ee) Investment Advisory Agreement (BEA U.S. Core Equity Portfolio)
between Registrant and BEA Associates, dated as of October 27,
1993. 15
(ff) Investment Advisory Agreement (BEA U.S. Core Fixed Income
Portfolio) between Registrant and BEA Associates, dated as of
October 27, 1993. 15
(gg) Investment Advisory Agreement (BEA Global Fixed Income Portfolio)
between Registrant and BEA Associates, dated as of October 27
1993. 15
(hh) Investment Advisory Agreement (BEA Municipal Bond Fund Portfolio)
between Registrant and BEA Associates, dated as of October 27,
1993. 15
(ii) Investment Advisory Agreement (Warburg Pincus Growth & Income
Fund) between Registrant and Warburg, Pincus Counsellors, Inc. 14
<PAGE>vii
See
Exhibit Page Note #
(jj) Form of Investment Advisory Agreement (Warburg Pincus Balanced
Fund) between Registrant and Warburg, Pincus Counsellors, Inc. 16
(kk) Form of Investment Advisory Agreement (BEA Balanced) between
Registrant and BEA Associates. 16
(ll) Form of Investment Advisory Agreement (BEA Short Duration)
between Registrant and BEA Associates. 16
(6) (r) Distribution Agreement and Supplements (Classes A through Q)
between the Registrant and Counsellors Securities Inc. dated as
of April 10, 1991. 8
(s) Distribution Agreement Supplement (Classes L, M, N and O) between
the Registrant and Counsellors Securities Inc. dated as of
November 5, 1991. 9
(t) Distribution Agreement Supplements (Classes R, S, and Alpha 1
through Theta 4) between the Registrant and Counsellors
Securities Inc. dated as of November 5, 1991. 9
(u) Distribution Agreement Supplement (Classes T, U and V) between
the Registrant and Counsellors Securities Inc. dated as of
September 18, 1992. 10
(v) Distribution Agreement Supplement (Class W) between the
Registrant and Counsellors Securities Inc. dated as of July 21,
1993. 14
(w) Distribution Agreement Supplement (Classes X, Y, Z and AA)
between the Registrant and Counsellors Securities Inc. 14
(x) Distribution Agreement Supplement (Classes BB and CC) between
Registrant and Counsellors Securities Inc. dated as of October
26, 1994. 18
(y) Distribution Agreement Supplement (Classes DD and EE) between
Registrant and Counsellors Securities Inc. dated as of October
26, 1994. 18
(z) Form of Distribution Agreement Supplement (Classes L, M, N, and
O) between the Registrant and Counselor's Securities Inc. 19
(aa) Form of Distribution Agreement Supplement (Classes R and S)
between the Registrant and Counselor's Securities Inc. 19
(bb) Form of Distribution Agreement Supplements (Classes Alpha 1
through Theta 4) between Registrant and Counsellor's Securities
Inc.) 19
<PAGE>viii
See
Exhibit Page Note #
(7) Fund Office Retirement Profit-Sharing and Trust Agreement, dated as of
October 24, 1990. 7
(8) (a) Custodian Agreement between Registrant and Provident National
Bank dated as of August 16, 1988. 3
(b) Sub-Custodian Agreement among The Chase Manhattan Bank, N.A., the
Registrant and Provident National Bank, dated as of July 13,
1992, relating to custody of Registrant's foreign securities. 10
(e) Amendment No. 1 to Custodian Agreement dated August 16, 1988. 9
(f) Agreement between Brown Brothers Harriman & Co. and Registrant on
behalf of BEA International Equity Portfolio, dated September 18,
1992. 10
(g) Agreement between Brown Brothers Harriman & Co. and Registrant on
behalf of BEA Strategic Fixed Income Portfolio, dated September
18, 1992. 10
(h) Agreement between Brown Brothers Harriman & Co. and Registrant on
behalf of BEA Emerging Markets Equity Portfolio, dated September
18, 1992. 10
(i) Agreement between Brown Brothers Harriman & Co. and Registrant on
behalf of BEA International Equity, BEA Emerging Markets, BEA
Strategic Fixed Income and BEA Global Fixed Income Portfolio,
dated as of November 29, 1993. 15
(j) Agreement between Brown Brothers Harriman & Co. and Registrant on
behalf of BEA U.S. Core Equity and BEA U.S. Core Fixed Income
Portfolios, dated as of November 29, 1993. 15
(k) Form of Custodian Contract between Registrant and State Street
Bank and Trust Company. 18
(9) (a) Transfer Agency Agreement (Sansom Street) between Registrant and
Provident Financial Processing Corporation, dated as of August
16, 1988. 3
(b) Transfer Agency Agreement (Cash Preservation) between Registrant
and Provident Financial Processing Corporation, dated as of
August 16, 1988. 3
<PAGE>ix
See
Exhibit Page Note #
(c) Shareholder Servicing Agreement (Sansom Street Money). 3
(d) Shareholder Servicing Agreement (Sansom Street Tax-Free Money). 3
(e) Shareholder Servicing Agreement (Sansom Street Government Money). 3
(f) Shareholder Services Plan (Sansom Street Money). 3
(g) Shareholder Services Plan (Sansom Street Tax-Free Money). 3
(h) Shareholder Services Plan (Sansom Street Government Money). 3
(i) Transfer Agency Agreement (SafeGuard) between Registrant and
Provident Financial Processing Corporation, dated as of August
16, 1988. 3
(j) Transfer Agency Agreement (Bedford) between Registrant and
Provident Financial Processing Corporation, dated as of August
16, 1988. 3
(k) Transfer Agency Agreement (Income Opportunities) between
Registrant and Provident Financial Processing Corporation dated
June 25, 1990. 7
(l) Administration and Accounting Services Agreement between
Registrant and Provident Financial Processing Corporation,
relating to Government Securities Portfolio, dated as of April
10, 1991. 8
(m) Administration and Accounting Services Agreement between
Registrant and Provident Financial Processing Corporation,
relating to New York Municipal Money Market Portfolio dated as of
November 5, 1991. 9
(n) Administration and Accounting Services Agreement between
Registrant and Provident Financial Processing Corporation,
relating to Equity Portfolio dated as of November 5, 1991. 9
(o) Administration and Accounting Services Agreement between
Registrant and Provident Financial Processing Corporation,
relating to High Yield Bond Portfolio, dated as of April 10,
1991. 9
<PAGE>x
See
Exhibit Page Note #
(p) Administration and Accounting Services Agreement between
Registrant and Provident Financial Processing Corporation
(International) dated as of September 18, 1992. (q)
Administration and Accounting Services Agreement between
Registrant and Provident Financial Processing Corporation
(Strategic) dated September 18, 1992. 10
(r) Administration and Accounting Services Agreement between
Registrant and Provident Financial Processing Corporation
(Emerging) dated September 18, 1992. 10
(s) Transfer Agency Agreement and Supplements (Bradford, Alpha, Beta,
Gamma, Delta, Epsilon, Zeta, Eta and Theta) between Registrant
and Provident Financial Processing Corporation dated as of
November 5, 1991. 9
(t) Transfer Agency Agreement Supplement (BEA) between Registrant and
Provident Financial Processing Corporation. 10
(u) Administration Services Agreement between Registrant and
Counsellor's Fund Services, Inc. (BEA Portfolios) dated September
18, 1992. 10
(v) Administration and Accounting Services Agreement between
Registrant and Provident Financial Processing Corporation,
relating to Tax-Free Money Market Portfolio, dated as of April
21, 1992. 10
(w) Transfer Agency Agreement Supplement (Laffer) between Registrant
and PFPC Inc. dated as of July 21, 1993. 12
(x) Administration and Accounting Services Agreement between
Registrant and PFPC Inc., relating to Laffer/Canto Equity Fund,
dated July 21, 1993. 12
(y) Transfer Agency Agreement Supplemental (BEA U.S. Core Equity, BEA
U.S. Core Fixed Income, BEA Global Fixed Income and BEA Municipal
Bond Fund) between Registrant and PFPC Inc. dated as of October
27, 1993. 15
(z) Administration and Accounting Services Agreement between
Registrant and PFPC Inc., (Core Equity) dated October 27, 1993. 15
<PAGE>xi
See
Exhibit Page Note #
(aa) Administration and Accounting Services Agreement between
Registrant and PFPC Inc. (Core Fixed Income) dated October 27,
1993. 15
(bb) Administration and Accounting Services Agreement between
Registrant and PFPC Inc. (International Fixed Income) dated
October 27, 1993. 15
(cc) Administration and Accounting Services Agreement between
Registrant and PFPC Inc. dated October 27, 1993. 15
(dd) Transfer Agency Agreement Supplement (BEA Balanced and Short
Duration) between Registrant and PFPC Inc. dated October 26,
1994. 18
(ee) Administration and Accounting Services Agreement between
Registrant and PFPC Inc. (BEA Balanced) dated October 26, 1994. 18
(ff) Administration and Accounting Services Agreement between
Registrant and PFPC Inc. (BEA Short Duration) dated October 26,
1994. 18
(gg) Co-Administration Agreement between Registrant and PFPC Inc.
(Warburg Pincus Growth & Income Fund) dated August 4, 1994. 18
(hh) Co-Administration Agreement between Registrant and PFPC Inc.
(Warburg Pincus Balanced Fund) dated August 4, 1994. 18
(ii) Co-Administration Agreement between Registrant and Counsellors
Fund Service, Inc. (Warburg Pincus Growth Income Fund) dated
August 4, 1994. 18
(jj) Co-Administration Agreement between Registrant and Counsellors
Fund Service, Inc. (Warburg Pincus Balanced Fund) dated August 4,
1994. 18
(kk) Administrative Services Agreement Supplement between Registrant
and Counsellor's Fund Services, Inc. (BEA Classes) dated October
26, 1994. 18
(10) (a) Opinion of Counsel.
Incorporated by reference herein to Registrant's 24f-2 Notice for
the fiscal year ending August 31, 1994 filed on October 7, 1994.
(b) Consent of Counsel.
(11) Consent of Independent Accountants.
(12) None.
<PAGE>xii
See
Exhibit Page Note #
(13) (a) Subscription Agreement (relating to Classes A through N). 2
(b) Subscription Agreement between Registrant and Planco Financial
Services, Inc., relating to Classes O and P. 7
(c) Subscription Agreement between Registrant and Planco Financial
Services, Inc., relating to Class Q. 7
(d) Subscription Agreement between Registrant and Counsellors
Securities Inc. relating to Classes R, S, and Alpha 1 through
Theta 4. 9
(e) Subscription Agreement between Registrant and Counsellors
Securities Inc. relating to Classes T, U and V. 10
(f) Subscription Agreement between Registrant and Counsellors
Securities Inc. relating to Classes BB and CC. 18
(g) Purchase Agreement between Registrant and Counsellors Securities
Inc. relating to Classes DD and EE. 18
(14) None.
(15) (a) Plan of Distribution (Sansom Street Money). 3
(b) Plan of Distribution (Sansom Street Tax-Free Money). 3
(c) Plan of Distribution (Sansom Street Government Money). 3
(d) Plan of Distribution (Cash Preservation Money). 3
(e) Plan of Distribution (Cash Preservation Tax-Free Money). 3
(f) Plan of Distribution (SafeGuard Equity). 3
(g) Plan of Distribution (SafeGuard Fixed Income). 3
(h) Plan of Distribution (SafeGuard Balanced). 3
(i) Plan of Distribution (SafeGuard Tax-Free). 3
(j) Plan of Distribution (SafeGuard Money). 3
(k) Plan of Distribution (SafeGuard Tax-Free Money). 3
<PAGE>xiii
See
Exhibit Page Note #
(l) Plan of Distribution (Bedford Money). 3
(m) Plan of Distribution (Bedford Tax-Free Money). 3
(n) Plan of Distribution (Bedford Government Money). 3
(o) Plan of Distribution (Bedford New York Municipal Money). 7
(p) Plan of Distribution (SafeGuard Government Securities). 7
(q) Plan of Distribution (Income Opportunities High Yield). 7
(r) Amendment No. 1 to Plans of Distribution (Classes A through Q). 8
(s) Plan of Distribution (Bradford Tax-Free Money). 9
(t) Plan of Distribution (Bradford Government Money). 9
(u) Plan of Distribution (Alpha Money). 9
(v) Plan of Distribution (Alpha Tax-Free Money). 9
(w) Plan of Distribution (Alpha Government Money). 9
(x) Plan of Distribution (Alpha New York Money). 9
(y) Plan of Distribution (Beta Money). 9
(z) Plan of Distribution (Beta Tax-Free Money). 9
(aa) Plan of Distribution (Beta Government Money). 9
(bb) Plan of Distribution (Beta New York Money). 9
(cc) Plan of Distribution (Gamma Money). 9
(dd) Plan of Distribution (Gamma Tax-Free Money). 9
(ee) Plan of Distribution (Gamma Government Money). 9
(ff) Plan of Distribution (Gamma New York Money). 9
(gg) Plan of Distribution (Delta Money). 9
(hh) Plan of Distribution (Delta Tax-Free Money). 9
(ii) Plan of Distribution (Delta Government Money). 9
<PAGE>xiv
See
Exhibit Page Note #
(jj) Plan of Distribution (Delta New York Money). 9
(kk) Plan of Distribution (Epsilon Money). 9
(ll) Plan of Distribution (Epsilon Tax-Free Money). 9
(mm) Plan of Distribution (Epsilon Government Money). 9
(nn) Plan of Distribution (Epsilon New York Money). 9
(oo) Plan of Distribution (Zeta Money). 9
(pp) Plan of Distribution (Zeta Tax-Free Money). 9
(qq) Plan of Distribution (Zeta Government Money). 9
(rr) Plan of Distribution (Zeta New York Money). 9
(ss) Plan of Distribution (Eta Money). 9
(tt) Plan of Distribution (Eta Tax-Free Money). 9
(uu) Plan of Distribution (Eta Government Money). 9
(vv) Plan of Distribution (Eta New York Money). 9
(ww) Plan of Distribution (Theta Money). 9
(xx) Plan of Distribution (Theta Tax-Free Money). 9
(yy) Plan of Distribution (Theta Government Money). 9
(zz) Plan of Distribution (Theta New York Money). 9
(aaa) Plan of Distribution (Laffer Equity). 12
(bbb) Plan Distribution (Warburg Pincus Growth & Income Series 2). 18
(ccc) Plan of Distribution (Warburg Pincus Balanced Series 2). 18
(16) Schedule of Computation of Performance Quotations. 3
(17) Representation of Ballard Spahr Andrews & Ingersoll pursuant to Rule
485(b) under the Securities Act of 1953.
- -----------------
<FN>
1 Incorporated herein by reference to the same exhibit number of
Registrant's Registration Statement (No. 33-20827) filed on March 24,
1988.
<PAGE>xv
2 Incorporated herein by reference to the same exhibit number of
Pre-Effective Amendment No. 2 to Registrant's Registration Statement
(No. 33-20827) filed on July 12, 1988.
3 Incorporated herein by reference to the same exhibit number of
Post-Effective Amendment No. 1 to Registrant's Registration Statement
(No. 33-20827) filed on March 23, 1989.
4 Incorporated herein by reference to the same exhibit number of
Post-Effective Amendment No. 2 to Registrant's Registration Statement
(No. 33-20827) filed on October 25, 1989.
5 Incorporated herein by reference to the same exhibit number of
Post-Effective Amendment No. 3 to the Registrant's Registration
Statement (No. 33-20827) filed on April 27, 1990.
6 Incorporated herein by reference to the same exhibit number of
Post-Effective Amendment No. 4 to the Registrant's Registration
Statement (No. 33-20827) filed on May 1, 1990.
7 Incorporated herein by reference to the same exhibit number of
Post-Effective Amendment No. 5 to the Registrant's Registration
Statement (No. 33-20827) filed on December 14, 1990.
8 Incorporated herein by reference to the same exhibit number of
Post-Effective Amendment No. 6 to the Registrant's Registration
Statement (No. 33-20827) filed on October 24, 1991.
9 Incorporated herein by reference to the same exhibit number of
Post-Effective Amendment No. 7 to the Registrant's Registration
Statement (No. 33-20827) filed on July 15, 1992.
10 Incorporated herein by reference to the same exhibit number of
Post-Effective Amendment No. 8 to the Registrant's Registration
Statement (No. 33-20827) filed on October 22, 1992.
11 Incorporated herein by reference to the same exhibit number of
Post-Effective Amendment No. 9 to the Registrant's Registration
Statement (No. 33-20827) filed on December 16, 1992.
12 Incorporated herein by reference to the same exhibit number of Post
Effective Amendment No. 11 to the Registration Statement (No.
33-20827) filed on June 21, 1993.
13 Incorporated herein by reference to the same exhibit number of
Post-Effective Amendment No. 12 to Registration Statement (No.
33-20827) filed on July 27, 1993.
14 Incorporated herein by reference to the same exhibit number of
Post-Effective Amendment No. 13 to Registration Statement (No.
33-20827 filed on October 29, 1993.
<PAGE>xvi
15 Incorporated herein by reference to the same exhibit number of
Post-Effective Amendment No. 14 to Registration Statement (No.
33-20827) filed on December 21, 1993.
16 Incorporated herein by reference to the same exhibit number of
Post-Effective Amendment No. 19 to Registration Statement (No.
33-20827) filed on October 14, 1994.
17 Incorporated herein by reference to the same exhibit number of
Post-Effective Amendment No. 20 to Registration Statement (No.
33-20827) filed on October 21, 1994.
18 Incorporated herein by reference to the same exhibit number of
Post-Effective Amendment No. 21 to Registration Statement (No.
33-20827) filed on October 28, 1994.
19 Incorporated herein by reference to the same exhibit number of
Post-Effective Amendment No. 22 to Registration Statement (No.
33-20827) filed on December 19, 1994.
</FN>
</TABLE>
Exhibit (10)(b)
CONSENT
We hereby consent to the use of our name under the caption
"Miscellaneous-Counsel" in the Statement of Additional Information of
Post-Effective Amendment No. 25 to the Registration Statement on Form N-1A of
The RBB Fund, Inc. (Registration No. 33-20827) filed under the Securities Act of
1933 and Amendment No. 27 under the Investment Company Act of 1940.
/s/ Ballard Spahr Andrews & Ingersoll
-------------------------------------
Ballard Spahr Andrews & Ingersoll
February 7, 1995
Exhibit (11)
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the following with respect to Post-Effective Amendment No.
25 to the Registration Statement (No. 33-20827) on Form N-1A under the
Securities Act of 1933, as amended, of The RBB Fund, Inc.:
* The inclusion of our report dated October 14, 1994 on our audit
of the financial statements and financial highlights of The RBB
Fund, Inc., in the Statement of Additional Information.
* The reference to our Firm under the headings "Financial
Highlights" in the Prospectus and under the heading "Independent
Accountants" in the Statement of Additional Information.
/s/ Coopers & Lybrand L.L.P.
- ----------------------------
COOPERS & LYBRAND L.L.P.
Philadelphia, Pennsylvania
February 3, 1995
Exhibit (17)
REPRESENTATION OF COUNSEL PURSUANT TO RULE
485 (b) UNDER THE SECURITIES ACT OF 1933
We hereby represent that Post-Effective Amendment No. 25 to the
Registration Statement on Form N-1A of The RBB Fund, Inc. (Registration No.
33-20827) filed with the Securities and Exchange Commission under the Securities
Act of 1933 and the Investment Company Act of 1940 contains no disclosures which
would render it ineligible to become effective pursuant to paragraph (b) of Rule
485 under the Securities Act of 1933.
/s/ Ballard Spahr Andrews & Ingersoll
--------------------------------------
Ballard Spahr Andrews & Ingersoll
February 7, 1995
