File No. 33-34411
File No. 811-06096
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION
ON APRIL 29, 1998
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 [ ]
POST-EFFECTIVE AMENDMENT NO. 8 [x]
and
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 [ ]
AMENDMENT NO. 11 [x]
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THE TORRAY FUND
(Exact Name of Registrant as Specified in Charter)
6610 Rockledge Drive, Bethesda, Maryland 20817
(Address of Principal Executive Offices)
Registrant's Telephone Number, including Area Code:
(301)493-4600
William M Lane, President
The Torray Fund
6610 Rockledge Drive, Bethesda, Maryland 20817
(Name and Address of Agent for Service)
Copies of communications to:
John H. Grady, Jr., Esquire
Morgan, Lewis & Bockius LLP
1800 M Street, N.W.
Washington, D.C. 20036
It is proposed that this filing will become effective (check appropriate box)
X Immediately upon filing pursuant to paragraph (b), or
On pursuant to paragraph (b), or
60 days after filing pursuant to paragraph (a), or
On [date] pursuant to paragraph (a) of Rule 485.
<PAGE>
THE TORRAY FUND
CROSS REFERENCE SHEET
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N-1A ITEM NUMBER LOCATION
================= ========
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PART A
Item 1. Cover Page Cover Page
Item 2. Synopsis Schedule of Fees
Item 3. Condensed Financial Information Financial Highlights
Item 4. General Description of Registrant Organization and Capitalization of the
Fund; Investment Objective, Policies, and
Risk Factors
Item 5. Management of the Fund Management of the Fund
Item 5A. Management's Discussion of Fund **
Performance
Item 6. Capital Stock and Other Securities Organization and Capitalization of the
Fund; Federal Income Taxes;
Distributions
Item 7. Purchase of Securities Being Offered How to Buy Shares; How Net Asset
Value Is Determined
Item 8. Redemption or Repurchase How to Redeem
Item 9. Pending Legal Proceedings *
PART B
Item 10. Cover Page Cover Page
Item 11. Table of Contents Table of Contents
Item 12. General Information and History *
Item 13. Investment Objective and Policies Investment Objectives and Policies;
Miscellaneous Investment Practices; Note
on Shareholder Approval; Investment
Restrictions
Item 14. Management of the Fund Management of the Fund
i
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Item 15. Control Persons and Principal Holders Management of the Fund
of Securities
Item 16. Investment Advisory and Other Management of the Fund; Other Services
Services
Item 17. Brokerage Allocation Portfolio Transactions
Item 18. Capital Stock and Other Securities Organization and Capitalization of the
Fund; Shareholder Liability; Distributions
Item 19. Purchase, Redemption, and Pricing of How Net Asset Value is Determined;
Securities Being Offered How to Redeem
Item 20. Tax Status Taxes
Item 21. Underwriters *
Item 22. Calculation of Performance Data Calculation of Return; Performance
Comparisons
Item 23. Financial Statements Financial Statements
</TABLE>
PART C
Information required to be included in Part C is set forth under the appropriate
item, so numbered, in Part C of this Registration Statement
* Not Applicable
** Information required under Item 5A is contained in the Fund's Annual Reports
to Shareholders.
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<PAGE>
THE TORRAY FUND
The Torray Fund (the "Fund") is a no load, open-end, diversified
management investment company. The Torray Corporation (the "Manager") serves as
the Fund's investment manager.
This Prospectus concisely describes the information which investors should
know before investing. Please read this Prospectus carefully and keep it for
future reference. A Statement of Additional Information dated April 30, 1998
(the "Statement") is available free of charge by writing to The Torray
Corporation, 6610 Rockledge Drive, Bethesda, Maryland 20817, or by telephoning
toll free at 1-(800)-443-3036. The Statement, which contains more detailed
information about the Fund, has been filed with the Securities and Exchange
Commission and is incorporated by reference in this Prospectus.
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 ON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
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The Date of this Prospectus is April 30, 1998
<PAGE>
SCHEDULE OF FEES
The expenses of the Fund are set forth in the following table, the form of
which is prescribed by federal securities laws and regulations.
SHAREHOLDER TRANSACTION EXPENSES
There are no shareholder transaction expenses such as sales loads, 12b-1,
or exchange fees.
ANNUAL FUND OPERATING EXPENSES
(As a percentage of average net assets)
<TABLE>
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Management Fees 1.00%
Other Expenses (1)(2) .09%
----
Total Operating Expenses (3) 1.09%
====
</TABLE>
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(1) These amounts have been restated to reflect anticipated expense levels as
of March 31, 1998.
(2) Redemption proceeds wired to a designated account at a shareholder's
request for amounts less than $10,000 will be reduced by a wire redemption
fee (currently $10.00). Certain institutional clients will not be charged
this wire redemption fee.
(3) If you purchase Fund shares through a discount brokerage firm or other
financial institution, there may be fees or commissions charged by them
for shareholder transactions.
The purpose of this table is to assist prospective shareholders in
understanding the various costs and expenses of the Fund that reduce the amount
of income available for distribution to shareholders.
<TABLE>
<CAPTION>
1 Year 3 Years 5 Years 10 Years
-------- --------- --------- ---------
<S> <C> <C> <C> <C>
EXAMPLE:
You 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: $11 $35 $60 $133
</TABLE>
NOTE: The figures shown in the examples are entirely hypothetical. They are not
representations of past or future performance or expenses; actual performance
and/or expenses may be more or less than shown.
2
<PAGE>
FINANCIAL HIGHLIGHTS
The table below sets forth certain financial information with respect to
the per-share data and ratios for The Torray Fund for the periods indicated,
which have been derived from financial statements audited by the Fund's,
independent certified public accountants, whose report thereon is incorporated
by reference into the Statement of Additional Information. The financial
highlights for the year ended December 31, 1997 were audited by Briggs, Bunting
& Dougherty, LLP and the financial highlights for the periods ended prior to
1997 were audited by Johnson & Lambert & Co.
<TABLE>
<CAPTION>
Year Year Year Year
ended ended ended ended
12/31/97 12/31/96 12/31/95 12/31/94
PER SHARE DATA ($) ------------- ------------- ------------ ------------
<S> <C> <C> <C> <C>
Net Asset Value,
Beginning of Period .......................... $ 25.220 $ 20.110 $ 13.755 $ 14.273
Income From Investment Operations
- ---------------------------------
Net Investment Income ......................... 0.130 0.186 0.215 0.213
Net Gains on Securities
(both realized and unrealized) ............... 9.206 5.642 6.674 0.130
-------- -------- -------- ---------
Total from
Investment Operations ...................... 9.336 5.828 6.889 0.343
Less Distributions
- ------------------
Dividends
(from Net Investment Income) ................. (0.130) (0.187) (0.214) (0.213)
Distributions (from Capital Gains) ............ (0.576) (0.531) (0.320) (0.648)
-------- -------- -------- ---------
Total Distributions ........................ (0.706) (0.718) (0.534) (0.861)
-------- -------- -------- ---------
Net Asset Value, End of Period ................ $ 33.850 $ 25.220 $ 20.110 $ 13.755
TOTAL RETURN(3)................................ 37.12% 29.09% 50.41% 2.41%
RATIOS/SUPPLEMENTAL DATA ......................
Net Assets, End of Period
(000's omitted) .............................. $ 608,537 $ 116,593 $ 50,744 $ 23,362
Ratio of Expenses to Average Net Assets ....... 1.13% 1.25% 1.25% 1.25%
Ratio of Net Income to Average Net Assets ..... 0.47% 0.87% 1.31% 1.51%
Portfolio Turnover Rate ....................... 11.72% 20.95% 22.56% 36.63%
Average Actual Commissions
Paid Per share(4)............................. $ 0.0737 $ 0.0871 $ 0.0813 n/a
<CAPTION>
Year Year Year Year
ended ended ended ended
12/31/93 12/31/92 12/31/91 12/31/90(1)
PER SHARE DATA ($) ------------ ------------ ------------- ---------------
<S> <C> <C> <C> <C>
Net Asset Value,
Beginning of Period .......................... $ 13.743 $ 11.514 $ 9.999 $ 10.000
Income From Investment Operations
- ---------------------------------
Net Investment Income ......................... 0.122 0.180 0.232 0.005
Net Gains on Securities
(both realized and unrealized) ............... 0.745 2.229 1.728 0.000
--------- --------- --------- --------
Total from
Investment Operations ...................... 0.867 2.409 1.960 0.005
Less Distributions
- ------------------
Dividends
(from Net Investment Income) ................. (0.122) (0.180) (0.233) (0.006)
--------- --------- --------- --------
Distributions (from Capital Gains) ............ (0.215) 0.0000 (0.212) 0.0000
--------- ---------- --------- --------
Total Distributions ........................ (0.337) (0.180) (0.445) (0.006)
--------- ---------- --------- --------
Net Asset Value, End of Period ................ $ 14.273 $ 13.743 $ 11.514 $ 9.999
TOTAL RETURN(3) ............................... 6.37% 21.04% 19.98% (0.03%)
RATIOS/SUPPLEMENTAL DATA ......................
Net Assets, End of Period
(000's omitted) .............................. $ 19,666 $ 10,298 $ 4,423 $ 200
Ratio of Expenses to Average Net Assets ....... 1.25% 1.25% 1.25% 0.82%(1)
Ratio of Net Income to Average Net Assets ..... 0.94% 1.54% 2.43% 2.15%(1)
Portfolio Turnover Rate ....................... 29.09% 37.09% 21.17% n/a (2)
Average Actual Commissions
Paid Per share(4) ............................ n/a n/a n/a n/a
</TABLE>
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(1) Annualized. The Fund commenced operations on December 18, 1990.
(2) Not applicable.
(3) Past performance is not predictive of future performance.
(4) Does not include spreads on shares traded on a principal basis.
3
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INVESTMENT OBJECTIVE, POLICIES AND RISK FACTORS
The Fund's objective is to earn 15% per year compounded, measured over
long periods (10 years or more) and to defer shareholder tax liability on
appreciated assets so that earnings can be generated on money which otherwise
would be paid in taxes. In order to accomplish these goals, management intends
to hold stocks for the long term, as opposed to actively buying and selling. An
added benefit of the buy-and-hold approach is that brokerage commissions will
be contained. There can be no assurance that the Fund's objective will be
achieved.
The Manager's Investment Philosophy and Approach to Selecting Common Stocks
The Torray Corporation's investment philosophy is simple. Ordinarily, 90%
or more of the Fund's assets will be committed to common stocks. Any balance
will be held in U.S. Treasury bills or Treasury notes. No effort is made to
forecast the stock market. Businesses in which the Fund invests must have
favorable economic characteristics, generally including rising sales and
earnings, a strong competitive position, capable management and a balance sheet
appropriate to the nature of the enterprise. Central to the philosophy is the
fact that value derives from the business, not from the stock. Accordingly, the
Fund's management focuses on business fundamentals, as opposed to stock market
dynamics, the idea being that if a business performs, the stock will take care
of itself.
The Manager's stock selection process is also simple: management will buy,
at a fair price, stock in the best companies it can identify and keep them
indefinitely. Portfolio investments may include small, medium or large
capitalization companies. The latter have predominated in recent years because
management believes they have represented the best available values. However,
that could change if the prices of high quality, small or medium-size company
stocks drop significantly.
Generally speaking, there is widespread agreement among investors about
which companies enjoy the brightest economic outlook. Unfortunately for
prospective buyers, the shares of these businesses usually trade at a premium.
Sometimes they become so over-priced that an investor's potential return will
be almost certainly diminished, or a major loss will occur in the event
corporate performance deteriorates. It is important, therefore, when buying
stocks to carefully assess the prices at which they are offered so that the
advantage gained from owning a top-flight company is not lost to a
miscalculation of its value. Management's policy in this regard is to focus its
research on those quality businesses which, for any number of reasons, have
fallen from favor with investors. Typically, stocks of the companies selected
for evaluation will have already dropped in price -- often as much as 25% - 50%
- -- in response to a perceived reversal in corporate fortunes. The research
effort's objective is to determine whether prevailing negative investor
sentiment is based on a sound assessment of long- term prospects, or is related
more to temporary factors which have little or no bearing on the enterprises's
fundamental economic value. Although the picture is seldom black and white,
management finds that in many instances popular "expert" opinion is misguided
and overly pessimistic. It is in this circumstance, when both the fundamentals
and price are right, that the Fund will invest.
There are also conditions under which stocks may be sold. If management
identifies a compelling investment opportunity, but the Fund has no cash
reserves, stocks with the least promising prospects relative to all other
portfolio holdings will be sold to raise the purchase price. Shares also will
be sold in any business which is materially deteriorating. Finally, in order to
maintain reasonable diversification, a stock or industry grouping of stocks may
be partially sold if, as a result of appreciation, either has become too large
a percentage of the Fund's assets. Generally speaking, and consistent with its
status as a diversified investment company, the Fund may hold up to 7% or 8% of
its assets in a single stock and may invest up to 25% in one industry group.
4
<PAGE>
Risk Factors Associated With Investing In Common Stocks
Three types of risk attach to investments in common stocks -- "business
risk," "systemic risk," and "market risk." The Fund's management, the Torray
Corporation, believes that long-term investors should be concerned only with
business risk. Business risk is the chance that something permanent goes wrong
with a company. When it does, shareholders lose money. The causes vary, but
often include intensifying competition, declining market share, contracting
profit margins, rising financial leverage, product obsolescence and weak
management. In such circumstances, the degree of risk to the investor is
directly related to the magnitude of business deterioration. While temporary
reversals are of little concern, serious problems sometimes lead to bankruptcy.
Most cases fall in-between. Mutual funds are subject to the same principle.
Their relative riskiness is a function of the economic profile of the companies
they own. In management's opinion, funds holding the stocks of important
high-quality businesses for long-term investment should entail little risk of
permanent loss except for those shareholders who choose, or are forced by
circumstance, to sell in a weak market. Funds comprised of lesser companies
will involve varying degrees of risk. As noted, the Torray Fund's policy is to
invest at a fair price in the best businesses it can identify and to hold them
indefinitely. In so doing, management believes that it can largely eliminate
the Fund's overall exposure to business risks. The other forms of risk --
"systemic" and "market" should not worry investors unduly. "Systemic risk"
denotes potential threats to the country's financial structure -- political
upheaval, runaway inflation or economic collapse, for instance. Such events
seem unlikely, and Torray Fund policies make no provision for defending against
them. "Market risk," in plain English, is the chance that when you want to
sell, you won't like the price. This experience is not unique to the stock
market, as many homeowners, art collectors and others have discovered. In order
to be successful, investors must accept the fact that although stocks of good
companies rise over long periods, they can trade at virtually any price in the
short run. Those who cannot tolerate fluctuations in the value of their
investments should seriously consider avoiding common stocks and mutual funds
that invest in them.
The investment objective and policies described in this Prospectus may be
changed without shareholder approval.
PORTFOLIO TURNOVER
While the Fund does not intend to engage in short term trading, portfolio
turnover is not a limiting factor with respect to investment decisions. For the
fiscal years ended December 31, 1997, 1996, and 1995, the Fund's portfolio
turnover rates were 11.72%, 20.95%, and 22.56%, respectively.
PERFORMANCE INFORMATION
From time to time, the Fund may make available certain information about
its performance. This information is based on the Fund's historical record and
is not intended to indicate future performance. When the Fund makes available
its total return, it will be calculated on an annualized basis for specified
periods of time, and may be calculated for the period since the start of the
Fund's operations. Total Return is measured by comparing the value of an
investment in the Fund at the beginning of the relevant period to the
redemption value of the investment at the end of the time period (assuming
reinvestment of any dividends or capital gains distributions).
HOW TO BUY SHARES
Shares of the Fund are continuously offered at net asset value, and there
are no sales charges on purchases of Fund shares. The minimum initial
investment is $10,000, and the minimum additional investment is $2,000.
5
<PAGE>
Orders for the purchase of shares of the Fund are executed at the net asset
value determined as of the next Valuation Time after receipt by the Fund's
transfer agent of all required documentation and funds representing the amount
of shares to be purchased. If payment for any shares requested to be purchased
is not received by the Fund's transfer agent prior to the Valuation Time on a
given day, the order will be effected at the Valuation Time on the following
Business Day. Shares will be eligible to receive dividends beginning the
following day. The Fund reserves the right to reject any order for the purchase
of its shares in whole or in part and the Fund reserves the right to refuse to
accept third party checks as payment for shares.
In the case of an initial investment, shares of the Fund may be purchased
by sending a check payable to "The Torray Fund," together with a completed
Application to:
The Torray Fund
c/o First Data Investor Services Group
3200 Horizon Drive
King of Prussia, PA 19406-0903
Shareholders should be aware that purchases and redemptions mailed to the
Fund at its address in Bethesda, Md. will not be effected until received by the
Fund's agent at the address(es) listed above.
Subsequent purchases may be made by mailing a check payable to "The Torray
Fund" to:
The Torray Fund
P.O. Box 412797
Kansas City, MO 64141-2797
(Please put your account number on your check.)
The Fund is also available through brokerage firms and other institutions.
If you place your order through a broker-dealer, you may be charged a fee for
its services. No such charge will be paid by an investor who purchases Fund
shares directly from the Fund as described above.
If you are interested in investing your IRA in the Fund, you will have to
establish a Transfer IRA or a Rollover IRA. Please call the Fund at
1-800-443-3036 to request an IRA package.
Shareholder inquiries may be directed to First Data Investor Services
Group, 3200 Horizon Drive, King of Prussia, PA 19406 or by calling
1-800-626-9769.
HOW TO REDEEM
Shares may be redeemed in writing or, for shareholders who elect this
privilege, by telephone. To redeem shares in writing, submit a written
redemption request directly to: The Torray Fund, c/o First Data Investor
Services Group, 3200 Horizon Drive, King of Prussia, PA 19406-0903. If the
shareholder is a corporation, partnership, agent, fiduciary or surviving joint
owner, additional documentation of a customary nature may be required. Where a
shareholder has chosen the telephone redemption option, shares may be redeemed
by telephone by calling toll-free 1-800-626-9769.
The Fund, through its transfer agent, has established procedures designed
to confirm the authenticity of telephonic instructions, which procedures
include requiring callers to establish their personal identity and limiting the
mailing of telephone redemption proceeds to the address or bank account set
forth on the Account Application. Investors should understand that neither the
Fund nor its transfer agent will be liable for acting upon
6
<PAGE>
instructions communicated by telephone that it reasonably believes to be
genuine. Redemption proceeds wired to a designated account at a shareholder's
request for amounts less than $10,000 will be reduced by a wire transfer fee
(currently $10.00). Certain institutional clients will not be charged this wire
redemption fee. Changes to the designated address or bank account must be made
in writing and may be required to be accompanied by a signature guarantee from
an eligible guarantor.
Shares are redeemed at their net asset value next determined after a
redemption request in good order has been received by the Fund's transfer
agent. A request is deemed to be in good order if it has been signed by the
account holder and is accompanied, where necessary, by a signature guarantee.
Redemption proceeds will be mailed or wired to the redeeming shareholder within
seven days, except where those shares have recently been purchased by personal
check. In those cases, redemption proceeds may be withheld until the check has
been collected, which may take up to fifteen days. To avoid such withholding,
investors should purchase shares by certified or bank check.
The Fund reserves the right to redeem, at net asset value, the shares of
any shareholder if, because of redemptions by the shareholder, the account of
such shareholder has a value of less than $10,000. Before the Fund exercises
its right to redeem such shares, the shareholder will be given written notice
of the proposed redemption and will be allowed 30 days to make an additional
investment in an amount which will increase the value of the account to at
least $10,000.
HOW NET ASSET VALUE IS DETERMINED
The net asset value per share of the Fund is determined once each day that
the New York Stock Exchange is open (a "Business Day"), as of the close of the
Exchange ("Valuation Time"). Portfolio securities for which market quotations
are readily available are valued at market value. Short-term obligations having
remaining maturities of 60 days or less are valued at amortized cost, which
approximates market value. All other securities and assets are valued at their
fair value as determined in good faith by the Trustees or by persons acting at
their direction pursuant to guidelines established by the Trustees. Liabilities
are deducted from the total, and the resulting amount is divided by the number
of shares outstanding to produce the "net asset value" per share.
DISTRIBUTIONS
The Fund intends to qualify as a "regulated investment company" under the
Internal Revenue Code of 1986, as amended (the "Code"), for as long as such
qualification is in the best interests of its shareholders. In keeping with
Code requirements regarding regulated investment companies, the Fund pays out
as dividends substantially all of its net investment income (which comes from
dividends and interest it receives from its investments) and net realized
capital gains.
All dividends and/or distributions will be reinvested in shares of the
Fund, at net asset value, unless the shareholder elects to receive cash. The
Fund declares and pays dividends out of investment income quarterly, and
distributes net realized capital gains annually. Dividends and capital gains
distributions may be declared more or less frequently at the discretion of the
Trustees.
FEDERAL INCOME TAXES
Dividends and short-term capital gains distributions of the Fund are
taxable to shareholders as ordinary income. Distributions of any long-term
capital gains are taxable to shareholders as such, regardless of how long
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<PAGE>
a shareholder may have owned shares in the Fund. Shareholders should consult
their tax advisors as to the application of state and local income tax laws to
Fund dividends and capital gain distributions.
In order to avoid a 4% excise tax on undistributed income, the Code
requires the Fund to distribute prior to calendar year end virtually all the
ordinary income of the Fund on a calendar year basis, and to distribute
virtually all of the capital gain net income realized in the one-year period
ending each December 31 and not previously distributed.
Distributions will be taxable whether received in cash or in shares
through the reinvestment of distributions. A dividend paid to a shareholder by
the Fund in January of a year generally is deemed to have been paid by the Fund
and received by shareholders on December 31 of the preceding year, if the
dividend was declared and payable to shareholders of record on a date in
October, November or December of that preceding year. The Fund will provide
federal tax information annually, including information about dividends and
distributions paid during the preceding year.
MANAGEMENT OF THE FUND
The Fund is managed by The Torray Corporation, 6610 Rockledge Drive, Suite
450, Bethesda, Maryland 20817 (the "Manager"), which provides investment
advisory and portfolio management services pursuant to a Management Agreement
dated November 16, 1990. The Manager also provides executive and other
personnel for management of the Fund. Pursuant to the Fund's Agreement and
Declaration of Trust, the Trustees supervise the affairs of the Fund as
conducted by the Manager. The Manager was formed in 1990 to serve as the
investment advisor to the Fund. Robert E. Torray, President of the Manager and
Portfolio Manager of the Fund, owns approximately 64% of the outstanding voting
securities of the Manager, and has over 36 years of investment experience. Mr.
Torray also owns 80 percent of the outstanding voting securities of Robert E.
Torray & Co., Inc., a registered investment advisor which has been in the
investment advisory business for 26 years.
For investment advisory and management services provided to the Fund, the
Manager receives a fee, computed daily and payable quarterly, at the annual
rate of one percent of the Fund's daily net assets. The Manager received 1.00%
of the Fund's average daily net assets for the fiscal year ended December 31,
1997.
ORGANIZATION AND CAPITALIZATION OF THE FUND
The Fund was established in 1990 as a business trust under Massachusetts
law. The Fund has an unlimited authorized number of shares of beneficial
interest which may, without shareholder approval, be divided into an unlimited
number of series of such shares. These shares are entitled to vote at any
meetings of shareholders. Shares are freely transferable, are entitled to
dividends as declared by the Trustees, and, in liquidation of the Fund, are
entitled to receive the net assets of the Fund. The Fund does not generally
hold annual meetings of shareholders and will do so only when required by law.
The management and affairs of the Trust are supervised by the Trustees under
the laws governing business trusts in the Commonwealth of Massachusetts. The
Trustees have approved certain contracts under which certain companies provide
essential management services to the Trust. Shareholders may remove Trustees
from office by votes cast in person or by proxy at a meeting of shareholders or
by written consent. The Manager controls the word "Torray" in the Fund's name
and, if it should cease to be the Fund's investment advisor, the Fund may be
required to change its name.
8
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NEW ACCOUNT INSTRUCTIONS: For The Torray Fund ("Fund")
- --------------------------------------------------------------------------------
Please call the Fund toll free at 1-(800)-626-9769 if you have any questions
while filling out this application.
1 Type of Account. An account can be registered as only one of the following:
<TABLE>
<S> <C> <C>
[ ] individual
[ ] joint tenants
Supply the Social
[ ] a custodial account Security number of
under the Uniform ---- the registered
Gifts or Uniform account owner.
Transfers to
Minors Act
[ ] a trust (i.e.,
retirement plans) Supply the
Taxpayer
---- Identification
[ ] a corporation number of the legal
partnership, entity.
organization,
fiduciary, etc.
[ ] Individual
Retirement Account ---- See the IRA
(IRA) package.
</TABLE>
Please check the box in Section 1 that corresponds with the type of account you
are opening and fill in the required information exactly as you wish it to
appear on the account.
Trading Authorization. If you desire to have a party(s) other than the
registered account owner have access to your account(s) or transact business on
your account(s), you must file a Trading Authorization with the Fund's transfer
agent. Other parties may include spouses, relatives, business officers, trust
officers, financial planners, tax advisors, etc. Call the Fund's transfer agent
to ask for a "Trading Authorization."
Corporate/Trust Resolution. Corporations are required to furnish a Corporate
Resolution. Trusts are required to furnish a Trust Resolution.
Trusts, fiduciaries, partnerships, and other business entities may be required
to furnish other documentation (e.g., a "Trust Authorization") to authorize
redemptions. Call the Fund's transfer agent to ask for the appropriate
documentation.
2 Your Mailing Address. Please complete all information in Section 2 requested
as it is required to open your account.
3 Your Initial Investment. The amount of your check(s) must meet the minimum
$10,000 initial investment.
4 Receiving Your Dividends and Capital Gains. Dividends and capital gains
distributions will be automatically paid in Fund shares unless the Shareholder
elects to receive distributions by check by marking the box in Section 4.
5 Telephone Redemptions. If you elect telephone redemptions, the Fund's
transfer agent will be authorized to act upon telephone instructions from you,
or from any person authorized to act on your behalf, without a signature
guarantee, to redeem shares of the Fund in accordance with the terms of the
Fund's Prospectus and Statement of Additional Information as in effect from
time to time. In electing this feature, you also agree that the Fund and the
Fund's transfer agent shall not have any liability for acting upon instructions
which they reasonably believe to be genuine.
6 Your Signature(s). Please be sure to sign this application. If the account is
registered in the name of:
[ ] an individual, the individual should sign
[ ] joint tenants, both should sign
[ ] a trustee or other fiduciary, the fiduciary(s) must indicate capacity (If
you are establishing a trust account and want to authorize redemptions,
you must file a "Trust Resolution" with the Fund's transfer agent as
stipulated in Section 1 under "Trust Resolution.")
[ ] a corporation or other organization, an officer must sign and indicate
capacity. (If you are establishing a corporate account and want to
authorize redemptions, you must file a "Corporate Resolution" with the
Fund's transfer agent as stipulated in Section 1 under "Corporate
Resolution.")
Page 9
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[This Page Intentionally Left Blank]
Page 10
<PAGE>
NEW ACCOUNT APPLICATION FOR THE TORRAY FUND
DO NOT USE THIS APPLICATION FOR AN IRA ACCOUNT
PLEASE SEE THE ENCLOSED IRA INFORMATION
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
[ ] Gift/Transfer [ ] Trust (i.e., [ ] Corporation, Partnership
1 Type of Account [ ] Individual [ ] Joint Tenants to a Minor retirement plans) or Other Entity
(check one) Complete A Complete A & B Complete C Complete D Complete E
only only only only
</TABLE>
- --------------------------------------------------------------------------------
A -- -- -- --
------------------------------- --------------------- --------------------
First Name, Middle Initial, Social Security Number Birthdate
Last Name (mm-dd-yy)
Required to open your account
-----------------------------
B -- -- -- --
------------------------------- --------------------- --------------------
First Name, Middle Initial, Social Security Number Birthdate
Last Name (mm-dd-yy)
Required to open your account
-----------------------------
Joint Tenants will have rights of survivorship unless otherwise specified.
- --------------------------------------------------------------------------------
C ------------------------------- as custodian for ---------------------------
Custodian's Name (only one permitted) Minor's Name (only one
------------------ permitted)
---------
under the [ ][ ] Uniform Gifts/Transfers to Minors Act -- --
-----
-- --
State (Circle One) ----------------- -----------------
Minor's Social Security Number
Minor's Birthday
Required to open the account
----------------------------
Required to open the account
----------------------------
- --------------------------------------------------------------------------------
D ------------------------------- ------------------------------------------
Name of Trustee Name of Trust
--
------------------------------- ---------------------
---------------------
Name of Second Trustee (if any) Date of Trust (mm-dd-yy)
Taxpayer Identification Number
Required to open your account Required
----------------------------- --------
to open your account
--------------------
- --------------------------------------------------------------------------------
E --
------------------------------- ---------------------
Name of Corporation or other entity. If other entity,
please specify type in the space below, e.g., Taxpayer Identification
partnership, club, etc. Required to open your account
-----------------------------
BUSINESS TYPE:------------------- Additional forms, such as a Corporate
Resolution, are required to authorize
redemptions and add account features. See
Application Instructions.
- --------------------------------------------------------------------------------
2 Your Mailing Address
------------------------------- -------------------------------
Street address and Apartment Area Code Business Telephone
number or Box number Number
------------------------------- -------------------------------
Area Code Home Telephone Number
-------------------------------
City State Zip Code I am a citizen of [ ] U.S. [ ] Other ---------
------- State of residence if different from mailing address
State
- --------------------------------------------------------------------------------
(Please complete the reverse side)
Page 11
<PAGE>
- --------------------------------------------------------------------------------
3 Your Initial Investment ($10,000 minimum).
[ ] I have enclosed a check (do not send cash) made payable to The Torray
Fund for $ -----------------------
- --------------------------------------------------------------------------------
4 Receiving Your Dividends and Capital Gains. If not completed, Option A will
be assigned.
A [ ] I would like all dividends and capital gains reinvested in the Fund.
B [ ] I would like all dividends and capital gains paid to me in cash.
C [ ] Dividend Income Paid by check and capital gains reinvested.
- --------------------------------------------------------------------------------
5 Telephone Redemptions. See Instructions. If not completed, Option A will be
assigned.
A [ ] I do not authorize telephone redemptions. B [ ] I do authorize
telephone redemptions.
Proceeds of redemption requests are paid by check and mailed to the address of
record or wired to your bank account. I (we) authorize First Data Investor
Services Group, Inc. to act upon instructions received from me (us) to redeem
shares. Neither the Fund nor First Data Investor Services Group, Inc. will be
liable for properly acting upon instructions believed to be genuine.
If you want to authorize to wire redemptions directly to your bank account
please attach a voided check and complete below. (See "How to Redeem" on Page 6
for wire charges)
Bank Name Branch Office (if applicable)
-----------------------------------------------------------------
Bank Address City State Zip Code
-----------------------------------------------------------------
Bank Wire Routing Number Bank Account Number
-----------------------------------------------------------------
- --------------------------------------------------------------------------------
6 Your Signature(s). All registered owners or legal representative(s) must sign
this section before we can open your account.
I (we) am (are) of legal age, have received and read the Prospectus, agree to
its terms and understand that by signing below (a) neither the Fund nor Torray
is a bank and Fund shares are not backed or guaranteed by any bank or insured
by the FDIC; (b) I (we) hereby ratify any instructions given on this account
and any account into which I (we) exchange relating to Items 1-5 and agree that
neither the Fund nor Torray will be liable for any loss, cost or expense for
acting upon such instructions (by telephone or writing) believed by it to be
genuine and in accordance with the procedures described in the Prospectus; and
(c) it is my (our) responsibility to read the Prospectus.
TAXPAYER IDENTIFICATION NUMBER CERTIFICATION: As required by federal law, I
(we) certify under penalty of perjury (1) that the Social Security Number
("SSN") or Taxpayer Identification Number ("TIN") provided above is correct
and (2) that the IRS has never notified me (us) that I (we) am (are) subject
to backup withholding due to notified payee underreporting, or has notified me
(us) that I (we) am (are) no longer subject to such backup withholding. (Note:
If any or all of Part (2) of this sentence is not true in your case, please
strike out that part before signing.) If I (we) fail to furnish my (our)
correct SSN or TIN, I (we) may be subject to a penalty of $50 for each failure
and my (our) account(s) may be subject to backup withholding on distribution
and redemption proceeds.
THE INTERNAL REVENUE SERVICE DOES NOT REQUIRE YOUR CONSENT TO ANY PROVISION OF
THIS DOCUMENT OTHER THAN THE CERTIFICATIONS REQUIRED TO AVOID BACKUP
WITHHOLDING.
Signature: ------------------------------- Date -----------
--------------------------
Citizenship (if not U.S.)
Signature: ------------------------------- Date -----------
--------------------------
Citizenship (if not U.S.)
- --------------------------------------------------------------------------------
For further information, contact the Fund toll free at 1-(800)-626-9769. Mail
your completed application to First Data Investor Services Group, 3200 Horizon
Drive, King of Prussia, PA 19406-0903.
Page 12
<PAGE>
(This Page Intentionally Left Blank)
<PAGE>
(This Page Intentionally Left Blank)
<PAGE>
INVESTMENT MANAGER
The Torray Corporation
6610 Rockledge Drive, Suite 450
Bethesda, MD 20817
LEGAL COUNSEL
Morgan, Lewis & Bockius LLP
1800 M Street, N.W.
Washington, D.C. 20036
INDEPENDENT AUDITORS
Briggs, Bunting, & Dougherty, LLP
Two Logan Square Suite 2121
18th & Arch Streets
Philadelphia, PA 19103-4901
CUSTODIAN
United Missouri Bank
928 Grand Blvd.
Kansas City, MO 64141-6226
TRANSFER AGENT
First Data Investor Services Group
P.O. Box 61503
3200 Horizon Drive
King of Prussia, PA 19406-0903
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
No person has been authorized to give any information or to make any
representations not contained in this Prospectus 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.
This Prospectus does not constitute an offer by the fund in any jurisdiction in
which such offering may not lawfully be made.
-------------------------------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
--------
<S> <C>
Schedule of Fees .......................... 2
Financial Highlights ...................... 3
Investment Objective, Policies
and Risk Factors ....................... 4
Portfolio Turnover ........................ 5
Performance Information ................... 5
How to Buy Shares ......................... 5
How to Redeem ............................. 6
How Net Asset Value is Determined ......... 7
Distributions ............................. 7
Federal Income Taxes ...................... 7
Management of the Fund .................... 8
Organization and Capitalization
of the Fund ............................ 8
New Account Instructions .................. 9
New Account Application ................... 11-12
</TABLE>
The Torray Fund
-------------------------------
PROSPECTUS
-------------------------------
April 30, 1998
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
THE TORRAY FUND
STATEMENT OF ADDITIONAL INFORMATION
April 30, 1998
This Statement of Additional Information is not a prospectus. This Statement of
Additional Information relates to the Prospectus dated April 30, 1998 and should
be read in conjunction therewith. A copy of the Prospectus may be obtained by
writing The Torray Corporation, 6610 Rockledge Drive, Bethesda, Maryland 20817,
or by telephoning toll free at 1-800-443-3036.
-1-
<PAGE>
- ----------------------------------------------------------------
TABLE OF CONTENTS
- ----------------------------------------------------------------
Page
INVESTMENT OBJECTIVE AND POLICIES......................................3
NOTE ON SHAREHOLDER APPROVAL...........................................3
INVESTMENT RESTRICTIONS................................................3
HOW TO REDEEM..........................................................6
HOW NET ASSET VALUE IS DETERMINED......................................7
CALCULATION OF RETURN..................................................8
PERFORMANCE COMPARISONS................................................9
DISTRIBUTIONS..........................................................9
TAXES ..............................................................9
MANAGEMENT OF THE FUND................................................11
OTHER SERVICES........................................................15
PORTFOLIO TRANSACTIONS................................................16
ORGANIZATION AND CAPITALIZATION OF THE FUND...........................18
SHAREHOLDER LIABILITY.................................................19
-2-
<PAGE>
INVESTMENT OBJECTIVE AND POLICIES
The investment objective and policies of The Torray Fund (the "Fund")
are summarized on the front page of the Prospectus and in the text of the
Prospectus following the caption "Investment Objective and Policies." There is
no assurance that the Fund's objective will be achieved.
This Statement contains certain additional information about the
objective and policies, including "miscellaneous investment practices" in which
the Fund may engage.
U.S. Treasury Securities. The Fund is free to invest in U.S. Treasury
Securities of varying maturities. There are usually no brokerage commissions as
such paid by the Fund in connection with the purchase of such instruments. The
value of such securities can be expected to vary inversely to the changes in
prevailing interest rates. Thus, if interest rates have increased from the time
a security was purchased, such security, if sold, might be sold at a price less
than its cost. Similarly, if interest rates have declined from the time a
security was purchased, such security, if sold, might be sold at a price greater
than its cost. See "Portfolio Transactions - Brokerage and Research Services,"
for a discussion of underwriters' commissions and dealers' spreads involved in
the purchase and sale of such instruments.
NOTE ON SHAREHOLDER APPROVAL
The investment objective and policies of the Fund set forth above and
in the Prospectus may be changed without shareholder approval.
INVESTMENT RESTRICTIONS
Without a vote of the majority of the outstanding voting securities of
the Fund, the Fund will not take any of the following actions:
(1) Borrow money in excess of 5% of the value (taken at the
lower of cost or current value) of the Fund's total assets (not
including the amount borrowed) at the time the borrowing is made, and
then only from banks as a temporary
-3-
<PAGE>
measure to facilitate the meeting of redemption requests (and not for
leverage) or for extraordinary or emergency purposes.
(2) Pledge, hypothecate, mortgage or otherwise encumber its
assets in excess of 10% of the Fund's total assets (taken at cost), and
then only to secure borrowings permitted by Restriction 1 above.
(3) Purchase securities on margin, except such short-term
credits as may be necessary for the clearance of purchases and sales of
securities.
(4) Make short sales of securities or maintain a short
position for the account of the Fund unless at all times when a short
position is open the Fund owns an equal amount of such securities or
owns securities which, without payment of any further consideration,
are convertible into or exchangeable for securities of the same issue
as, and equal in amount to, the securities sold short.
(5) Underwrite securities issued by other persons except to
the extent that, in connection with the disposition of its portfolio
investments, it may be deemed to be an underwriter under federal
securities laws.
(6) Purchase or sell real estate, although it may invest in
securities of issuers which deal in real estate, including securities
of real estate investment trusts, and may purchase securities which are
secured by interests in real estate.
(7) Purchase or sell commodities or commodity contracts,
including future contracts.
(8) Make loans, except by purchase of debt obligations or by
entering into repurchase agreements.
(9) Invest in securities of any issuer if, immediately after
such investment, more than 5% of the total assets of the Fund (taken at
current value) would be invested in the securities of such issuer,
except that up to 25% of the Fund's total assets taken at current value
may be invested without regard to such 5% limitation; provided,
however, that this limitation does not apply to obligations issued or
-4-
<PAGE>
guaranteed as to interest and principal by the U.S.
government or its agencies or instrumentalities.
(10) Acquire more than 10% of the voting securities of any
issuer.
(11) Concentrate more than 25% of the value of its total
assets in any one industry.
It is contrary to the Fund's present policy, which may be changed by
the Trustees without shareholder approval, to borrow money, pledge or
hypothecate its assets, make any short sales of securities, maintain any short
position for the account of the Fund, issue senior securities, or purchase
foreign securities which are not publicly traded in the United States. In
addition, it is contrary to the Fund's present policy to:
(1) Invest more than 10% of the Fund's net assets (taken at
current value) in securities which at the time of such investment are
not readily marketable.
(2) Write (sell) or purchase options.
(3) Buy or sell oil, gas or other mineral leases, rights or
royalty contracts.
(4) Make investments for the purpose of gaining control of a
company's management.
All percentage limitations on investments set forth herein and in the
Prospectus will apply at the time of the making of an investment and shall not
be considered violated unless an excess or deficiency occurs or exists
immediately after and as a result of such investment.
The phrase "shareholder approval," as used in the Prospectus, and the
phrase "vote of a majority of the outstanding voting securities," as used
herein, means the affirmative vote of the lesser of (1) more than 50% of the
outstanding shares of the Fund, or (2) 67% or more of the shares of the Fund
present at a meeting if more than 50% of the outstanding shares are represented
at the meeting in person or by proxy.
-5-
<PAGE>
HOW TO REDEEM
The procedures for redemption of Fund shares are summarized in the text
of the Prospectus following the caption "How to Redeem." Redemption requests
must be in good order, as defined in the Prospectus. Upon receipt of a
redemption request in good order, the Shareholder will receive a check equal to
the net asset value of the redeemed shares next determined after the redemption
request has been received. The Fund will accept redemption requests only on days
the New York Stock Exchange is open. Proceeds will normally be forwarded on the
next day on which the New York Stock Exchange is open; however, the Fund
reserves the right to take up to seven days to make payment if, in the judgment
of the Manager, the Fund could be adversely affected by immediate payment. The
proceeds of redemption may be more or less than the shareholder's investment and
thus may involve a capital gain or loss for tax purposes. If the shares to be
redeemed represent an investment made by check, the Fund reserves the right not
to forward the proceeds of the redemption until the check has been collected.
The Fund may suspend the right of redemption and may postpone payment
only when the New York Stock Exchange is closed for other than customary
weekends and holidays, or if permitted by the rules of the Securities and
Exchange Commission during periods when trading on the Exchange is restricted or
during any emergency which makes it impracticable for the Fund to dispose of its
securities or to determine fairly the value of its net assets, or during any
other period permitted by order of the Securities and Exchange Commission.
It is currently the Trust's policy to pay all redemptions in cash. The
Trust retains the right, however, to alter this policy to provide for
redemptions in whole or in part by a distribution in-kind of securities held by
a Fund in lieu of cash. Shareholders may incur brokerage charges on the sale of
any such securities so received in payment of redemptions.
The Fund reserves the right to redeem shares and mail the proceeds to
the shareholder if at any time the net asset value of the shares in the
shareholder's account in the Fund falls below a specified level, currently set
at $10,000. Shareholders will be notified and will have 30 days to bring the
account up to the required level before any redemption action will be taken by
the Fund. The Fund also reserves the right to redeem shares in a
-6-
<PAGE>
shareholder's account in excess of an amount set from time to time by the
Trustees. No such limit is presently in effect, but such a limit could be
established at any time and could be applicable to existing as well as future
shareholders.
HOW NET ASSET VALUE IS DETERMINED
As described in the text of the Prospectus following the caption "How
Net Asset Value is Determined," the net asset value per share of the Fund is
determined once on each day on which the New York Stock Exchange is open, as of
the close of the Exchange. The Trust expects that the days, other than weekend
days, that the Exchange will not be open are New Year's Day, Martin Luther King,
Jr. Day, President's Day, Good Friday, Memorial Day, Independence Day, Labor
Day, Thanksgiving Day and Christmas Day. The Fund's portfolio securities for
which market quotations are readily available are valued at market value, which
is determined by using the last reported sale price, or, if no sales are
reported -- and in the case of certain securities traded over-the-counter -- the
last reported bid price.
As described in the Prospectus, certain securities and assets of the
Fund may be valued at fair value as determined in good faith by the Trustees or
by persons acting at their direction pursuant to guidelines established by the
Trustees. Such valuations and procedures are reviewed periodically by the
Trustees. The fair value of such securities is generally determined as the
amount which the Fund could reasonably expect to realize from an orderly
disposition of such securities over a reasonable period of time. The valuation
procedures applied in any specific instance are likely to vary from case to
case. However, consideration is generally given to the financial position of the
issuer and other fundamental analytical data relating to the investment and to
the nature of the restrictions on disposition of the securities (including any
registration expenses that might be borne by the Fund in connection with such
disposition). In addition, such specific factors are also generally considered
as the cost of the investment, the market value of any unrestricted securities
of the same class (both at the time of purchase and at the time of valuation),
the size of the holding, the prices of any recent transactions or offers with
respect to such securities and any available analysts' reports regarding the
issuer.
-7-
<PAGE>
Generally, trading in U.S. Government Securities is substantially
completed each day at various times prior to the close of the Exchange. The
value of such securities used for determining the Fund's net asset value per
share is computed as of such times. Occasionally, events affecting the value of
such securities may occur between such times and the close of the Exchange which
will not be reflected in the computation of the Fund's net asset value. If
events materially affecting the value of the Fund's securities occur during such
period, then these securities will be valued at their fair value as determined
in good faith by the Trustees.
CALCULATION OF RETURN
As summarized in the Prospectus under the heading "Performance
Information," Total Return is a measure of the change in value of an investment
in the Fund over the period covered, which assumes any dividends or capital
gains distributions are reinvested immediately rather than paid to the investor
in cash. The formula for Total Return used herein includes four steps: (1)
adding to the total number of shares purchased by a hypothetical $10,000
investment in the Fund all additional shares which would have been purchased if
all dividends and distributions paid or distributed during the period had been
immediately reinvested; (2) calculating the value of the hypothetical initial
investment of $10,000 as of the end of the period by multiplying the total
number of shares owned at the end of the period by the net asset value per share
on the last trading day of the period; (3) assuming redemption at the end of the
period; and (4) dividing this account value for the hypothetical investor by the
initial $10,000 investment and annualizing the result for periods of less than
one year.
The average annual total return for the Fund from commencement of
investment operations (December 31, 1990) through December 31, 1997 was 22.79%,
and the Fund's average annual total return for the one-year and five-year
periods ended December 31, 1997 was 37.12% and 23.73% respectively.
-8-
<PAGE>
PERFORMANCE COMPARISONS
The Fund may from time to time include its Total Return in information
furnished to present or prospective shareholders. The Fund may from time to time
also include its Total Return and Yield and the ranking of those performance
figures relative to such figures for groups of mutual funds categorized by
Lipper Analytical Services, Morningstar, the Investment Company Institute and
other similar services as having the same investment objective as the Fund.
DISTRIBUTIONS
Distributions from Net Investment Income. As described in the
Prospectus under the caption "Distributions," the Fund pays out substantially
all of its net investment income, (i.e., dividends, interest it receives from
its investments, and short-term gains). It is the present policy of the Fund to
declare and pay distributions from net investment income quarterly.
Distributions of Capital Gains. As described in the Prospectus, the
Fund's policy is to distribute annually substantially all of the net realized
capital gain, if any, after giving effect to any available capital loss
carryover. Net realized capital gain is the excess of net realized long-term
capital gain over net realized short-term capital loss.
TAXES
The tax status of the Fund and the distributions which it intends to
make are summarized in the text of the Prospectus immediately following the
caption "Taxes." All dividends and distributions of the Fund, whether received
in shares or cash, are taxable to the Fund's shareholders as described in the
Prospectus, and must be reported by each shareholder on his federal income tax
return. Although a dividend or capital gains distribution received after the
purchase of the Fund's shares reduces the net asset value of the shares by the
amount of the dividend or distribution, it will be treated as a dividend even
though, economically, it represents a return of capital, and will be subject to
federal income taxes as ordinary income or, if properly designated by the Fund,
as long-term capital gain. In general, any gain or loss realized upon a taxable
disposition of
-9-
<PAGE>
Fund shares by a shareholder will be treated as long-term capital gain or loss
if the shares have been held for more than one year and otherwise as short-term
capital gain or loss. However, any loss realized upon a taxable disposition of
shares held for six months or less will be treated as long-term capital loss to
the extent of any long-term capital gain distributions received by the
shareholder with respect to those shares. All or a portion of any loss realized
upon a taxable disposition of Fund shares will be disallowed if other Fund
shares are purchased by the shareholder within 30 days before or after the
disposition.
The Fund intends to qualify each year as a "regulated investment
company" under Subchapter M of the Internal Revenue Code of 1986, as amended
(the "Code"). In order to so qualify, the Fund must, among other things, (a)
derive at least 90% of its gross income from dividends, interest, payments with
respect to certain securities loans, and gains from the sale of stock or
securities, or other income derived with respect to its business of investing in
such stock or securities; (b) each year distribute at least 90% of its
"investment company taxable income," which, in general, consists of investment
income and short-term capital gains; and (c) diversify its holdings so that, at
the end of each fiscal quarter (i) at least 50% of the market value of the
Fund's assets is represented by cash, cash items, U.S. Government securities,
securities of other regulated investment companies, and other securities,
limited in respect of any one issuer to a value not greater than 5% of the value
of the Fund's total assets and 10% of the outstanding voting securities of such
issuer, and (ii) not more than 25% of the value of its assets is invested in the
securities (other than those of the U.S. Government or other regulated
investment companies) of any one issuer or of two or more issuers which the Fund
controls and which are engaged in the same, similar or related trades or
businesses. By so qualifying, the Fund will not be subject to federal income
taxes to the extent that its net investment income, net realized short-term
capital gains and net realized long-term capital gains are distributed.
In years when the Fund distributes amounts in excess of its earnings
and profits, such distributions may be treated in part as a return of capital. A
return of capital is not taxable to a shareholder and has the effect of reducing
the shareholder's basis in the shares. The Fund currently has no intention or
policy to distribute amounts in excess of its earnings and profits.
-10-
<PAGE>
It is expected that at least some of the distributions from the Fund
will qualify for the dividends-received deduction for corporations to the extent
that the Fund's gross income was derived from qualifying dividends from domestic
corporations.
Annually, shareholders will receive information as to the tax status of
distributions made by the Fund in each calendar year.
The Fund is required to withhold and remit to the U.S. Treasury 31% of
all dividend income earned by any shareholder account for which an incorrect or
no taxpayer identification number has been provided or where the Fund is
notified that the shareholder has under-reported income in the past (or the
shareholder fails to certify that he is not subject to such withholding). In
addition, the Fund will be required to withhold and remit to the U.S. Treasury
31% of the amount of the proceeds of any redemption of shares of a shareholder
account for which an incorrect or no taxpayer identification number has been
provided.
The foregoing relates to federal income taxation. Distributions from
investment income and capital gains may also be subject to state and local
taxes. The Fund is organized as a Massachusetts business trust. Under current
law, as long as the Fund qualifies for the federal income tax treatment
described above, it is believed that the Fund will not be liable for any income
or franchise tax imposed by Massachusetts.
MANAGEMENT OF THE FUND
Trustees and officers of the Trust and their principal occupations
during the past five years are as follows:
Professor Frederick Amling (DOB 12/23/26), Trustee of
the Fund. Professor of Finance, The George Washington
University; President, Frederick Amling & Associates
(computer investment programs); President, Amling &
Company, Inc. (financial advisors).
Robert P. Moltz (DOB 10/03/47), Trustee of the Fund.
President and Chief Executive Officer, Weaver Bros.
Insurance Associates, Inc. (insurance).
-11-
<PAGE>
Professor Roy A. Schotland (DOB 03/18/33), Trustee of the
Fund. Professor of Law, Georgetown University Law Center;
Director, Custodial Trust Company (banking). Director,
Croft Funds Corporation (open-end management investment
company).
Wayne H. Shaner (DOB 08/23/47), Trustee of the Fund. Vice
President, Investments, Lockheed Martin Corporation; Member,
Investment Committee, Maryland State Retirement System.
Bruce C. Ellis (DOB 07/26/44), Trustee of the Fund.
Chairman, Transmedia Sports & Leisure USA Inc.; Director
Shepards Foundation (charity); since 1992, Director,
Rushmore/Cappiello Fund (investment company) and Rushmore
Funds (investment companies).
* William M Lane (DOB 05/21/50), Chairman of the Board of
Trustees, President, and Secretary of the Fund. Vice
President, Robert E. Torray & Co., Inc.; Vice President and
Secretary, The Torray Corporation; Secretary and Treasurer,
Birmingham Capital Management Co., Inc.
Douglas C. Eby (DOB 07/28/59), Vice President and Treasurer
of the Fund. Since April 1992, President, Robert E. Torray
& Co., Inc.; Assistant Treasurer, The Torray Corporation.
Through April, 1992, Vice President and Portfolio Manager of
Foxhall Investment Management (investment advisor).
- -----------------------------------
* Mr. Lane is an "interested person" of the Fund under the
Investment Company Act of 1940.
The mailing address of the officers and Trustees is c/o the Fund, 6610
Rockledge Drive, Bethesda, Maryland 20817.
The Fund's Agreement and Declaration of Trust provides that the Fund
will indemnify its Trustees and each of its officers against liabilities and
expenses incurred in connection with the litigation in which they may be
involved because of their offices with the Fund, except if it is determined in
the manner specified in the Agreement and Declaration of Trust that they have
not acted in good faith in the reasonable belief that their actions were in the
best interests of the Fund or that such indemnification would relieve any
officer or Trustee of any errors and omissions to the Fund or its shareholders
by reason of
-12-
<PAGE>
willful misfeasance, bad faith, gross negligence or reckless disregard of his or
her duties.
Each Trustee who is not an "interested person" of the Fund receives an
annual fee of $5,000, plus $500 for each Trustees' meeting attended. The
salaries and expenses of each of the Fund's officers are paid by the Manager.
Mr. Lane and Mr. Eby as stockholders and/or officers of the Manager, will
benefit from the management fees paid by the Fund.
The following table exhibits Trustee Compensation for the fiscal year
ended December 31, 1997.
<TABLE>
<CAPTION>
Name of Aggregate Pension or Estimated
Person, Compensation From Retirement Annual
Position Registrant for the Benefits Benefits Upon
Fiscal Year Ended Accrued as Retirement
December 31, 1997 Part of Fund
Expenses
<S> <C>
Frederick $2,850 -0- -0-
Amling
Robert P. $2,850 -0- -0-
Moltz
Roy A. $2,850 -0- -0-
Schotland
Wayne H. $2,850 -0- -0-
Shaner
Bruce C. Ellis $2,850 -0- -0-
</TABLE>
As of April 15, 1998 , the Trustees, officers, and affiliated persons
of the Fund, as a group, owned 703,659 shares (2.025%) of the Fund.
The Manager. Under a written management contract ("Management
Agreement") between the Fund and the Manager, subject to such policies as the
Trustees of the Fund may determine, the Manager, at its expense, will furnish
continuously an investment program for the Fund and will make investment
decisions on behalf of the Fund and place all orders for the purchase and sale
of portfolio securities subject always to applicable investment objective,
policies and restrictions.
-13-
<PAGE>
Pursuant to the Management Agreement and subject to the control of the
Trustees, the Manager also manages, supervises and conducts the other affairs
and business of the Fund, furnishes office space and equipment, provides
bookkeeping and certain clerical services and pays all fees and expenses of the
officers of the Fund. As indicated under "Portfolio Transactions -Brokerage and
Research Services," the Fund's portfolio transactions may be placed with brokers
which furnish the Manager, without cost, certain research, statistical and
quotation services of value to them or their respective affiliates in advising
the Fund or their other clients. In so doing, the Fund may incur greater
brokerage commissions than it might otherwise pay.
The Manager's compensation under the Management Agreement is subject to
reduction to the extent that in any year the expenses of the Fund exceed the
limits on investment company expenses imposed by any statute or regulatory
authority of any jurisdic tion in which shares of such Fund are qualified for
offer and sale. The term "expenses" is subject to interpretation by each of such
jurisdictions, and, generally speaking, excludes brokerage commissions, taxes,
interest, distribution-related expenses and extraordinary expenses. As of this
date, shares are not sold in any state which imposes such a restriction. The
Manager received the following compensation for the fiscal years indicated:
Advisory Fees Paid
1995 1996 1997
$313,512 $732,902 $3,446,533
The Management Agreement has been approved by the Trustees of the Fund.
By its terms, the Management Agreement will continue in force from year to year,
but only so long as its continuance is approved at least annually by the
Trustees at a meeting called for that purpose or by the vote of a majority of
the outstanding shares of the Fund. The Management Agreement automatically
terminates on assignment, and is terminable upon notice by the Fund. In
addition, the Management Agreement may be terminated on not more than 60 days'
notice by the Manager to the Fund. In the event the Manager ceases to be the
manager of the
-14-
<PAGE>
Fund, the right of the Fund to use the identifying name of "Torray" may be
withdrawn.
As described in the text of the Prospectus under the caption
"Management of the Fund," the Fund pays, in addition to the management fee
described above, all expenses not borne by the Manager, including, without
limitation, fees and expenses of the Trustees, interest charges, taxes,
brokerage commissions, expenses of issue or redemption of shares, fees and
expenses of registering and qualifying the shares of the Fund for distribution
under federal and state laws and regulations, charges of custodians, auditing
and legal expenses, expenses of determining net asset value of the Fund's
shares, reports to shareholders, expenses of meetings of shareholders, expenses
of printing and mailing prospectuses, proxy statements and proxies to existing
shareholders, and insurance premiums. The Fund is also responsible for such
nonrecurring expenses as may arise, including litigation in which the Fund may
be a party, and other expenses as determined by the Trustees. The Fund may have
an obligation to indemnify its officers and Trustees with respect to such
litigation.
The Management Agreement provides that the Manager shall not be subject
to any liability in connection with the performance of its services thereunder
in the absence of willful misfeasance, bad faith, gross negligence or reckless
disregard of its obligations and duties.
The Manager is a Maryland corporation organized in 1990. Approximately
sixty-four percent (64%) of the outstanding voting shares of the Manager is
owned by Robert E. Torray.
OTHER SERVICES
Custodial Arrangements. United Missouri Bank ("UMB"), 928 Grand Blvd.,
Kansas City, MO 64141, is the custodian for the Fund. As such, UMB holds in
safekeeping certificated securities and cash belonging to the Fund and, in such
capacity, is the registered owner of securities in book-entry form belonging to
the Fund. Upon instruction, UMB receives and delivers cash and securities of the
Fund in connection with the Fund transactions and collects all dividends and
other distributions made with respect to the Fund's portfolio securities. UMB
also maintains certain accounts and records of the Fund.
-15-
<PAGE>
Transfer and Shareholder Servicing Agent. First Data Investor Services Group,
3200 Horizon Drive, King of Prussia, PA 19406- 0903 serves as transfer agent and
shareholder servicing agent to the Fund pursuant to a Transfer Agent Service
Agreement (the "Transfer Agent Agreement"). Under the Transfer Agent Agreement,
First Data Investor Services Group has agreed to (i) issue and redeem Shares of
the Fund; (ii) provide shareholder services which includes responding to
Shareholder correspondence and inquiries; (iii) maintain Shareholder accounts
and certain subaccounts; and (iv) prepare periodic reports to the Fund's
officers and/or Board of Trustees. The Transfer Agent received $140,797 in fees
for the fiscal year ended December 31, 1997.
Certified Public Accountants. The Fund's independent public accountants are
Briggs, Bunting & Dougherty, LLP. Briggs, Bunting & Dougherty, LLP conducts an
annual audit of the Fund, assists in the preparation of the Fund's federal and
state income tax returns and consults with the Fund as to matters of accounting
and federal and state income taxation.
PORTFOLIO TRANSACTIONS
Brokerage and Research Services. Transactions on stock exchanges and
other agency transactions involve the payment by the Fund of negotiated
brokerage commissions. Such commissions vary among different brokers. Also, a
particular broker may charge different commissions according to such factors as
the difficulty and size of the transaction. There is generally no stated
commission in the case of securities, such as U.S. Government Securities, traded
in the over-the-counter markets or in the case of gold bullion but the price
paid by the Fund usually includes an undisclosed dealer commission or mark-up.
It is anticipated that most purchases and sales of short-term portfolio
securities will be with the issuer or with major dealers in money market
instruments acting as principals. In underwritten offerings, the price paid
includes a disclosed, fixed commission or discount retained by the underwriter
or dealer.
When the Manager places orders for the purchase and sale of portfolio
securities for the Fund and buys and sells securities for the Fund, it is
anticipated that such transactions will be effected through a number of brokers
and dealers. In so doing, the Manager intends to use its best efforts to obtain
for the Fund the most favorable price and execution available, except to
-16-
<PAGE>
the extent that it may be permitted to pay higher brokerage commissions as
described below. In seeking the most favorable price and execution, the Manager
considers all factors it deems relevant, including, by way of illustration,
price, the size of the transaction, the nature of the market for the security,
the amount of commission, the timing of the transaction taking into account
market prices and trends, the reputation, experience and financial stability of
the broker/dealer involved and the quality of service rendered by the
broker/dealer in other transactions.
It has for many years been a common practice in the investment advisory
business for advisors of investment companies and other institutional investors
to receive research, statistical and quotation services from brokers which
execute portfolio transactions for the clients of such advisors. Consistent with
this practice, the Manager may receive research, statistical and quotation
services from brokers with which the Fund's portfolio transactions are placed.
These services, which in some instances could also be purchased for cash,
include such matters as general economic and security market reviews, industry
and company reviews, evaluations of securities and recommendations as to the
purchase and sale of securities. Some of these services may be of value to the
Manager in advising various of its clients (including the Fund), although not
all of these services are necessarily useful and of value in managing the Fund.
The fees paid to the Manager are not reduced because it receives such services.
As permitted by Section 28(e) of the Securities Exchange Act of 1934
and the Management Agreement, the Manager may cause the Fund to pay a broker
which provides "brokerage and research services" (as defined in the Act) to the
Manager an amount of disclosed commission for effecting a securities transaction
for the Fund in excess of the commission which another broker would have charged
for effecting that transaction. The authority of the Manager to cause the Fund
to pay any such greater commissions is subject to such policies as the Trustees
may adopt from time to time.
Under the Investment Company Act, persons affiliated with the Fund are
prohibited from dealing with the Fund as a principal in the purchase and sale of
securities.
-17-
<PAGE>
The total brokerage commissions paid for the fiscal year ended December
31, 1995, 1996, and 1997 were $64,932, $160,089, and $757,611.00 respectively.
ORGANIZATION AND CAPITALIZATION OF THE FUND
The Fund was established as a Massachusetts business trust under the
laws of Massachusetts by an Agreement and Declaration of Trust dated April 19,
1990. A copy of the Agreement and Declaration of Trust is on file with the
Secretary of The Commonwealth of Massachusetts. The Trust's fiscal year ends on
December 31 of each year.
As described in the text of the Prospectus following the caption
"Organization and Capitalization of the Fund," shares of the Fund are entitled
to one vote per share (with proportional voting for fractional shares) on such
matters as shareholders are entitled to vote. There will normally be no meetings
of shareholders for the purpose of electing Trustees, except insofar as
elections are required under the 1940 Act in the event that (i) less than a
majority of the Trustees have been elected by shareholders, or (ii) if, as a
result of a vacancy, less than two-thirds of the Trustees have been elected by
the shareholders, the vacancy will be filled only by a vote of the shareholders.
In addition, the Trustees may be removed from office by a written consent signed
by the holders of two-thirds of the outstanding shares of the Fund and filed
with the Fund's custodian or by a vote of the holders of two-thirds of the
outstanding shares of the Fund at a meeting duly called for the purpose, which
meeting shall be held upon the written request of the holders of not less than
10% of the outstanding shares. Upon written request by ten or more shareholders,
who have been such for at least six months, and who hold shares constituting 1%
of the outstanding shares, stating that such shareholders wish to communicate
with the other shareholders for the purpose of obtaining the signatures
necessary to demand a meeting to consider removal of a Trustee, the Fund has
undertaken to provide a list of shareholders or to disseminate appropriate
materials (at the expense of the requesting shareholders). Except as set forth
above, each Trustee shall continue to hold office and may appoint his successor.
-18-
<PAGE>
SHAREHOLDER LIABILITY
Under Massachusetts law, shareholders could, under certain
circumstances, be held liable for the obligations of the Fund. However, the
Fund's Agreement and Declaration of Trust disclaims shareholder liability for
acts or obligations of the Fund and requires that notice of such disclaimer be
given in each agreement, obligation or instrument entered into or executed by
the Fund or the Trustees. The Agreement and Declaration of Trust provides for
indemnification out of the Fund's property for all loss and expense of any
shareholder of the Fund held liable on account of being or having been a
shareholder. Thus, the risk of a shareholder incurring financial loss on account
of shareholder liability is limited to circumstances in which the Fund would be
unable to meet its obligations.
FINANCIAL STATEMENTS
The financial statements for the fiscal year ended December 31, 1997
including notes thereto and the report thereon of Briggs, Bunting & Dougherty,
LLP are herein incorporated by reference. A copy of the 1997 Annual Report to
Shareholders must accompany the delivery of this Statement of Additional
Information.
-19-
<PAGE>
THE TORRAY FUND
POST-EFFECTIVE AMENDMENT NO. 8 ON FORM N-1A
PART C
OTHER INFORMATION
Item 24. Financial Statements and Exhibits.
(a) Part A Financial Highlights
Part B The following audited financial statements as
of December 31, 1997 and the report of Briggs,
Bunting, & Dougherty, LLP January 16, 1998 are
hereby incorporated by reference to the
Statement of Additional Information from Form
N-30D, the Annual Report of Shareholders, as
filed with the Securities and Exchange
Commission on February 13, 1998 with Accession
Number 0000916641-98-000121.
Schedule of Investments
Statements of Assets and Liabilities
Statement of Operations
Statement of Changes in Net Assets
Financial Highlights
Notes to Financial Highlights
(b) Exhibits
(1) Agreement and Declaration of Trust as filed as
Exhibit (1) to the Registrant's Initial
Registration Statement on Form N-1A dated April
24, 1990, is incorporated by reference to
Exhibit (1) to Post-Effective Amendment No. 6,
as filed on April 30, 1996
(2) By-Laws as filed as Exhibit (2) to the
Registrant's Initial Registration Statement on
Form N-1A, as filed April 24, 1990, are
incorporated by reference to Exhibit (2) to
Post-Effective Amendment No. 6, as filed on
April 30, 1996
(3) Inapplicable
C-1
<PAGE>
(4) Inapplicable
(5) Management Contract with The Torray Corporation
("Torray") as filed as Exhibit (5) to
PreEffective Amendment No. 2 to the Registrant's
Registration Statement on Form N-1A, filed
November 20, 1990, is incorporated by reference
to Exhibit (5) to Post-Effective Amendment No.
6, as filed on April 30, 1996
(6) Inapplicable
(7) Inapplicable
(8)(a) Custodian Agreement between Registrant and
Sovran Bank/Maryland as filed as Exhibit (8) to
Pre-Effective Amendment No. 2 to the
Registrant's Registration Statement on Form N-
1A, filed November 20, 1990, is incorporated by
reference to Exhibit (8) to Post-Effective
Amendment No. 6, as filed on April 30, 1996
(8)(b) Custodian Agreement between Registrant and
Rushmore Trust and Savings, FSB as filed as
Exhibit (8)(b) to Post-Effective Amendment No. 4
to the Registrant's Registration Statement on
Form N-1A, filed April 29, 1994, is incorporated
by reference to exhibit (8)(b) to Post-Effective
Amendment No. 6, as filed on April 30, 1996
(8) (c) Custody Administration and Agency Agreement
between Registrant and FPS Services, Inc.(First
Data Investors Services Group) is filed
herewith
(9) Transfer Agency and Shareholder Service
Agreement between Registrant and Torray as filed
as Exhibit (9) to Pre-Effective Amendment No. 2
to the Registrant's Registration Statement on
Form N-1A, filed November 20, 1990, is
incorporated by reference to Exhibit (9) to
Post-Effective Amendment No. 6, as filed on
April 30, 1996
C-2
<PAGE>
(9) (a) Transfer Agent Services Agreement dated
September 20, 1996 between Registrant and FPS
Services, Inc. (First Data Investors Services
Group) is filed herewith
(10) Opinion and Consent of Morgan, Lewis & Bockius
LLP as to legality of the securities being
registered is incorporated by reference to the
Registrant's 24f-2 Notice on February 26, 1997)
(11)(a) Consent of Briggs, Bunting & Dougherty LLP is
filed herewith
(11)(b) Consent of Johnson Lambert & Co., Independent
Accountants, is filed herewith
(12) Inapplicable
(13) Purchase Agreement between Registrant and Robert
E. Torray as filed as Exhibit (13) to
Pre-Effective Amendment No. 2 to the
Registrant's Registration Statement on Form N-
1A, filed November 20, 1990, is incorporated by
reference to Exhibit (13) to Post-Effective
Amendment No. 6, as filed on April 30, 1996
(14) Inapplicable
(15) Inapplicable
(16) Performance Calculations as filed as Exhibit
(16) to Post-Effective Amendment No. 2 to the
Registrant's Registration Statement on Form N-
1A, filed on March 6, 1992, are incorporated by
reference to Exhibit 16 to Post-Effective
Amendment No. 6, as filed on April 30, 1996
(17) Financial Data Schedule is filed herewith
(24) Powers of Attorney for Robert Moltz, Bruce C.
Ellis, Roy Shotland, Wayne Shaner are filed
herewith
C-3
<PAGE>
Item 25. Persons Controlled by or under Common Control with
Registrant.
None.
Item 26. Number of Holders Securities.
As of April 15, 1998, there were 16,437 record holders of
securities of the Registrant.
Item 27. Indemnification.
Article VIII of the Registrant's Agreement and Declaration of
Trust, provides in effect that the Registrant will indemnify its officers and
Trustees under certain circumstances. However, in accordance with Section 17(h)
and 17(i) of the Investment Company Act of 1940 and its own terms, said
Agreement and Declaration of Trust does not protect any person against any
liability to the Registrant or its shareholders to which he or she 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
or her office.
Insofar as indemnification for liability arising under the
Securities Act of 1933 may be permitted to Trustees, officers, and controlling
persons of the Registrant pursuant to the foregoing provisions (or otherwise),
the Registrant has been advised that, in the opinion of the Securities and
Exchange 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 the
Registrant of expenses incurred or paid by a Trustee, officer or controlling
person of the Registrant in the successful defense of any action, suit or
proceeding) is asserted by such Trustee, officer or controlling person in
connection with the securities being registered, the Registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act and will
be governed by the final adjudication of such issue.
C-4
<PAGE>
Item 28. Business and Other Connections of Investment Advisor.
(a) Registrant's investment advisor is The Torray Corporation, a
Maryland corporation ("Torray"), which was organized in 1990. The principal
place of business of Torray is 6610 Rockledge Drive, Bethesda, Maryland 20817.
The only business in which Torray currently engages is that of investment
advisor and administrator to the Registrant and other investment companies that
Torray may sponsor in the future. Information pertaining to business and other
connections of the investment advisor is hereby incorporated by reference to the
section of the Prospectus captioned "Management of the Fund" and to the section
of the Statement of Additional Information captioned "Management of the Fund."
(b) The business, profession, vocation or employment of a substantial
nature in which each director and officer of Torray is or has been engaged
during the past two fiscal years for his or her own account in the capacity of
director, officer, employee, partner or Trustee is as follows:
Name Name of Company and Capacity Therewith
Robert E. Torray Chairman of the Board, Robert E. Torray &
Co., Inc. (investment advice); President and
Chairman of the Board of Directors, The
Torray Corporation; Chairman, Birmingham
Capital Management Co., Inc. (investment
advice);
Douglas C. Eby President, Robert E. Torray & Co. Inc.;
Assistant Treasurer, The Torray Corporation.
William M Lane Vice President, Robert E. Torray & Co. Inc.;
Vice President and Secretary, The Torray
Corporation; Secretary and Treasurer,
Birmingham Capital Management Co., Inc.;
Item 29. Principal Underwriters.
None
C-5
<PAGE>
Item 30. Location of Accounts and Records.
All accounts, books and other documents required to be
maintained pursuant to Section 31(a) of the Investment Company Act of 1940 and
the rules thereunder are maintained at the offices of the Registrant's Transfer
Agent, First Data Investor Services Group, P.O. Box 61503, 3200 Horizon Drive,
King of Prussia, PA 19406-0903 (transfer agency and shareholder records), the
offices of Registrant's manager, The Torray Corporation, 6610 Rockledge Drive,
Bethesda, MD 20817, at the offices of the Registrant's Custodian, United
Missouri Bank, 928 Grand Blvd., Kansas City, MO 64141-6226 (journals, ledgers,
receipts, and brokerage orders), or at the offices of Morgan, Lewis & Bockius
LLP, counsel to the Registrant, 1800 M Street, N.W., Washington, D.C. 20036
(minute books and declaration of trust).
Item 31. Management Services.
Not applicable.
Item 32. Undertakings.
The Trust hereby undertakes to furnish each person to whom a
prospectus is delivered with a copy of the Trust's latest annual report to
shareholders, upon request and without charge.
Notice
A copy of the Agreement and Declaration of Trust of The Torray
Fund is on file with the Secretary of the Commonwealth of Massachusetts and
notice is hereby given that this instrument is executed on behalf of the
Registrant by an officer of the Registrant as an officer and not individually
and that the obligations of or arising out of this instrument are not binding
upon any of the Trustees or shareholders individually but are binding only upon
the assets and property of the Registrant.
C-6
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the Investment
Company Act of 1940, as amended, Registrant certifies that it meets all of the
requirements for the effectiveness of this Registration Statement pursuant to
Rule 485(b) under the Securities Act of 1933 and has duly caused this
Post-Effective Amendment No. 8 to be signed on behalf of the undersigned,
thereto duly authorized, in the City of Bethesda and State of Maryland, on the
28th day of April, 1998.
THE TORRAY FUND
By: /s/ William M. Lane
---------------------------
William M Lane, President
As required by the Securities Act of 1933, this Post-Effective Amendment No. 7
to the Registration Statement has been signed by the following persons in the
capacity and on the date indicated.
Signature Title Date
* Trustee April 28,1998
- ------------------------
Frederick Amling
* Trustee April 28,1998
- ------------------------
Robert P. Moltz
* Trustee April 28,1998
- ------------------------
Roy Schotland
/s/ William M. Lane Trustee April 28,1998
- ------------------------ President
William M Lane Principal
Financial
Officer
* Trustee April 28,1998
- ------------------------
Bruce Ellis
* Trustee April 28,1998
- ------------------------
Wayne Shaner
* By: /s/ William M. Lane
------------------------
William M Lane
Attorney-in-Fact
C-7
<PAGE>
EXHIBIT INDEX
(1) Agreement and Declaration of Trust as filed as Exhibit
(1) to the Registrant's Initial Registration Statement
on Form N-1A dated April 24, 1990, is incorporated by
reference to Exhibit (1) to Post-Effective Amendment
No. 6, as filed on April 30, 1996
(2) By-Laws as filed as Exhibit (2) to the Registrant's
Initial Registration Statement on Form N-1A, as filed
April 24, 1990, are incorporated by reference to
Exhibit (2) to Post-Effective Amendment No. 6, as filed
on April 30, 1996
(3) Inapplicable
(4) Inapplicable
(5) Management Contract with The Torray Corporation
("Torray") as filed as Exhibit (5) to Pre-Effective
Amendment No. 2 to the Registrant's Registration
Statement on Form N-1A, filed November 20, 1990, is
incorporated by reference to Exhibit (5) to Post-
Effective Amendment No. 6, as filed on April 30, 1996
(6) Inapplicable
(7) Inapplicable
(8)(a) Custodian Agreement between Registrant and Sovran
Bank/Maryland as filed as Exhibit (8) to Pre-Effective
Amendment No. 2 to the Registrant's Registration
Statement on Form N-1A, filed November 20, 1990, is
incorporated by reference to Exhibit (8) to PostEffective
Amendment No. 6, as filed on April 30, 1996
(8)(b) Custodian Agreement between Registrant and Rushmore Trust and
Savings, FSB as filed as Exhibit (8)(b) to Post-Effective
Amendment No. 4 to the Registrant's Registration Statement on
Form N-1A, filed April 29, 1994, is incorporated by reference
to exhibit (8)(b) to Post-Effective Amendment No. 6, as filed
on April 30, 1996
1
<PAGE>
(8) (c) Custody Administration and Agency Agreement between Registrant
and FPS Services, Inc. is filed herewith.
(9) Transfer Agency and Shareholder Service Agreement between
Registrant and Torray as filed as Exhibit (9) to Pre-Effective
Amendment No. 2 to the Registrant's Registration Statement on
Form N-1A, filed November 20, 1990, is incorporated by
reference to Exhibit (9) to Post-Effective Amendment No. 6, as
filed on April 30, 1996
(9) (a) Transfer Agent Services Agreement dated September 20, 1996
between Registrant and FPS Services, Inc. (now First Data) is
filed herewith
(10) Opinion and Consent of Morgan, Lewis & Bockius LLP as to
legality of the securities being registered (filed with Rule
24f-2 Notice on February 26, 1997)
(11)(a) Consent of Briggs, Bunting & Dougherty LLP is filed herewith
(11)(b) Consent of Johnson Lambert & Co., Independent Accountants,
is filed herewith
(12) Inapplicable
(13) Purchase Agreement between Registrant and Robert E. Torray as
filed as Exhibit (13) to Pre-Effective Amendment No. 2 to the
Registrant's Registration Statement on Form N-1A, filed
November 20, 1990, is incorporated by reference to Exhibit
(13) to Post- Effective Amendment No. 6, as filed on April 30,
1996
(14) Inapplicable
(15) Inapplicable
(16) Performance Calculations as filed as Exhibit (16) to
Post-Effective Amendment No. 2 to the Registrant's
Registration Statement on Form N-1A, filed on March 6, 1992,
are incorporated by reference to Exhibit 16 to Post-Effective
Amendment No. 6, as filed on April 30, 1996
2
<PAGE>
(24) Powers of Attorney for Robert Moltz, Bruce C. Ellis,
Roy Shotland, Wayne Shaner are filed herewith
(27) Financial Data Schedule is filed herewith
3
EXHIBIT 8(c)
CUSTODY ADMINISTRATION AND AGENCY AGREEMENT
THIS AGREEMENT, dated as of the 15 day of August, 1997 made by and between
the Torray Fund, ("Torray"), a business trust operating as an open-end,
management investment company registered under the Investment Company Act of
1940, as amended (the "Act"), duly organized and existing under the laws of the
Commonwealth of Massachusetts and FPS Services, Inc. ("FPS"), a corporation duly
organized under the laws of the State of Delaware (collectively, the "Parties").
WITNESSETH THAT:
WHEREAS, Torray is authorized by its Trust Instrument to issue separate
series of shares representing interests in separate investment portfolios which
are identified on Schedule "B" attached hereto, and which Schedule "B" may be
amended from time to time by mutual agreement of Torray and FPS; and
WHEREAS, the Parties desire to enter into an agreement whereby FPS will
provide certain custody administration services on behalf of Torray on the terms
and conditions set forth in this Agreement; and
WHEREAS, Torray desires that FPS act as its agent for the specific purpose
of taking receipt of, and making payment for, custody services performed on
Torray's behalf by UMB Bank, n.a. (the "Custodian") pursuant to an agreement
between the Custodian and Torray; and
WHEREAS, FPS is willing to serve in such capacity and perform such
functions upon the terms and conditions set forth below.
NOW, THEREFORE, in consideration of the premises and mutual covenants
contained herein and for good and valuable consideration, the receipt and
sufficiency is hereby acknowledged, the Parties hereto, intending to be legally
bound, do hereby agree as follows:
Section 1. Torray hereby appoints FPS as its agent, and FPS hereby accepts
such appointment, for the limited purpose of: (i) accepting invoices charged to
Torray for custody services performed by the Custodian on Torray's behalf, and
(ii) remitting payment to the Custodian for such services performed in amounts
as set forth in Schedule "A" attached hereto.
Section 2. The services to be provided under this Agreement are as follows:
(bullet) Assign a Custody Administrator to accept, control and process
Torray's daily portfolio transactions through direct computer link
with the Custodian.
<PAGE>
(bullet) Match and review DTC eligible ID's and trade information with
Torray's instructions for accuracy and coordinating with the
Custodian and Torray's accounting agent for recording and
affirmation processing with the depository.
(bullet) Systematically settle all depository eligible issues. Transactions
requiring physical delivery will be settled through the
Custodian's New York office.
(bullet) Assist Torray in placing cash management trades through the
Custodian, such as commercial paper, CDs and repurchase
agreements.
(bullet) Provide Torray's fund accounting agent and investment advisor with
daily custodian statements reflecting all prior day cash activity
on behalf of each portfolio by 8:30 a.m. Eastern time. Complete
descriptions of any posting, inclusive of Sedol/CUSIP numbers,
interest/dividend payment date, capital stock details, expense
authorizations, beginning/ending cash balances, etc., will be
provided by the Custodian's reports or system.
(bullet) Provide monthly activity statements combining both cash changes
and security trades, and a full portfolio listing.
(bullet) Communicate to Torray and Torray's fund accounting agent on any
corporate actions, capital changes and interest rate changes
supported by appropriate supplemental reports received from the
Custodian. Follow-up will be made with the Custodian to ensure all
necessary actions and/or paperwork is completed.
(bullet) Work with fund accounting and the Custodian on monthly asset
reconciliations.
(bullet) Coordinate and resolve unsettled dividends, interest, paydowns and
capital changes. Assist in resolution of failed transactions and
any settlement problems.
(bullet) Arrange for securities lending, lines of credit, and/or letters of
credit through the Custodian.
(bullet) Provide automated mortgage-backed processing through the
Custodian.
(bullet) Provide broker interface ensuring trade settlement with fail trade
follow up.
(bullet) Provide Torray's auditors with trade documentation to help
expedite Torray's audit.
(bullet) Cooperation and communications between Fund Accounting, Custodian
and Transfer Agent is facilitated smoothly when Custody
Administration is performed by FPS.
Section 3. Compensation. Torray agrees to pay FPS compensation for its
services, and to reimburse it for expenses, at the rates, times, manner and
amounts as set forth in Schedule "A" attached hereto and incorporated herein by
reference, and as will be set forth in any amendments to such Schedule "A"
agreed upon in writing by the Parties. Torray hereby authorizes FPS to
<PAGE>
debit its custody account for payment of services invoiced therefore. In
addition, Torray agrees to reimburse FPS for any out-of-pocket expenses
paid by FPS on behalf of Torray within the ten (10) calendar days of
Torray's receipt of an invoice therefor.
For the purpose of determining fees payable to FPS, the value of Torray's
net assets will be computed at the times and in the manner specified in Torray's
controlling documents then in effect.
During the terms of this Agreement, should Torray seek services or
functions in addition to those outlined above, a written amendment to this
Agreement specifying the additional services and corresponding compensation will
be executed by the Parties.
Section 4. Duration and Termination.
(a) The initial term of this Agreement will be for the period of three (3)
years commencing on the date hereinabove first written (the "Effective Date")
and will continue thereafter subject to termination by either Party as set forth
in subsection (c) below.
(b) The fee schedules set forth in Schedule "A" attached hereto will be
fixed for two (2) years commencing on the Effective Date of this Agreement and
will continue thereafter subject to their review and any adjustment.
(c) After the initial term of this Agreement, a Party may give written
notice to the other (the day on which the notice is received by the Party
against which the notice is made shall be the "Notice Date") of a date on which
this Agreement shall be terminated ("Termination Date"). The Termination Date
shall be set on a day not be less than one hundred eighty (180) days after the
Notice Date. The period of time commencing on the Notice Date up to and
including the Termination Date shall be identified herein as the "Notice
Period." Any time up to, but not later than fifteen (15) days prior to the
Termination Date, Torray will pay to FPS such compensation as may be due as of
the Termination Date and will likewise reimburse FPS for any out-of-pocket
expenses and disbursements reasonably incurred or expected to by incurred by FPS
up to and including the Termination Date.
(d) In connection with the termination of this Agreement, if a successor to
any of FPS' duties or responsibilities under this Agreement is designated by
Torray by written notice to FPS, FPS will promptly, on the Termination Date and
upon receipt by FPS of any payments owed to it as set forth in (c) above, shall
transfer to the successor, at Torray's expense, all records which belong to
Torray and Torray will provide appropriate, reasonable and professional
cooperation in transferring such records to the named successor.
<PAGE>
(e) Should Torray desire to move any of the services outlined in this
Agreement to a successor service provider prior to the Termination Date, FPS
shall make a good faith effort to facilitate the conversion on such prior date,
however, there can be no guarantee that FPS will be able to facilitate a
conversion of services prior to the end of the Notice Period. Should services be
converted to a successor service provider prior to the end of the Notice Period,
or if Torray is liquidated or its assets merged or purchased or the like with
another entity, payment of fees to FPS shall be accelerated to a date prior to
the conversion or termination of services and calculated as if the services had
remained at FPS until the expiration of the Notice Period and calculated at the
asset levels on the Notice Date.
(f) Notwithstanding the foregoing, this Agreement may be terminated at any
time by either party in the event of a material breach by the other party
involving gross negligence, willful misfeasance, bad faith or a reckless
disregard of its obligations and duties under this Agreement provided that such
breach shall not have been remedied for sixty (60) days or more after receipt of
written specification thereof.
Section 5. Indemnification.
(a) FPS, its directors, officers, employees, shareholders, and agents will
be liable for any loss suffered by Torray resulting from the willful
misfeasance, bad faith, gross negligence or reckless disregard on the part of
FPS in the performance of its obligations and duties under this Agreement.
(b) Any director, officer, employee, shareholder or agent of FPS, who may
be or become an officer, Trustee, employee or agent of Torray, will be deemed,
when rendering services to Torray, or acting on any business of Torray (other
than services or business in connection with FPS' duties hereunder), to be
rendering such services to or acting solely for Torray and not as a director,
officer, employee, shareholder or agent of, or under the control or direction of
FPS even though such person may be receiving compensation from FPS.
(c) Torray agrees to indemnify and hold FPS harmless, together with its
directors, officers, employees, shareholders and agents from and against any and
all claims, demands, expenses and liabilities (whether with or without basis in
fact or law) of any and every nature which FPS may sustain of incur or which may
be asserted against FPS by any person by reason of, or as a result of:
<PAGE>
(i) any action taken or omitted to be taken by FPS except claims, demands,
expenses and liabilities arising from willful misfeasance, bad faith, gross
negligence or reckless disregard on the part of FPS in the performance of its
obligations and duties under this Agreement; or
(ii) any action taken or omitted to be taken by FPS in reliance upon any
Certificate, instrument, order or stock certificate or other document reasonably
believed by FPS to be genuine and signed, countersigned or executed by any duly
authorized person, upon the Oral Instructions or Written Instructions of an
authorized person of Torray, or upon written opinion of legal counsel for Torray
or FPS.
If a claim is made against FPS as to which FPS may seek indemnity under
this Section, FPS will notify Torray promptly after any written assertion of
such claim threatening to institute an action or proceeding with respect thereto
and will notify Torray promptly of any action commenced against FPS within ten
(10) days after FPS has been served with a summons or other legal process,
giving information as to the nature and basis of the claim. Failure to notify
Torray will not, however, relieve Torray from any liability which it may have on
account of the indemnity under this Section so long as Torray has not been
prejudiced in any material respect by such failure.
Torray and FPS will cooperate in the control of the defense of any action,
suit or proceeding in which FPS is involved and for which indemnity is being
provided by Torray to FPS. Torray may negotiate the settlement of any action,
suit or proceeding subject to FPS' approval, which will not be unreasonably
withheld. FPS reserves the right, but not the obligation, to participate in the
defense or settlement of a claim, action or proceeding with its own counsel.
Costs or expenses incurred by FPS in connection with, or as a result of, such
participation will be borne solely by Torray if:
(i) FPS has received an opinion of counsel from counsel to Torray stating
that the use of counsel to Torray by FPS would present an impermissible conflict
of interest;
(ii) the defendants in, or targets of, any such action or proceeding
include both FPS and Torray, and legal counsel to FPS has reasonably concluded
that there are legal defenses available to it which are different from or
additional to those available to Torray or which may be adverse to or
inconsistent with defenses available to Torray (in which case Torray will not
have the right to direct the defense of such action on behalf of FPS); or
(iii) Torray authorizes FPS to employ separate counsel at the expense of
Torray.
(d) The terms of this Section will survive the termination of this
Agreement.
<PAGE>
Section 6. Except as otherwise provided in this Agreement, any notice or
other communication required by or permitted to be given in connection with this
Agreement shall be in writing, and shall be delivered in person or sent by first
class mail, postage prepaid, to the respective parties as follows:
If to The Torray Fund If to FPS:
--------------------- ----------
The Torray Fund FPS Services, Inc.
6610 Rockledge Drive, Suite 450 3200 Horizon Drive
Bethesda, MD 20817 King of Prussia, PA 19406-0903
Attn: William Lane Attn: Kenneth J. Kempf
Vice President President
Section 7. Torray represents and warrants to FPS that the execution and
delivery of this Agreement by the undersigned officers of Torray has been duly
and validly authorized by resolution of the Board of Trustees of Torray.
Section 8. This Agreement may be executed in two or more counterparts, each
of which when so executed shall be deemed to be an original, but such
counterparts shall together constitute but one and the same instrument.
Section 9. This Agreement shall extend to and shall be binding upon the
Parties and their respective successors and assigns; provided, however,
that this Agreement shall not be assignable by Torray without the written
consent of FPS or by FPS without the written consent of Torray, authorized
or approved by a resolution of their respective Board of Trustees.
Section 10. This Agreement shall be governed by the laws of the State of
Pennsylvania and the exclusive venue of any action arising under this Agreement
will be Montgomery County, Commonwealth of Pennsylvania.
Section 11. No provision of this Agreement may be amended or modified, in
any manner except in writing, properly authorized and executed by FPS and
Torray.
Section 12. If any part, term or provision of this Agreement is held by any
court to be illegal, in conflict with any law or otherwise invalid, the
remaining portion or portions shall be considered severable and not be affected,
and the rights and obligations of the parties shall be construed and enforced as
if the Agreement did not contain the particular part, term or provision held to
be illegal or invalid provided that the basic Agreement is not thereby
substantially impaired.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement,
consisting in its entirety of six (6) typewritten pages, together with Schedule
"A" to be signed by their duly authorized officers, as of the day and year first
above written.
The Torray Fund FPS Services, Inc.
/s/ William Lane /s/ Kenneth J. Kempf
---------------------------- -------------------------------
By: William Lane, Vice President By: Kenneth J. Kempf, President
<PAGE>
SCHEDULE "A"
------------
FEES ATTRIBUTABLE TO THE ADMINISTRATION OF THE CUSTODY
OF THE ASSETS OF TORRAY USING UMB BANK
I. Domestic Securities and ADRs: (1/12th payable monthly)
Subject to a minimum monthly fee of $250 for each separate series of
shares, Torray agrees to pay FPS monthly for services related to the
administration of the custody of the assets of Torray at the annual rate
of:
$.00010 on the first $100 million of average net assets
$.00008 on average net assets between $100 million and $300 million and
$.00006 on average net assets in excess of $300 million
II. Custody Domestic Securities Transactions Charge: (billed monthly)
Torray agrees to pay FPS monthly for each transaction as set forth below:
Book Entry DTC, Federal Book Entry, PTC $11.00
Physical Securities 24.00
Options and Futures 28.00
P & I Pay downs 5.50
Check Requests and Wires 8.00
A transaction includes buys, sells, maturities or free security
movements.
Cedel/Euroclear:
Safekeeping (annual charge) $0.0004
Transaction Charge 30.00
Note: Safekeeping charge is calculated upon month end market value.
III. When Issued, Securities Lending, Index Futures:
Separate segregated custody account monthly fee $250.00
IV. Custody Miscellaneous Fees
Administrative fees incurred in certain local markets will be passed onto
the customer with a detailed description of the fees. Fees include income
collection, corporate action handling, overdraft charges, funds transfer,
special local taxes, stamp duties, registration fees, messenger and
courier services and other out-of-pocket expenses.
<PAGE>
V. Out of Pocket Expenses
Torray will reimburse FPS monthly for all reasonable out-of-pocket
expenses, including telephone, postage, telecommunications, special
reports, record retention, special transportation costs, copying and
sending materials to auditors and/or regulatory agencies as incurred and
approved.
<PAGE>
SCHEDULE "B"
------------
IDENTIFICATION OF SEPARATE SERIES OF SHARES
Below are listed the separate funds to which services under this Agreement are
to be performed as of the Execution Date of this Agreement:
The Torray Fund
This Schedule "B" may be amended from time to time by agreement of the Parties.
Exhibit 9(a)
TRANSFER AGENT SERVICES AGREEMENT
This agreement, dated as of the 20th day of September, 1996, made by and
between The Torray Corporation, (Torray), a corporation duly organized under the
laws of the State of Maryland and FPS Services, Inc. ("FPS"), a corporation duly
organized and existing under the laws of the State of Delaware (collectively,
the "Parties").
WITNESSETH THAT:
WHEREAS, Torray desires to retain FPS to perform share transfer agency,
redemption and dividend disbursing services as set forth in this Agreement and
in Schedule "A" attached hereto, and to perform certain other functions in
connection with these duties; and
WHEREAS, FPS is registered with the Securities and Exchange Commission as a
Transfer Agent as required under Section 17A(c) of the Securities Exchange Act
of 1934, as amended (the Exchange Act); and
WHEREAS, the Torray Fund (the Fund) is an open-end, management investment
company registered under the Investment Company Act of 1940, as amended (the
Act); and
WHEREAS, Torray is responsible for the provision of transfer agency and
shareholder services pursuant to an agreement between Torray and the Fund dated
as of November 16, 1990; and
WHEREAS, FPS is willing to serve in such capacity and perform such
functions upon the terms and conditions set forth below; and
NOW, THEREFORE, in consideration of the premises and mutual covenants
contained herein, and in exchange of good and valuable consideration, the
sufficiency and receipt of which is hereby acknowledged, the Parties hereto,
intending to be legally bound, do hereby agree as follows:
Section 1 The terms as defined in this Section wherever used in this
Agreement, or in any amendment or supplement hereto, shall have the meanings
herein specified unless the context otherwise requires.
Shareholders shall mean the registered owners of the shares of the Series
in accordance with the share registry records maintained by FPS for Torray.
Shares shall mean the issued and outstanding shares of the Series.
Signature Guarantee shall mean the guarantee of signatures by an "eligible
guarantor institution" as defined in Rule 17Ad-15 under the Exchange Act.
Eligible guarantor
<PAGE>
institutions include banks, brokers, dealers, credit unions, national securities
exchanges, registered securities associations, clearing agencies and savings
associations. Broker-dealers guaranteeing signatures must be members of a
clearing corporation or maintain net capital of at least $100,000. Signature
guarantees will be accepted from any eligible guarantor institution which
participates in a signature guarantee program.
Oral Instruction shall mean an authorization, instruction, approval, item
or set of data, or information of any kind transmitted to FPS in person or by
telephone, telegram, telecopy or other mechanical or documentary means lacking
original signature, by a person or persons reasonably identified to FPS to be a
person or persons so authorized by a resolution of the Board of Trustees of the
Fund or the Board of Directors of Torray to give Oral Instructions to Fund/Plan.
Written Instruction shall mean an authorization, instruction, approval,
item or set of data or information of any kind transmitted to FPS in an original
writing containing an original signature or a copy of such document transmitted
by telecopy including transmission of such signature reasonably identified to
FPS to be the signature of a person or persons so authorized by a resolution of
the Board of Trustees of the Fund or the Board of Directors of Torray to give
Written Instructions to FPS.
Appointment as Agent Torray hereby appoints FPS, as the agent of Torray, to
provide transfer agent and shareholder services for the benefit of the Fund,
subject to the supervision of the Board of Directors of Torray and the Board of
Trustees of the Fund for the period and on the terms set forth in this
Agreement. Torray may appoint FPS as shareholder services and transfer agent
for any additional Series which, from time to time, may be added to the Fund.
FPS accepts such appointment and agrees to furnish the services herein set
forth in return for compensation as provided in Section 22 of this Agreement and
Schedule B hereto.
Representations and Warranties
FPS represents and warrants that:
- it is a corporation duly organized and existing and in good standing
under the laws of Delaware;
- it is empowered under applicable laws and by its Certificate of
Incorporation and By-Laws to enter into and perform this Agreement;
- all requisite corporate proceedings have been taken to authorize FPS
to enter
<PAGE>
into and perform this Agreement;
- it has and will continue to have, access to the facilities, personnel
and equipment required to fully perform its duties and obligations
hereunder;
- no legal or administrative proceeding have been instituted or
threatened which would impair FPS's ability to perform its duties and
obligations under this Agreement;
- its entrance into this Agreement shall not cause a material breach or
be in material conflict with any other agreement or obligation of FPS
or any law or regulation applicable to it;
- it is registered as a transfer agent under Section 17A(c)(2) of the
Exchange Act;
- this Agreement has been duly authorized by FPS, and when executed and
delivered, will constitute valid, legal and binding obligation of FPS,
enforceable in accordance with its terms.
Torray represents and warrants that:
- it is a corporation duly organized and existing and in good standing
under the laws of the State of Maryland;
- it is empowered under applicable laws and by its Certificate of
Incorporation and By-Laws to enter into and perform this Agreement;
- all requisite corporate proceedings have been taken to authorize
Torray to enter into and perform this Agreement;
- no legal or administrative proceedings have been instituted or
threatened which would impair Torray's ability to perform its duties
and obligations under this Agreement;
- Torray's entrance into this Agreement shall not cause a material
breach or be in material conflict with any other agreement or
obligations of Torray or the Fund, or any law or regulation applicable
to either;
- the shares of the Fund are registered or otherwise authorized for
issuance and sale;
- this Agreement has been duly authorized by Torray and, when executed
and delivered, will constitute valid, legal and binding obligation of
Torray, enforceable in accordance with its terms.
<PAGE>
Delivery of Documents
Torray will furnish or cause to be furnished to FPS the following
documents;
- the Fund's current Prospectus and Statement of Additional Information;
- copies of the Management Contract between the Fund and Torray dated as
of November 16, 1990;
- copies of the Transfer Agency and Shareholder Servicing Agreement
between the Fund and Torray dated as of November 16, 1990;
- The Fund's most recent Annual Report;
- the Fund's most recent Semi-Annual Report for registered investment
companies on Form N-SAR;
- resolutions of Torray's Board of Directors and the Fund's Board of
Trustees authorizing the execution of Written Instructions or the
transmittal of Oral Instructions.
Reports and Records
FPS agrees to furnish to Torray, the Fund, and to their properly authorized
auditors, investment advisers, examiners, distributors, dealers, underwriters,
salesmen, insurance companies and other designated by Torray or the Fund such
report at such times as are prescribed in Schedule "A" attached hereto, or as
subsequently agreed upon by the parties pursuant to an amendment to Schedule
"A". FPS also agrees that, on the request of Torray or the Fund, FPS will make
available copies of all records maintained by FPS as may reasonable be requested
by Torray or the fund to ensure compliance with this Agreement and applicable
law. FPS agrees that such records will be made available to the Securities and
Exchange Commission in accordance with the requirements of Rule 17Ad-7(g) under
the Exchange Act.
Ownership
All records and other data created and maintained by FPS pursuant to this
Agreement and Schedule "A" are the exclusive property of the Fund and all such
records and other data will be furnished to the Fund as soon as practicable
after termination of this Agreement for any reason.
All services provided by FPS on behalf of Torray for the benefit of the
Fund are subject to the control, direction, and supervision of the Board of
Directors of Torray and the Board of Trustees of the Fund and must be in
compliance with the objectives, policies and
<PAGE>
limitations set forth in the Fund's registration statement, Declaration and
By-Laws, applicable laws and regulations and all resolutions and policies
implemented by the Board of Trustees of the Fund. FPS will immediately advise
Torray and the Fund in writing of any discrepancies, errors or inaccuracies in
the records, accounts and documents maintained by FPS pursuant to this
Agreement.
For all purposes under this Agreement, FPS is authorized to act upon
receipt of the first of any Written or Oral Instruction it receives from the
Fund, Torray or their agents. In cases where the first instruction is an Oral
Instruction that is not in the form of a document or written record,
confirmatory Written Instruction or Oral Instruction in the form of a document
or written record shall be delivered, and in cases where FPS receives an
Instruction, whether Written or Oral, to enter a portfolio transaction on the
records, the Fund shall cause the broker/dealer executing such transaction to
send a written confirmation to the Custodian. FPS shall be entitled to rely on
the first Instruction received, and for any act or omission undertaken in
compliance therewith shall be free of liability and fully indemnified and held
harmless by Torray, provided however, that in the event a Written or Oral
Instruction received by FPS is countermanded by a timely received subsequent
written or Oral Instruction prior to acting upon such countermanded Instruction,
FPS shall act upon such subsequent Written or Oral Instruction. The sole
obligation of FPS with respect to any follow-up or confirmatory Written
Instruction, Oral Instruction in documentary or written form, shall be to make
reasonable efforts to detect any such discrepancy between the original
Instruction and such confirmation and to report such discrepancy to the Fund and
Torray. Torray shall be responsible, at Torray's expense, for taking any action,
including any reprocessing, necessary to correct any discrepancy or error. To
the extent such action requires FPS to act, the Fund or Torray shall give FPS
specific Written Instruction as to the action required.
TRANSFER AGENCY SERVICES
Section 2. FPS shall make original issues of Shares in accordance with
this Agreement and with Torray's Prospectus and Statement of Additional
Information then in effect, upon the written request of Torray, and upon being
furnished with (i) a certified copy of a resolution or resolutions of the Board
of Trustees of Torray authorizing such issue; (ii) an opinion of
<PAGE>
counsel as to the validity of such Shares; and (iii) necessary funds for the
payment of any original issue tax applicable to such Shares.
Section 3. Transfers of Shares shall be registered and new Shares issued
by FPS upon redemption of outstanding Shares, (i) in the form deemed by FPS to
be properly endorsed for transfer, (ii) with all necessary endorser's signatures
guaranteed pursuant to Rule 17Ad-15 under the Securities Exchange Act of 1934,
as amended, and accompanied by, (iii) such assurances as FPS shall deem
necessary or appropriate to evidence the genuineness and effectiveness of each
necessary endorsement, and (iv) satisfactory evidence of compliance with all
applicable laws relating to the payment or collection of taxes.
Section 4. In registering transfers, FPS may rely upon the applicable
commercial code or any other applicable law which, in the written opinion of
counsel (a copy of which shall previously have been furnished to Torray and the
Fund), protect FPS, Torray and the Fund in not requiring complete documentation,
in registering transfer without inquiry into adverse claims, in delaying
registration for purposes of such inquiry, or in refusing registration where in
its judgment an adverse claim requires such refusal.
Section 5. With respect to confirmed trades received by FPS from a
registered representative of an NASD member, FPS shall periodically notify
Torray of the current status of outstanding confirmed trades. FPS is
authorized to cancel confirmed trades which have been outstanding for thirty
(30) days. Upon such cancellation, FPS shall instruct the accounting agent
to adjust the books of Torray accordingly. FPS will not accept telephone
purchases directly from shareholders.
Section 6. FPS will maintain stock registry records in the usual form
in which it will note the issuance, transfer and redemption of Shares. FPS
is responsible to provide reports of Share purchases, redemptions, and total
Shares outstanding on the next business day after each net asset valuation.
FPS is authorized to keep records, which will be part of the stock transfer
records, in which it will note the names and registered address of Share-
holders and the number of Shares and fractions thereof owned by them.
Section 7. In addition to the duties and functions above-mentioned, FPS
will perform the usual duties and functions of a stock transfer agent for an
investment company as listed in Schedule "A" attached hereto. FPS may rely
conclusively and act without further investigation upon any list, instruction,
certification, authorization or other instrument or paper
<PAGE>
reasonably believed by FPS in good faith, to be genuine and unaltered,
and to have been signed, countersigned, or executed by duly authorized
person or persons, or upon the instructions of any officer of Torray or
the Fund, or upon the advice of counsel for Torray, the Fund or FPS. FPS
may record any transfer of Shares which it reasonably believes to have
been duly authorized or may refuse to record any transfer of Shares if
in good faith FPS deems such refusal necessary in order to avoid any
liability either of Torray, the Fund or FPS. Torray agrees to indemnify
and hold harmless FPS from and against any and all losses, costs,
claims, and liability which it may suffer or incur by reason of such
reliance or acting or refusing to act. FPS shall maintain and reconcile
all operating bank accounts necessary to facilitate all transfer agency
processes; including, but not limited to, distribution disbursements,
redemptions and payment clearance accounts.
Section 8. In the event of any request or demand for the inspection of
the Share records is received, FPS shall use its best efforts to notify
Torray and to secure instructions as to permitting or refusing such inspection.
FPS may, however, exhibit such records to any person in any case where it is
advised by its counsel that it may be held liable for failure to do so.
FPS, Torray and the Fund may from time to time adopt such procedures as
agreed upon in writing, and FPS may conclusively assume that any procedure
approved by Torray or the Fund or directed by Torray or the Fund, does not
conflict with or violate any requirements of the Fund's Prospectus, Statement
of Additional Information, Fund Instrument or any rule or regulation of any
regulatory body or governmental agency.
ISSUANCE OF SHARES
Section 9. Prior to the daily determination of net asset value in
accordance with the Series' Prospectus and Statement of Additional Information,
FPS shall process all purchase orders received since the last determination
of the net asset value.
FPS shall calculate daily the amount available for investment in Shares
at the net asset value determined by the pricing agent as of the close of
regular trading on the New York Stock Exchange, the number of Shares and
fractional Shares to be purchased and the net asset value to be deposited
with Torray's custodian bank (the "Custodian"). FPS shall place a purchase
order daily for the proper number of Shares and fractional Shares to be
purchased and confirm such number to Torray, in writing.
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
We have issued our report dated January 16, 1998, accompanying the December 31,
1997 financial statements of the The Torray Fund which are included in Part B of
the Post-Effective Amendment to this Registration Statement and Prospectus. We
consent to the use of the aforementioned report in the Registration Statement
and Prospectus.
BRIGGS, BUNTING & DOUGHERTY, LLP
Philadelphia, Pennsylvania
April 27, 1998
Exhibit 11(b)
[JOHNSON LAMBERT & CO. LETTERHEAD]
CONSENT OF INDEPENDENT ACCOUNTANTS
To the Board of Trustees of The Torray Fund
We consent to the following with respect to Post-Effective Amendment No. 33
pursuant to the Securities Act of 1933, as amended, to the Registration
Statement on form N-1A of The Torray Fund:
o The reference to our Firm as auditors under the heading "Financial Highlights"
in the Prospectus as it relates to The Torray Fund for periods prior to 1997.
/s/ Johnson Lambert & Co.
--------------------------
JOHNSON LAMBERT & CO.
Bethesda, Maryland
April 22, 1998
Exhibit 24
POWER OF ATTORNEY
I, the undersigned trustee and officer of The Torray Fund, a
Massachusetts business trust, do hereby constitute and appoint William
M Lane, Kathryn B. McGrath and John H. Grady, Jr., and each of them
singly, my true and lawful attorneys, with full power to them and each
of them to sign for me and in my name and in the capacity as trustee and
officer, the Registration Statement and any amendments thereto on Form
N-1A of The Torray Fund, and to file the same with all exhibits thereto,
and other documents in connection thereunder, with the Securities and
Exchange Commission, granting unto my said attorneys, and each of them
acting alone, full power and authority to do and perform each and every
act and thing requisite or necessary to be done in the premises, as fully
as to all intents and purposes as he or she might or could do in person,
hereby ratifying and confirming all that said attorneys or any of them
may lawfully do or cause to be done by virtue thereof.
WITNESS my hand on the date set forth below.
February 4, 1994 /s/ Wayne H Shaner
--------------------------------
Wayne Shaner, Trustee
<PAGE>
POWER OF ATTORNEY
I, the undersigned trustee and officer of The Torray Fund, a
Massachusetts business trust, do hereby constitute and appoint William
M Lane, Kathryn B. McGrath and John H. Grady, Jr., and each of them
singly, my true and lawful attorneys, with full power to them and each
of them to sign for me and in my name and in the capacity as trustee and
officer, the Registration Statement and any amendments thereto on Form
N-1A of The Torray Fund, and to file the same with all exhibits thereto,
and other documents in connection thereunder, with the Securities and
Exchange Commission, granting unto my said attorneys, and each of them
acting alone, full power and authority to do and perform each and every
act and thing requisite or necessary to be done in the premises, as fully
as to all intents and purposes as he or she might or could do in person,
hereby ratifying and confirming all that said attorneys or any of them
may lawfully do or cause to be done by virtue thereof.
WITNESS my hand on the date set forth below.
January 28, 1994 /s/ Robert Moltz
--------------------------------
Robert Moltz, Trustee
<PAGE>
POWER OF ATTORNEY
I, the undersigned trustee and officer of The Torray Fund, a
Massachusetts business trust, do hereby constitute and appoint William
M Lane, Kathryn B. McGrath and John H. Grady, Jr., and each of them
singly, my true and lawful attorneys, with full power to them and each
of them to sign for me and in my name and in the capacity as trustee and
officer, the Registration Statement and any amendments thereto on Form
N-1A of The Torray Fund, and to file the same with all exhibits thereto,
and other documents in connection thereunder, with the Securities and
Exchange Commission, granting unto my said attorneys, and each of them
acting alone, full power and authority to do and perform each and every
act and thing requisite or necessary to be done in the premises, as fully
as to all intents and purposes as he or she might or could do in person,
hereby ratifying and confirming all that said attorneys or any of them
may lawfully do or cause to be done by virtue thereof.
WITNESS my hand on the date set forth below.
January 30th, 1994 /s/ Bruce C Ellis
--------------------------------
Bruce Ellis, Trustee
<PAGE>
POWER OF ATTORNEY
I, the undersigned trustee and officer of The Torray Fund, a
Massachusetts business trust, do hereby constitute and appoint William
M Lane, Kathryn B. McGrath and John H. Grady, Jr., and each of them
singly, my true and lawful attorneys, with full power to them and each
of them to sign for me and in my name and in the capacity as trustee and
officer, the Registration Statement and any amendments thereto on Form
N-1A of The Torray Fund, and to file the same with all exhibits thereto,
and other documents in connection thereunder, with the Securities and
Exchange Commission, granting unto my said attorneys, and each of them
acting alone, full power and authority to do and perform each and every
act and thing requisite or necessary to be done in the premises, as fully
as to all intents and purposes as he or she might or could do in person,
hereby ratifying and confirming all that said attorneys or any of them
may lawfully do or cause to be done by virtue thereof.
WITNESS my hand on the date set forth below.
February 7, 1994 /s/ Roy Schotland
--------------------------------
Roy Schotland, Trustee
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000862696
<NAME> THE TORRAY FUND
<S> <C>
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