<PAGE>
DEAR SHAREHOLDER:
I'm pleased to report to you on the performance of the Schwab Institutional
Advantage Money Fund-Registered Trademark- for the fiscal year ended
December 31, 1997. During the reporting period, the Fund provided you with
current income consistent with preservation of capital. By the end of the
reporting period, the Schwab Institutional Advantage Money Fund's net assets had
increased to over $275 million.
PERFORMANCE REVIEW
The table below presents 7-day yields for the Schwab Institutional Advantage
Money Fund at the end of the reporting period. Bear in mind that, as with all
money market funds, past performance is no guarantee of future results. Also
note that, although the Fund seeks to maintain a stable $1.00 share price, money
market funds are neither insured nor guaranteed by the U.S. government and there
can be no assurance that the Fund will be able to maintain a stable net asset
value per share.
7-Day Average Yields (1)
(12/31/97)
<TABLE>
<CAPTION>
Current Effective
<S> <C> <C>
Schwab Institutional Advantage
Money Fund 5.37% 5.52%
</TABLE>
Enclosed you will find a complete listing of the Fund's holdings as of
December 31, 1997.
We appreciate your confidence in SchwabFunds-Registered Trademark- and look
forward to continuing to help you achieve your financial goals in the future.
Sincerely,
/s/ CHARLES R. SCHWAB
Charles R. Schwab
Chairman
The Charles Schwab Family of Funds
1. A portion of the Fund's fees were waived or reimbursed during the reporting
period. Without the waivers or reimbursements, the 7-day current yield would
have been 5.02% and the 7-day effective yield would have been 5.15% as of
December 31, 1997.
<PAGE>
SCHWAB INSTITUTIONAL ADVANTAGE MONEY FUND-Registered Trademark-
- --------------------------------------------------------------------------------
PORTFOLIO SUMMARY
<TABLE>
<CAPTION>
ASSET GROWTH
Total Total Percentage
Net Assets Net Assets Growth Over
as of 12/31/97 as of 12/31/96 Reporting
(000s) (000s) Period
- --------------------------------------------------------------------------------
<S> <C> <C>
$275,337 $139,021 98%
- --------------------------------------------------------------------------------
</TABLE>
AVERAGE YIELDS FOR THE YEAR ENDED DECEMBER 31, 1997*
<TABLE>
<CAPTION>
Last Last Last
Seven Days Three Months Twelve Months
- --------------------------------------------------------------------------------
<S> <C> <C>
5.37% 5.26% 5.18%
- --------------------------------------------------------------------------------
</TABLE>
MATURITY SCHEDULE
PERCENT OF TOTAL INVESTMENTS
<TABLE>
<CAPTION>
Maturity Range 3/31/97 6/30/97 9/30/97 12/31/97
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
0 - 15 Days 20.5% 36.6% 38.6 12.7
16 - 30 Days 19.9 17.0 13.7 20.8
31 - 60 Days 17.4 7.1 21.3 17.5
61 - 90 Days 23.9 11.7 14.3 23.2
91 -120 Days 15.0 12.8 0.4 15.6
Over 120 Days 3.3 14.8 11.7 10.2
Weighted Average 52 Days 53 Days 46 Days 62 Days
- --------------------------------------------------------------------------------
</TABLE>
PORTFOLIO QUALITY
<TABLE>
<CAPTION>
Percent of
SEC Tier Net Assets
Rating 12/31/97
------------------------------------
<S> <C>
Tier 1 100.0%
Tier 2 0.0
------------------------------------
</TABLE>
* A portion of the Fund's expenses were reduced during the periods. Had these
expenses not been reduced, yields would have been lower.
<PAGE>
SCHWAB INSTITUTIONAL ADVANTAGE MONEY FUND -Registered Trademark-
SCHEDULE OF INVESTMENTS (IN THOUSANDS)
DECEMBER 31, 1997
<TABLE>
<CAPTION>
Par Value
--- -----
<S> <C> <C>
COMMERCIAL PAPER AND OTHER CORPORATE OBLIGATIONS - 77.8%(a)
AUTOMOBILE RECEIVABLES - 2.2%
New Center Asset Trust
5.86%, 03/17/98 $6,000 $5,928
-------
AUTOMOTIVE - 6.9%
Ford Credit Europe PLC
5.66%, 04/09/98 7,000 6,895
General Motors Acceptance Corp.
5.79%, 04/16/98 6,000 5,902
5.74%, 05/08/98 6,000 5,882
-------
18,679
-------
BANKING-AUSTRALIA - 1.8%
National Australia Funding (Delaware)
5.69%, 03/13/98 5,000 4,945
-------
BANKING-BELGIUM - 5.5%
BBL North America
5.80%, 02/25/98 10,000 9,913
Generale Bank, Inc.
5.70%, 02/13/98 5,000 4,967
-------
14,880
-------
BANKING-DENMARK - 2.2%
Unifunding, Inc.
5.66%, 01/20/98 6,000 5,982
-------
BANKING-GERMANY - 1.8%
Comision Federal de Electricidad / (Westdeutsche Landesbank LOC)
5.86%, 02/12/98 5,000 4,966
-------
BANKING-SPAIN - 4.7%
BEX America Finance, Inc.
5.79%, 02/24/98 5,000 4,957
5.84%, 03/06/98 8,000 7,918
-------
12,875
-------
BANKING-SWEDEN - 4.3%
Nordbanken of North America, Inc.
5.83%, 03/16/98 12,000 11,858
-------
BANKING-UNITED KINGDOM - 4.3%
Abbey National N.A. Corp.
5.65%, 04/01/98 12,000 11,835
-------
COMPUTERS AND OFFICE EQUIPMENT - 2.2%
CSC Enterprises
5.88%, 03/12/98 6,000 5,932
-------
DIVERSIFIED FINANCIAL ASSETS - 3.3%
Sigma Finance Inc.
5.74%, 02/27/98 9,000 8,920
-------
</TABLE>
1
<PAGE>
SCHWAB INSTITUTIONAL ADVANTAGE MONEY FUND -Registered Trademark-
SCHEDULE OF INVESTMENTS (IN THOUSANDS)
DECEMBER 31, 1997
<TABLE>
<CAPTION>
Par Value
--- -----
<S> <C> <C>
FINANCE-COMMERCIAL - 10.2%
Finova Capital Corp.
5.89%, 03/24/98 $2,000 $1,974
General Electric Capital Corp.
5.71%, 03/27/98 6,000 5,921
General Electric Capital Services
5.71%, 02/13/98 7,000 6,954
Heller Financial, Inc.
5.78%, 01/14/98 1,000 998
6.07%, 01/26/98 6,000 5,975
5.80%, 02/10/98 6,000 5,962
-------
27,784
-------
MISCELLANEOUS SERVICES - 4.4%
PHH Corp.
5.64%, 01/20/98 12,000 11,965
-------
MORTGAGE BANKING - 4.4%
Countrywide Home Loans, Inc.
6.47%, 01/09/98 5,000 4,993
5.88%, 01/21/98 7,000 6,977
-------
11,970
-------
SECURITIES BROKERAGE-DEALER - 19.6%
BT Alex Brown Inc.
5.73%, 04/10/98 3,000 2,954
Goldman Sachs Group, LP
5.82%, 05/22/98 9,000 8,801
5.83%, 05/26/98 1,000 977
Lehman Brothers Holdings, Inc.
6.17%, 01/09/98 2,000 1,997
6.04%, 01/28/98 2,000 1,991
5.85%, 01/29/98 7,000 6,969
5.80%, 02/13/98 1,000 993
Morgan Stanley-Dean Witter, Discover
5.87%, 03/25/98 12,000 11,840
PaineWebber Group, Inc.
5.87%, 01/22/98 13,000 12,957
Salomon, Inc.
5.87%, 01/28/98 4,000 3,983
-------
53,462
-------
TOTAL COMMERCIAL PAPER AND OTHER CORPORATE OBLIGATIONS
(Cost $211,981) 211,981
-------
CERTIFICATES OF DEPOSIT - 7.7%
BANKING-CANADA - 0.4%
Bank of Nova Scotia
6.05%, 06/29/98 1,000 1,000
-------
BANKING-DOMESTIC - 6.2%
Chase Manhattan Bank USA
5.65%, 04/07/98 10,000 9,999
Wilmington Trust Company
5.70%, 03/20/98 7,000 7,000
-------
16,999
-------
</TABLE>
2
<PAGE>
SCHWAB INSTITUTIONAL ADVANTAGE MONEY FUND -Registered Trademark-
SCHEDULE OF INVESTMENTS (IN THOUSANDS)
DECEMBER 31, 1997
<TABLE>
<CAPTION>
Par Value
--- -----
<S> <C> <C>
BANKING-FRANCE - 1.1%
Societe Generale
5.90%, 08/21/98 $3,000 $2,999
-------
TOTAL CERTIFICATES OF DEPOSIT (Cost $20,998) 20,998
-------
BANK NOTES - 4.8%
BANKING-DOMESTIC - 4.8%
Bank of Boston N.A.
5.65%, 04/06/98 5,000 5,000
5.82%, 05/13/98 8,000 8,000
-------
TOTAL BANK NOTES (Cost $13,000) 13,000
-------
VARIABLE RATE OBLIGATIONS - 3.7%(a)(b)
BANKING-DOMESTIC - 3.7%
City of Aurora, Kane, Dupage, Will and Kendall Counties, Illinois Taxable
Variable Rate Demand Industrial Development Revenue Bonds Series 1996B /
(First of America Bank-ILL NA-LOC)
6.10%, 01/07/98 2,175 2,175
Illinois Development Finance Authority Taxable Adjustable Rate Industrial
Development Revenue Bonds (Maples & Sprowl Steel, LTD. Project) Series
1996B / (LaSalle National Bank LOC)
6.10%, 01/07/98 828 828
MoviePlex Realty Leasing, L.L.C. Adjustable Rate Tender Securities (Carmike
Cinemas) Series 1997B-3 / (Bank of New York LOC)
5.96%, 01/07/98 2,675 2,675
New York City Industrial Development Authority Taxable Variable Rate
Demand Industrial Revenue Bonds (1997 Allway Tools, Inc. Project) /
(Citibank LOC)
6.30%, 01/07/98 200 200
Starcrest of Cartersville Series 95A / (PNC Kentucky LOC)
6.25%, 01/07/98 2,420 2,420
Upper Illinois River Valley Development Authority Taxable Variable Rate
Demand Solid Waste Disposal Revenue Bonds (Exolon - ESK Company
Project) Series 1996B / (Chase Manhattan Bank LOC)
6.10%, 01/07/98 2,000 2,000
-------
TOTAL VARIABLE RATE OBLIGATIONS (Cost $10,298) 10,298
-------
REPURCHASE AGREEMENTS - 6.0%(c)
Maturity
--------
Salomon Brothers, Inc. 6.80%, Issue Date 12/31/97
Due 01/02/98; Tri-Party Repurchase Agreement;
Collateralized By: U.S. Government Agency Obligations 16,382 16,376
-------
TOTAL REPURCHASE AGREEMENTS (Cost $16,376) 16,376
-------
TOTAL INVESTMENTS - 100%
(Cost $272,653) 272,653
-------
</TABLE>
See accompanying Notes to Schedule of Investments and Notes to Financial
Statements.
3
<PAGE>
SCHWAB INSTITUTIONAL ADVANTAGE MONEY FUND -Registered Trademark-
SCHEDULE OF INVESTMENTS (IN THOUSANDS)
DECEMBER 31, 1997
NOTES TO SCHEDULE OF INVESTMENTS
Yields shown are effective yields at the time of purchase, except for
variable rate securities which are described below and agency coupon notes
which reflect the coupon rate of the security. Yields for each type of
security are stated according to the market convention for that security
type. For each security, cost (for financial reporting and federal income
tax purposes) and carrying value are the same.
(a) Certain securities purchased by the Fund are private placement securities
exempt from registration by Section 4(2) of the Securities Act of 1933.
These securities generally are issued to institutional investors, such as the
Schwab Institutional Advantage Money Fund. Any resale by the Fund must be
in an exempt transaction, normally to a qualified institutional buyer. At
December 31, 1997, the aggregate value of private placement securities held
by the Fund was $12,168,000 which represented 4.42% of net assets. All of
these private placement securities were determined by the Investment Manager
to be liquid in accordance with procedures adopted by the Board of Trustees.
(b) Variable rate securities. Interest rates vary periodically based on
current market rates. Rates shown are the effective rates as of the report
date. Dates shown represent the earlier of the demand date or next interest
rate change date, which is considered the maturity date for financial
reporting purposes. For variable rate securities without demand features,
the next interest reset date is shown.
(c) Due dates shown for repurchase agreements represent either the final
maturity date or put date, which is considered the maturity date for
financial reporting purposes. Repurchase Agreements are payable on seven-day
demand.
Abbreviations
- -------------
LOC Letter of Credit
See accompanying Notes to Financial Statements.
4
<PAGE>
SCHWAB INSTITUTIONAL ADVANTAGE MONEY FUND-Registered Trademark-
- -------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES (in thousands)
December 31, 1997
<TABLE>
<S> <C>
ASSETS
Investments, at value (Cost: $272,653) $272,653
Receivables:
Interest 532
Fund shares sold 5,745
Deferred organization costs 10
Prepaid expenses 33
--------
Total assets 278,973
--------
LIABILITIES
Payables:
Dividends 1,783
Fund shares redeemed 1,689
Investment advisory and administration fees 7
Transfer agency and shareholder service fees 17
Other Liabilities 140
--------
Total liabilities 3,636
--------
Net assets applicable to outstanding shares $275,337
--------
--------
NET ASSETS CONSIST OF:
Paid-in-capital $275,340
Accumulated net realized loss on investments sold (3)
--------
$275,337
--------
--------
PRICING OF SHARES
Outstanding shares, $0.00001 par value
(unlimited shares authorized) 275,340
Net asset value, offering and redemption price per share $1.00
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
5
<PAGE>
SCHWAB INSTITUTIONAL ADVANTAGE MONEY FUND-Registered Trademark
- -------------------------------------------------------------------------------
STATEMENT OF OPERATIONS (in thousands)
Year ended December 31, 1997
<TABLE>
<S> <C>
Interest income $ 14,314
--------
Expenses:
Investment advisory and administration fees 1,156
Transfer agency and shareholder service fees 628
Custodian fees 123
Registration fees 122
Professional fees 27
Shareholder reports 11
Trustees' fees 13
Amortization of deferred organization costs 12
Insurance and other expenses 12
--------
2,104
Less: expenses reduced (see Note 4) (848)
--------
Total expenses incurred by Fund 1,256
--------
Net investment income 13,058
Increase in net assets resulting from operations $ 13,058
--------
--------
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
6
<PAGE>
SCHWAB INSTITUTIONAL ADVANTAGE MONEY FUND-Registered Trademark-
- -------------------------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS (in thousands)
<TABLE>
<CAPTION>
Year ended
December 31,
1997 1996
--------- ---------
<S> <C> <C>
Operations:
Net investment income $ 13,058 $ 5,656
Net realized (loss) on investments sold - (2)
--------- ---------
Increase in net assets resulting
from operations 13,058 5,654
--------- ---------
Dividends to shareholders from
net investment income (13,058) (5,656)
--------- ---------
Capital share transactions (at $1.00 per share):
Proceeds from shares sold 612,896 369,135
Net asset value of shares issued in
reinvestment of dividends 10,165 4,155
Less payments for shares redeemed (486,745) (315,013)
--------- ---------
Increase in net assets from
capital share transactions 136,316 58,277
--------- ---------
Total increase in net assets 136,316 58,275
Net Assets:
Beginning of period 139,021 80,746
--------- ---------
End of period $275,337 $139,021
--------- ---------
--------- ---------
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
7
<PAGE>
SCHWAB INSTITUTIONAL ADVANTAGE MONEY FUND-Registered Trademark-
- -------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
For a share outstanding throughout each period:
<TABLE>
<CAPTION>
Year ended Period ended
December 31, December 31,
1997 1996 1995 1994(1)
-------- -------- ------- ------------
<S> <C> <C> <C> <C>
Net asset value at beginning of period $ 1.00 $ 1.00 $ 1.00 $ 1.00
INCOME FROM INVESTMENT OPERATIONS
Net investment income 0.05 0.05 0.06 0.04
Net realized and unrealized gain on investments - - - -
-------- -------- ------- ----------
Total from investment operations 0.05 0.05 0.06 0.04
LESS DISTRIBUTIONS
Dividends from net investment income (0.05) (0.05) (0.06) (0.04)
-------- -------- ------- ----------
Total distributions (0.05) (0.05) (0.06) (0.04)
-------- -------- ------- ----------
Net asset value at end of period $ 1.00 $ 1.00 $ 1.00 $ 1.00
-------- -------- ------- ----------
-------- -------- ------- ----------
TOTAL RETURN (not annualized) 5.31% 5.15% 5.65% 3.86%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000s) $275,337 $139,021 $80,746 $60,088
Ratio of expenses to average net assets+ 0.50% 0.50% 0.53% 0.55%*
Ratio of net investment income to average net assets+ 5.20% 5.03% 5.50% 4.04%*
____________
+ The information contained in the above table is based on actual expenses
for the periods, after giving effect to the portion of expenses reduced and
absorbed by the Investment Manager and Schwab. Had these expenses not been
reduced and absorbed, the Fund's expense and net investment income ratios
would have been:
Ratio of expenses to average net assets 0.84% 0.88% 0.90% 0.92%*
Ratio of net investment income to average net assets 4.86% 4.65% 5.13% 3.67%*
</TABLE>
(1) For the period from January 4, 1994 (commencement of operations) to
December 31, 1994.
* Annualized
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
8
<PAGE>
SCHWAB INSTITUTIONAL ADVANTAGE MONEY FUND-Registered Trademark-
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
Year ended December 31, 1997
1. DESCRIPTION OF THE FUND
The Schwab Institutional Advantage Money Fund (the "Fund") is a series of The
Charles Schwab Family of Funds (the "Trust"), a no-load, open-end investment
management company organized as a Massachusetts business trust on October 20,
1989 and registered under the Investment Company Act of 1940, as amended.
In addition to the Fund, the Trust also offers -- the Schwab Money Market Fund,
Schwab Government Money Fund, Schwab U.S. Treasury Money Fund, Schwab Municipal
Money Fund, Schwab California Municipal Money Fund, Schwab New York Municipal
Money Fund, Schwab Value Advantage Money Fund-Registered Trademark-, Schwab
Retirement Money Fund-Registered Trademark- and Schwab Government Cash Reserves.
(The Schwab Government Cash Reserves was effective on October 20, 1997.
However, the Fund has not commenced operations). The assets of each series are
segregated and accounted for separately.
2. SIGNIFICANT ACCOUNTING POLICIES
The following significant accounting policies are in conformity with generally
accepted accounting principles for investment companies. The preparation of
financial statements in accordance with generally accepted accounting principles
requires management to make estimates and assumptions that affect the reported
amounts and disclosures in the financial statements. Actual results could
differ from those estimates.
SECURITY VALUATION - Investments are stated at amortized cost which approximates
market value.
SECURITY TRANSACTIONS, INTEREST INCOME AND REALIZED GAINS (LOSSES) - Security
transactions are accounted for on a trade date basis (date the order to buy or
sell is executed). Interest income is accrued daily and includes amortization
of premium and accretion of discount on investments. Realized gains and losses
from security transactions are determined on an identified cost basis.
REPURCHASE AGREEMENTS - Repurchase agreements are fully collateralized by U.S.
Treasury or U.S. government agency obligations. All collateral is held by the
Fund's custodian, except in the case of a tri-party agreement, the collateral is
held by an agent bank. The collateral is monitored daily to ensure that its
market value at least equals the repurchase price under the agreement.
DIVIDENDS TO SHAREHOLDERS - The Fund declares a daily dividend, equal to its net
investment income for that day, payable monthly.
DEFERRED ORGANIZATION COSTS - Costs incurred in connection with the organization
of the Fund and its initial registration with the Securities and Exchange
Commission are amortized on a straight-line basis over a five-year period from
the Fund's commencement of operations.
9
<PAGE>
SCHWAB INSTITUTIONAL ADVANTAGE MONEY FUND-Registered Trademark-
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
Year ended December 31, 1997
EXPENSES - Expenses arising in connection with the Fund are charged directly to
the Fund. Expenses common to all series of the Trust are generally allocated to
each series in proportion to their relative net assets.
FEDERAL INCOME TAXES - It is the Fund's policy to meet the requirements of the
Internal Revenue Code applicable to regulated investment companies and to
distribute all of its net investment income and realized net capital gains, if
any, to shareholders. Therefore, no federal income tax provision is required.
The Fund is considered a separate entity for tax purposes.
3. TRANSACTIONS WITH AFFILIATES
INVESTMENT ADVISORY AND ADMINISTRATION AGREEMENT - The Trust has investment
advisory and administration agreements with Charles Schwab Investment
Management, Inc. (the "Investment Manager"). For advisory services and
facilities furnished, the Fund pays an annual fee, payable monthly, of 0.46%
of the first $1 billion of average daily net assets, 0.45% the next $2
billion, 0.40% of the next $7 billion, 0.37% of the next $10 billion, and
0.34% of such assets in excess of $20 billion. The Investment Manager has
reduced a portion of its fee for the year ended December 31, 1997 (see Note
4).
TRANSFER AGENCY AND SHAREHOLDER SERVICE AGREEMENTS - The Trust has transfer
agency and shareholder service agreements with Charles Schwab & Co., Inc.
("Schwab"). For services provided under these agreements, Schwab receives an
annual fee, payable monthly, of 0.25% of average daily net assets. Schwab has
reduced a portion of its fee for the year ended December 31, 1997 (see Note 4).
OFFICERS AND TRUSTEES -Certain officers and trustees of the Trust are also
officers and/or directors of the Investment Manager and/or Schwab. During the
year ended December 31, 1997, the Trust made no direct payments to its officers
or trustees who are "interested persons" within the meaning of the Investment
Company Act of 1940, as amended. The Fund incurred fees of $13,000 related to
the Trust's unaffiliated trustees.
4. EXPENSES REDUCED BY THE INVESTMENT MANAGER AND SCHWAB
The Investment Manager and Schwab guarantee that, through at least April 30,
1998, the Fund's total operating expenses will not exceed 0.50% of the Fund's
average daily net assets, after reductions and reimbursements. For the purpose
of this guarantee, operating expenses do not include interest expenses,
extraordinary expenses and taxes.
The Investment Manager and Schwab reduced a portion of their fees in order to
limit the Fund's ratio of operating expenses to average net assets. For the
year ended December 31, 1997, the total of such fees reduced by the Investment
Manager and Schwab was $768,000 and $80,000, respectively (see Financial
Highlights).
10
<PAGE>
To the Trustees
and Shareholders of Schwab Institutional Advantage Money Fund-Registered
Trademark-
In our opinion, the accompanying statement of assets and liabilities,
including the schedule of investments, and the related statements of
operations and of changes in net assets and the financial highlights present
fairly, in all material respects, the financial position of the Schwab
Institutional Advantage Money Fund (one of the series constituting The
Charles Schwab Family of Funds, hereafter referred to as the "Trust") at
December 31, 1997, the results of its operations for the year then ended, and
the changes in its net assets and the financial highlights for the periods
presented, in conformity with generally accepted accounting principles.
These financial statements and financial highlights (hereafter referred to as
"financial statements") are the responsibility of the Trust's management; our
responsibility is to express an opinion on these financial statements based
on our audits. We conducted our audits of these financial statements in
accordance with generally accepted auditing standards which require that we
plan and perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures
in the financial statements, assessing the accounting principles used and
significant estimates made by management, and evaluating the overall
financial statement presentation. We believe that our audits, which included
confirmation of securities at December 31, 1997 by correspondence with the
custodian, and brokers, and the application of alternative auditing
procedures where confirmation from brokers were not received provide a
reasonable basis for the opinion expressed above.
PRICE WATERHOUSE LLP
San Francisco, California
January 30, 1998
11
