<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION
ON April 5, 2000
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
__________________
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 [ ]
POST-EFFECTIVE AMENDMENT NO. 11 [x]
and
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 [ ]
AMENDMENT NO. 14 [x]
__________________
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
1701 Market Street
Philadelphia, PA 19103
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>
PROSPECTUS
April 5 , 2000
The Torray Fund
The Torray Fund is a no-load mutual fund managed by The Torray Corporation.
The Securities and Exchange Commission has not approved or
disapproved these securities or determined if this prospectus
is truthful or complete. Any representation to the contrary
is a criminal offense.
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
About the Fund............................................................. 2
Performance................................................................ 4
Fund Expenses.............................................................. 5
Financial Highlights....................................................... 6
Fund Management............................................................ 7
Purchasing and Redeeming Shares............................................ 7
Taxes and Distributions.................................................... 10
</TABLE>
1
<PAGE>
ABOUT THE FUND
Investment Goals:
The Torray Fund's goals are to build shareholder wealth over long periods (10
years or more) and to minimize shareholder capital gains tax liability by
limiting the realization of long and short-term gains.
There is no guarantee that the Fund will meet these objectives.
Investment Strategies and Policies:
The manager's strategy is to buy and hold stocks of quality companies for
long-term investment. In this context, "quality" refers to demonstrated
earning power, sound finances, solid competitive position, and capable
executive leadership. Management never trades for quick profits and no effort
is made to forecast the market or time the Fund's investments to take
advantage of the perceived outlook. Ordinarily 90% or more of assets will be
invested in common stocks with the balance held in U.S. Treasury securities or
other cash instruments. Investments are not limited to any particular
capitalization size. Positions in individual stocks will generally not exceed
8% of assets and in industry groupings, 25%.
The manager believes that value exists in businesses, not stocks.
Consequently, a thorough analysis of corporate economic fundamentals is the
essential element of The Torray Corporation's approach. History shows that the
stocks of companies generating higher earnings rise over time. The manager's
research, therefore, concentrates on studying growing businesses, the
objective being to capitalize on the values that accumulate in such
enterprises over long periods. Companies that have performed poorly for
extended periods or appear headed downhill with little chance of recovery are
not bought, regardless of how undervalued their shares may appear. However,
quality companies that have fallen from investor favor are often of interest
because the price of their shares may fail to reflect the business's intrinsic
value. In such cases the manager seeks to determine whether the seemingly low
price reflects temporary problems or a serious impairment of economic values.
Investments are made only when it is believed that a company's long-term
outlook is sound and the shares are fairly priced.
2
<PAGE>
Investors in search of unrealistically high returns or quick profits, or to
whom quarterly performance is important, should not invest in The Torray Fund.
The Fund's goals and investment strategy can be changed without shareholder
approval.
MAIN RISKS
Torray Fund investors face the risk that the manager's business analyses prove
faulty. The Fund usually holds between 25 and 40 stocks compared to a mutual
fund industry average of well over 100. If the fundamental prospects of a
number of large holdings are misjudged, shareholders may suffer losses even
during a time when the general market and many other funds are rising. Beyond
that possibility there is always a risk that money may be lost on investments
in equity mutual funds.
PERFORMANCE
Below are a chart and table showing the Fund's performance. The bar chart
illustrates how the Fund's returns have varied from year to year. The table
compares the Fund's performance against the performance of an unmanaged market
index. These figures assume that all distributions were reinvested. It is
important to remember that the Fund's past performance does not indicate how
the Fund will perform in the future.
<TABLE>
<CAPTION>
1991 1992 1993 1994 1995 1996 1997 1998 1999
------ ------ ----- ----- ------ ------ ------ ----- ------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
The Torray Fund.... 19.98% 21.04% 6.37% 2.41% 50.41% 29.09% 37.12% 8.20% 24.01%
</TABLE>
Annual Total Return (%) as of 12/31
3
<PAGE>
The Fund's best return for a calendar quarter was 21.30% in the Fourth Quarter
of 1998, and the lowest return for a calendar quarter was (21.30%) in the
Third Quarter of 1998.
Average Annual Total Returns as of 12/31/99
<TABLE>
<CAPTION>
9 Years
1 beginning
Year 5 Years 12/31/90*
----- ------- ---------
<S> <C> <C> <C>
Torray Fund............................................ 24.01% 29.00% 21.22%
S&P 500 Index.......................................... 21.04% 28.55% 20.85%
</TABLE>
* Commencement of Operations
FUND EXPENSES
This table describes the fees and expenses that you may pay if you buy and
hold shares of the Fund.
<TABLE>
<S> <C>
Shareholder Transaction Fees
(fees paid directly from your investment)
None
Annual Fund Operating Expenses
(expenses that are deducted from Fund assets)
Management Fees.......................................................... 1.00%
Other Expenses........................................................... .07
----
Total Annual Fund Operating Expenses..................................... 1.07%
====
</TABLE>
Example
This example is intended to help you compare the cost of investing in the Fund
with the cost of investing in other mutual funds. This example uses the same
assumptions that are in all mutual fund prospectuses: a $10,000 investment, a
5% return and fund expenses that remain the same each year. The figures shown
in this example are entirely hypothetical. They are not representations of
past or future performance or expenses. Your actual costs and returns may be
higher or lower.
<TABLE>
<CAPTION>
1 Year 3 Years 5 Years 10 Years
- ------ ------- ------- --------
<S> <C> <C> <C>
$ 110 $ 342 $ 593 $ 1,310
</TABLE>
4
<PAGE>
FUND MANAGEMENT
The Fund's manager is The Torray Corporation, 6610 Rockledge Drive, Suite 450,
Bethesda, Maryland 20817. Robert E. Torray has served as President of the
manager since 1990. Mr. Torray is also the Chairman of Robert E. Torray & Co.
Inc., a manager of large institutional portfolios, that he founded May 1,
1972. Douglas C. Eby, the Fund's co-manager, joined The Torray Corporation in
1992. He serves as its Executive Vice President and is also President of
Robert E. Torray & Co. Inc. Mr. Torray is 62 and Mr. Eby is 40.
The manager provides investment advice and portfolio management services and
oversees the administration of the Fund. The manager received 1.0% of the
Fund's average daily net assets as compensation for these services for the
fiscal year ended December 31, 1999.
PURCHASING AND REDEEMING SHARES
Pricing Fund Shares
Orders to buy or redeem shares that are received in good order prior to the
close of the Fund (generally 4:00 P.M. Eastern time) will be processed at the
net asset value calculated that day. Net asset value per share is calculated
by dividing the Fund's net assets by the number of shares outstanding after
the New York Stock Exchange ("NYSE") closes for the day.
The Fund uses market quotes that are readily available to value its
securities. In cases where quotes are not readily available, the securities
will be valued using fair value guidelines approved by the Fund's board of
trustees.
5
<PAGE>
How To Buy Shares
You may buy shares of the Fund on a no-load basis on any day that the NYSE is
open.
The minimum initial purchase is $10,000. You should send your check payable to
"The Torray Fund" with a completed account application to the Fund's transfer
agent:
The Torray Fund
c/o PFPC Inc.
211 South Gulph Road
P.O. Box 61503
King of Prussia, PA 19406-0903
Additional purchases can be made for $500 or more and should be mailed to:
The Torray Fund
c/o PFPC Inc.
211 South Gulph Rd.
P.O. Box 61767
King of Prussia, PA 19406-8767
Please remember to include your account number on your check.
You, your spouse, or your children may open a related account for an initial
investment of $2,000 if your current account meets the minimum initial
investment amount of $10,000. A related account can be a joint account with
your spouse or children or a retirement account such as an IRA.
To open a related account you may be asked to present additional documents as
proof of the relationship in addition to an account application. You will also
be asked to provide your existing account number and taxpayer identification
number. You should use caution when giving these numbers to another person
because that person may be able to gain access to your account or other
confidential financial information.
You may also buy shares through a broker or other financial institution and
may be charged a fee for their services.
6
<PAGE>
How to Redeem Shares
You may redeem your shares either in writing or by telephone if you elected
the telephone redemption privilege on your application. You should submit your
written redemption request directly to:
The Torray Fund
c/o PFPC Inc.
211 South Gulph Road
P.O. Box 61503
King of Prussia, PA 19406-0903
If your account is held in the name of a corporation, as a fiduciary or agent,
or as a surviving joint owner, you may be required to provide additional
documents with your redemption request.
To redeem by telephone you can call 1-800-626-9769.
Please remember that all redemption requests must include your name and
account number. The Fund may take up to seven days to pay redemption proceeds.
If you are redeeming shares that were recently purchased by check, the
proceeds may be delayed until the check for purchase clears; this may take up
to 15 days from the date of purchase.
Additional Purchase and Redemption Information
The Fund reserves the following rights as they relate to purchases and
redemptions:
. To redeem your shares if your account balance falls below $10,000 as a
result of redemptions. You will receive 30 days notice to increase the
value of your account to $10,000 before the account is closed.
. To refuse any purchase order.
. To refuse third-party checks for purchases of shares.
. To change or waive the Fund's investment minimums.
. To suspend the right to redeem and delay redemption proceeds during
times when trading on the NYSE is restricted or halted, or otherwise as
permitted by the SEC.
7
<PAGE>
. To require a signature guarantee for fund redemptions sent to an address
different from the address of record.
. To require a signature guarantee for some fund redemptions and IRA
transfers.
Shareholders should be aware that purchase and redemption requests mailed to
the Fund's Maryland address will not be processed until they are received by
the Fund's transfer agent (generally the next business day) at the address
above. You can avoid delays by mailing requests for purchases and redemptions
directly to the Fund's transfer agent.
TAXES AND DISTRIBUTIONS
The Fund declares and pays dividends quarterly and net capital gains at least
annually. All distributions will be invested in shares of the Fund unless you
elect on your account application to receive distributions in cash. You can
elect to cancel cash payments by notifying the Fund, in writing, prior to the
date of distribution. Your choice will be effective for distributions paid
after the Fund receives your written notice.
The Fund will distribute substantially all of its investment income and
capital gains, if any. The dividends and distributions you receive may be
subject to federal, state and local taxation, depending upon your tax
situation. Capital gains distributions may be taxable at different rates
depending on the length of time the Fund holds its securities. The manager's
buy and hold strategy may act to limit the realization of short term gains,
and defer the realization of long term gains. Each redemption of Fund shares
is a taxable event. You should consult a tax advisor regarding your investment
in the Fund.
8
<PAGE>
FINANCIAL HIGHLIGHTS
The financial highlights table is intended to help you understand the Fund's
financial performance for the past 5 years. Certain information reflects
financial results for a single Fund share. The total returns in the table
represent the rate that an investor would have earned on an investment in the
Fund (assuming reinvestment of all dividends and distributions). The
information for 12/31/99, 12/31/98 and 12/31/97 has been audited by Briggs,
Bunting & Dougherty, LLP, whose report, along with the Fund's financial
statements are incorporated by reference into the Statement of Additional
Information, which is available upon request. The information for 12/31/96 and
12/31/95 has been audited by other auditors.
<TABLE>
<CAPTION>
Year Year Year Year Year
ended ended ended ended ended
12/31/99 12/31/98 12/31/97 12/31/96 12/31/95
---------- ---------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
PER SHARE DATA
Net Asset Value,
Beginning of Period.... $ 36.480 $ 33.850 $ 25.220 $ 20.110 $13.755
Income From Investment
Operations:
Net Investment Income.... 0.073 0.139 0.130 0.186 0.215
Net Gains on Securities
(both realized and
unrealized)............ 8.616 2.630 9.206 5.642 6.674
---------- ---------- -------- -------- -------
Total from Investment
Operations............ 8.689 2.769 9.336 5.828 6.889
Less Distributions:
Dividends (from Net
Investment Income)..... (0.073) (0.139) (0.130) (0.187) (0.214)
Distributions (from
Capital Gains)......... (0.786) 0.000 (0.576) (0.531) (0.320)
---------- ---------- -------- -------- -------
Total Distributions..... (0.859) (0.139) (0.706) (0.718) (0.534)
---------- ---------- -------- -------- -------
Net Asset Value, End of
Period................. $ 44.310 $ 36.480 $ 33.850 $ 25.220 $20.110
========== ========== ======== ======== =======
TOTAL RETURN /1/ ........ 24.01% 8.20% 37.12% 29.09% 50.41%
RATIOS/SUPPLEMENTAL
DATA
Net Assets, End of Period
(000's omitted)........ $1,895,538 $1,458,854 $608,537 $116,593 $50,744
Ratio of Expenses to
Average Net Assets..... 1.07% 1.09% 1.13% 1.25% 1.25%
Ratio of Net Income to
Average Net Assets..... 0.18% 0.42% 0.47% 0.87% 1.31%
Portfolio Turnover Rate.. 32.55% 25.96% 11.72% 20.95% 22.56%
</TABLE>
- ----------
/1/Past performance is not predictive of future performance.
9
<PAGE>
INVESTMENT MANAGER
The Torray Corporation
6610 Rockledge Drive, Suite 450
Bethesda, MD 20817
LEGAL COUNSEL
Morgan, Lewis & Bockius LLP
1701 Market Street
Philadelphia, PA 19103
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
PFPC Inc.
211 South Gulph Road
P.O. Box 61503
King of Prussia, PA 19406-0903
<PAGE>
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
HOW TO OBTAIN MORE INFORMATION
The Statement of Additional Information (SAI) contains additional information
about the Fund including a more detailed discussion of its investment policies
and the risks associated with various investments. The SAI is incorporated by
reference into this prospectus. This means that the SAI is legally a part of
the prospectus.
Additional information about the Fund's investments is available in the Fund's
Annual and Semi-annual Report to Shareholders. In the Fund's annual report,
you will find a discussion of the market conditions and investment strategies
that significantly affected the Fund's performance during its last fiscal
year.
You may obtain a copy of the SAI or Reports to Shareholders by request and
without charge by contacting the Fund at 1-800-443-3036 or in writing to The
Torray Corporation, 6610 Rockledge Drive, Suite 450, Bethesda, Maryland 20817.
Information about the Fund (including the SAI) can be reviewed and copied at
the Securities and Exchange Commission's Public Reference Room in Washington,
D.C., or from the EDGAR Database on the SEC's website (http://www.sec.gov).
Information on the operation of the Public Reference Room may be obtained by
calling the Commission at 1-202-942-8090. Copies of this information may be
obtained upon payment of a duplicating fee by writing to: Securities and
Exchange Commission, Public Reference Section, Washington, D.C. 20549-0102.
You also may obtain this information upon payment of a duplicating fee, by e-
mailing the SEC at the following address: publicinfo@ sec.gov.
The Torray Fund - 811-06096
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
The
TORRAY
FUND
--------------
PROSPECTUS
--------------
April 3, 2000
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
<PAGE>
THE TORRAY FUND
STATEMENT OF ADDITIONAL INFORMATION
April 5, 2000
This Statement of Additional Information is not a prospectus. This Statement of
Additional Information should be read in conjunction with the Prospectus dated
April 5, 2000. A copy of the Prospectus may be obtained by writing The Torray
Corporation, 6610 Rockledge Drive, Suite 450, Bethesda, Maryland 20817, or by
telephoning toll free at 1-800-443-3036. The Fund's most recent annual report is
a separate document supplied with the SAI and include the Fund's audited
financial statements, which are incorporated by reference into this Statement of
Additional Information.
<PAGE>
- -------------------------------------------------------------------------
TABLE OF CONTENTS
- -------------------------------------------------------------------------
<TABLE>
<CAPTION>
Page
<S> <C>
INVESTMENT OBJECTIVE, POLICIES, RISKS, RESTRICTIONS,AND LIABILITIES.. 3
MANAGEMENT OF THE FUND............................................... 6
INVESTMENT MANAGER AND OTHER SERVICES................................ 9
DISTRIBUTIONS........................................................ 11
BROKERAGE SERVICES................................................... 11
ORGANIZATION AND CAPITALIZATION OF THE FUND.......................... 13
REDEMPTION OF SHARES AND DETERMINATION OF NET ASSET VALUE............ 13
TAXES................................................................ 15
CALCULATION OF RETURN................................................ 17
FINANCIAL STATEMENTS................................................. 18
</TABLE>
-2-
<PAGE>
INVESTMENT OBJECTIVE, POLICIES, RISKS, RESTRICTIONS, AND LIABILITIES
- --------------------------------------------------------------------
Investment Objective.
---------------------
The Torray Fund (the "Fund") is a diversified, open-end mutual fund. The
Fund's goals are to build shareholder wealth over long periods (10 years or
more) and to minimize shareholder capital gains tax liability by limiting the
realization of long and short-term gains. There is no guarantee that the Fund
will meet these objectives.
Equity Securities. Since it purchases equity securities, the Fund is
------------------
subject to the risks that stock prices both individually and market-wide will
fall over short or extended periods of time, and that prices of the Fund's
equity securities may fluctuate from day-to-day. Historically, the stock
markets have moved in cycles. Individual companies may report poor results or
be negatively affected by industry and/or economic trends and developments. The
stock prices of these companies may suffer a decline in response. These factors
contribute to price volatility. Therefore, in order to be successful, investors
must accept the fact that although the stocks of good companies generally will
rise over long periods, they can trade at virtually any price in the short run.
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 "Brokerage Services," for a discussion of underwriters'
commissions and dealers' spreads involved in the purchase and sale of such
instruments.
The investment objective and policies of the Fund set forth above and in
the Prospectus may be changed without shareholder approval.
-3-
<PAGE>
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 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.
-4-
<PAGE>
(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 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.
-5-
<PAGE>
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.
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.
MANAGEMENT OF THE FUND
----------------------
The Trust is overseen by a board of trustees. The board of trustees meets
regularly to review the Fund's activities, contractual arrangements, and
performance.
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, Amling & Company
(investment management company).
Robert P. Moltz (DOB 10/03/47), Trustee of the Fund. President and Chief
------------------------------
Executive Officer, Weaver Bros. Insurance Associates, Inc. (insurance).
Professor Roy A. Schotland (DOB 03/18/33), Trustee of the Fund. Professor
-----------------------------------------
of Law, Georgetown University Law Center;
-6-
<PAGE>
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 and Lockheed Martin Investment
Management Company; Member, Investment Committee, Maryland State Retirement
System.
Bruce C. Ellis (DOB 07/26/44), Trustee of the Fund. 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, Secretary and Treasurer, 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.
-----------------------------
President, Robert E. Torray & Co., Inc.; Vice President and Treasurer, The
Torray Corporation.
___________________________________
* 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 Torray Fund,
6610 Rockledge Drive, Suite 450, 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
willful misfeasance, bad faith, gross negligence or reckless disregard of his or
her duties.
-7-
<PAGE>
Each Trustee who is not an "interested person" of the Fund receives an
annual fee of $10,000, plus $1,000 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, 1999.
<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, 1999 Part of Fund
Expenses
- ------------------------------------------------------------------------------
<S> <C> <C> <C>
Frederick $12,000 -0- -0-
Amling
- ------------------------------------------------------------------------------
Robert P. $13,000 -0- -0-
Moltz
- ------------------------------------------------------------------------------
Roy A. $13,000 -0- -0-
Schotland
- ------------------------------------------------------------------------------
Wayne H. $13,000 -0- -0-
Shaner
- ------------------------------------------------------------------------------
Bruce C. Ellis $13,000 -0- -0-
- ------------------------------------------------------------------------------
</TABLE>
As of March 14, 2000, the Trustees, officers, and affiliated persons of the
Fund, as a group, owned 859,142.642 shares (2.001%) of the Fund.
As of March 14, 2000 the following shareholders owned beneficially or of
record more than 5% of the outstanding shares of the Fund.
<TABLE>
<CAPTION>
- -----------------------------------------------------------------
Shareholder # of Shares % of Fund
- ----------- -------------- -----------
- -----------------------------------------------------------------
<S> <C> <C>
Charles Schwab & Co., Inc. 12,805,276.027 29.25%
FBO Schwab Customers
101 Montgomery Street
San Francisco, CA 94104
- -----------------------------------------------------------------
</TABLE>
-8-
<PAGE>
<TABLE>
<CAPTION>
- -----------------------------------------------------------------
Shareholder # of Shares % of Fund
- ----------- ------------- -----------
- -----------------------------------------------------------------
<S> <C> <C>
National Financial Services, Corp. 4,848,761.146 11.07%
200 Liberty Street
5th Floor
New York, NY 10281
Donaldson, Lufkin 2,678,074.608 6.13%
Jenrette Securities Corp.
P.O. Box 2052
Jersey City, NJ 07303-9998
- -----------------------------------------------------------------
</TABLE>
INVESTMENT MANAGER AND OTHER SERVICES
- -------------------------------------
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 objectives, policies and restrictions.
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 "Brokerage 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
it or its 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 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
-9-
<PAGE>
Fund, the right of the Fund to use the identifying name of "Torray" may be
withdrawn.
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, 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.
--------------------------------------
Advisory Fees Paid
--------------------------------------
1997 1998 1999
--------------------------------------
$3,446,533 $12,821,032 $16,626,268
--------------------------------------
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.
Code of Ethics.
--------------
The Board of Trustees of the Fund has adopted a Code of Ethics
pursuant to Rule 17j-1 under the Investment Company Act of 1940. In addition,
the manager has also adopted a Code of Ethics pursuant to Rule 17j-1. These
Codes of Ethics apply to the personal investing activities of trustees, officers
and certain employees ("access persons"). Rule 17j-1 and the Codes are designed
to prevent unlawful practices in connection with the purchase or sale of
securities by access persons. Under each
-10-
<PAGE>
Code of Ethics, access persons are permitted to engage in personal securities
transactions, but are required to report their personal securities transactions
for monitoring purposes. In addition, certain access persons are required to
obtain approval before investing in initial public offerings or private
placements. Copies of these Codes of Ethics are on file with the Securities and
Exchange Commission, and are available to the public.
Other Services.
---------------
United Missouri Bank ("UMB"), 928 Grand Blvd., Kansas City, MO 64141,
is the custodian for the Fund. PFPC, 211 South Gulph Road, King of Prussia, PA
19406-0903 serves as transfer agent and shareholder servicing agent to the Fund.
Certified Public Accountants. The Fund's independent public
----------------------------
accountants are Briggs Bunting & Dougherty, LLP, Two Logan Square, Suite 2121,
Philadelphia, PA 19103.
Fund Counsel. Morgan, Lewis and Bockius LLP, 1701 Market Street,
------------
Philadelphia, PA 19103, serves as counsel to the Trust.
DISTRIBUTIONS
- --------------
Distributions from Net Investment Income. 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. 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.
BROKERAGE 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
-11-
<PAGE>
commissions according to such factors as the difficulty and size of the
transaction. There is generally no stated commission in the case of securities
traded in the over-the-counter markets but the price paid by the Fund usually
includes a 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 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.
-12-
<PAGE>
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.
The total brokerage commissions paid for the fiscal year ended
December 31, 1997, 1998 and 1999 were $757,611.00, $1,804,630.00, and
$1,892,000, 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. The Trust's fiscal year ends on December 31 of each year.
REDEMPTION OF SHARES AND DETERMINATION OF NET ASSET VALUE
- ----------------------------------------------------------
How to Redeem Shares.
--------------------
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
-13-
<PAGE>
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 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.
----------------------------------
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
-14-
<PAGE>
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.
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.
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.
TAXES
- ------
All dividends and distributions of the Fund, whether received in
shares or cash, are taxable to the Fund's shareholders and must be reported by
each shareholder on his
-15-
<PAGE>
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, 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 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.
-16-
<PAGE>
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.
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.
CALCULATION OF RETURN AND PERFORMANCE COMPARISONS
- --------------------------------------------------
Calculation of Return.
----------------------
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)
-17-
<PAGE>
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, 1999 was 21.22%,
and the Fund's average annual total return for the one-year and five-year
periods ended December 31, 1999 was 24.01% and 29.00% respectively.
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.
FINANCIAL STATEMENTS
- ---------------------
The financial statements for the Fund for the year ended December 31,
1999, including notes thereto and the report of Briggs Bunting & Dougherty, LLP
have been filed with the SEC and are incorporated by reference into this
Statement of Additional Information.
-18-
<PAGE>
THE TORRAY FUND
POST-EFFECTIVE AMENDMENT NO. 11 ON FORM N-1A
PART C
OTHER INFORMATION
Item 23. Exhibits.
--------
(a) Agreement and Declaration of Trust originally 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, electronically
filed on April 30, 1996
(b) By-Laws originally 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, electronically filed on April 30,
1996
(c) Inapplicable
(d) Management Contract with The Torray Corporation ("Torray")
originally 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, electronically
filed on April 30, 1996
(e) Inapplicable
(f) Inapplicable
(g)(1) Custodian Agreement between Registrant and Sovran Bank/Maryland
originally 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, electronically
filed on April 30, 1996
C-2
<PAGE>
(g)(2) Custodian Agreement between Registrant and Rushmore Trust and
Savings, FSB originally 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, electronically filed on April 30, 1996
(g)(3) Custody Administration and Agency Agreement between Registrant
and FPS Services, Inc.(First Data Investors Services Group) is
incorporated by reference to exhibit 8(c) to Post-Effective
Amendment No. 8, electronically filed on February 11, 1998
(h)(1) Transfer Agency and Shareholder Service Agreement between
Registrant and Torray originally 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, electronically filed on April 30, 1996
(h)(2) Transfer Agent Services Agreement dated September 20, 1996
between Registrant and FPS Services, Inc. (First Data Investors
Services Group) is incorporated by reference to exhibit (9a) to
Post-Effective Amendment No. 8, electronically filed on April
29, 1998
(i) Opinion of Morgan, Lewis & Bockius LLP is filed herewith
(j) Consent of independent accountants Briggs Bunting & Dougherty,
LLP is filed herewith
(k) Inapplicable
(l) 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
(m) Inapplicable
(n) Inapplicable
C-3
<PAGE>
(o) Inapplicable
(p)(1) Code of Ethics of the Torray Fund is filed herewith
(p)(2) Code of Ethics ofThe Torray Corporation is filed herewith
C-4
<PAGE>
Item 24. Persons Controlled by or under Common Control with Registrant.
-------------------------------------------------------------
None.
Item 25. 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.
Item 26. 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
C-5
<PAGE>
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 27. Principal Underwriters.
----------------------
None
Item 28. 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,
PFPC, 211 South Gulph Road, 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 29. Management Services.
-------------------
Not applicable.
Item 30. Undertakings
------------
Not applicable.
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 Post-Effective Amendment No. 11 to
Registrant's Registration Statement on Form N-1A pursuant to Rule 485(b) under
the 1993 Act and has duly caused this Post-Effective Amendment No. 10 to be
signed on behalf of the undersigned, thereto duly authorized, in the City of
Bethesda and State of Maryland, on the day of April 5, 2000.
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. 11
to the Registration Statement has been signed by the following persons in the
----------------------------
capacity and on the date indicated.
- ------------------------------------
Signature Title Date
- --------- ----- ----
* Trustee April 5, 2000
- ------------------
Frederick Amling
* Trustee April 5, 2000
- ------------------
Robert P. Moltz
* Trustee April 5, 2000
- ------------------
Roy Schotland
/s/ William M Lane Trustee April 5, 2000
William M Lane President
Principal
Financial
Officer
* Trustee April 5, 2000
- ------------------
Bruce Ellis
* Trustee April 5, 2000
- ------------------
Wayne Shaner
* By: /s/ William M Lane
--------------------
William M Lane
Attorney-in-Fact
C-7
<PAGE>
EXHIBIT INDEX
(a) Agreement and Declaration of Trust as filed originally 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, electronically filed on April 30, 1996
(b) By-Laws originally filed as exhibit (2) to the Registrant's Initial
Registration Statement on Form N-1A, originally filed April 24, 1990,
are incorporated by reference to exhibit (2) to Post-Effective
Amendment No. 6, as filed on April 30, 1996
(c) Inapplicable
(d) Management Contract with The Torray Corporation ("Torray") originally
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, electronically filed on April 30, 1996
(e) Inapplicable
(f) Inapplicable
(g)(1) Custodian Agreement between Registrant and Sovran Bank/Maryland
originally 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, electronically filed on April 30, 1996
(g)(2) Custodian Agreement between Registrant and Rushmore Trust and Savings,
FSB originally 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, electronically filed on April 30, 1996
(g)(3) Custody Administration and Agency Agreement between Registrant and FPS
Services, Inc. is incorporated by reference to exhibit 8(c) to Post-
Effective Amendment No. 8, electronically filed on February 11, 1998
(h)(1) Transfer Agency and Shareholder Service Agreement between Registrant
and Torray originally filed as exhibit (9) to Pre-Effective Amendment
No. 2
1
<PAGE>
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, electronically filed on April 30, 1996
(h)(2) Transfer Agent Services Agreement dated September 20, 1996 between
Registrant and FPS Services, Inc. (now First Data) is Exhibit 9a
incorporated by reference to Post-Effective Amendment to be filed by
later amendment No. 8
(i) Opinion of Morgan, Lewis & Bockius LLP is filed herewith
(j) Consent of Briggs Bunting & Dougherty, LLP is filed herewith
(k) Inapplicable
(l) Purchase Agreement between Registrant and Robert E. Torray originally
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
(m) Inapplicable
(n) Inapplicable
(o) Inapplicable
(p)(1) Code of Ethics of the Torray Fund is filed herewith
(p)(2) Code of Ethics ofThe Torray Corporation is filed herewith
2
<PAGE>
Exhibit 99(i)
March 31, 2000
The Torray Fund
6610 Rockledge Drive, Suite 450
Bethesda, Maryland 20817
Re: Opinion of Counsel regarding Post-Effective Amendment No. 11 to the
Registration Statement filed on Form N-1A under the Securities Act of 1933
-------------------------------------------------------------
(File No. 33-34411).
-------------------
Ladies and Gentlemen:
We have acted as counsel to The Torray Fund, a Massachusetts trust (the
"Trust"), in connection with the above-referenced Registration Statement (as
amended, the "Registration Statement") which relates to the Trust's units of
beneficial interest, without par value (collectively, the "Shares"). This
opinion is being delivered to you in connection with the Trust's filing of Post
Effective Amendment No. 11 to the Registration Statement (the "Amendment") to be
filed with the Securities and Exchange Commission pursuant to Rule 485(b) of the
Securities Act of 1933 (the "1933 Act"). With your permission, all assumptions
and statements of reliance herein have been made without any independent
investigation or verification on our part except to the extent otherwise
expressly stated, and we express no opinion with respect to the subject matter
or accuracy of such assumptions or items relied upon.
In connection with this opinion, we have reviewed, among other things, executed
copies of the following documents:
(a) a certificate of the Commonwealth of Massachusetts as to the existence
and good standing of the Trust;
(b) the Agreement and Declaration of Trust for the Trust and all
amendments and supplements thereto (the "Declaration of Trust");
(c) a certificate executed by William M Lane, the Secretary of the Trust,
certifying as to, and attaching copies of, the Trust's Declaration of
Trust and Amended and
<PAGE>
Restated By-Laws (the "By-Laws"), and certain resolutions adopted by
the Board of Trustees of the Trust authorizing the issuance of the
Shares; and
(d) a printer's proof of the Amendment.
In our capacity as counsel to the Trust, we have examined the originals, or
certified, conformed or reproduced copies, of all records, agreements,
instruments and documents as we have deemed relevant or necessary as the basis
for the opinion hereinafter expressed. In all such examinations, we have assumed
the legal capacity of all natural persons executing documents, the genuineness
of all signatures, the authenticity of all original or certified copies, and the
conformity to original or certified copies of all copies submitted to us as
conformed or reproduced copies. As to various questions of fact relevant to such
opinion, we have relied upon, and assume the accuracy of, certificates and oral
or written statements of public officials and officers or representatives of the
Fund. We have assumed that the Amendment, as filed with the Securities and
Exchange Commission, will be in substantially the form of the printer's proof
referred to in paragraph (d) above.
Based upon, and subject to, the limitations set forth herein, we are of the
opinion that the Shares, when issued and sold in accordance with the Declaration
of Trust and By-Laws, and for the consideration described in the Registration
Statement, will be legally issued, fully paid and non assessable under the laws
of the Commonwealth of Massachusetts.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement. In giving this consent, we do not concede that we are in
the category of persons whose consent is required under Section 7 of the 1933
Act.
Very truly yours,
Morgan, Lewis and Bockius LLP
<PAGE>
EXHIBIT 99(j)
[LOGO OF BRIGGS
BUNTING &
DOUGHERTY, LLP APPEARS HERE]
- -------------------------------------------------------------------------------
Certified Public Accountants and Business Advisors
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
We have issued our report dated January 20, 2000, accompanying the December 31,
1999 financial statements of 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
March 31, 2000
<PAGE>
Exhibit 99(p)(1)
THE TORRAY FUND
CODE OF ETHICS
Adopted Under Rule 17j-1
The Torray Fund (the "Fund"), is confident that its Trustees, Officers, and
employees act with integrity and good faith. The Fund recognizes, however, that
personal interests may conflict with the Fund's interests where Officers,
Trustees and certain other persons:
. know about present or future Fund portfolio transactions; or
. have the power to influence Fund portfolio transactions; and
. engage in Securities transactions for their personal account(s).
----------
In an effort to prevent any conflict from arising and in accordance with Rule
17j-1(b)(1) under the Investment Company Act of 1940, the Fund has adopted this
Code of Ethics to address transactions that may create or appear to create
conflicts of interest, and to establish reporting requirements and enforcement
procedures.
I. About this Code of Ethics
A. Who is covered by the Code of Ethics?
------------------------------------
. All Fund Officers; and
. All Fund Trustees, both Interested and Independent.
---------- -----------
B. What rules apply to me?
----------------------
This Code sets forth specific prohibitions regarding Securities
----------
transactions. They are applicable to everyone, except where otherwise
noted. It also sets out certain reporting requirements. For the
reporting requirements that apply to you, please refer to Parts A-B,
as indicated below. (Definitions of underlined terms are included in
----------
Appendix I).
. Independent Trustees Part A
-----------
. Interested Trustees and Fund Officers Part B
----------
II. Statement of General Principles.
In recognition of the trust and confidence placed in the Fund by its
shareholders, and because the Fund believes that its operations should
benefit its shareholders, the Fund has adopted the following universally
applicable principles:
<PAGE>
A. The interests of Fund shareholders are paramount. Shareholder
interests must be placed before your personal interests.
B. All personal Securities transactions must be accomplished in a manner
----------
that avoids conflict between personal interests with those of the Fund
and its shareholders.
C. You must avoid actions or activities that allow (or appear to allow)
you or your family to benefit from your position with the Fund, or
that bring into question your independence or judgment.
III. Generally Applicable Prohibitions and Restrictions
A. Prohibition Against Fraud, Deceit and Manipulation.
---------------------------------------------------
You cannot, in connection with the purchase or sale, directly or
indirectly, of a security held or to be acquired by the Fund:
-------- ----------------------
(1) employ any device, scheme or artifice to defraud the Fund;
(2) make to the Fund any untrue statement of a material fact or omit
to state to the Fund a material fact necessary in order to make
the statements made, in light of the circumstances under which
they are made, not misleading;
(3) engage in any act, practice or course of business which would
operate as a fraud or deceit upon the Fund; or
(4) engage in any manipulative practice with respect to the Fund.
B. Limits on Accepting or Receiving Gifts.
--------------------------------------
You cannot accept or receive any gift of more than de minimis value
from any person or entity in connection with the Fund's entry into a
contract, development of an economic relationship, or other course of
dealing by or on behalf of the Fund.
C. Blackout Period on Personal Securities Transactions.
---------------------------------------------------
Interested Trustees and Fund Officers cannot purchase or sell,
-------------------
directly or indirectly, any security in which they have (or by reason
--------
of such transaction acquire) any beneficial ownership on the same day
--------------------
as the same (or a related) security is being purchased or sold by
-----------------------------------
Fund.
-2-
<PAGE>
D. Prohibition on Selling Recently-Acquired Securities.
---------------------------------------------------
Interested Trustees and Fund Officers cannot sell a security within 60
------------------- --------
days of acquiring that security.
--------
E. Pre-Approval of IPO's and Private Placements.
--------------------------------------------
Interested Trustees and Fund Officers must obtain approval from the
-------------------
Fund's President before acquiring beneficial ownership of any
--------------------
Securities offered in connection with an IPO or a private placement.
---------- --- -----------------
IV. Reporting Requirements
Subject to Section VII hereof, all Trustees, Officers and certain named
persons must comply with the reporting requirements set forth in Parts A-C.
V. Management's Annual Written Report to the Board
At least once a year, the management of the Fund will provide a written
report that includes:
A. Issues Arising Under the Code. The report will describe any issue(s)
-----------------------------
that arose during the previous year under the Code or procedures
thereto, including any material Code or procedural violations, and any
resulting sanctions.
B. Certification and Adoption. The report will certify to the Board that
--------------------------
the Code has measures reasonably necessary to prevent Access Persons
--------------
from violating the Code currently and in the future.
VI. Review and Enforcement of the Fund's Code.
A. Appointment of Review Officer.
-----------------------------
A review officer (the "Review Officer") will be appointed by the
Fund's President to perform the duties described in this Section VI.
B. The Review Officer's Duties and Responsibilities.
------------------------------------------------
(1) The Review Officer shall notify each person who becomes an Access
------
Person and is thereby required to report under this Code of
------
Ethics, no later than 10 days prior to the first quarter in which
they are obligated to begin reporting.
-3-
<PAGE>
(2) The Review Officer will, on a monthly basis, compare all reported
-------
personal Securities transactions with the Fund's completed
----------
portfolio transactions and a list of Securities being considered
----------
for purchase or sale by the Fund's adviser (if such a list
exists) company to determine whether a Code violation may have
occurred. Before determining that a person has violated the
Code, the Review Officer must give the person an opportunity to
supply explanatory material.
(3) If the Review Officer determines that a Code violation has or may
have occurred, the Review Officer must submit the determination,
together with the confidential quarterly report and any
explanatory material provided by the person, to the President and
legal counsel for the Fund. The President and such counsel will
determine whether the person violated the Code.
(4) No person is required to participate in a determination of
whether he or she has committed a Code violation or discuss the
imposition of any sanction against himself or herself.
(5) The Review Officer will report his or her own Securities
----------
transactions to an Alternate Review Officer on a quarterly basis,
which Alternative Review Officer shall otherwise fulfill the
duties of the Review Officer with respect to Securities
----------
transactions so reported. If a Securities transaction of the
----------
Review Officer is under consideration, a Vice President will act
for the Review Officer for purposes of this Section VI.
C. Resolution; Sanctions.
---------------------
If the President finds that a person has violated the Code, the
President will approve a proposed resolution of the situation or, if
appropriate, impose upon the person sanctions that the President deems
appropriate and will report the violation and the resolution and/or
sanction imposed to the Board of Trustees at the next regularly
scheduled board meeting unless, in the sole discretion of the
President, circumstances warrant an earlier report.
VII. Interrelationship With Investment Manager's Code of Ethics.
A. General Principle. A person who is both a Fund Trustee or Fund Officer
-----------------
and an Access Person of the Torray Corporation is only required to
-------------
report under, and otherwise comply with the Torray Corporation's Code
of Ethics.
-4-
<PAGE>
B. Procedures. The Manager of the Fund must:
----------
(1) Submit to the Board of Trustees of the Fund a copy of its code
of ethics adopted pursuant to Rule 17j-1;
(2) Promptly furnish to the Fund, upon request, copies of any
reports made under its code of ethics by any person who is also
covered by the Fund's Code;
(3) Promptly report to the Fund in writing any material amendments
to its code of ethics; and
(4) Immediately furnish to the Fund, without request, all material
information regarding any violation of its code of ethics by any
person.
VIII. Record Keeping.
The Fund will maintain records as set forth below. These records will be
maintained in accordance with rule 31a-2 under the 1940 Act and the
following requirements. They will be available for examination by
representatives of the Securities and Exchange Commission.
A. A copy of this Code and any other code which is, or at any time
within the past five years has been, in effect will be preserved in
an easily accessible place;
B. A list of all persons who are, or within the past five years have
been, required to submit reports under this Code, or who were
responsible for reviewing these reports, will be maintained in an
easily accessible place;
C. A copy of each quarterly transaction report made by an officer or
Trustee under this Code will be preserved for a period of not less
than five years from the end of the fiscal year in which it is made,
the first two years in an easily accessible place; and
D. A record of any Code violation and of any sanctions taken will be
preserved in an easily accessible place for a period of not less than
five years following the end of the fiscal year in which the
violation occurred.
E. A copy of each annual report to the Board must be maintained for at
least five years from the end of the fiscal year in which it is made,
the first two years in an easily accessible place.
-5-
<PAGE>
F. The Fund must maintain a record of any decision, and the reasons
supporting the decision, to approve the acquisition by Interested
----------
Trustees and Fund Officers of Securities acquired in an IPO or private
-------- ---------- --- -------
placement, for at least five years after the end of the fiscal year in
---------
which the approval is granted.
-6-
<PAGE>
IX. Miscellaneous.
A. Confidentiality. All personal Securities transactions reports and any
--------------- ----------
other information filed with the Fund under this Code will be treated
as confidential, provided that such reports and related information
may be provided to the Securities and Exchange Commission and other
regulatory agencies.
B. Interpretation of Provisions. The Board of Trustees may from time to
----------------------------
time adopt such interpretations of this Code as it deems appropriate.
Adopted [__________________]
-7-
<PAGE>
PART A
Procedures for Independent Trustees
I. Required Reports.
Quarterly Transaction Reports.
(A) You must report transactions in Securities on a quarterly basis,
----------
as well as any Securities accounts established during the
----------
quarter. You must submit your report to the Review Officer no
later than 10 days after the end of the calendar quarter in which
the transaction to which the report relates was effected. A
Quarterly Personal Securities Transactions Report is included as
Appendix II.
(B) Notwithstanding Part (A), above, reports of individual Securities
----------
transactions are required only if you knew at the time of the
transaction or, in the ordinary course of fulfilling your
official duties as a Trustee, should have known, that during the
15 day period immediately preceding or following the date of your
transaction, the same security was purchased or sold, or was
--------
being considered for purchase or sale, by the Fund.
(B) If you had no reportable transactions during the quarter or did
not open any accounts in which Securities were held, you are
----------
still required to submit a report. Please note on your report
that you had no reportable transactions during the quarter, and
return it, signed and dated.
II. What Securities Transactions and Accounts are Covered Under My
Quarterly Reporting Obligation?
(A) If the transaction is reportable because it comes within
paragraph (1), above, you must report all transactions in
Securities that because of the transaction, you acquire direct or
----------
indirect beneficial ownership.
--------------------
(B) The report must include any account you established in which any
Securities were held during the quarter.
----------
Note: The "should have known" standard does not:
----
. imply a duty of inquiry;
A-1
<PAGE>
. presume you should have deduced or extrapolated from
discussions or memoranda dealing with the Fund's
investment strategies; or
. impute knowledge from your awareness of the Fund's
portfolio holdings, market considerations, or
investment policies, objectives and restrictions.
III. What Transactions May Be Excluded from Your Report?
(A) You are not required to detail or list the following transactions
on your quarterly report:
(1) Purchases or sales effected for any account over which you
have no direct or indirect influence or control.
-------
(2) Purchases you made solely with the dividend proceeds
received in a dividend reinvestment plan or that are part of
an automatic payroll deduction plan, where you purchase
Securities issued by your employer.
----------
(3) Purchases arising from the exercise of rights issued by an
issuer pro rata to all holders of a class of its Securities,
----------
as long as you acquired these rights from the issuer, and
sales of such rights so acquired.
(4) Purchases or sales which are non-volitional on the part of
the person, including purchases or sales upon exercise of
puts or calls written by the person and sales from a margin
account to a bona fide margin call.
(B) You may include a statement in your report that the report shall
not be construed as your admission that you have any direct or
indirect beneficial ownership in the security included in the
-------------------- --------
report.
A-2
<PAGE>
PART B
Procedures For Interested Trustees and Fund Officers
I. General Obligations.
(A) List of Securities Holdings. You must provide the Review Officer
with a complete listing of all Securities you beneficially own as of
---------- ------------ ---
December 31, 1999. Each following year, you must submit a revised list
to the Review Officer showing the Securities you beneficially own as
---------- ------------ ---
of December 31. You must submit the initial listing within 10 days of
the date you first become a Trustee, and each update no later than 30
days after the start of the year.
(B) Exception. You are not required to provide this list of Securities if
----------
you must provide this information under a code of ethics adopted by
the Torray Corporation.
II. Required Transaction Reports.
(A) Quarterly Transaction Reports
(1) You must report transactions in Securities on a quarterly basis,
----------
as well as any Securities accounts established during the
----------
quarter. You must submit your report to the Review Officer no
later than 10 days after the end of the calendar quarter in which
the transaction to which the report relates was effected. A
Quarterly Personal Securities Transactions Report is included as
Appendix II.
(2) If you had no reportable transactions during the quarter or did
not open any accounts in which Securities were held, you are
----------
still required to submit a report. Please note on your report
that you had no reportable transactions during the quarter, and
return it, signed and dated.
(3) Remember: You are not required to report your transactions under
--------
the Fund's Code this if you are required to file reports under a
code of ethics adopted by the Investment Manager.
III. What Securities Transactions and Accounts are Covered Under Your Quarterly
Reporting Obligation?
(A) You must report all transactions in Securities that because of the
----------
transaction, you acquire direct or indirect beneficial ownership.
--------------------
B-1
<PAGE>
(B) The report must also include any account you established in which
Securities were held during the quarter.
----------
IV. What Securities Transactions May Be Excluded from Your Report?
(A) You are not required to detail or list the following Securities or
----------
transactions on your report:
(1) Purchases or sales effected for any account over which you have
no direct or indirect influence or control.
-------
(2) Purchases you made solely with the dividend proceeds received in
a dividend reinvestment plan or that are part of an automatic
payroll deduction plan, where you purchase Securities issued by
----------
your employer.
(3) Purchases arising from the exercise of rights issued by an issuer
pro rata to all holders of a class of its Securities, as long as
----------
you acquired these rights from the issuer, and sales of such
rights so acquired.
(4) Purchases or sales which are non-volitional on the part of the
person, including purchases or sales upon exercise of puts or
calls written by the person and sales from a margin account to a
bona fide margin call.
(B) You may include a statement in your report that the report shall not
be construed as your admission that you have any direct or indirect
beneficial ownership in the security included in the report.
-------------------- --------
B-2
<PAGE>
APPENDIX I
Definitions
Access Person includes any director or officer of a fund or of a fund's
- -------------
investment adviser, or employee of the fund or its investment adviser who, in
connection with his or her regular functions or duties, participates in the
selection of a fund's portfolio Securities or who has access to information
----------
regarding a fund's future purchases or sales of portfolio Securities.
----------
Beneficial ownership means the same as it does under Section 16 of the
- --------------------
Securities Exchange Act of 1934. You should generally consider yourself the
"beneficial owner" of any Securities in which you have a direct or indirect
----------
pecuniary interest. In addition, you should consider yourself the beneficial
owner of Securities held by your spouse, your minor children, a relative who
----------
shares your home, or other persons by reason of any contract, arrangement,
understanding or relationship that provides you with sole or shared voting or
investment power.
Control means the same as it does under in Section 2(a)(9) of the 1940 Act.
- -------
Section 2(a)(9) provides that "control" means the power to exercise a
-------
controlling influence over the management or policies of a company, unless such
power is solely the result of an official position with such company. Ownership
of 25% or more of a company's outstanding voting Securities is presumed to give
----------
the holder of such Securities control over the company. This presumption may be
---------- -------
countered by the facts and circumstances of a given situation.
Independent Trustee means a Trustee of the Fund who is not an "interested
- -------------------
person" of the Fund within the meaning of Section 2(a)(19) of the 1940 Act. As
of January 20, 2000, the Fund's independent Trustees are:
--------------------
Frederick Amling
Bruce C. Ellis
Robert P. Moltz
Roy A. Schotland
Wayne H. Shaner
Initial Public Offering ("IPO") means an offering of Securities registered under
- ------------------------------- ----------
the Securities Act of 1933, the issuer of which, immediately before
registration, was not subject to the reporting requirements of Section 13 or
Section 15(d) of the Securities and Exchange Act of 1934.
Interested Trustee means a Trustee of the Fund who is an "interested person" of
- ------------------
the Fund within the meaning of Section 2(a)(19) of the 1940 Act. As of January
20, 2000, the Fund's interested Trustee is:
------------------
William M Lane
I-1
<PAGE>
Private Placement (or Limited Offering) means an offering that is exempt from
- ---------------------------------------
registration under the Securities Act of 1933 pursuant to Section 4(2) or
Section 4(6) of the Securities Act of 1933. Purchase or sale of a security
------------------------------
includes, among other things, the writing of an option to purchase or sell a
security.
- --------
Security means the same as it does under Section 2(a)(36) of the 1940 Act,
- --------
except that it does not include Securities issued by the U.S. government or its
----------
agencies, bankers' acceptances, bank certificates of deposit, commercial paper
and registered, open-end mutual funds.
A security held or to be acquired by the Fund means any security which, within
------------------------------- --------
the most recent 15 days, (i) is or has been held by the Fund, or (ii) is being
or has been considered by the Fund's adviser or sub-adviser for purchase by the
Fund.
A security is being purchased or sold by the Fund from the time a purchase or
-------- -----------------------
sale program has been communicated to the person who places buy and sell orders
for the Fund until the program has been fully completed or terminated.
A security is being considered for purchase or sale by a Fund when a security is
-------- ------------------------------------- --------
identified as such by the adviser to the Fund.
I-2
<PAGE>
APPENDIX II
THE TORRAY FUND
Quarterly Personal Securities Transactions Report
Name of Reporting Person:__________________________________
Calendar Quarter Ended:____________________________________
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------
Name of Broker, Dealer
Name or
of Date of Title of No. of Shares/ Type of Bank Effecting
Issuer Transaction Security Principal Amount Transaction Price Transaction
- ----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
- ----------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------
</TABLE>
If you established an account within the last quarter, please provide the
following information:
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------
Name of Broker, Date Account was Interest Rate Maturity Date Date Report Submitted
Dealer or Bank Established (if applicable) (if applicable) by Access Person
<S> <C> <C> <C> <C>
- ----------------------------------------------------------------------------------------------------
</TABLE>
If you had no reportable transactions during the quarter, please check here. [_]
If you to disclaim beneficial ownership of one or more Securities reported
-------------------- ----------
above, please describe below and indicate which Securities are at issue.________
----------
________________________________________________________________________________
________________________________________________________________________________
____________________ __________
Signature Date
RETURN TO WILLIAM M LANE.
II-1
<PAGE>
Exhibit 99(p)(2)
THE TORRAY CORPORATION
CODE OF ETHICS
Adopted Under Rule 17j-1
The Torray Corporation (the "Corporation"), is confident that its Directors,
officers, and employees act with integrity and good faith. The Corporation
recognizes, however, that personal interests may conflict with the Fund's
interests where officers, Directors or employees:
. know about present or future Fund portfolio transactions; or
. have the power to influence Fund portfolio transactions; and
. engage in Securities transactions for their personal account(s).
----------
In an effort to prevent these conflicts and in accordance with Rule 17j-1(b)(1)
under the Investment Company Act of 1940, the Corporation has adopted this Code
of Ethics (the "Code") to prohibit transactions that create, may create, or
appear to create conflicts of interest, and to establish reporting requirements
and enforcement procedures. (Definitions of underlined terms are included in
----------
Appendix I.)
I. About this Code of Ethics
1. Who is covered by the Code of Ethics?
------------------------------------
. All Corporation Officers;
--------
. All Corporation Directors; and
---------
. All Employees who, in connection with their regular duties,
participate in the selection of the Fund's Securities or have
----------
access to information regarding the Fund's purchases and/or sales
of Securities.
----------
2. What rules apply to me?
----------------------
This Code sets forth specific prohibitions regarding Securities
----------
transactions. They are applicable to everyone except where otherwise
noted. It also sets out certain reporting requirements. For the
reporting requirements that apply to you, please refer to Parts A-B,
as indicated below.
. Directors and Officers Part A
. Employees who are Access Persons Part B
--------------
2. Statement of General Principles.
In recognition of the trust and confidence placed in the Corporation by the
Fund, and because the Corporation believes that its operations should
benefit the Fund's shareholders, the Corporation has adopted the following
general principles:
<PAGE>
1. The interests of Fund shareholders are paramount. Shareholder
interests must be placed before your own.
2. You must accomplish all personal Securities transactions in a manner
----------
that avoids conflict between your personal interests and those of the
Fund and its shareholders.
3. You must avoid actions or activities that allow (or appear to allow)
you or your family to profit or benefit from your position with the
Corporation, or that bring into question your independence or
judgment.
3. Prohibitions and Restrictions Applicable to All Torray Corporation
Personnel.
1. Prohibition Against Fraud, Deceit and Manipulation.
--------------------------------------------------
You cannot, in connection with the purchase or sale, directly or
indirectly, of a security held or to be acquired by the Fund:
----------------------
1. employ any device, scheme or artifice to defraud the Fund;
2. make to the Fund any untrue statement of a material fact or omit
to state to the Fund a material fact necessary in order to make
the statements made, in light of the circumstances under which
they are made, not misleading;
3. engage in any act, practice or course of business which would
operate as a fraud or deceit upon the Fund; or
4. engage in any manipulative practice with respect to the Fund.
2. Limits on Accepting or Receiving Gifts.
--------------------------------------
You may accept or receive any gift of more than de minimis value from
any person or entity in connection with the Fund's entry into a
contract, development of an economic relationship, or other course of
dealing by or on behalf of the Fund.
3. Blackout Period on Personal Securities Transactions.
---------------------------------------------------
You cannot purchase or sell, directly or indirectly, any security in
--------
which you have (or by reason of such transaction acquire) any
beneficial ownership on the same day as the same (or a related)
--------------------
security is being purchased or sold by Fund.
-----------------------------------
4. Sixty-Day Prohibition on Selling Securities.
-------------------------------------------
You cannot sell a security within 60 days of acquiring that security.
-------- --------
-2-
<PAGE>
5. Pre-Approval of Private Placements; Purchase of Shares in IPOs.
--------------------------------------------------------------
You must obtain approval from the Corporation's President before
acquiring beneficial ownership of any Securities sold in a private
----------
placement or as a part of an initial public offering.
------- ------ --------
4. Review and Enforcement of the Corporations's Code.
1. Appointment of Review Officer.
-----------------------------
A review officer (the "Review Officer") will be appointed by the
Corporation's President to perform the duties described in this
Section V.
2. The Review Officer's Duties and Responsibilities.
------------------------------------------------
1. The Review Officer shall notify each person who becomes an Access
------
Person and is thereby required to report under this Code of
------
Ethics, no later than 10 days prior to the first quarter in which
they are obligated to begin reporting.
2. The Review Officer will, on a monthly basis, compare all reported
-------
personal Securities transactions with the Fund's completed
----------
portfolio transactions and a list of Securities being considered
----------
for purchase or sale by the Corporation to determine whether a
Code violation may have occurred. Before determining that a
person has violated the Code, the Review Officer must give the
person an opportunity to supply explanatory material.
3. If the Review Officer determines that a Code violation has or may
have occurred, the Review Officer must submit the determination,
together with the confidential quarterly report and any
explanatory material provided by the person, to the President.
The President will determine whether the person violated the
Code.
4. No person is required to participate in a determination of
whether he or she has committed a Code violation or discuss the
imposition of any sanction against himself or herself.
5. The Review Officer will report his or her own Securities
----------
transactions to an Alternate Review Officer on a quarterly basis,
which Alternative Review Officer shall otherwise fulfill the
duties of the Review Officer with respect to Securities
----------
transactions so reported.
3. Resolution; Sanction(s).
-----------------------
-3-
<PAGE>
If the President finds that a person has violated the Code, the
President will approve a proposed resolution of the situation or, if
appropriate, impose upon the person sanctions that the President deems
appropriate and will report the violation and the resolution and/or
sanction imposed to the Fund's Board of Trustees at the next regularly
scheduled board meeting unless, in the sole discretion of the
President, circumstances warrant an earlier report.
5. Interrelationship With The Torray Fund's Code of Ethics.
1. General Principle.
-----------------
A person who is both an Officer and/or Trustee of the Fund and an
---- ---
Officer, Director and/or Employee of the Corporation is only required
to report under this Code of Ethics.
2. Procedures. The President of the Corporation shall:
----------
1. Submit to the Board of Trustees of the Fund a copy of this code
of ethics;
2. Promptly furnish to the Fund, upon request, copies of any reports
made under this code of ethics by any person who is also covered
by the Fund's code;
3. Promptly report to the Fund in writing any material amendments to
this code of ethics; and
4. Immediately furnish to the Fund, without request, all material
information regarding any violation of this code of ethics by any
person.
6. Annual Written Report to the Board
At least once a year, the Torray Corporation will provide a written report
to the Board that includes:
(1) Issues Arising Under the Code. The report will describe any issue(s)
-----------------------------
that arose during the previous year under the Code or procedures
thereto, including any material Code or procedural violation(s), and
any resulting sanction(s).
(2) Certification and Adoption. The report will certify to the Board that
--------------------------
the Torray Corporation has adopted measures reasonably necessary to
prevent its Access Persons from violating the Code currently and in
--------------
the future.
7. Recordkeeping.
-4-
<PAGE>
The Corporation will maintain records as set forth below. These records
will be maintained in accordance with Rule 31a-2 under the 1940 Act and the
following requirements. They will be available for examination by
representatives of the Securities and Exchange Commission.
1. A copy of this Code and any other code which is, or at any time within
the past five years has been, in effect will be preserved in an easily
accessible place.
2. A list of all persons who are, or within the past five years have
been, required to submit reports under this Code, or who are or were
responsible for reviewing these reports, will be maintained in an
easily accessible place.
3. A copy of each quarterly transaction report made by an Access Person
under this Code will be preserved for a period of not less than five
years from the end of the fiscal year in which it is made, the first
two years in an easily accessible place.
4. A record of any Code violation and of any sanctions taken will be
preserved in an easily accessible place for a period of not less than
five years following the end of the fiscal year in which the violation
occurred.
5. A copy of each annual written report to the Board must be maintained
for at least five years from the end of the fiscal year in which it is
made, the first two years in an easily accessible place.
6. The Corporation must maintain a record of any decisions, and the
reasons supporting the decision, to approve the acquisition by Access
Persons of Securities acquired in an IPO or private placement, for at
----------
least five years after the end of the fiscal year in which the
approval is granted.
8. Miscellaneous.
1. Confidentiality. All personal Securities transactions reports and any
--------------- ----------
other information filed under this Code will be treated as
confidential, provided that such reports and related information may
be provided to the Securities and Exchange Commission and other
----------
regulatory agencies.
2. Interpretation of Provisions. The Corporations's President may from
----------------------------
time to time adopt such interpretations of this Code as he deems
appropriate.
-5-
<PAGE>
PART A
Directors and Officers
9. General Obligations.
List of Securities Holdings.
---------------------------
You must provide the Review Officer with a complete listing of all
Securities you beneficially own as of December 31, 1999. Each following
---------- ------------ ---
year, you must submit a revised list to the Review Officer showing the
Securities you beneficially own as of December 31. You must submit the
---------- ------------ ---
initial listing within 10 days of the date you first become a Trustee, and
each update no later than 30 days after the start of the year.
10. Required Transaction Reports.
1. Quarterly Transaction Reports:
-----------------------------
1. On a quarterly basis, you must report transactions in Securities,
----------
as well as any securities accounts established. You must submit
your report to the Review Officer no later than 10 days after the
end of the calendar quarter in which the transaction to which the
report relates was effected. A Quarterly Personal Securities
Transactions Report is included as Appendix II.
2. If you had no reportable transactions or did not open any
Securities accounts during the quarter, you are still required to
----------
submit a report. Please note on your report that you had no
reportable transactions during the quarter, and return it, signed
and dated.
3. Remember: You are not required to report your transactions under
the Fund's Code if you are required to file reports under this
Code of Ethics.
2. What Securities Transactions and Accounts are Covered Under Your
----------------------------------------------------------------
Quarterly Reporting Obligation?
------------------------------
You must report all transactions in Securities that because of the
----------
transaction, you acquire direct or indirect beneficial ownership. The
--------------------
report must also include any account you established in which
securities were held during the quarter.
A-1
<PAGE>
3. What Securities Transactions May Be Excluded from Your Report?
-------------------------------------------------------------
You are not required to detail or list the following Securities or
----------
transactions on your report:
1. Purchases or sales effected for any account over which you have
no direct or indirect influence or control.
-------
2. Purchases you made solely with the dividend proceeds received in
a dividend reinvestment plan or that are part of an automatic
payroll deduction plan, where you purchase Securities issued by
----------
your employer.
3. Purchases arising from the exercise of rights issued by an issuer
pro rata to all holders of a class of its Securities, as long as
----------
you acquired these rights from the issuer, and sales of such
rights so acquired.
4. Purchases or sales which are non-volitional on the part of the
person, including purchases or sales upon exercise of puts or
calls written by the person and sales from a margin account to a
bona fide margin call.
You may include a statement in your report that the report shall not
be construed as your admission that you have any direct or indirect
beneficial ownership in the security included in the report.
-------------------- --------
A-2
<PAGE>
PART B
Employees Who Are "Access Persons" --
Those who, in connection with their
regular duties, participate in the selection
of the Fund's Securities, or have access to the
----------
Fund's future purchase or sale of Securities
----------
11. General Obligations.
1. List of Securities Holdings.
---------------------------
You must provide the Review Officer with a complete listing of all
Securities you beneficially own as of December 31, 1999. Each
---------- ------------ ---
following year, you must submit a revised list to the Review Officer
showing the Securities you beneficially own as of December 31. You
---------- ------------ ---
must submit the initial listing within 10 days of the date you first
become a Trustee, and each update no later than 30 days after the
start of the year.
12. Required Transaction Reports.
1. Quarterly Transaction Reports:
-----------------------------
1. On a quarterly basis, you must report transactions in Securities,
----------
as well as any securities accounts established. You must submit
your report to the Review Officer no later than 10 days after the
end of the calendar quarter in which the transaction to which the
report relates was effected. A Quarterly Personal Securities
Transactions Report is included as Appendix II.
2. If you had no reportable transactions or did not open any
Securities accounts during the quarter, you are still required to
----------
submit a report. Please note on your report that you had no
reportable transactions during the quarter, and return it, signed
and dated.
2. What Securities Transactions and Accounts are Covered Under Your
----------------------------------------------------------------
Quarterly Reporting Obligation?
------------------------------
You must report all transactions in Securities that because of the
----------
transaction, you acquire direct or indirect beneficial ownership. The
--------------------
report must also include any account you established in which
Securities were held during the quarter.
----------
B-1
<PAGE>
3. What Securities Transactions May Be Excluded from Your Report?
-------------------------------------------------------------
You are not required to detail or list the following Securities or
----------
transactions on your report:
1. Purchases or sales effected for any account over which you have
no direct or indirect influence or control.
-------
2. Purchases you made solely with the dividend proceeds received in
a dividend reinvestment plan or that are part of an automatic
payroll deduction plan, where you purchase Securities issued by
----------
your employer.
3. Purchases arising from the exercise of rights issued by an issuer
pro rata to all holders of a class of its Securities, as long as
----------
you acquired these rights from the issuer, and sales of such
rights so acquired.
4. Purchases or sales which are non-volitional on the part of the
person, including purchases or sales upon exercise of puts
or calls written by the person and sales from a margin account to
a bona fide margin call.
You may include a statement in your report that the report shall not
be construed as your admission that you have any direct or indirect
beneficial ownership in the security included in the report.
-------------------- --------
B-2
<PAGE>
APPENDIX I
Definitions
Access Person includes any director or officer of a fund or of a fund's
- -------------
investment adviser and any employee of the fund or its investment adviser who,
in connection with his or her regular functions or duties, participates in the
selection of a fund's portfolio Securities or who has access to information
----------
regarding a fund's purchases or sales of Securities.
----------
Beneficial ownership means the same as it does under Section 16 of the
- --------------------
Securities Exchange Act of 1934 and Rule 16a-1(a)(2) thereunder. You should
generally consider yourself the "beneficial owner" of any Securities in which
----------
you have a direct or indirect pecuniary interest. In addition, you should
consider yourself the beneficial owner of Securities held by your spouse, your
----------
minor children, a relative who shares your home, or other persons by reason of
any contract, arrangement, understanding or relationship that provides you with
sole or shared voting or investment power.
Control means the same as it does under in Section 2(a)(9) of the 1940 Act.
- -------
Section 2(a)(9) provides that "control" means the power to exercise a
-------
controlling influence over the management or policies of a company, unless such
power is solely the result of an official position with such company. Ownership
of 25% or more of a company's outstanding voting Securities is presumed to give
----------
the holder of such Securities control over the company. This presumption may be
---------- -------
countered by the facts and circumstances of a given situation.
Initial public offering ("IPO") means an offering of Securities registered under
- ------------------------------- ----------
the Securities Act of 1933, the issuer of which, immediately before
registration, was not subject to the reporting requirements of section 13 or
section 15(d) of the Securities Exchange Act of 1934.
Private placement (or limited offering) means an offering that is exempt from
- ----------------- ----------------
registration under the Securities Act of 1933 pursuant to section 4(2) or
section 4(6) in the Securities Act of 1933.
Purchase or sale of a security includes, among other things, the writing of an
- ------------------------------
option to purchase or sell a security.
--------
Security means the same as it does under Section 2(a)(36) of the 1940 Act,
- --------
except that it does not include direct obligations of the U.S. Government or its
agencies, bankers' acceptances, bank certificates of deposit, commercial paper,
high quality short-term debt instruments, including repurchase agreements, any
option to purchase or sell, and any security convertible into or exchangeable
--------
for any security.
--------
A security held or to be acquired by the Fund means any security that within the
------------------------------- --------
most recent 15 days, (i) is or has been held by the Fund, or (ii) is being or
has been considered by the Fund's adviser or sub-adviser for purchase by the
Fund, any option to purchase or sell, and any security convertible into or
--------
exchangeable for any security.
--------
I-1
<PAGE>
A security is being purchased or sold by the Fund from the time a purchase or
-------- -----------------------
sale program has been communicated to the person who places buy and sell orders
for the Fund until the program has been fully completed or terminated.
A security is being considered for purchase or sale by a Fund when a security is
-------- ------------------------------------- --------
identified as such by the Adviser to the Fund.
I-2
<PAGE>
APPENDIX II
THE TORRAY CORPORATION
Quarterly Personal Securities Transactions Report
Name of Reporting Person: __________________________________
Calendar Quarter Ended: ____________________________________
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------
Name of Broker, Dealer
Name or
of Date of Title of No. of Shares/ Type of Bank Effecting
Issuer Transaction Security Principal Amount Transaction Price Transaction
- ----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
- ----------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------
</TABLE>
If you had no reportable transactions during the quarter, please check here. [_]
If you established an account within the last quarter, please provide the
following information:
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------
Name of Broker, Date Account was Interest Rate Maturity Date Date Report Submitted
Dealer or Bank Established (if applicable) (if applicable) by Access Person
<S> <C> <C> <C> <C>
- ----------------------------------------------------------------------------------------------------
</TABLE>
If you did not establish a account within the last quarter, please check here.
[_]
If you to disclaim beneficial ownership of one or more Securities reported
-------------------- ----------
above, please describe below and indicate which are at issue.___________________
________________________________________________________________________________
________________________________________________________________________________
_______________________ ________
Signature Date
RETURN TO WILLIAM M LANE.
II-1
