<PAGE> 1
As filed with the Securities and Exchange Commission on August 15, 1997
1933 Act Registration No. 2-47015
1940 Act Registration No. 811-2354
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 [x]
POST-EFFECTIVE AMENDMENT NO. 57
and
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 [x]
TEMPORARY INVESTMENT FUND, INC.
(Exact Name of Registrant As Specified In Charter)
<TABLE>
<S> <C>
Bellevue Park Corporate Center EDWARD J. ROACH
400 Bellevue Parkway, Suite 100 Bellevue Park Corporate Center
Wilmington, Delaware 19809 400 Bellevue Parkway, Suite 100
(Address of Principal Executive Offices) Wilmington, Delaware 19809
Registrant's Telephone Number: (302) 792-2555 (Name and Address of Agent for Service)
</TABLE>
Copies to:
W. BRUCE McCONNEL, III
Drinker Biddle & Reath LLP
Philadelphia National Bank Building
1345 Chestnut Street
Philadelphia, Pennsylvania 19107-3496
It is proposed that this filing will become effective (check appropriate box)
[x] immediately upon filing pursuant to paragraph (b) on (date) pursuant to
[ ] paragraph (b) 60 days after filing pursuant to paragraph
[ ] (a)(i) on (date) pursuant to paragraph (a)(i) 75 days after
[ ] filing pursuant to paragraph (a)(ii) on (date) pursuant to
[ ] paragraph (a)(ii) of Rule 485
If appropriate, check the following box:
[ ] this post-effective amendment designates a new effective date for a
previously filed post-effective amendment.
The Registrant has registered an indefinite number of securities under the
Securities Act of 1933 pursuant to Rule 24f-2. The Form 24f-2 Notice and Opinion
for the Registrant's fiscal year ended September 30, 1996 was filed on November
25, 1996.
<PAGE> 2
TEMPORARY INVESMENT FUND, INC.
(TEMPFUND DOLLAR SHARES)
CROSS REFERENCE SHEET
<TABLE>
<CAPTION>
FORM N-1A ITEM PROSPECTUS CAPTION
-------------- ------------------
<S> <C>
1. Cover Page............................................................ Cover Page
2. Synopsis.............................................................. Background and
Expense Information
3. Condensed Financial Information ...................................... Financial Highlights;
Yields
4. General Description of
Registrant.......................................................... Cover Page; Financial
Highlights; Investment
Objective and Policies
5. Management of the Fund................................................ Management of the Fund;
Dividends
6. Capital Stock and Other
Securities.......................................................... Cover Page; Financial
Highlights; Dividends;
Taxes; Description of
Shares and
Miscellaneous
7. Purchase of Securities Being
Offered ............................................................ Management of the Fund;
Purchase and
Redemption of Shares
8. Redemption or Repurchase.............................................. Purchase and Redemption
of Shares
9. Pending Legal Proceedings............................................. Inapplicable
</TABLE>
<PAGE> 3
TempFund
Dollar Shares
An Investment Portfolio Offered by
Temporary Investment Fund, Inc.
Bellevue Park Corporate Center For purchase and redemption orders only
400 Bellevue Parkway, Suite 100 call: 800- 851-1154
Wilmington, DE 19809
Temporary Investment Fund, Inc. (the "Company") is a no-load,
diversified, open-end investment company presently offering shares in
two separate money market portfolios. This Prospectus describes one
class of shares ("Dollar Shares") in the TempFund portfolio (the
"Fund").
The Fund's investment objective is to seek current income and stability of
principal. The Fund invests in a portfolio consisting of a broad range of money
market instruments, including government, bank, and commercial obligations and
repurchase agreements relating to such obligations.
Dollar Shares may not be purchased by individuals directly, but
institutional investors may purchase shares for accounts maintained by
individuals. Service Organizations will perform shareholder
servicing and provide assistance in connection with the distribution
of Dollar Shares and receive fees from the Fund for their services.
(See "Management of the Fund--Service Organizations.")
PNC Institutional Management Corporation ("PIMC") and PNC Bank,
National Association ("PNC Bank") serve as the Fund's investment
adviser and sub-adviser, respectively. PFPC Inc. ("PFPC") and
Provident Distributors, Inc. ("PDI") serve as the Fund's
administrators. PDI also serves as the Fund's distributor.
--------------------
SHARES OF THE FUND ARE NOT DEPOSITS OR OBLIGATIONS
OF OR GUARANTEED, ENDORSED, OR OTHERWISE SUPPORTED
BY PNC BANK CORP. OR ITS AFFILIATES, OR THE
U.S. GOVERNMENT, AND ARE NOT FEDERALLY INSURED
BY THE FEDERAL DEPOSIT INSURANCE CORPORATION,
THE FEDERAL RESERVE BOARD OR ANY OTHER AGENCY.
AN INVESTMENT IN THE FUND INVOLVES INVESTMENT RISKS,
INCLUDING THE POSSIBLE LOSS OF PRINCIPAL. THERE CAN
BE NO ASSURANCE THAT IT WILL BE ABLE TO MAINTAIN
ITS NET ASSET VALUE OF $1.00 PER SHARE.
<PAGE> 4
This Prospectus briefly sets forth certain information about the Fund that
investors should know before investing. Investors are advised to read this
Prospectus and retain it for future reference. Additional information about the
Fund, contained in a Statement of Additional Information currently dated
August 15, 1997, has been filed with the Securities and Exchange Commission and
is available to investors without charge by calling the Fund at 800-821-7432.
The Statement of Additional Information, as amended from time to time, is
incorporated in its entirety by reference into this Prospectus.
- --------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED
BY THE SECURITIES AND EXCHANGE COMMISSION OR
ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE
SECURITIES COMMISSION PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO
THE CONTRARY IS A CRIMINAL OFFENSE.
--------------------
August 15, 1997
-2-
<PAGE> 5
BACKGROUND AND EXPENSE INFORMATION
The Company was incorporated in Maryland on February 8, 1973 and commenced
operations of the Fund on October 10, 1973. The Fund presently offers two
separate classes of shares--TempFund Shares and TempFund Dollar Shares ("Dollar
Shares"). Shares of each class represent equal, pro rata interests in the Fund
and accrue daily dividends in the same manner except that Dollar Shares bear
fees payable by the Fund (at the rate of .25% per annum) to institutional
investors for services they provide to the beneficial owners of such shares.
(See "Management of the Fund--Service Organizations.")
EXPENSE SUMMARY - DOLLAR SHARES
<TABLE>
<CAPTION>
TEMPFUND
DOLLAR
SHARES
------
<S> <C>
ESTIMATED ANNUAL FUND OPERATING EXPENSES
(as a percentage of average net assets)
Management Fees (net of waivers)............................................ .08%
Other Expenses.............................................................. .35%
Administration Fees (net of waivers).................................. .08%
Shareholder Servicing Fees............................................ .25%
Miscellaneous......................................................... .02% ---
Total Fund Operating Expenses (net of waivers).............................. .43%
===
</TABLE>
- ---------------
<TABLE>
<CAPTION>
EXAMPLE 1 YEAR 3 YEARS 5 YEARS 10 YEARS
- ------- ------ ------- -------- --------
<S> <C> <C> <C> <C>
You would pay the following expenses on a $1,000
investment, assuming (1) a 5% annual return;
and (2) redemption at the end of each time
period with respect to the following: ......................
TempFund Dollar Shares: ................................. $ 4 $ 14 $ 24 $ 54
</TABLE>
THE FOREGOING SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR FUTURE
EXPENSES OR RATE OF RETURN. ACTUAL EXPENSES AND RATE OF RETURN MAY BE GREATER OR
LESSER THAN THOSE SHOWN.
The purpose of the foregoing table is to assist an investor in
understanding the various costs and expenses that an investor in the Fund will
bear directly or indirectly. In addition, institutional investors may charge
fees for providing administrative services in connection with their customers'
investment in Dollar Shares. (For more complete descriptions of the various
costs and expenses, see "Management of the Fund" in this Prospectus and the
Statement of Additional Information.) Total Fund operating expenses for Dollar
Shares for the fiscal year ended September 30, 1996, absent fee waivers, would
have been .51% of the Fund's average net assets. The investment adviser and
administrators may from time to time waive the investment advisory and
administration fees otherwise payable to them or may reimburse the Fund for its
operating expenses. The foregoing table reflects anticipated waivers and has not
been audited by the Fund's independent accountants.
-3-
<PAGE> 6
FINANCIAL HIGHLIGHTS
The following financial highlights for TempFund Dollar Shares have been
derived from the financial statements of the Fund for the semi-annual period
ended March 31, 1997, for the fiscal year ended September 30, 1996, and for each
of the nine preceding fiscal years. The financial highlights for the fiscal
years ended September 30, 1996, 1995, 1994, 1993 and 1992 have been audited by
Coopers & Lybrand L.L.P., independent accountants, whose report on the financial
statements and financial highlights of the Fund is incorporated by reference
into the Statement of Additional Information. The tables should be read in
conjunction with the financial statements and related notes incorporated by
reference into the Statement of Additional Information. Further information
about the performance of the Fund is available in the semi-annual and annual
reports to shareholders, which may be obtained by calling (800) 821-7432.
TEMPFUND DOLLAR SHARES
The table below sets forth selected financial data for a TempFund Dollar Share
outstanding throughout each period presented.
<TABLE>
<CAPTION>
Six Months
ended
March 31, Year Ended September 30,
1997 1996 1995 1994 1993 1992
---- ---- ---- ---- ---- ----
(Unaudited)
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period........... $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
----- ----- ----- ----- ----- -----
Income From Investment Operations
Net Investment Income......................... .0251 .0516 .0542 .0335 .0285 .0399
----- ----- ----- ----- ----- -----
Net Realized Gains on Investments............. -- -- -- -- -- .0015
----- ----- ----- ----- ----- -----
Total From Investment Operations.............. .0251 .0516 .0542 .0335 .0285 .0414
----- ----- ----- ----- ----- -----
Less Distributions
Dividends (From Net Investment Income)....... (.0251) (.0516) (.0542) (.0335) (.0285) (.0399)
Distributions (From Capital Gains)............ -- -- -- -- -- (.0015)
----- ----- ----- ----- ----- -----
Total Distributions........................... (.0251) (.0516) (.0542) (.0335) (.0285) (.0414)
----- ----- ----- ----- ----- -----
Net Asset Value, End of Period................. $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
===== ===== ===== ===== ===== =====
Total Return.................................. 5.16%(2) 5.30% 5.57% 3.41% 2.89% 4.23%
----- ----- ----- ----- ----- -----
Ratios/Supplemental Data
Net Assets, End of Period (000's)............ $418,814 $162,119 $81,828 $102,105 $112,695 $217,230
Ratio of Expenses to Average Daily
Net Assets.................................. 43%(1,2) .43%(1) .49%(1) .50%(1) .46% .46%
Ratio of Net Investment Income to
Average Daily Net Assets.................... 5.04%(2) 5.16% 5.42% 3.35% 2.85% 3.88%
</TABLE>
<TABLE>
<CAPTION>
1991 1990 1989 1988 1987
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period........... $1.00 $1.00 $1.00 $1.00 $1.00
----- ----- ----- ----- -----
Income From Investment Operations
Net Investment Income......................... .0642 .0790 .0871 .0682 .0584
----- ----- ----- ----- -----
Net Realized Gains on Investments............. -- -- -- -- --
----- ----- ----- ----- -----
Total From Investment Operations.............. .0642 .0790 .0871 .0682 .0584
----- ----- ----- ----- -----
Less Distributions
Dividends (From Net Investment Income)....... (.0642) (.0790) (.0871) (.0682) (.0584)
Distributions (From Capital Gains)............ -- -- -- -- --
----- ----- ----- ----- -----
Total Distributions........................... (.0642) (.0790) (.0871) (.0682) (.0584)
----- ----- ----- ----- -----
Net Asset Value, End of Period................. $1.00 $1.00 $1.00 $1.00 $1.00
===== ===== ===== ===== =====
Total Return.................................. 6.62% 8.22% 9.09% 7.06% 6.04%
----- ----- ----- ----- -----
Ratios/Supplemental Data
Net Assets, End of Period (000's)............ $44,667 $73,968 $101,989 $65,077 $37,746
Ratio of Expenses to Average Daily
Net Assets.................................. .52% .55% .55% .53% .53%
Ratio of Net Investment Income to
Average Daily Net Assets.................... 6.28% 7.91% 8.71% 6.77% 5.81%
</TABLE>
- -----------------
-4-
<PAGE> 7
(1) Without the waiver of advisory and administration fees, the ratio of
expenses to average daily net assets for TempFund Dollar Shares would
have been .49% (annualized) for the six months ended March 31, 1997,
.51% for the year ended September 30, 1996 and .52% for the years ended
September 30, 1995 and 1994, respectively.
(2) Annualized.
-5-
<PAGE> 8
INVESTMENT OBJECTIVE AND POLICIES
The Fund's investment objective is to seek current income and stability
of principal. In pursuing its investment objective, the Fund invests in a broad
range of money market instruments, including government, bank and commercial
obligations that may be available in the money markets. The following
descriptions illustrate the types of instruments in which the Fund invests.
Portfolio obligations held by the Fund have remaining maturities of 397
days (thirteen months) or less (with certain exceptions), subject to the
quality, diversification, and other requirements of Rule 2a-7 under the
Investment Company Act of 1940, as amended (the "1940 Act") and other rules of
the Securities and Exchange Commission (the "SEC"). Pursuant to Rule 2a-7, the
Fund will limit its purchases of any one issuer's securities (other than U.S.
Government obligations) to 5% of the Fund's total assets, except that up to 25%
of its total assets may be invested in securities of one issuer for a period of
up to three business days.
With respect to the types of instruments in which the Fund may invest,
the Fund will purchase only "First Tier Eligible Securities" (as defined by the
SEC) that present minimal credit risks as determined by the investment adviser
pursuant to guidelines approved by the Company's Board of Directors.
Additionally, securities purchased by the Fund (or the issuers thereof) will be
rated at the time of purchase in the highest rating category by either Standard
& Poor's Ratings Group ("Standard & Poor's") or Moody's Investors Service, Inc.
("Moody's"), and no such security will be rated less than the highest rating
category (e.g. less than "A-1" by Standard & Poor's or "Prime-1" by Moody's) by
any NRSRO. A description of applicable NRSRO ratings is in the Appendix to the
Statement of Additional Information. First Tier Eligible Securities consist of
the following types of securities: (a) securities that have ratings at the time
of purchase in the highest rating category by at least two unaffiliated
nationally recognized statistical rating organizations ("NRSROs") (or one NRSRO
if the security was rated by only one NRSRO); (b) securities that are issued by
an issuer with such ratings; (c) securities without such short-term ratings that
have been determined to be of comparable quality by the investment adviser
pursuant to guidelines approved by the Board of Directors; or (d) securities
issued or guaranteed as to principal or interest by the U.S. Government or any
of its agencies or instrumentalities.
The Fund may purchase obligations issued or guaranteed by the U.S.
Government or its agencies and instrumentalities. Obligations of certain
agencies and instrumentalities of the U.S.
-6-
<PAGE> 9
Government are backed by the full faith and credit of the United States. Others
are backed by the right of the issuer to borrow from the U.S. Treasury or are
backed only by the credit of the agency or instrumentality issuing the
obligation. Securities issued or guaranteed by the U.S. Government, its agencies
and instrumentalities have historically involved little risk of loss of
principal if held to maturity. However, due to fluctuations in interest rates,
the market value of such securities may vary during the period a shareholder
owns shares of the Fund. Certain government securities held by the Fund may have
remaining maturities exceeding thirteen months if such securities provide for
adjustments in their interest rates not less frequently than every thirteen
months. To the extent consistent with its investment objectives, the Fund may
invest in Treasury receipts and other "stripped" securities issued or guaranteed
by the U.S. Government, where the principal and interest components are traded
independently under the Separate Trading of Registered Interest and Principal of
Securities program ("STRIPS"). Under the STRIPS program, the principal and
interest components are individually numbered and separately issued by the U.S.
Treasury at the request of depository financial institutions, which then trade
the component parts independently. Currently, the Fund only invests in
"stripped" securities issued or guaranteed by the U.S. Government which are
registered under the STRIPS program. The principal and interest components may
exhibit greater price volatility than ordinary debt securities because of the
manner in which their principal and interest are returned to investors.
The Fund may purchase bank obligations such as certificates of deposit
and bankers' acceptances issued or supported by the credit of domestic banks or
savings institutions having total assets at the time of purchase in excess of $1
billion. The Fund may also make interest-bearing savings deposits in commercial
and savings banks in amounts not in excess of 5% of the Fund's assets.
The Fund may invest in commercial paper, short-term notes and corporate
bonds of domestic corporations that meet the Fund's quality and maturity
requirements.
The Fund may purchase variable or floating rate notes, which are
unsecured instruments that provide for adjustments in the interest rate on
certain reset dates or whenever a specified interest rate index changes,
respectively. Such notes may not be actively traded in a secondary market, but,
in some cases, the Fund may be entitled to payment of principal on demand and
may be able to re-sell such notes in the dealer market. Variable and floating
notes are not typically rated by credit rating agencies, but their issuers must
satisfy the same criteria as set forth above for issuers of commercial paper. If
an issuer of such a note were to default on its payment obligation, the Fund
might be
-7-
<PAGE> 10
unable to dispose of the note because of the absence of an active secondary
market and might, for this or other reasons, suffer a loss to the extent of the
default. The Fund invests in variable or floating rate notes only when the
investment adviser deems the investment to involve minimal credit risk. Variable
and floating rate notes that do not provide for settlement within seven days may
be deemed illiquid and subject to the 10% limitation on such investments.
The Fund may purchase money market instruments from financial
institutions, such as banks and broker-dealers, subject to the seller's
agreement to repurchase them at an agreed upon time and price ("repurchase
agreements"). The securities subject to a repurchase agreement may bear
maturities exceeding thirteen months, provided the repurchase agreement itself
matures in one year or less. The seller under a repurchase agreement will be
required to maintain the value of the securities subject to the agreement at not
less than the repurchase price. Default by the seller would, however, expose the
Fund to possible loss because of adverse market action or delay in connection
with the disposition of the underlying obligations.
The Fund may also purchase securities on a "when-issued" basis.
When-issued securities are securities purchased for delivery beyond the normal
settlement date at a stated price and yield. The Fund will generally not pay for
such securities or start earning interest on them until they are received.
Securities purchased on a when-issued basis are recorded as an asset and are
subject to changes in value based upon changes in the general level of interest
rates. The Fund expects that commitments to purchase when-issued securities will
not exceed 25% of the value of its total assets absent unusual market
conditions. The Fund does not intend to purchase when-issued securities for
speculative purposes but only in furtherance of its investment objective.
The Fund may invest in asset-backed securities which are backed by
mortgages, installment sales contracts, credit card receivables or other assets.
The estimated life of certain asset-backed securities varies with the prepayment
experience with respect to the underlying instruments. For this and other
reasons, an asset-backed security's stated maturity may be shortened, and the
security's total return may be difficult to predict precisely.
In addition, the Fund may, when deemed appropriate by its investment
adviser in light of the Fund's investment objective, invest in high quality,
short-term obligations issued by state and local governmental issuers which
carry yields that are competitive with those of other types of money market
instruments of comparable quality.
-8-
<PAGE> 11
The Fund will not knowingly invest more than 10% of the value of its
total assets in illiquid securities, including time deposits and repurchase
agreements having maturities longer than seven days. Securities that have
readily available market quotations are not deemed illiquid for purposes of this
limitation. (See "Investment Objectives and Policies -- Illiquid Securities" in
the Statement of Additional Information.)
INVESTMENT LIMITATIONS
The Fund's investment objective and the policies described above are
not fundamental and may be changed by the Company's Board of Directors without a
vote of shareholders. If there is a change in the investment objective,
shareholders should consider whether the Fund remains an appropriate investment
in light of their then current financial position and needs. The Fund's
investment limitations summarized below may not be changed without the
affirmative vote of the holders of a majority of its outstanding shares. (A
complete list of the investment limitations that cannot be changed without a
vote of shareholders is contained in the Statement of Additional Information
under "Investment Objectives and Policies.")
THE FUND MAY NOT:
1. Purchase any securities other than so-called money market
instruments, some of which may be subject to repurchase agreements, but the Fund
may make interest-bearing savings deposits in amounts not in excess of 5% of the
value of the Fund's assets.
2. Borrow money, except from banks for temporary purposes and then in
amounts not in excess of 10% of the value of the Fund's assets at the time of
such borrowing; or pledge any assets except in connection with any such
borrowing and in amounts not in excess of the lesser of the dollar amounts
borrowed or 10% of the value of the Fund's assets at the time of such borrowing.
3. Purchase any securities which would cause 25% or more of the value
of its total assets at the time of purchase to be invested in the securities of
issuers conducting their principal business activities in the same industry,
provided that there is no limitation with respect to investments in federal
government obligations or certain bank obligations.
4. Purchase securities of any one issuer, other than the federal
government, if immediately after such purchase more than 5% of the value of its
total assets would be invested in such issuer, except that up to 25% of the
value of the Fund's total assets may be invested without regard to such 5%
limitation.
-9-
<PAGE> 12
PURCHASE AND REDEMPTION OF SHARES
PURCHASE PROCEDURES
Dollar Shares are sold exclusively to institutional investors, such as
banks and savings and loan associations ("Service Organizations"), acting on
behalf of themselves or their customers and customers of their affiliates
("customers"). American Express Centurion Bank acts as Service Organization for
its customers and customers of its affiliates with respect to all shares offered
by this Prospectus. The customers, which may include individuals, trusts,
partnerships and corporations, must maintain accounts (such as demand deposit,
custody, trust or escrow accounts) with the Service Organization. Service
Organizations (or their nominees) will normally be the holders of record of
Dollar Shares, and will reflect their customers' beneficial ownership of shares
in the account statements provided by them to their customers. The exercise of
voting rights and the delivery to customers of shareholder communications from
the Fund will be governed by the customers' account agreements with the Service
Organizations. Investors wishing to purchase Dollar Shares should contact their
account representatives.
Purchase orders must be transmitted by a Service Organization directly
to PFPC, the Fund's transfer agent. All such transactions are effected pursuant
to procedures established by the Service Organization in connection with a
customer's account. Dollar Shares are sold at the net asset value per share next
determined after acceptance of a purchase order by PFPC.
Purchase orders for shares are accepted by the Fund only on days on
which both the New York Stock Exchange and the Federal Reserve Bank of
Philadelphia are open for business (a "Business Day") and must be transmitted to
PFPC in Wilmington, Delaware by telephone (800-441-7450; in Delaware:
302-791-5350) or through the Fund's computer access program. Orders accepted
before 12:00 noon, Eastern time, for which payment has been received by PNC
Bank, the Fund's custodian, will be executed at 12:00 noon. Orders accepted
after 12:00 noon and before 5:30 P.M., Eastern time (or orders accepted earlier
in the same day for which payment has not been received by 12:00 noon), will be
executed at 5:30 P.M., Eastern time, if payment has been received by PNC Bank by
that time. Orders received at other times, and orders for which payment has not
been received by 5:30 P.M., Eastern time, will not be accepted, and notice
thereof will be given to the Service Organization placing the order. (Payment
for orders which are not received or accepted will be returned after prompt
inquiry to the sending institution.) Between 3:00 P.M. and 5:30 P.M., Eastern
time, purchase orders may only be transmitted by telephone, and the Fund
reserves the right to limit the amount of
-10-
<PAGE> 13
such orders. The Fund may in its discretion reject any order for shares.
Payment for Dollar Shares may be made only in federal funds or other
funds immediately available to PNC Bank. The minimum initial investment by a
Service Organization is $5,000 and there is no minimum subsequent investment;
however, Service Organizations may set a higher minimum initial investment and
minimum subsequent investments for their customers.
Conflict of interest restrictions may apply to a Service
Organization's receipt of compensation paid by the Fund in connection with the
investment of fiduciary funds in Dollar Shares. (See also "Management of the
Fund -- Service Organizations.") Institutions, including banks regulated by the
Comptroller of the Currency and investment advisers and other money managers
subject to the jurisdiction of the SEC, the Department of Labor or state
securities commissions, are urged to consult their legal advisors before
investing fiduciary funds in Dollar Shares. (See also "Management of the Fund --
Banking Laws.")
REDEMPTION PROCEDURES
Redemption orders must be transmitted by American Express Centurion
Bank to PFPC in Wilmington, Delaware in the manner described under "Purchase
Procedures," except that redemption orders placed between 3:00 P.M. and 5:30
P.M., Eastern time, may only be transmitted by telephone. Shares are redeemed at
the net asset value per share next determined after PFPC's receipt of the
redemption order. Telephone instructions for redemptions received between 3:00
P.M. and 5:30 P.M., Eastern time, on a Business Day are received for execution
on that same day, however, the Fund reserves the right to make payment for such
redemptions the next Business Day. While the Fund intends to use its best
efforts to maintain its net asset value per share at $1.00, the proceeds paid to
a shareholder upon redemption may be more or less than the amount invested
depending upon a share's net asset value at the time of redemption.
Payment for redeemed shares for which a redemption order is received by
PFPC by 5:30 P.M., Eastern time, on a Business Day is normally made in federal
funds wired to the redeeming Service Organization on the same day. Payment for
redemption orders which are received on a day when PNC Bank is closed is
normally wired in federal funds on the next day following redemption that PNC
Bank is open for business.
The Fund shall have the right to redeem shares in any Dollar Shares
account if the value of the account is less than $1,000, after sixty-days'
prior written notice to the Service
-11-
<PAGE> 14
Organization. Any such redemption shall be effected at the net asset value next
determined after the redemption order is entered. If during the sixty-day period
the Service Organization increases the value of its account to $1,000 or more,
no such redemption shall take place. In addition, the Fund may also redeem
shares involuntarily under certain special circumstances described in the
Statement of Additional Information under "Additional Purchase and Redemption
Information."
OTHER MATTERS
The Fund's net asset value per share for purposes of pricing purchase
and redemption orders is determined by PIMC as of 12:00 noon and 5:30 P.M.,
Eastern time, on each Business Day (excluding those holidays on which either the
Federal Reserve Bank of Philadelphia or the New York Stock Exchange are closed).
Currently, one or both of these institutions are closed on the customary
national business holidays of New Year's Day, Martin Luther King, Jr. Day,
Presidents' Day, Good Friday, Memorial Day (observed), Independence Day, Labor
Day, Columbus Day (observed), Veterans' Day, Thanksgiving Day, and Christmas
Day. The net asset value per share of each class of the Fund's shares is
calculated by adding the value of all securities and other assets of the Fund
that are allocable to a particular class, subtracting liabilities charged to
such class, and dividing the result by the total number of outstanding shares of
such class. In computing net asset value, the Fund uses the amortized cost
method of valuation as described in the Statement of Additional Information
under "Additional Purchase and Redemption Information." The Fund's net asset
value per share for purposes of pricing purchase and redemption orders is
determined independently of the net asset value of the Company's TempCash
portfolio. Under the 1940 Act, the Fund may postpone the date of payment of any
redeemable security for up to seven days.
Fund shares are sold and redeemed without charge by the Fund. Service
Organizations purchasing or holding Dollar Shares for their customer accounts
may charge customers a fee for cash management and other services provided in
connection with their accounts. In addition, if a customer has agreed with a
particular Service Organization to maintain a minimum balance in its account
with the Service Organization and the balance in such account falls below that
minimum, the customer may be obliged by the Service Organization to redeem all
or part of its shares in the Fund to the extent necessary to maintain the
required minimum balance in such account. A customer should, therefore, consider
the terms of its account with a Service Organization before purchasing
Dollar Shares. A Service Organization purchasing or redeeming shares on behalf
of its customers is responsible for transmitting orders to the Fund in
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<PAGE> 15
accordance with its customer agreements, and providing customers with account
statements with respect to share transactions for their accounts.
MANAGEMENT OF THE FUND
BOARD OF DIRECTORS
The business and affairs of the Fund are managed under the direction of
the Company's Board of Directors.
INVESTMENT ADVISER AND SUB-ADVISER
PIMC, a wholly-owned indirect subsidiary of PNC Bank, serves as the
Fund's investment adviser. PIMC is one of the largest bank managers of mutual
funds, with assets currently under management in excess of $30 billion. PIMC was
organized in 1977 by PNC Bank to perform advisory services for investment
companies and has its principal offices at Bellevue Park Corporate Center, 400
Bellevue Parkway, Wilmington, Delaware 19809. PNC Bank serves as the Fund's
sub-adviser. PNC Bank is one of the largest bank managers of investments for
individuals in the United States, and together with its predecessors, has been
in the business of managing the investments of fiduciary and other accounts
since 1847. PNC Bank is a wholly-owned, indirect subsidiary of PNC Bank Corp.,
and has principal offices at 1600 Market Street, Philadelphia, Pennsylvania
19103. In 1973, Provident National Bank (predecessor to PNC Bank) commenced
advising the first institutional money market mutual fund -- a U.S.
dollar-denominated constant net asset value fund -- offered in the United
States. PIMC and PNC Bank also serve as investment adviser and sub-adviser,
respectively, to the Company's TempCash portfolio.
PNC Bank Corp., a multi-bank holding company headquartered in
Pittsburgh, Pennsylvania, is one of the largest financial services organizations
in the United States, with banking subsidiaries in Pennsylvania, New Jersey,
Delaware, Ohio, Kentucky, Indiana, Massachusetts and Florida. Its major
businesses include corporate banking, consumer banking, real estate banking,
mortgage banking and asset management.
As investment adviser, PIMC manages the Fund's portfolio and is
responsible for all purchases and sales of the Fund's portfolio securities. PIMC
also maintains certain of the Fund's financial accounts and records and computes
the Fund's net asset value and net income. For the investment advisory services
provided and expenses assumed by it, PIMC is entitled to receive a fee, computed
daily and payable monthly, based on the Fund's average net assets. PIMC and the
administrators may from time to
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<PAGE> 16
time reduce the investment advisory and administration fees otherwise payable to
them or may reimburse the Fund for its operating expenses. Any fees waived and
any expenses reimbursed by PIMC and the administrators with respect to a
particular fiscal year are not recoverable. For the fiscal year ended September
30, 1996, the Fund paid investment advisory fees aggregating .08% of its average
net assets.
As sub-adviser, PNC Bank provides research, credit analysis and
recommendations with respect to the Fund's investments and supplies PIMC with
certain computer facilities, personnel and other services. For its sub-advisory
services, PNC Bank is entitled to receive from PIMC an amount equal to 75% of
the advisory fee paid by the Fund to PIMC (subject to adjustment in certain
circumstances). The sub-advisory fees paid by PIMC to PNC Bank have no effect on
the investment advisory fees payable by the Fund to PIMC. PNC Bank also serves
as the Fund's custodian. The services provided by PNC Bank and PIMC and the fees
payable by the Fund for these services are described further in the Statement of
Additional Information under "Management of the Fund."
ADMINISTRATORS
PFPC, whose principal business address is 400 Bellevue Parkway,
Wilmington, Delaware 19809, and PDI, whose principal business address is set
forth below under "The Distributor," serve as administrators. PFPC is an
indirect wholly-owned subsidiary of PNC Bank Corp. A majority of the outstanding
stock of PDI is owned by its officers. The administrative services provided by
the administrators, which are described more fully in the Statement of
Additional Information, include providing and supervising the operation of an
automated data processing system to process purchase and redemption orders;
assisting in maintaining the Fund's Wilmington, Delaware office; performing
administrative services in connection with the Fund's computer access program
maintained to facilitate shareholder access to the Fund; accumulating
information for and coordinating the preparation of reports to the Fund's
shareholders and the SEC; and, maintaining the registration of the Fund's shares
for sale under state securities laws. PFPC and PDI are jointly and severally
responsible for carrying out the duties undertaken pursuant to the
Administration Agreement with the Fund.
For their administrative services, the administrators are entitled
jointly to receive a fee, computed daily and payable monthly, based on the
Fund's average net assets. (For information regarding the administrators'
administrative fee waivers and expense reimbursements, see "Investment Adviser
and Sub-Adviser" above.) The Fund also reimburses each administrator for its
reasonable out-of-pocket expenses incurred in connection
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<PAGE> 17
with the Fund's computer access program. For the fiscal year ended September 30,
1996, the Fund paid administrative fees aggregating .08% of its average net
assets.
PFPC also serves as transfer agent, registrar and dividend disbursing
agent. PFPC's address as transfer agent is P.O. Box 8950, Wilmington, Delaware
19885-9628. The services provided by PFPC and PDI and the fees payable by the
Fund for these services are described further in the Statement of Additional
Information under "Management of the Funds."
THE DISTRIBUTOR
PDI also serves as distributor of the Fund's shares. Its principal
offices are located at Four Falls Corporate Center, 6th Floor, West
Conshohocken, Pennsylvania 19428. Fund shares are sold on a continuous basis by
the distributor as agent. The distributor pays the cost of printing and
distributing prospectuses to persons who are not shareholders of the Fund
(excluding preparation and printing expenses necessary for the continued
registration of the Fund's shares) and of printing and distributing all sales
literature. No compensation is payable by the Fund to the distributor for its
distribution services.
SERVICE ORGANIZATIONS
As stated above, Service Organizations (which may include affiliates
of PNC Bank Corp.) may purchase Dollar Shares offered by the Fund. American
Express Centurion Bank acts as Service Organization for its customers and
customers of its affiliates with respect to all shares offered by this
Prospectus. Dollar Shares are identical in all respects to TempFund Shares
except that they bear the service fees described below and enjoy certain
exclusive voting rights on matters relating to these fees. The Fund will enter
into an agreement with each Service Organization which purchases Dollar Shares
requiring it to provide support services to its customers who are the beneficial
owners of such shares in consideration of the Fund's payment of .25% (on an
annualized basis) of the average daily net asset value of the Dollar Shares held
by the Service Organization for the benefit of customers. Such services, which
are described more fully in the Statement of Additional Information under
"Management of the Fund -- Service Organizations," include aggregating and
processing purchase and redemption requests from customers and placing net
purchase and redemption orders with PFPC; processing dividend payments from the
Fund on behalf of customers; providing information periodically to customers
showing their positions in Dollar Shares; and providing sub-accounting or the
information necessary for sub-accounting with respect to Dollar Shares
beneficially owned by customers. Under the terms of the agreements, Service
Organizations are required
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<PAGE> 18
to provide to their customers a schedule of any fees that they may charge
customers in connection with their investments in Dollar Shares.
EXPENSES
Except as noted above and in the Statement of Additional Information,
the Fund's service contractors bear all expenses in connection with the
performance of their services. Similarly, the Fund bears the expenses incurred
in its operations. For the fiscal year ended September 30, 1996, the Fund's
total expenses with respect to Dollar Shares were .43% of the average net
assets of the Dollar Shares.
BANKING LAWS
Banking laws and regulations presently prohibit a bank holding company
registered under the Federal Bank Holding Company Act of 1956 or any bank or
non-bank affiliate thereof from sponsoring, organizing, or controlling a
registered, open-end investment company engaged continuously in the issuance of
its shares and prohibit banks generally from issuing, underwriting, selling or
distributing securities such as Fund shares. Such banking laws and regulations
do not prohibit such a holding company or affiliate or banks generally from
acting as investment adviser, transfer agent or custodian to such an investment
company or from purchasing shares of such a company for or upon the order of
customers. PNC Bank, PIMC and PFPC, as well as some Service Organizations, are
subject to such banking laws and regulations, but believe they may perform the
services for the Fund contemplated by their respective agreements, this
Prospectus and the Statement of Additional Information without violating
applicable banking laws or regulations.
Should future legislative, judicial, or administrative action prohibit
or restrict the activities of bank Service Organizations in connection with the
provision of support services to their customers, the Fund might be required to
alter or discontinue its arrangements with Service Organizations and change its
method of operations with respect to Dollar Shares. It is not anticipated,
however, that any change in the Fund's method of operations would affect its net
asset value per share or result in a financial loss to any customer.
DIVIDENDS
Shareholders of the Fund are entitled to dividends and distributions
arising only from the net investment income and capital gains, if any, earned on
investments held by the Fund. The Fund's net investment income is declared daily
as a dividend
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<PAGE> 19
to shares held of record at the close of business on the day of declaration.
Shares begin accruing dividends on the day the purchase order for the shares is
effected and continue to accrue dividends through the day before such shares are
redeemed. Dividends are paid monthly by check, or by wire transfer if requested
in writing by the shareholder, within five business days after the end of the
month or within five business days after a redemption of all of a shareholder's
shares of a particular class. The Fund does not expect to realize net long-term
capital gains.
Institutional shareholders may elect to have their dividends reinvested
in additional full and fractional shares of the same class of shares with
respect to which such dividends are declared at the net asset value of such
shares on the payment date. Reinvested dividends receive the same tax treatment
as dividends paid in cash. Such election, or any revocation thereof, must be
made in writing to PFPC, the Fund's transfer agent, at P.O. Box 8950,
Wilmington, Delaware 19885-9628 and will become effective after its receipt by
PFPC with respect to dividends paid.
PFPC, as transfer agent, will send each Fund shareholder or its
authorized representative an annual statement designating the amount, if any, of
any dividends and distributions made during each year and their federal tax
qualification.
TAXES
The Fund qualified in its last taxable year and intends to qualify in
future years as a "regulated investment company" under the Internal Revenue Code
of 1986, as amended (the "Code"). A regulated investment company generally is
exempt from federal income tax on amounts distributed to its shareholders.
Qualification as a regulated investment company under the Code for a
taxable year requires, among other things, that the Fund distribute to its
shareholders at least 90% of its investment company taxable income for such
year. In general, the Fund's investment company taxable income will be its
taxable income (including dividends and short-term capital gains, if any)
subject to certain adjustments and excluding the excess of any net long-term
capital gain for the taxable year over any net short-term capital loss for such
year. The Fund intends to distribute substantially all of its investment company
taxable income each year. Such distributions will be taxable as ordinary income
to Fund shareholders which are not currently exempt from federal income taxes,
whether such income is received in cash or
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<PAGE> 20
reinvested in additional shares. (Federal income taxes for distributions to an
IRA or a qualified retirement plan are deferred under the Code.) It is
anticipated that none of the Fund's distributions will be eligible for the
dividends received deduction for corporations. The Fund does not expect to
realize long-term capital gains and, therefore, does not contemplate payment of
any "capital gain dividends" as described in the Code.
Dividends declared in October, November, or December of any year
payable to shareholders of record on a specified date in such months will be
deemed to have been received by the shareholders and paid by the Fund on
December 31 of such year in the event such dividends are actually paid during
January of the following year.
The foregoing discussion is only a brief summary of some of the
important federal tax considerations generally affecting the Fund and its
shareholders. As noted above, IRAs receive special tax treatment. No attempt is
made to present a detailed explanation of the federal, state or local income tax
treatment of the Fund or its shareholders, and this discussion is not intended
as a substitute for careful tax planning. Accordingly, potential investors in
the Fund should consult their tax advisors with specific reference to their own
tax situation.
YIELDS
From time to time, in advertisements or in reports to shareholders, the
"yield" and "effective yield" for Dollar Shares may be quoted. The
"yield" for a particular class or sub-class of Fund shares refers to the income
generated by an investment in such shares over a specified period (such as a
seven-day period). This income is then "annualized"; that is, the amount of
income generated by the investment during that period is assumed to be generated
for each such period over a 52- week or one-year period and is shown as a
percentage of the investment. The "effective yield" is calculated similarly but,
when annualized, the income earned by an investment in a particular class or
sub-class is assumed to be reinvested. The "effective yield" will be slightly
higher than the "yield" because of the compounding effect of this assumed
reinvestment.
The Fund's yield may be compared to those of other mutual funds with
similar objectives, to stock or other relevant indices, or to rankings prepared
by independent services or other financial or industry publications that monitor
the performance of mutual funds. For example, such data is reported in national
financial publications such as IBC/Donoghue's Money Fund Report(R), The Wall
Street Journal, and The New York Times, reports prepared
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<PAGE> 21
by Lipper Analytical Services, Inc., and publications of a local or regional
nature.
The Fund's yield figures for Dollar Shares represent the Fund's past
performance, will fluctuate, and should not be considered as representative of
future results. The yield of any investment is generally a function of portfolio
quality and maturity, type of investment, and operating expenses. Any fees
charged by Service Organizations or other institutional investors directly to
their customers in connection with investments in Fund shares are not reflected
in the Fund's yield; such fees, if charged, would reduce the actual return
received by customers on their investments. The methods used to compute the
Fund's yield are described in more detail in the Statement of Additional
Information. Investors may call (800) 821-6006 (Dollar Shares code: 20) to
obtain current yield information.
DESCRIPTION OF SHARES AND MISCELLANEOUS
The Company has authorized capital of 60 billion shares of Common
Stock, $.001 par value per share, of which 40 billion shares are classified as
Class B Common Stock, 5 billion shares are classified as Class B -- Special
Series 1 Common Stock, 5 billion shares are classified as Class C Common Stock
and 10 billion shares are classified as Class C -- Special 1 Common Stock.
Shares of Class C Common Stock and Class C -- Special Series 1 Common Stock
represent interests in the Company's TempCash portfolio. Shares of Class B
Common Stock and Class B -- Special Series 1 Common Stock (also known as
"Dollar Shares") represent interests in the TempFund portfolio. Under the
Company's charter, the Board of Directors has the power to classify or
reclassify any unissued shares of Common Stock into one or more classes or
sub-classes.
THIS PROSPECTUS AND THE STATEMENT OF ADDITIONAL INFORMATION
INCORPORATED HEREIN RELATE PRIMARILY TO THE DOLLAR SHARES OF THE FUND AND
DESCRIBE ONLY THE INVESTMENT OBJECTIVE AND POLICIES, OPERATIONS, CONTRACTS, AND
OTHER MATTERS RELATING TO THE FUND. INVESTORS WISHING TO OBTAIN SIMILAR
INFORMATION REGARDING THE FUND'S OTHER CLASS OF SHARES OR THE COMPANY'S TEMPCASH
PORTFOLIO MAY OBTAIN SEPARATE PROSPECTUSES BY CALLING 800-998-7633.
The Company does not presently intend to hold annual meetings of
shareholders except as required by the 1940 Act or other applicable law. The
Company will call a meeting of shareholders for the purpose of voting upon the
question of removal of a member of the Board of Directors upon written request
of shareholders owning at least 10% of the outstanding shares of the Company
entitled to vote.
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<PAGE> 22
Each Fund share represents an equal, proportionate interest in the
assets belonging to the TempFund portfolio. Fund shares do not have preemptive
or conversion rights. When issued for payment as described in this Prospectus,
Fund shares will be fully paid and non-assessable.
Holders of the Fund's TempFund Shares and Dollar Shares will vote in
the aggregate and not by class or sub-class on all matters, except where
otherwise required by law and except that only Dollar Shares will be entitled to
vote on matters submitted to a vote of shareholders pertaining to the Fund's
arrangements with Service Organizations. Further, shareholders of the Fund and
of the Company's TempCash portfolio will vote in the aggregate and not by
portfolio except as otherwise required by law or when the Board of Directors
determines that the matter to be voted upon affects only the interests of the
shareholders of a particular portfolio. (See the Statement of Additional
Information under "Additional Description Concerning Fund Shares" for examples
where the 1940 Act requires voting by portfolio.) Shareholders of the Company
are entitled to one vote for each full share held (irrespective of class,
sub-class, or portfolio) and fractional votes for fractional shares held. Voting
rights are not cumulative and, accordingly, the holders of more than 50% of the
aggregate shares of Common Stock of the Company may elect all of the directors.
For information concerning the redemption of Fund shares and possible
restrictions on their transferability, see "Purchase and Redemption of Shares."
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<PAGE> 23
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS NOT CONTAINED IN THIS PROSPECTUS, OR IN THE FUND'S STATEMENT OF
ADDITIONAL INFORMATION INCORPORATED HEREIN BY REFERENCE, IN CONNECTION WITH THE
OFFERING MADE BY THIS PROSPECTUS; AND, IF GIVEN OR MADE, SUCH INFORMATION OR
REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY
OR ITS DISTRIBUTOR. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFERING BY THE
COMPANY OR BY THE DISTRIBUTOR IN ANY JURISDICTION IN WHICH SUCH OFFERING MAY NOT
LAWFULLY BE MADE.
-------------------
TABLE OF CONTENTS
PAGE
BACKGROUND AND EXPENSE INFORMATION..................................... 3
FINANCIAL HIGHLIGHTS................................................... 4
INVESTMENT OBJECTIVE AND POLICIES...................................... 5
PURCHASE AND REDEMPTION OF SHARES...................................... 9
MANAGEMENT OF THE FUND................................................. 12
DIVIDENDS.............................................................. 15
TAXES .............................................................. 16
YIELDS .............................................................. 17
DESCRIPTION OF SHARES AND MISCELLANEOUS............................... 18
CAPITAL BUILDER(SM)
TEMPFUND
DOLLAR SHARES
PROSPECTUS
AUGUST 15, 1997
OFFERED THROUGH:
AMERICAN
EXPRESS
CENTURION
BANK
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<PAGE> 24
TEMPFUND AND TEMPCASH
Investment Portfolios Offered By
Temporary Investment Fund, Inc.
Statement of Additional Information
August 15, 1997
TABLE OF CONTENTS
Page
The Company..................................... 2
Investment Objectives and Policies.............. 2
Additional Purchase and Redemption Information.. 12
Management of the Funds......................... 14
Additional Information Concerning Taxes......... 25
Dividends....................................... 27
Additional Yield Information.................... 27
Additional Description Concerning Shares........ 30
Counsel......................................... 32
Auditors........................................ 32
Miscellaneous................................... 32
Appendix A...................................... A-1
This Statement of Additional Information is meant to be read
in conjunction with the Prospectuses for the TempFund and TempCash portfolios,
each dated January 31, 1997, and the Prospectus for TempFund Dollar Shares dated
August 15, 1997, and is incorporated by reference in its entirety into each
Prospectus. Because this Statement of Additional Information is not itself a
prospectus, no investment in shares of the TempFund or TempCash portfolios
should be made solely upon the information contained herein. Copies of a
Prospectus for TempFund, TempFund Dollar Shares, TempCash or TempCash Dollar
Shares may be obtained by calling 800-821-7432. Capitalized terms used but not
defined herein have the same meanings as in the Prospectuses.
<PAGE> 25
THE COMPANY
Temporary Investment Fund, Inc. (the "Company") is a no-load,
diversified, open-end investment company presently offering shares in two
separate money market portfolios -TempFund and TempCash (individually, a "Fund";
collectively, the "Funds").
Although TempFund and TempCash have the same investment
adviser and have comparable investment objectives, their yields will normally
vary due to their differing cash flows and their differing types of portfolio
securities (for example, TempCash invests in obligations of foreign governments,
foreign banks and foreign branches of U.S. banks and TempFund does not).
INVESTMENT OBJECTIVES AND POLICIES
As stated in the Funds' Prospectuses, the investment objective
of each Fund is to seek current income and stability of principal, and the Funds
do so by investing in a portfolio of money market instruments. The following
policies supplement the description of each Fund's investment objective and
policies as contained in the applicable Prospectuses.
PORTFOLIO TRANSACTIONS
Subject to the general control of the Company's Board of
Directors, PNC Institutional Management Corporation ("PIMC"), each Fund's
investment adviser, is responsible for, makes decisions with respect to, and
places orders for all purchases and sales of portfolio securities for a Fund.
PIMC purchases portfolio securities for the Funds either directly from the
issuer or from dealers who specialize in money market instruments. Such
purchases are usually without brokerage commissions. In making portfolio
investments, PIMC seeks to obtain the best net price and the most favorable
execution of orders. To the extent that the execution and price offered by more
than one dealer are comparable, PIMC may, in its discretion, effect transactions
in portfolio securities with dealers who provide the Company with research
advice or other services. For the fiscal years ended September 30, 1994, 1995
and 1996, TempFund and TempCash paid no brokerage commissions.
PIMC may seek to obtain an undertaking from issuers of
commercial paper or dealers selling commercial paper to consider the repurchase
of such securities from a Fund prior to their maturity at their original cost
plus interest (interest may sometimes be adjusted to reflect the actual maturity
of the securities) if PIMC believes that a Fund's anticipated need for liquidity
makes such action desirable. Certain dealers (but not
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<PAGE> 26
issuers) have charged and may in the future charge a higher price for commercial
paper where they undertake to repurchase prior to maturity. The payment of a
higher price in order to obtain such an undertaking reduces the yield which
might otherwise be received by a Fund on the commercial paper. The Company's
Board of Directors has authorized PIMC to pay a higher price for commercial
paper where it secures such an undertaking if PIMC believes that the prepayment
privilege is desirable to assure a Fund's liquidity and such an undertaking
cannot otherwise be obtained.
Investment decisions for each Fund are made independently from
those for another of the Company's portfolios or other investment company
portfolios or accounts advised or managed by PIMC. Such other portfolios may
also invest in the same securities as the Funds. When purchases or sales of the
same security are made at substantially the same time on behalf of such other
portfolios, transactions are averaged as to price, and available investments
allocated as to amount, in a manner which PIMC believes to be equitable to each
portfolio, including either Fund. In some instances, this investment procedure
may adversely affect the price paid or received by a Fund or the size of the
position obtained for a Fund. To the extent permitted by law, PIMC may aggregate
the securities to be sold or purchased for a Fund with those to be sold or
purchased for such other portfolios in order to obtain best execution.
The Funds will not execute portfolio transactions through or
acquire portfolio securities issued by PIMC, PNC Bank, National Association
("PNC Bank"), PFPC Inc. ("PFPC"), and Provident Distributors, Inc. ("PDI"), or
any affiliated person (as such term is defined in the Investment Company Act of
1940 (the "1940 Act")) of any of them, except to the extent permitted by the
Securities and Exchange Commission (the "SEC"). In addition, with respect to
such transactions, securities, deposits and agreements, the Funds will not give
preference to Service Organizations with whom a Fund enters into agreements
concerning the provision of support services to customers who beneficially own
TempFund Dollar shares or TempCash Dollar Shares (collectively, "Dollar
Shares"). (See the applicable Prospectus, "Management of the Fund -- Service
Organizations.")
The TempFund Portfolio does not intend to seek profits through
short-term trading. Each Fund's annual portfolio turnover will be relatively
high, but is not expected to have a material effect on its net income. Each
Fund's portfolio turnover rate is expected to be zero for regulatory reporting
purposes.
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<PAGE> 27
ADDITIONAL INFORMATION ON PORTFOLIO INSTRUMENTS
VARIABLE AND FLOATING RATE INSTRUMENTS. With respect to the
variable and floating rate instruments described in the applicable Prospectuses,
the investment adviser will consider the earning power, cash flows, and other
liquidity ratios of the issuers and guarantors of such instruments and will
continuously monitor their financial ability to meet payment.
REPURCHASE AGREEMENTS. Collateral for a repurchase agreement
may include obligations issued by the U.S. Government or its agencies or
instrumentalities or obligations rated in the highest category by a nationally
recognized statistical rating organization (an "NRSRO"). The repurchase price
under the repurchase agreements described in the Funds' Prospectuses generally
equals the price paid by that Fund plus interest negotiated on the basis of
current short-term rates (which may be more or less than the rate on the
securities underlying the repurchase agreement). Securities subject to
repurchase agreements will be held by the Company's custodian or sub-custodian,
or in the Federal Reserve/Treasury book-entry system. Repurchase agreements are
considered to be loans by the Funds under the 1940 Act.
WHEN-ISSUED PURCHASES. As stated in the Funds' Prospectuses,
each Fund may purchase securities on a when-issued basis. When a Fund agrees to
purchase when-issued securities, the custodian will set aside cash or liquid
portfolio securities equal to the amount of the commitment in a separate
account. Normally, the custodian will set aside portfolio securities to satisfy
a purchase commitment, and in such a case that Fund may be required subsequently
to place additional assets in the separate account in order to ensure that the
value of the account remains equal to the amount of such Fund's commitment. It
may be expected that the market value of the Fund's net assets will fluctuate to
a greater degree when it sets aside portfolio securities to cover such purchase
commitments than when it sets aside cash. A Fund's liquidity and ability to
manage its portfolio might be affected when it sets aside cash or portfolio
securities to cover such purchase commitments. When a Fund engages in
when-issued transactions, it relies on the seller to consummate the trade.
Failure of the seller to do so may result in a Fund's incurring a loss or
missing an opportunity to obtain a price considered to be advantageous. Neither
Fund intends to purchase when-issued securities for speculative purposes but
only in furtherance of its investment objective. Each Fund reserves the right to
sell these securities before the settlement date if it is deemed advisable.
U.S. GOVERNMENT OBLIGATIONS. Examples of the types of
U.S. Government obligations that may be held by a Fund include
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<PAGE> 28
U.S. Treasury Bills, Treasury Notes, and Treasury Bonds and the obligations of
the Federal Housing Administration, Farmers Home Administration, Export-Import
Bank of the United States, Small Business Administration, Government National
Mortgage Association, Federal National Mortgage Association, Federal Financing
Bank, General Services Administration, Student Loan Marketing Association,
Central Bank for Cooperatives, Federal Home Loan Banks, Federal Home Loan
Mortgage Corporation, Federal Intermediate Credit Banks, Federal Land Banks,
Federal Farm Credit Banks, Maritime Administration, Tennessee Valley Authority,
Washington D.C. Armory Board, and International Bank for Reconstruction and
Development. The Funds may also invest in mortgage-related securities issued or
guaranteed by U.S. Government agencies and instrumentalities, including such
instruments as obligations of the Government National Mortgage Association
("GNMA"), Federal National Mortgage Association ("FNMA") and the Federal Home
Loan Mortgage Corporation ("FHLMC").
MORTGAGE-RELATED AND OTHER ASSET-BACKED SECURITIES.
Mortgage-related securities include fixed and adjustable Mortgage Pass-Through
Certificates, which provide the holder with a pro-rata share of interest and
principal payments on a pool of mortgages, ordinarily on residential properties.
There are a number of important differences among the agencies and
instrumentalities of the U.S. Government that issue mortgage-related securities
and among the securities that they issue. Pass-Through Certificates guaranteed
by GNMA (also known as "Ginnie Maes") are guaranteed as to the timely payment of
principal and interest by GNMA, whose guarantee is backed by the full faith and
credit of the United States. Mortgage-related securities issued by FNMA include
FNMA guaranteed Mortgage Pass-Through Certificates (also known as "Fannie
Maes") which are guaranteed as to timely payment of principal and interest by
FNMA. They are not backed by or entitled to the full faith and credit of the
United States, but are supported by the right of the FNMA to borrow from the
Treasury. Mortgage-related securities issued by FHLMC include FHLMC Mortgage
Participation Certificates (also known as "Freddie Macs"). Freddie Macs are not
guaranteed by the United States or by any Federal Home Loan Banks and do not
constitute a debt or obligation of the United States or of any Federal Home Loan
Bank. Freddie Macs entitle the holder to timely payment of interest, which is
guaranteed by the FHLMC. FHLMC guarantees either ultimate collection or timely
payment of all principal payments on the underlying mortgage loans. When FHLMC
does not guarantee timely payment of principal, FHLMC is required to remit the
amount due on account of its guarantee of ultimate payment of principal no later
than one year after it becomes payable.
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<PAGE> 29
TempCash may also invest in classes of collateralized mortgage
obligations ("CMOs") which have a remaining maturity of 397 days or less in
accordance with the requirements of Rule 2a-7 under the 1940 Act. Each class of
a CMO, which frequently elect to be taxed as a real estate mortgage investment
conduit ("REMIC"), represents an ownership interest in, and the right to receive
a specified portion of, the cash flow consisting of interest and principal on a
pool of residential mortgage loans or mortgage pass-through securities
("Mortgage Assets"). CMOs are issued in multiple classes, each with a specified
fixed or floating interest rate and a final distribution date. The relative
payment rights of the various CMO classes may be structured in many ways. In
most cases, however, payments of principal are applied to the CMO classes in the
order of their respective stated maturities, so that no principal payments will
be made on a CMO class until all other classes having an earlier stated maturity
date are paid in full. These multiple class securities may be issued or
guaranteed by U.S. Government agencies or instrumentalities, including GNMA,
FNMA and FHLMC, or issued by trusts formed by private originators of, or
investors in, mortgage loans. Classes in CMOs which the Fund may hold are known
as "regular" interests. CMOs also issue "residual" interests, which in general
are junior to and more volatile than regular interests. TempCash does not intend
to purchase residual interests.
The Funds may also invest in non-mortgage asset-backed
securities (backed, e.g., by installment sales contracts, credit card
receivables or other assets). Asset-backed securities are generally issued as
pass-through certificates, which represent undivided fractional ownership
interests in an underlying pool of assets, or as debt instruments, which are
also known as collateralized obligations, and are generally issued as the debt
of a special purpose entity organized solely for the purpose of owning such
assets and issuing such debt.
The yield characteristics of certain mortgage-related and
asset-backed securities may differ from traditional debt securities. One such
major difference may be that the principal amount of the obligations may be
prepaid at any time because the underlying assets (i.e., loans) may be prepaid
at any time. As a result, a decrease in interest rates in the market may result
in increases in the level of prepayments as borrowers, particularly mortgagors,
refinance and repay their loans. An increased prepayment rate with respect to a
mortgage-related or asset-backed security subject to such a prepayment feature
will have the effect of shortening the maturity of the security. If a Fund has
purchased such a mortgage-related or asset-backed security at a premium, a
faster than anticipated prepayment rate could result in a loss of principal to
the extent of the premium paid. Conversely, an increase in interest rates may
result in
-6-
<PAGE> 30
lengthening the anticipated maturity of such a security because expected
prepayments are reduced. A prepayment rate that is faster than expected will
reduce the yield to maturity of such a security, while a prepayment rate that is
slower than expected may have the opposite effect of increasing yield to
maturity.
In general, the assets supporting non-mortgage asset-backed
securities are of shorter maturity than the assets supporting mortgage-related
securities. Like other fixed-income securities, when interest rates rise the
value of an asset-backed security generally will decline; however, when interest
rates decline, the value of an asset-backed security with prepayment features
may not increase as much as that of other fixed-income securities, and, as noted
above, changes in market rates of interest may accelerate or retard prepayments
and thus affect maturities.
These characteristics may result in a higher level of price
volatility for asset-backed securities with prepayment features under certain
market conditions. In addition, while the trading market for short-term
mortgages and asset backed securities is ordinarily quite liquid, in times of
financial stress the trading market for these securities sometimes becomes
restricted.
BANKING INDUSTRY OBLIGATIONS. For purposes of TempCash's
investment policies with respect to obligations of issuers in the banking
industry, the assets of a bank or savings institution will be deemed to include
the assets of its domestic and foreign branches. Obligations of foreign banks in
which TempCash may invest include Eurodollar Certificates of Deposit ("ECDs")
which are U.S. dollar-denominated certificates of deposit issued by offices of
foreign and domestic banks located outside the United States; Eurodollar Time
Deposits ("ETDs") which are U.S. dollar-denominated deposits in a foreign branch
of a U.S. bank or a foreign bank; Canadian Time Deposits ("CTDs") which are
essentially the same as ETDs except they are issued by Canadian offices of major
Canadian banks; and Yankee Certificates of Deposit ("Yankee CDs") which are U.S.
dollar-denominated certificates of deposit issued by a U.S. branch of a foreign
bank and held in the United States.
SPECIAL CONSIDERATIONS REGARDING FOREIGN INVESTMENTS.
TempCash's investments in the obligations of foreign issuers, including foreign
governments, foreign banks and foreign branches of U.S. banks, may subject
TempCash to investment risks that are different in some respects from those of
investments in obligations of U.S. domestic issuers. These risks may include
future unfavorable political and economic developments, possible withholding
taxes on interest income, seizure or nationalization of foreign deposits,
interest limitations, the possible
-7-
<PAGE> 31
establishment of exchange controls, or other governmental restrictions which
might affect the payment of principal or interest on the securities held by the
Fund. Additionally, foreign branches of U.S. banks and foreign banks may be
subject to less stringent reserve requirements and to different accounting,
auditing, reporting and recordkeeping requirements than those applicable to
domestic branches of U.S. banks. TempCash will acquire securities issued by
foreign issuers, including foreign governments, foreign banks and foreign
branches of U.S. banks, only when the Fund's investment adviser believes that
the risks associated with such instruments are minimal.
GUARANTEED INVESTMENT CONTRACTS. Pursuant to its investments
in guaranteed investment contracts and similar funding agreements ("GICs"),
TempCash makes cash contributions to a deposit fund of the insurance company's
general account. The insurance company then credits to the Fund on a monthly
basis guaranteed interest which is based on an index (in most cases this index
is expected to be the Salomon Brothers CD Index). The GICs provide that this
guaranteed interest will not be less than a certain minimum rate. The purchase
price paid for a GIC becomes part of the general assets of the insurance
company, and the contract is paid from the general assets of the insurance
company. Each Fund will only purchase GICs from insurance companies which, at
the time of purchase, are rated "A+" by A.M. Best Company, have assets of $1
billion or more and meet quality and credit standards established by the adviser
under guidelines approved by the Board of Directors. Generally, GICs are not
assignable or transferable without the permission of the issuing insurance
companies, and an active secondary market in GICs does not currently exist. The
Fund's investments in GICs are not expected to exceed 5% of its total assets (at
the time of investment) absent unusual market conditions.
MUNICIPAL OBLIGATIONS. As stated in the Funds' Prospectuses,
each Fund may invest in obligations issued by state and local governmental
entities. Municipal securities are issued by various public entities to obtain
funds for various public purposes, including the construction of a wide range of
public facilities, the refunding of outstanding obligations, the payment of
general operating expenses and the extension of loans to public institutions and
facilities. Private activity bonds that are issued by or on behalf of public
authorities to finance various privately operated facilities are considered to
be municipal securities and may be purchased by a Fund. Dividends paid by a Fund
that are derived from interest on municipal securities would be taxable to that
Fund's shareholders for federal income tax purposes.
RESTRICTED AND OTHER ILLIQUID SECURITIES. The SEC has
adopted Rule 144A under the Securities Act of 1933 (the "1933
-8-
<PAGE> 32
Act") that allows for a broader institutional trading market for securities
otherwise subject to restriction on resale to the general public. Rule 144A
establishes a "safe harbor" from the registration requirements of the 1933 Act
for resales of certain securities to qualified institutional buyers. The
investment adviser anticipates that the market for certain restricted securities
such as institutional commercial paper will expand further as a result of this
regulation and the development of automated systems for the trading, clearance
and settlement of unregistered securities of domestic and foreign issuers, such
as the PORTAL System sponsored by the National Association of Securities
Dealers.
Each Fund's investment adviser will monitor the liquidity of
restricted and other illiquid securities under the supervision of the Board of
Directors. In reaching liquidity decisions, the investment adviser will
consider, inter alia, the following factors: (1) the unregistered nature of a
Rule 144A security; (2) the frequency of trades and quotes for the Rule 144A
security; (3) the number of dealers wishing to purchase or sell the Rule 144A
security and the number of other potential purchasers; (4) dealer undertakings
to make a market in the Rule 144A security; (5) the trading markets for the Rule
144A security; and (6) the nature of the Rule 144A security and the nature of
the marketplace trades (e.g., the time needed to dispose of the Rule 144A
security, the method of soliciting offers and the mechanics of the transfer).
NRSRO RATINGS. The ratings by NRSROs represent their
respective opinions as to the quality of the obligations they undertake to rate.
Ratings, however, are general and are not absolute standards of quality.
Consequently, obligations with the same rating, maturity, and interest rate may
have different market prices. The Appendix to this Statement of Additional
Information contains a description of the relevant rating symbols used by NRSROs
for commercial paper that may be purchased by each Fund.
INVESTMENT LIMITATIONS
The Funds' Prospectuses summarize certain investment
limitations that may not be changed without the affirmative vote of the holders
of a majority of such Fund's outstanding shares (as defined below under
"Miscellaneous"). Below is a complete list of each Fund's investment limitations
that may not be changed without such a vote of shareholders.
-9-
<PAGE> 33
A FUND MAY NOT:
1. Purchase any securities other than so-called money market
instruments, including U.S. Treasury Bills; other obligations issued or
guaranteed by the federal government, its agencies or instrumentalities;
certificates of deposit; bankers' acceptances; and commercial paper (including
variable rate demand notes); some of which may be subject to repurchase
agreements, but each Fund may make interest-bearing savings deposits in
commercial and savings banks in amounts not in excess of 5% of the value of the
Fund's assets, and TempCash may make time deposits.
2. Borrow money, except from banks for temporary purposes and
then in amounts not in excess of 10% of the value of a Fund's assets at the time
of such borrowing; or mortgage, pledge or hypothecate any assets except in
connection with any such borrowing and in amounts not in excess of the lesser of
the dollar amounts borrowed or 10% of the value of the Fund's assets at the time
of such borrowing. (A loan limitation in excess of 5% is generally associated
with a leveraged fund, but since a Fund anticipates paying interest on borrowed
money at rates comparable to its yield, the potential for improving income by
such borrowing is remote. This borrowing provision is included solely to
facilitate the orderly sale of portfolio securities to accommodate abnormally
heavy redemption requests if they should occur and is not for leverage
purposes.)
3. With respect to TempFund, purchase any securities which
would cause 25% or more of the value of its total assets at the time of such
purchase to be invested in the securities of one or more issuers conducting
their principal business activities in the same industry, provided that (a)
there is no limitation with respect to investments in U.S. Treasury Bills, other
obligations issued or guaranteed by the federal government, its agencies and
instrumentalities, certificates of deposit, and bankers' acceptances and (b)
neither all finance companies, as a group, nor all utility companies, as a
group, are considered a single industry for purposes of this policy. The Fund
interprets the exception for "certificates of deposit, and bankers' acceptances"
in this fundamental policy to include other similar obligations of domestic
banks.
4. With respect to TempCash, purchase any securities which
would cause, at the time of purchase, less than 25% of the value of its total
assets to be invested in obligations of issuers in the banking industry or in
obligations, such as repurchase agreements, secured by such obligations (unless
the Fund is in a temporary defensive position) or which would cause, at the time
of purchase, 25% or more of the value of its total assets to be invested in the
obligations of issuers in any other
-10-
<PAGE> 34
industry, provided that (a) there is no limitation with respect to investments
in U.S. Treasury Bills and other obligations issued or guaranteed by the federal
government, its agencies and instrumentalities and (b) neither all finance
companies, as a group, nor all utility companies, as a group, are considered a
single industry for purposes of this policy.
5. Purchase securities of any one issuer, other than the
federal government, if immediately after such purchase more than 5% of the value
of its total assets would be invested in such issuer, except that up to 25% of
the value of a Fund's total assets may be invested without regard to such 5%
limitation.
6. Make loans, except that a Fund may purchase or hold debt
instruments in accordance with its investment objective and policies, and may
enter into repurchase agreements with respect to commercial paper, certificates
of deposit and obligations issued or guaranteed by the U.S. Government, its
agencies or instrumentalities.
7. Purchase or sell commodities or commodity contracts, or
invest in oil, gas or mineral exploration or development programs.
8. Acquire voting securities of any issuer or acquire
securities of other investment companies.
9. Purchase or sell real estate. However, each Fund may
purchase commercial paper issued by companies which invest in real estate or
interests therein.
10. Purchase securities on margin, make short sales of
securities or maintain a short position.
11. Act as an underwriter of securities.
* * *
The percentage restrictions on borrowing and collateralization
contained in the second investment limitation above are based on a Fund's total
assets, and any interest paid by that Fund on its borrowings pursuant to this
investment limitation would reduce the Fund's income. It is currently each
Fund's policy not to purchase portfolio securities while borrowings in excess of
5% of that Fund's net assets are outstanding. Further, with respect to the
above-stated third limitation with respect to TempFund and the fourth limitation
with respect to TempCash, each Fund will consider wholly-owned finance companies
to be in the industries of their parents, if their activities are primarily
related to financing the activities of their parents, and will divide utility
companies
-11-
<PAGE> 35
according to their services, for example, gas, gas transmission, electric and
gas, electric, and telephone will each be considered a separate industry.
Neither Fund will invest in inverse floaters, range notes or mortgage derived
interest only notes. The policy and practices stated in this paragraph may be
changed without the affirmative vote of the holders of a majority of a Fund's
outstanding shares, but any such change would be disclosed in such Fund's
Prospectuses prior to implementation.
ADDITIONAL PURCHASE AND REDEMPTION INFORMATION
IN GENERAL
Information on how to purchase and redeem each Fund's shares
is included in the applicable Prospectuses. The issuance of shares is recorded
on a Fund's books, and share certificates are not issued unless expressly
requested in writing. Certificates are not issued for fractional shares.
The regulations of the Comptroller of the Currency provide
that funds held in a fiduciary capacity by a national bank approved by the
Comptroller to exercise fiduciary powers must be invested in accordance with the
instrument establishing the fiduciary relationship and local law. The Company
believes that the purchase of TempFund and TempCash shares by such national
banks acting on behalf of their fiduciary accounts is not contrary to applicable
regulations if consistent with the particular account and proper under the law
governing the administration of the account.
Prior to effecting a redemption of shares represented by
certificates, PFPC, the Company's transfer agent, must have received such
certificates at its principal office. All such certificates must be endorsed by
the redeeming shareholder or accompanied by a signed stock power, in each
instance with the signature guaranteed by a commercial bank or a member of a
major stock exchange, or other eligible guarantor organization, unless other
arrangements satisfactory to a Fund have previously been made. A Fund may
require any additional information reasonably necessary to evidence that a
redemption has been duly authorized.
Under the 1940 Act, a Fund may suspend the right of redemption
or postpone the date of payment upon redemption for any period during which the
New York Stock Exchange is closed, other than customary weekend and holiday
closings, or during which trading on said Exchange is restricted, or during
which (as determined by the SEC by rule or regulation) an emergency exists as a
result of which disposal or valuation of portfolio securities is not reasonably
practicable, or for such other periods as the SEC may permit. (A Fund may also
suspend or
-12-
<PAGE> 36
postpone the recordation of the transfer of its shares upon the occurrence of
any of the foregoing conditions.)
In addition, a Fund may redeem shares involuntarily in certain
other instances if the Board of Directors determines that failure to redeem may
have material adverse consequences to that Fund's shareholders in general. Each
Fund is obligated to redeem shares solely in cash up to $250,000 or 1% of such
Fund's net asset value, whichever is less, for any one shareholder within a
90-day period. Any redemption beyond this amount will also be in cash unless the
Board of Directors determines that conditions exist which make payment of
redemption proceeds wholly in cash unwise or undesirable. In such a case, a Fund
may make payment wholly or partly in securities or other property, valued in the
same way as that Fund determines net asset value. (See "Net Asset Value" below
for an example of when such redemption or form of payment might be appropriate.)
Redemption in kind is not as liquid as a cash redemption. Shareholders who
receive a redemption in kind may incur transaction costs, if they sell such
securities or property, and may receive less than the redemption value of such
securities or property upon sale, particularly where such securities are sold
prior to maturity.
Any institution purchasing shares on behalf of separate
accounts will be required to hold the shares in a single nominee name (a "Master
Account"). Institutions investing in more than one of the Company's portfolios,
or classes or sub-classes of shares, must maintain a separate Master Account for
each Fund's class or sub-class of shares. Institutions may also arrange with
PFPC for certain sub-accounting services (such as purchase, redemption, and
dividend recordkeeping). Sub-accounts may be established by name or number
either when the Master Account is opened or later.
NET ASSET VALUE
Net asset value per share of each class of shares in a
particular Fund is calculated by adding the value of all portfolio securities
and other assets belonging to a Fund that are attributable to a class,
subtracting the Fund's liabilities attributable to the class, and dividing the
result by the number of outstanding shares in the class. "Assets belonging to" a
Fund consist of the consideration received upon the issuance of Fund shares
together with all income, earnings, profits and proceeds derived from the
investment thereof, including any proceeds from the sale of such investments,
any funds or payments derived from any reinvestment of such proceeds, and a
portion of any general assets of the Company not belonging to a particular
portfolio. Assets belonging to a Fund are charged with the direct liabilities of
that Fund and with a share of the general liabilities of the Company allocated
on a daily basis in
-13-
<PAGE> 37
proportion to the relative net assets of each of the Company's portfolios.
Determinations made in good faith and in accordance with generally accepted
accounting principles by the Company's Board of Directors as to the allocation
of any assets or liabilities with respect to a Fund are conclusive. The expenses
that are charged to a Fund are borne equally by each share of the Fund except
for payments to Service Organizations which are borne solely by Dollar Shares.
As stated in the Funds' Prospectuses, in computing the net
asset value of its shares for purposes of sales and redemptions, each Fund uses
the amortized cost method of valuation. Under this method, a Fund values each of
its portfolio securities at cost on the date of purchase and thereafter assumes
a constant proportionate amortization of any discount or premium until maturity
of the security. As a result, the value of a portfolio security for purposes of
determining net asset value normally does not change in response to fluctuating
interest rates. While the amortized cost method seems to provide certainty in
portfolio valuation, it may result in valuations of a Fund's securities which
are higher or lower than the market value of such securities.
In connection with its use of amortized cost valuation, each
Fund limits the dollar-weighted average maturity of its portfolio to not more
than 90 days and does not purchase any instrument with a remaining maturity of
more than thirteen months (397 days) (with certain exceptions). The Company's
Board of Directors has also established procedures, pursuant to rules
promulgated by the SEC, that are intended to stabilize each Fund's net asset
value per share for purposes of sales and redemptions at $1.00. Such procedures
include the determination, at such intervals as the Board deems appropriate, of
the extent, if any, to which a Fund's net asset value per share calculated by
using available market quotations deviates from $1.00 per share. In the event
such deviation exceeds 1/2 of 1%, the Board will promptly consider what action,
if any, should be initiated. If the Board believes that the amount of any
deviation from a Fund's $1.00 amortized cost price per share may result in
material dilution or other unfair results to investors or existing shareholders,
it will take such steps as it considers appropriate to eliminate or reduce to
the extent reasonably practicable any such dilution or unfair results. These
steps may include selling portfolio instruments prior to maturity to realize
capital gains or losses or to shorten a Fund's average portfolio maturity,
redeeming shares in kind, reducing or withholding dividends, or utilizing a net
asset value per share determined by using available market quotations.
-14-
<PAGE> 38
MANAGEMENT OF THE FUNDS
DIRECTORS AND OFFICERS
The Company's directors and executive officers, their
addresses, ages, principal occupations during the past five years and other
affiliations are as follows:
<TABLE>
<CAPTION>
Principal Occupations
Position with During Past 5 Years and
Name and Address the Company Other Affiliations
---------------- ----------- -----------------------
<S> <C> <C>
G. NICHOLAS BECKWITH, III Director President and Chief
Beckwith Machinery Company Executive Officer,
Post Office Box 8718 Beckwith Machinery
Pittsburgh, PA 15221 Company; Chairman of the
Age: 52 Board of Trustees, Shadyside
Hospital; Vice Chairman of the
Board of Trustees, Shadyside
Academy; Trustee, Claude
Washington Benedum Foundation;
Trustee, Chatham College.
PHILIP E. COLDWELL(2,3,4) Director Economic Consultant;
Coldwell Financial Member of the Board of
Consultants Governors of the Federal
3330 Southwestern Blvd. Reserve System, 1974 to 1980;
Dallas, TX 75225 President, Federal Reserve Bank
Age: 75 of Dallas, 1968 to 1974;
Director, Maxus Energy
Corporation (energy and
chemical products) 1987 to
1993; Director, Diamond
Shamrock Corporation (energy
and chemical products) until
1987.
ROBERT R. FORTUNE(2,3,4) Director Financial Consultant;
2920 Ritter Lane Chairman, President, and Chief
Allentown, PA 18104 Executive Officer, Associated
Age: 80 Electric & Gas Insurance
Services Limited, from July
1984 to July 1993; Member of
the Financial Executives
Institute and American
Institute of Certified Public
Accountants.
JERROLD B. HARRIS Director President and Chief
706 Haldane Drive Executive Officer, VWR
Kennett Square, PA 19348 Corporation 1990 to
Age: 54 present.
</TABLE>
-15-
<PAGE> 39
<TABLE>
<CAPTION>
Principal Occupations
Position with During Past 5 Years and
Name and Address the Company Other Affiliations
---------------- ----------- ------------------
<S> <C> <C>
RODNEY D. JOHNSON(3,4) Director President, Fairmount Capital
Fairmount Capital Advisors, Inc. (financial
Advisors, Inc. advising), since 1987.
1435 Walnut Street Treasurer, North Philadelphia
Drexel Building Health System (formerly Girard
Philadelphia, PA 19102 Medical Center), 1988 to 1992;
Age: 55 Member, Board of Education,
School District of
Philadelphia, 1983 to 1988;
Treasurer, Cascade Aphasia
Center, 1984 to 1988.
G. WILLING PEPPER(1,2) Chairman of the Retired; Chairman of the
128 Springton Lake Road Board, Board, The Institute for
Media, PA 19063 President, Cancer Research until 1979;
Age: 88 and Director Director, Philadelphia National
Bank until 1978; President,
Scott Paper Company, 1971 to
1973; Chairman of the Board,
Specialty Composites
Corporation until May 1984.
</TABLE>
-16-
<PAGE> 40
<TABLE>
<CAPTION>
Principal Occupations
Position with During Past 5 Years and
Name and Address the Company Other Affiliations
---------------- ----------- ------------------
<S> <C> <C>
EDWARD J. ROACH Vice President Certified Public Accountant;
Bellevue Park Corporate and Treasurer Partner of the accounting firm
Center of Main Hurdman until 1981;
400 Bellevue Parkway Vice Chairman of the Board, Fox
Suite 100 Chase Cancer Center;
Wilmington, DE 19809 Trustee Emeritus,
Age: 72 Pennsylvania School for the
Deaf; Trustee Emeritus,
Immaculata College; President
or Vice President and
Treasurer of various
investment companies advised
by PNC Institutional
Management Corporation;
Director, The Bradford Funds,
Inc.
W. BRUCE McCONNEL, III Secretary Partner of the law firm of
Philadelphia National Bank Drinker Biddle & Reath LLP,
Bldg. Philadelphia, Pennsylvania.
1345 Chestnut Street
Philadelphia, PA 19107-3496
Age: 53
</TABLE>
(1) This director is considered by the Company to be an "interested person"
of the Company as defined in the 1940 Act.
(2) Executive Committee Member.
(3) Audit Committee Member.
(4) Nominating Committee Member.
During intervals between meetings of the Board, the Executive
Committee may exercise the authority of the Board of Directors in the management
of the Company's business to the extent permitted by law.
Each director of the Company serves as a trustee of Trust
for Federal Securities ("Fed") and Municipal Fund for Temporary
Investment ("Muni"). In addition, Messrs. Fortune and Pepper are
directors of Independence Square Income Securities, Inc. ("ISIS")
and Managing General Partners of Chestnut Street Exchange Fund
("Chestnut"); Messrs. Johnson and Pepper are directors of Municipal
Fund for California Investors, Inc. ("Cal Muni"); and Mr. Johnson
is a director of Municipal Fund for New York Investors, Inc. ("New
York Muni") and a director of International Dollar Reserve Fund
("IDR").
Each of the Company's officers holds like offices with
Fed and Muni. In addition, Mr. Roach is Treasurer of Chestnut,
President and Treasurer of The RBB Fund, Inc. and New York Muni,
-17-
<PAGE> 41
and Vice President and Treasurer of ISIS and Cal Muni; and Mr. Pepper is
President and Chairman of the Board of Cal Muni. Each of the investment
companies named above receives various advisory and other services from PIMC
and/or PNC Bank. Of the above-mentioned funds, PDI or an affiliate provides
distribution services to Fed, Muni, Compass Capital Funds(R) ("Compass"), Cal
Muni, New York Muni and IDR. Of the above-mentioned funds, PFPC and/or PDI (or
an affiliate) provide administrative services to Fed, Muni, Cal Muni, New York
Muni, Compass and IDR.
The following chart provides certain information for the
fiscal year ended September 30, 1996 about the fees received by the directors of
the Company as directors and/or officers of the Company and as directors and/or
trustees of the Fund Complex.
<TABLE>
<CAPTION>
TOTAL
PENSION OR COMPENSATION
RETIREMENT FROM
AGGREGATE BENEFITS ESTIMATED REGISTRANT AND
COMPENSATION ACCRUED AS ANNUAL FUND COMPLEX(1)
NAME OF PERSON, FROM PART OF FUND BENEFITS UPON PAID TO
POSITION REGISTRANT EXPENSES RETIREMENT DIRECTORS
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
G. Nicholas Beckwith, $8,050 n/a n/a $20,650(3)(3)
III, Director(2)
- --------------------------------------------------------------------------------------------------------------------------
Philip E. Coldwell, $15,750 n/a n/a $44,125(3)(3)
Director
- --------------------------------------------------------------------------------------------------------------------------
Robert R. Fortune, $15,750 n/a n/a $65,025(6)(3)
Director
- --------------------------------------------------------------------------------------------------------------------------
Jerrold B. Harris, $8,950 n/a n/a $23,350(3)(3)
Director(2)
- --------------------------------------------------------------------------------------------------------------------------
Rodney D. Johnson, $15,750 n/a n/a $57,025(6)(3)
Director
- --------------------------------------------------------------------------------------------------------------------------
G. Willing Pepper, $24,750 n/a n/a $96,275(7)(3)
Chairman of the Board
and President
- --------------------------------------------------------------------------------------------------------------------------
Anthony Santomero, $2,375 n/a n/a $56,400(6)(3)
Director(4)
- --------------------------------------------------------------------------------------------------------------------------
David R. Wilmerding, $2,792 n/a n/a $62,650(6)(3)
Vice Chairman of the
Board(4)
==========================================================================================================================
</TABLE>
1. A Fund complex means two or more investment companies that hold themselves
out to investors as related companies for purposes of investment and investor
services, or have a common investment adviser or have an investment adviser that
is an affiliated person of the investment adviser of any of the other investment
companies.
2. These directors were elected to the Board of Directors of the Company on
March 22, 1996.
3. Total number of such other investment companies a director served on within
the Fund Complex during the fiscal year ended September 30, 1996.
4. These directors resigned from the Board of Directors of the Company on
January 4, 1996.
-18-
<PAGE> 42
For the Company's fiscal year ended September 30, 1996, the
Company paid a total of $139,960 to its officers and directors in all
capacities, of which $112,068 was allocated to TempFund and $27,892 was
allocated to TempCash. In addition, the Company contributed $2,690 for the last
fiscal year to its retirement plan for employees (who included Mr. Roach), of
which $1,883 was allocated to TempFund and $807 was allocated to TempCash.
Drinker Biddle & Reath LLP, of which Mr. McConnel is a partner, receives legal
fees as counsel to the Company. No employee of PDI, PIMC, PFPC or PNC Bank
receives any compensation from the Company for acting as an officer or director
of the Company. The directors and officers of the Company as a group own less
than 1% of the shares of each of the Company's portfolios.
By virtue of the responsibilities assumed by PDI, PIMC and PNC
Bank under their respective agreements with the Company, the Company itself
requires only one part-time employee in addition to its officers.
INVESTMENT ADVISER AND SUB-ADVISER
The advisory and sub-advisory services provided by PIMC and
PNC Bank are described in the Funds' Prospectuses. For the advisory services
provided and expenses assumed by it, PIMC is entitled to receive fees, computed
daily and payable monthly, at the following annual rates:
TEMPFUND:
---------
ANNUAL FEE AVERAGE NET ASSETS
- ---------- ------------------
.175% ............................ of the first $1 billion
.150% ............................ of the next $1 billion
.125% ............................ of the next $1 billion
.100% ............................ of the next $1 billion
.095% ............................ of the next $1 billion
.090% ............................ of the next $1 billion
.080% ............................ of the next $1 billion
.075% ............................ of the next $1 billion
.070% ............................ of amounts in excess of $8 billion.
-19-
<PAGE> 43
TEMPCASH:
---------
ANNUAL FEE AVERAGE NET ASSETS
- ---------- ------------------
.175% ............................ of the first $1 billion
.150% ............................ of the next $1 billion
.125% ............................ of the next $1 billion
.100% ............................ of the next $1 billion
.095% ............................ of the next $1 billion
.090% ............................ of the next $1 billion
.085% ............................ of the next $1 billion
.080% ........................... of amounts in excess of $7 billion.
PIMC and the administrators may from time to time reduce their
fees to ensure that TempFund's and TempCash's respective ordinary operating
expenses (excluding interest, taxes, brokerage fees, fees paid to Service
Organizations pursuant to Servicing Agreements, and extraordinary expenses) do
not exceed a specified percentage of each Portfolio's average net assets. PIMC
and the administrators have agreed that if, in any fiscal year, the expenses
borne by a Fund exceed the applicable expense limitations imposed by the
securities regulations of any state in which shares of that Fund are registered
or qualified for sale to the public, they will each reimburse that Fund for a
portion of any such excess expense in an amount equal to the portion that the
administration fees otherwise payable by the Fund to the administrators bear to
the total amount of the investment advisory and administrator fees otherwise
payable by the Fund. During the fiscal year ended September 30, 1996 the expense
limitations then in effect were not exceeded.
For the fiscal years ended September 30, 1996, 1995 and 1994,
TempFund paid to PIMC advisory fees (net of waivers) of $5,254,506, $5,898,096
and $6,682,252, respectively. For the same periods, PIMC waived advisory fees
with respect to TempFund of $2,765,281, $942,342 and $612,404, respectively.
For the fiscal years ended September 30, 1996, 1995 and 1994,
TempCash paid to PIMC advisory fees (net of waivers) of $2,170,845, $2,682,100
and $1,652,235, respectively. For the same periods, PIMC waived advisory fees
with respect to TempCash of $2,106,346, $2,595,378 and $2,119,803, respectively.
BANKING LAWS
Certain banking laws and regulations with respect to
investment companies are discussed in each Fund's Prospectuses. PIMC, PNC Bank
and PFPC believe that they may perform the services for the Funds contemplated
by their respective agreements, Prospectuses and this Statement of Additional
Information without
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<PAGE> 44
violation of applicable banking laws or regulations. It should be noted,
however, that future changes in legal requirements relating to the permissible
activities of banks and their affiliates, as well as further interpretations of
present requirements, could prevent PIMC and PFPC from continuing to perform
such services for the Funds and PNC Bank from continuing to perform such
services for PIMC and the Funds. If PIMC, PFPC or PNC Bank were prohibited from
continuing to perform such services, it is expected that the Company's Board of
Directors would recommend that the Funds enter into new agreements with other
qualified firms. Any new advisory agreement would be subject to shareholder
approval.
In addition, state securities laws on this issue may differ
from the interpretations of federal law expressed herein and banks and financial
institutions may be required to register as dealers pursuant to state law.
ADMINISTRATORS
As the Funds' administrators, PFPC and PDI have agreed to
provide the following services: (i) assist generally in supervising the Funds'
operations, including providing a Wilmington, Delaware order-taking facility
with toll-free IN-WATS telephone lines, providing for the preparing, supervising
and mailing of purchase and redemption order confirmations to shareholders of
record, providing and supervising the operation of an automated data processing
system to process purchase and redemption orders, maintaining a back-up
procedure to reconstruct lost purchase and redemption data, providing
information concerning the Funds to their shareholders of record, handling
shareholder problems, providing (through PDI) the services of employees to
preserve and strengthen shareholder relations and monitoring the arrangements
pertaining to the Funds' agreements with Service Organizations; (ii) assure that
persons are available to receive and transmit purchase and redemption orders;
(iii) participate in the periodic updating of the Funds' prospectuses; (iv)
assist in the Funds' Wilmington, Delaware office; (v) accumulate information for
and coordinate the preparation of reports to the Funds' shareholders and the
SEC; (vi) maintain the registration of the Funds' shares for sale under state
securities laws; (vii) review and provide advice with respect to all sales
literature of the Funds; and (viii) assist in the monitoring of regulatory and
legislative developments which may affect the Company, participate in counseling
and assisting the Company in relation to routine regulatory examinations and
investigations, and work with the Company's counsel in connection with
regulatory matters and litigation.
For their administrative services, the administrators are
entitled jointly to receive fees, computed daily and payable
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<PAGE> 45
monthly, as described above determined in the same manner as PIMC's advisory fee
set forth above. As stated in the Prospectuses, each administrator is also
reimbursed for its reasonable out-of-pocket expenses incurred by it in
connection with the Fund's computer access program. For information regarding
the administrators' obligation to reimburse the Funds in the event their
expenses exceed certain prescribed limits, see "Investment Adviser and Sub-
Adviser" above. Any fees waived by the administrators with respect to a
particular fiscal year are not recoverable.
For the fiscal years ended September 30, 1996, 1995 and 1994,
TempFund paid PFPC and PDI administration fees (net of waivers) of $5,254,506,
$5,898,096 and $6,682,252, respectively. For the same periods, PFPC and PDI
waived administration fees with respect to TempFund of $2,765,281, $942,342 and
$612,404, respectively.
For the fiscal years ended September 30, 1996, 1995 and 1994,
TempCash paid PFPC and PDI administration fees (net of waivers) of $2,170,845,
$2,682,100 and $1,652,235, respectively. For the same periods, PFPC and PDI
waived administration fees with respect to TempCash of $2,106,346, $2,595,378
and $2,119,803, respectively.
PFPC, a wholly-owned, indirect subsidiary of PNC Bank, and PDI
provide administrative and in some cases sub-administrative services to
investment companies which are distributed by PDI or its affiliates.
DISTRIBUTOR
PDI acts as the distributor of the Fund's shares. Each Fund's
shares are sold on a continuous basis by the distributor as agent, although it
is not obliged to sell any particular amount of shares. The distributor pays the
cost of printing and distributing prospectuses to persons who are not
shareholders of the Funds (excluding preparation and printing expenses necessary
for the continued registration of the Fund shares). The distributor shall
prepare or review, provide advice with respect to, and file with the federal and
state agencies or other organizations as required by federal, state or other
applicable laws and regulations, all sales literature (advertisements, brochures
and shareholder communications) for each of the Funds and any class or subclass
thereof. No compensation is payable by the Fund to the distributor for its
distribution services. PDI is a Delaware corporation with its principal place of
business located at Four Falls Corporate Center, 6th Floor, West Conshohocken,
Pennsylvania 19428.
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<PAGE> 46
CUSTODIAN AND TRANSFER AGENT
Pursuant to a Custodian Agreement, PNC Bank serves as the
Fund's custodian, holding a Fund's portfolio securities, cash and other
property. Under the Custodian Agreement, PNC Bank has agreed to provide the
following services: (i) maintain a separate account or accounts in the name of a
Fund; (ii) hold and disburse portfolio securities on account of a Fund; (iii)
collect and make disbursements of money on behalf of a Fund; (iv) collect and
receive all income and other payments and distributions on account of a Fund's
portfolio securities; and (v) make periodic reports to the Board of Directors
concerning a Fund's operations.
PNC Bank is also authorized to select one or more banks or
trust companies to serve as sub-custodian on behalf of a Fund, provided that PNC
Bank shall remain responsible for the performance of all of its duties under the
Custodian Agreement and shall hold each Fund harmless from the acts and
omissions of any bank or trust company serving as sub-custodian chosen by PNC
Bank.
PFPC also serves as transfer agent, registrar and dividend
disbursing agent to each Fund pursuant to a Transfer Agency Agreement. Under the
Agreement, PFPC has agreed to provide the following services: (i) maintain a
separate account or accounts in the name of a Fund; (ii) issue, transfer and
redeem Fund shares; (iii) transmit all communications by a Fund to its
shareholders of record, including reports to shareholders, dividend and
distribution notices and proxy material for its meetings of shareholders; (iv)
respond to correspondence by shareholders, security brokers and others relating
to its duties; (v) maintain shareholder accounts and sub-accounts; (vi) provide
installation and other services in connection with the Funds' computer access
program maintained to facilitate shareholder access to a Fund; (vii) send each
shareholder of record a monthly statement showing the total number of a Fund's
shares owned as of the last business day of the month (as well as the dividends
paid during the current month and year); and (viii) provide each shareholder of
record with a daily transaction report for each day on which a transaction
occurs in the shareholder's Master Account with a Fund. Further, an institution
establishing sub-accounts with PFPC is provided with a daily transaction report
for each day on which a transaction occurs in a sub-account and, as of the last
calendar day of each month, a report which sets forth the share balances for the
sub-accounts at the beginning and end of the month and income paid or
reinvested during the month. Finally, PFPC provides each shareholder of record
with copies of all information relating to dividends and distributions which is
required to be filed with the Internal Revenue Service and other appropriate
taxing authorities.
Pursuant to the Custodian Agreement, each Fund pays PNC Bank
an annual fee, calculated daily on the average daily gross
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<PAGE> 47
assets and paid monthly, at the rate of $.25 for each $1000 of the first $250
million, $.20 for each $1000 on the next $250 million, $.15 for each $1000 on
the next $500 million, $.09 for each $1000 on the next $2 billion, and $.08 for
each $1000 on amounts over $3 billion, plus $15.00 for each purchase, sale, or
delivery of fixed income securities (other than "Money Market" obligations) and
$40 for each interest collection or claim item. For transfer agency and dividend
disbursing services, each Fund pays PFPC fees at the annual rate of $12.00 per
account and sub-account maintained by PFPC plus $1.00 for each purchase or
redemption transaction by an account (other than a purchase transaction made in
connection with the automatic reinvestment of dividends). Payments to PFPC for
sub-accounting services provided by others are limited to the amount which PFPC
pays to others for such services. In addition, each Fund reimburses PNC Bank and
PFPC for out-of-pocket expenses related to such services. PNC Bank maintains a
principal business address at 1600 Market Street, Philadelphia, Pennsylvania
19103.
SERVICE ORGANIZATIONS
As stated in the Funds' Prospectuses, a Fund will enter into
an agreement with banks, savings and loan associations, and other financial
institutions, including affiliates of PNC Bank Corp. ("Service Organizations"),
requiring them to provide administrative support services to their customers
("Customers") who beneficially own a Fund's Dollar Shares in consideration of
such Fund's payment of .25% (on an annualized basis) of the average daily net
asset value of that Fund's Dollar Shares held by the Service Organization for
the benefit of its Customers. Such services include: (i) aggregating and
processing purchase and redemption requests from Customers and placing net
purchase and redemption orders with PFPC; (ii) providing Customers with a
service that invests the assets of their accounts in a Fund's Dollar Shares;
(iii) processing dividend payments from a Fund on behalf of Customers; (iv)
providing information periodically to Customers showing their positions in a
Fund's Dollar Shares; (v) arranging for bank wires; (vi) responding to Customer
inquiries relating to the services performed by the Service Organization; (vii)
providing sub-accounting with respect to a Fund's Dollar Shares beneficially
owned by Customers or the information necessary for sub-accounting; (viii)
forwarding shareholder communications from a Fund (such as proxies, shareholder
reports, annual and semi-annual financial statements, and dividend distribution
and tax notices) to Customers, if required by law; and (ix) other similar
services if requested by a Fund.
For the fiscal year ended September 30, 1996, TempFund Dollar
Shares were charged $307,468 in Service Organization fees, of which $215,093 was
paid to affiliates of PIMC.
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<PAGE> 48
For the fiscal year ended September 30, 1996, TempCash Dollar
Shares were charged $1,226,772 in Service Organization fees, of which $328,534
was paid to affiliates of PIMC.
Each Fund's agreements with Service Organizations are governed
by a Shareholder Services Plan (the "Plan") that has been adopted by the
Company's Board of Directors pursuant to an exemptive order granted by the SEC
in connection with the offering of a Fund's Dollar Shares. Pursuant to the Plan,
the Board of Directors reviews, at least quarterly, a written report of the
amounts expended under each Fund's agreements with Service Organizations and the
purposes for which the expenditures were made. In addition, a Fund's
arrangements with Service Organizations must be approved annually by a majority
of the Company's directors, including a majority of the directors who are not
"interested persons" of the Company as defined in the 1940 Act and have no
direct or indirect financial interest in such arrangements.
The Board of Directors has approved each Fund's arrangements
with Service Organizations based on information provided by the Company's
service contractors and others that there is a reasonable likelihood that the
arrangements will benefit such Fund and its shareholders by affording the Fund
greater flexibility in connection with the servicing of the accounts of the
beneficial owners of its shares in an efficient manner. Any material amendment
to a Fund's arrangements with Service Organizations must be approved by a
majority of the Company's Board of Directors (including a majority of the
non-interested directors). So long as a Fund's arrangements with Service
Organizations are in effect, the selection and nomination of the members of the
Company's Board of Directors who are not "interested persons" (as defined in the
1940 Act) of the Company will be committed to the discretion of such
non-interested directors.
EXPENSES
A Fund's expenses include taxes, interest, fees and salaries
of the Company's directors and officers who are not directors, officers or
employees of the Company's service contractors, SEC fees, state securities
registration fees, costs of preparing and printing prospectuses for regulatory
purposes and for distribution to shareholders, advisory and administration fees,
charges of the custodian and of the transfer and dividend disbursing agent,
Service Organization fees, costs of the Funds' computer access program, certain
insurance premiums, outside auditing and legal expenses, costs of shareholder
reports and shareholder meetings and any extraordinary expenses. A Fund also
pays for brokerage fees and commissions (if any) in connection with the purchase
and sale of portfolio securities.
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<PAGE> 49
ADDITIONAL INFORMATION CONCERNING TAXES
The following summarizes certain additional tax considerations
generally affecting a Fund and its shareholders that are not described in the
Funds' Prospectuses. No attempt is made to present a detailed explanation of the
tax treatment of a Fund or its shareholders or possible legislative changes, and
the discussion here and in the applicable Prospectuses is not intended as a
substitute for careful tax planning.
As stated in each Prospectus, each Fund is treated as a
separate corporate entity under the Internal Revenue Code of 1986, as amended
(the "Code") and intends to qualify each year as a regulated investment company
under the Code. In order to so qualify for a taxable year, a Fund must satisfy
the distribution requirement described in the Prospectuses, derive at least 90%
of its gross income for the year from certain qualifying sources and comply with
certain diversification requirements.
A 4% non deductible excise tax is imposed on regulated
investment companies that fail currently to distribute an amount equal to
specified percentages of their ordinary taxable income and capital gain net
income (excess of capital gains over capital losses). Each Fund intends to make
sufficient distributions or deemed distributions of its ordinary taxable income
and any capital gain net income prior to the end of each calendar year to avoid
liability for this excise tax.
If for any taxable year a Fund does not qualify for tax
treatment as a regulated investment company, all of that Fund's taxable income
will be subject to tax at regular corporate rates without any deduction for
distributions to Fund shareholders. In such event, dividend distributions to
shareholders would be taxable as ordinary income to the extent of that Fund's
earnings and profits and would be eligible for the dividends received deduction
in the case of corporate shareholders.
Each Fund will be required in certain cases to withhold and
remit to the U.S. Treasury 31% of taxable dividends or 31% of gross proceeds
paid to a shareholder who has failed to provide a correct tax identification
number in the manner required, is
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<PAGE> 50
subject to withholding by the Internal Revenue Service for failure properly to
include on his return payments of taxable interest or dividends, or has
failed to certify to the Fund that he is not subject to backup withholding when
required to do so or that it is an "exempt recipient."
Although each Fund expects to qualify as a regulated
investment company and to be relieved of all or substantially all federal income
tax, depending upon the extent of its activities in states and localities in
which its offices are maintained, in which its agents or independent contractors
are located or in which it is otherwise deemed to be conducting business, a Fund
may be subject to the tax laws of such states or localities. In addition, in
those states and localities that have income tax laws, the treatment of the
Fund and its shareholders under such laws may differ from the treatment under
federal income tax laws. Shareholders are advised to consult their tax advisors
concerning the application of state and local taxes.
The foregoing discussion is based on federal tax laws and
regulations which are in effect on the date of this Statement of Additional
Information. Such laws and regulations may be changed by legislative or
administrative action.
DIVIDENDS
GENERAL
Each Fund's net investment income for dividend purposes
consists of (i) interest accrued and original issue discount earned on that
Fund's assets, (ii) plus the amortization of market discount and minus the
amortization of market premium on such assets and (iii) less accrued expenses
directly attributable to that Fund and the general expenses (e.g. legal,
accounting and directors' fees) of the Company prorated to such Fund on the
basis of its relative net assets. Any realized short-term capital gains may also
be distributed as dividends to Fund shareholders. In addition, a Fund's Dollar
Shares bear exclusively the expense of fees paid to Service Organizations. (See
"Management of the Funds -- Service Organizations.")
As stated, the Company uses its best efforts to maintain the
net asset value per share of each Fund at $1.00. As a result of a significant
expense or realized or unrealized loss incurred by either Fund, it is possible
that the Fund's net asset value per share may fall below $1.00.
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<PAGE> 51
ADDITIONAL YIELD INFORMATION
The "yields" and "effective yields" are calculated separately
for TempFund and TempFund Dollar Shares and for TempCash and TempCash Dollar
Shares. The seven-day yield for each class or sub-class of shares in a Fund is
calculated by determining the net change in the value of a hypothetical
pre-existing account in a Fund having a balance of one share of the class
involved at the beginning of the period, dividing the net change by the value of
the account at the beginning of the period to obtain the base period return, and
multiplying the base period return by 365/7. The net change in the value of an
account in a Fund includes the value of additional shares purchased with
dividends from the original share and dividends declared on the original share
and any such additional shares, net of all fees charged to all shareholder
accounts in proportion to the length of the base period and the Fund's average
account size, but does not include gains and losses or unrealized appreciation
and depreciation. In addition, the effective annualized yield may be computed on
a compounded basis (calculated as described above) by adding 1 to the base
period return, raising the sum to a power equal to 365/7, and subtracting 1 from
the result. Similarly, based on the calculations described above, 30-day (or
one-month) yields and effective yields may also be calculated.
For the seven-day period ended March 31, 1997, the yield and
the compounded effective yield on TempFund Shares were 5.43% and 5.58%,
respectively. For the same period, the yield and the compounded effective yield
on TempFund Dollar Shares were 5.18% and 5.32%, respectively. For the 30-day
period ended March 31, 1997, the yield and the compounded effective yield on
TempFund Shares were 5.33% and 5.46%, respectively. Similarly, for the same
30-day period, the yield and the compounded effective yield on TempFund Dollar
Shares were 5.08% and 5.20%, respectively.
For the seven-day period ended March 31, 1997, the yield and
the compounded effective yield on TempCash Shares were 5.44% and 5.59%,
respectively. For the same period, the yield and the compounded effective yield
on TempCash Dollar Shares were 5.19% and 5.33%, respectively. For the 30-day
period ended March 31, 1997, the yield and the compounded effective yield on
TempCash Shares were 5.33% and 5.46%, respectively. Similarly, for the same
30-day period, the yield and the compounded effective yield on TempCash Dollar
Shares were 5.08% and 5.20%, respectively.
From time to time, in reports to shareholders or otherwise, a
Fund's yield may be quoted and compared to that of other money market funds or
accounts with similar investment objectives, to stock or other relevant indices
and to other reports
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<PAGE> 52
or analyses that relate to yields, interest rates, total return, market
performance, etc. For example, the yield of the Fund may be compared to the
IBC/Donoghue's Money Fund Average, which is an average compiled by
IBC/Donoghue's MONEY FUND REPORT(R) of Holliston, MA 01746, a widely recognized
independent publication that monitors the performance of money market funds, or
to the average yields reported by the Bank Rate Monitor from money market
deposit accounts offered by the 50 leading banks and thrift institutions in the
top five standard metropolitan statistical areas.
YIELD WILL FLUCTUATE, AND ANY QUOTATION OF YIELD SHOULD NOT BE
CONSIDERED AS REPRESENTATIVE OF THE FUTURE PERFORMANCE OF THE FUND. Since yields
fluctuate, yield data cannot necessarily be used to compare an investment in a
Fund's shares with bank deposits, savings accounts, and similar investment
alternatives which often provide an agreed or guaranteed fixed yield for a
stated period of time. Shareholders should remember that performance and yield
are generally functions of the kind and quality of the investments held in a
fund, portfolio maturity, operating expenses and market conditions. Any fees
charged by banks with respect to customer accounts in investing in shares of a
Fund will not be included in yield calculations; such fees, if charged, would
reduce the actual yield from that quoted.
The Funds may also from time to time include in
advertisements, sales literature, communications to shareholders and other
materials ("Materials"), discussions or illustrations of the effects of
compounding. "Compounding" refers to the fact that, if dividends or other
distributions on an investment are reinvested by being paid in additional
Portfolio shares, any future income or capital appreciation of a Fund would
increase the value, not only of the original investment, but also of the
additional shares received through reinvestment. As a result, the value of the
Fund investment would increase more quickly than if dividends or other
distributions had been paid in cash.
In addition, the Funds may also include in Materials
discussions and/or illustrations of the potential investment goals of a
prospective investor (including materials that describe general principles of
investing, questionnaires designed to help create a personal financial profile,
worksheets used to project savings needs based on certain assumptions and action
plans offering investment alternatives), investment management strategies,
techniques, policies or investment suitability of a Fund, economic and political
conditions, the relationship between sectors of the economy and the economy as a
whole, various securities markets, the effects of inflation and historical
performance of various asset classes, including but not limited to, stocks,
bonds and Treasury securities, and hypothetical investment returns based on
certain assumptions. From time to time, Materials may summarize the substance of
information contained in shareholder
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<PAGE> 53
reports (including the investment composition of a Fund), as well as the views
of the advisers as to current market, economic, trade and interest rate trends,
legislative, regulatory and monetary developments, investment strategies and
related matters believed to be of relevance to a Fund. In addition, selected
indices may be used to illustrate historical performance of select asset
classes. The Funds may also include in Materials charts, graphs or drawings
which compare the investment objective, return potential, relative stability
and/or growth possibilities of the Funds and/or other mutual funds, or
illustrate the potential risks and rewards of investment in various investment
vehicles, including but not limited to, stocks, bonds, Treasury securities and
shares of a Fund and/or other mutual funds. Materials may include a discussion
of certain attributes or benefits to be derived by an investment in a Fund
and/or other mutual funds (such as value investing, market timing, dollar cost
averaging, asset allocation, constant ratio transfer, automatic accounting
rebalancing and the advantages and disadvantages of investing in tax-deferred
and taxable investments), shareholder profiles and hypothetical investor
scenarios, timely information on financial management, tax and retirement
planning and investment alternatives to certificates of deposit and other
financial instruments, designations assigned a Fund by various rating or ranking
organizations, and Fund identifiers (such as CUSIP numbers or NASDAQ symbols).
Such Materials may include symbols, headlines or other material which highlight
or summarize the information discussed in more detail therein.
Materials may include lists of representative clients of the
Funds' investment adviser, may include discussions of other products or
services, may contain information regarding average weighted maturity or other
maturity characteristics, and may contain information regarding the background,
expertise, etc. of the investment adviser or of a Fund's portfolio manager.
From time to time in advertisements, sales literature and
communications to shareholders, the Funds may compare their total returns to
rankings prepared by independent services or other financial or industry
publications that monitor the performance of mutual funds. For example, such
data is found in IBC/Donoghue's Money Fund Report and reports prepared by Lipper
Analytical Services, Inc. Total return is the change in value of an investment
in a Fund over a particular period, assuming that all distributions have been
reinvested. SUCH RANKINGS REPRESENT THE FUNDS' PAST PERFORMANCE AND SHOULD NOT
BE CONSIDERED AS REPRESENTATIVE OF FUTURE RESULTS.
The following information has been provided by the Funds'
distributor: In managing each Fund's portfolio, the investment adviser utilizes
a "pure and simple" approach, which may include
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<PAGE> 54
disciplined research, stringent credit standards and careful
management of maturities.
ADDITIONAL DESCRIPTION CONCERNING SHARES
The Company does not presently intend to hold annual meetings
of shareholders except as required by the 1940 Act or other applicable law. Upon
the written request of shareholders owning at least twenty percent of the
Company's shares, the Company will call for a meeting of shareholders to
consider the removal of one or more directors and other certain matters. To the
extent required by law, the Company will assist in shareholder communication in
such matters.
The Company's Charter authorizes the Board of Directors,
without shareholder approval (unless otherwise required by applicable law), to:
(i) sell and convey a Fund's assets to another management investment company for
consideration which may include securities issued by the purchaser and, in
connection therewith, to cause all outstanding shares of a Fund to be redeemed
at a price which is equal to their net asset value and which may be paid in cash
or by distribution of the securities or other consideration received from the
sale and conveyance; (ii) sell and convert a Fund's assets into money and, in
connection therewith, to cause all outstanding shares of a Fund to be redeemed
at their net asset value; or, (iii) combine a Fund's assets with the assets
belonging to another portfolio of the Company if the Board of Directors
reasonably determines that such combination will not have a material adverse
effect on the shareholders of such Fund and such other portfolio and, in
connection therewith, to cause all outstanding shares of a Fund to be redeemed
or converted into shares of another class of the Company's Common Stock at net
asset value. The exercise of such authority by the Board will be subject to the
provisions of the 1940 Act.
As stated in the Funds' Prospectuses, holders of shares in a
Fund in the Company will vote in the aggregate and not by class or sub-class on
all matters, except as described above, and except that only a Fund's Dollar
Shares will be entitled to vote on matters submitted to a vote of shareholders
pertaining to that Fund's arrangements with Service Organizations. (See
"Management of the Funds -- Service Organizations.") Further, shareholders of
each of the Company's portfolios will vote in the aggregate and not by portfolio
except as otherwise required by law or when the Board of Directors determines
that the matter to be voted upon affects only the interests of the shareholders
of a particular portfolio. Rule 18f-2 under the 1940 Act provides that any
matter required to be submitted by the provisions of such Act or applicable
state law, or otherwise, to the holders of the outstanding securities of an
investment company such as the Company shall not be deemed to have
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<PAGE> 55
been effectively acted upon unless approved by the holders of a majority of the
outstanding shares of each portfolio affected by the matter. Rule 18f-2 further
provides that a portfolio shall be deemed to be affected by a matter unless it
is clear that the interests of each portfolio in the matter are identical or
that the matter does not affect any interest of the portfolio. Under the Rule,
the approval of an investment advisory agreement or any change in a fundamental
investment policy would be effectively acted upon with respect to a portfolio
only if approved by the holders of a majority of the outstanding voting
securities of such portfolio. However, the Rule also provides that the
ratification of the selection of independent accountants, the approval of
principal underwriting contracts, and the election of directors are not subject
to the separate voting requirements and may be effectively acted upon by
shareholders of the investment company voting without regard to portfolio.
Notwithstanding any provision of Maryland law requiring a
greater vote of shares of the Company's Common Stock (or of any class voting as
a class) in connection with any corporate action, unless otherwise provided by
law (for example by Rule 18f-2 discussed above) or by the Company's Charter, the
Company may take or authorize such action upon the favorable vote of the holders
of more than 50% of all of the outstanding shares of Common Stock voting without
regard to class (or portfolio).
COUNSEL
Drinker Biddle & Reath LLP, Philadelphia National Bank
Building, 1345 Chestnut Street, Philadelphia, Pennsylvania 19107-3496, of which
W. Bruce McConnel, III, Secretary of the Company, is a partner, will pass upon
the legality of the shares offered hereby.
AUDITORS
Coopers & Lybrand L.L.P., with offices at 2400 Eleven Penn
Center, Philadelphia, Pennsylvania 19103 has been selected as the independent
accountants of each Fund for the fiscal year ended September 30, 1997.
MISCELLANEOUS
SHAREHOLDER VOTE
As used in this Statement of Additional Information and the
Funds' Prospectuses, a "majority of the outstanding shares" of a Fund or of a
particular portfolio means, with respect to the
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<PAGE> 56
approval of an investment advisory agreement, a distribution plan or a change in
a fundamental investment policy, the lesser of (1) 67% of that Fund's shares
(irrespective of class or subclass) or of the portfolio represented at a meeting
at which the holders of more than 50% of the outstanding shares of that Fund or
portfolio are present in person or by proxy, or (2) more than 50% of the
outstanding shares of a Fund (irrespective of class or subclass) or of the
portfolio.
SECURITIES HOLDINGS OF BROKERS
As of September 30, 1996, TempFund held the following
securities of its regular brokers or dealers or their parents:
Goldman Sachs Group, L.P. $260,000,000, Merrill Lynch & Co.
$325,000,000, C.S. First Boston Group, Inc. $75,000,000, Bear
Stearns Co., Inc. $225,000,000 and Morgan Stanley Group, Inc.
$234,000,000.
As of September 30, 1996, TempCash held the following
securities of its regular brokers or dealers or their parents:
Merrill Lynch & Co. $50,000,000, Lehman Brothers Holding, Inc.
$125,000,000, Nomura Holding America, Inc. $50,000,000, Bear
Stearns Co., Inc. $50,000,000 and C.S. First Boston, Inc.
$120,000,000.
CERTAIN RECORD HOLDERS
On July 31, 1997, the name, address and percentage of
ownership of each institutional investor that owned of record 5% or more of the
outstanding shares of the TempFund portfolio were as follows: Saxon & Co., 200
Stevens Drive, Lester, PA 19113, 7.06%; and Sanwa Bank California, P.O. Box
60078, Los Angeles, CA 90060, 5.35%.
On July 31, 1997, the name, address and percentage of
ownership of the institutional investors that owned of record 5% or more of the
outstanding shares of the TempCash portfolio were as follows: Saxon & Co., 200
Stevens Drive, Lester, PA 19113, 9.33%; Harris Trust & Savings Bank, 111 West
Monroe Street, P.O. Box 755, Chicago, IL 60690, 7.10%; and BHC Securities
Inc., 2005 Market Street, One Commerce Square, 11th Floor, Philadelphia, PA
19103, 5.27%.
FINANCIAL STATEMENTS
The unaudited financial statements and notes thereto for
each Fund contained in the Company's Semi-Annual Report to Shareholders dated
March 31, 1997, and the audited financial statements and notes thereto for each
Fund contained in the Company's Annual Report to Shareholders dated September
30, 1996, are each incorporated by reference into this Statement of
-33-
<PAGE> 57
Additional Information . The financial statements and notes thereto for each
Fund contained in the Company's Annual Report to Shareholders have been audited
by Coopers & Lybrand L.L.P., whose report thereon also appears in such Annual
Report and is also incorporated by reference herein. No other parts of the
Semi-Annual Report or Annual Report are incorporated by reference herein. Such
audited financial statements and notes thereto have been incorporated herein in
reliance on the report of Coopers & Lybrand L.L.P., independent accountants,
given on the authority of said firm as experts in auditing and accounting.
-34-
<PAGE> 58
TEMPFUND AND TEMPCASH
APPENDIX A
NRSRO COMMERCIAL PAPER RATINGS
The following is a description of the securities ratings
of Standard & Poor's Corporation ("S&P"), Moody's Investors
Service, Inc. ("Moody's"), Duff & Phelps Credit Rating Co. ("D&P"),
Fitch Investor Services, Inc. ("Fitch"), Thomson BankWatch, and
IBCA Limited and IBCA Inc. ("IBCA").
Commercial paper ratings of S&P are current assessments of the
likelihood of timely payment of debt considered short-term in the relevant
market. Commercial paper rated A-1 by S&P indicates that the degree of safety
regarding timely payment is strong. Those issues determined to possess extremely
strong safety characteristics are denoted "A-1+".
Commercial paper ratings by Moody's are current assessments of
the ability of issuers to repay punctually promissory obligations not having an
original maturity in excess of nine months. The rating "Prime-1" is the highest
commercial paper rating assigned by Moody's. Issuers (or related supporting
institutions) rated "Prime-1" are considered to have a superior capacity for
repayment of short-term promissory obligations.
D&P uses short-term ratings for investment grade commercial
paper. The highest rating category of D&P for short-term debt is "D-1+". D&P
employs three designations, "D-1+", "D-1" and "D-1-", within the highest rating
category. "D-1+" indicates highest certainty of timely payment. Short-term
liquidity, including internal operating factors and/or access to alternative
sources of funds, is outstanding, and safety is just below risk-free U.S.
Treasury short-term obligations. "D-1" indicates very high certainty of timely
payment. Liquidity factors are excellent and supported by good fundamental
protection factors. Risk factors are minor. "D-1-" indicates high certainty of
timely payment. Liquidity factors are strong and supported by good fundamental
protection factors. Risk factors are very small.
Fitch's short-term ratings for commercial paper apply to debt
obligations that are payable on demand or have original maturities of up to
three years. The highest rating category is "F-1+". "F-1+" securities possess
exceptionally strong credit quality. Issues assigned this rating are regarded as
having the strongest degree of assurance for timely payment.
Thomson BankWatch short-term ratings assess the likelihood of
an untimely or incomplete payment of principal or
A-1
<PAGE> 59
interest of unsubordinated instruments having a maturity of one year or less
which is issued by United States commercial banks, thrifts and non-bank banks;
non-United States banks; and broker-dealers. The highest category is "TBW-1".
This designation indicates a very high degree of likelihood that principal and
interest will be paid on a timely basis.
IBCA assesses the investment quality of unsecured debt with an
original maturity of less than one year which is issued by bank holding
companies and their principal bank subsidiaries. The "A1+" rating by IBCA is
used for the highest category obligations which have the highest capacity for
timely repayment. Capacity for timely repayment of principal and interest is
substantial but may be susceptible to adverse changes in business, economic or
financial conditions.
A-2
<PAGE> 60
PART C
OTHER INFORMATION
ITEM 24. FINANCIAL STATEMENTS AND EXHIBITS
(a) Financial Statements:
(1) Included in Part A hereof:
Financial Highlights for:
- TempFund Dollar Shares
(2) Incorporated by reference in Part B hereof:
- The financial statements and related
notes thereto for each of the TempFund
portfolio and TempCash portfolio for the
fiscal period ended March 31, 1997, are
incorporated herein by reference to the
Semi-Annual Report to Shareholders as
filed with the Securities and Exchange
Commission on May 20, 1997 pursuant to
Rule 30b2-1 of the Investment Company
Act of 1940 (the "1940 Act") (Nos.
2-47015/811-2354).
- The audited financial statements and
related notes thereto as well as the
auditor's report thereon for each of the
TempFund portfolio and TempCash
portfolio for the fiscal year ended
September 30, 1996 are incorporated
herein by reference to the Annual Report
to Shareholders as filed with the
Securities and Exchange Commission on
November 25, 1996 pursuant to Rule
30b2-1 of the 1940 Act (Nos. 2-
47015/811-2354).
(b) Exhibits:
(1) Articles of Restatement dated March
30, 1994.
(2) Registrant's By-Laws as amended and
restated on January 21, 1993.
(3) None.
<PAGE> 61
(4) (a) Specimen copy of share certificate for
Class B Common Stock of the Company is
incorporated herein by reference to
Exhibit (4)(b) of Post-Effective
Amendment No. 2 to Registrant's
Registration Statement (No. 2-87227)
relating to its TempFund Shares, filed
on October 3, 1984.
(b) Specimen copy of share certificate for
Class C Common Stock of the Company is
incorporated herein by reference to
Exhibit (4)(c) of Post-Effective
Amendment No. 2 to Registrant's
Registration Statement (No. 2-87227)
relating to its TempCash Dollar Shares,
filed on October 3, 1984.
(c) Specimen copy of share certificate for
Class B Common Stock - Special Series 1
is incorporated herein by reference to
Exhibit (4)(d) of Post-Effective
Amendment No. 45 to Registrant's
Registration Statement (No. 2-47015)
relating to its TempFund Dollar Shares,
filed on December 3, 1986.
(d) Specimen copy of share certificate for
Class C Common Stock - Special Series 1
is incorporated herein by reference to
Exhibit (4)(e) of Post-Effective
Amendment No. 45 to Registrant's
Registration Statement (No. 2-87227)
relating to its TempCash Shares, filed
on December 3, 1986.
(5) (a) Investment Advisory Agreement between
Registrant and PNC Institutional
Management Corporation ("PIMC")
dated March 11, 1987.
(b) Sub-Advisory Agreement between PIMC
and PNC Bank, National Association
("PNC Bank") dated March 11, 1987.
(6) Distribution Agreement between
Registrant and Provident Distributors,
Inc. ("PDI") dated January 18, 1994.
C-2
<PAGE> 62
(7) Registrant's Fund Office Retirement Profit-
Sharing Plan and Trust Agreement.
(8) (a) Custodian Agreement between Registrant
and PNC Bank dated June 1, 1989.
(9) (a) Administration Agreement between
Registrant, PDI (formerly MFD Group,
Inc.) and PFPC Inc. ("PFPC") dated as of
January 18, 1993.
(b) Transfer Agency Agreement between
Registrant and PFPC dated June 1, 1989.
(10) Opinion and Consent of Counsel.(1)
(11) Consent of Coopers & Lybrand L.L.P.
(12) None.
(13) None.
(14) None.
(15) None.
(16) Schedules of Performance Computations
are incorporated herein by reference to
Exhibit (16) of Post-Effective Amendment
No. 49 to Registrant's Registration
Statement (No. 2-47015) relating to its
TempFund Portfolio and Exhibit (16) of
Post-Effective Amendment No. 9 to
Registrant's Registration Statement (No.
2-87227) relating to its TempCash
Portfolio, both filed on December 12,
1990.
(17) Financial Data Schedules.
ITEM 25. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH
REGISTRANT
Registrant is controlled by its Board of Directors.
- --------
(1) Filed with the Securities and Exchange Commission on November
25, 1996 under Rule 24f-2 as part of Registrant's Form 24f-2
Notice.
C-3
<PAGE> 63
ITEM 26. NUMBER OF HOLDERS OF SECURITIES
The following information is as of July 31, 1997:
<TABLE>
<CAPTION>
NUMBER OF
TITLE OF CLASS RECORD HOLDERS
-------------- --------------
<S> <C>
Class B Common Stock (TempFund Shares)........................ 1,215
-----
Class B Common Stock - Special
Series 1 (TempFund Dollar Shares)............................ 231
-----
Class C Common Stock (TempCash
Dollar Shares)............................................... 251
-----
Class C Common Stock - Special
Series 1 (TempCash Shares)................................... 386
-----
</TABLE>
ITEM 27. INDEMNIFICATION
Indemnification of Registrant's Principal Underwriter,
Custodian and Transfer Agent against certain stated
liabilities is provided for in Section 6 of the Distribution
Agreement, Section 22 of the Custodian Agreement and
Section 17 of the Transfer Agency Agreement, included as
Exhibits 6, 8(a) and 9(b) hereto, respectively.
Registrant has obtained from a major insurance carrier a
directors' and officers' liability policy covering certain
types of errors and omissions.
Section 2 of Article VI of Registrant's By-Laws, included as
Exhibit 2 hereto, provides for the indemnification of
Registrant's directors and officers.
Insofar as indemnification for liability arising under the
Securities Act of 1933 may be permitted to directors,
officers, and controlling persons of Registrant pursuant to
the foregoing provisions, or otherwise, Registrant has been
advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as
expressed in the Act and is, therefore, unenforceable. In the
event that a claim for indemnification against such
liabilities (other than the payment by Registrant of expenses
incurred or paid by a director, officer or controlling person
of Registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or
controlling person in
C-4
<PAGE> 64
connection with the securities being registered, Registrant
will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in
the Act and will be governed by the final adjudication of such
issue.
ITEM 28. BUSINESS AND OTHER CONNECTIONS OF INVESTMENT ADVISER
(a) PIMC performs investment advisory services for Registrant
and certain other investment companies and accounts. PNC Bank
and its predecessors have been in the business of managing the
investments of fiduciary and other accounts in the
Philadelphia area since 1847. In addition to its trust
business, PNC Bank provides commercial banking services.
To the Registrant's knowledge, none of the directors or
officers of PIMC or PNC Bank, except those set forth below,
is, or has been at any time during Registrant's past two
fiscal years, engaged in any other business, profession,
vocation or employment of a substantial nature, except that
certain directors and officers of PNC Bank and PIMC also hold
various positions with, and engage in business for, PNC Bank
Corp., which indirectly owns all the outstanding stock of PNC
Bank, or other subsidiaries of PNC Bank Corp.
(b) The information required by this Item 28 with respect to
each director, officer and partner of PIMC is incorporated by
reference to Schedules A and D of Form ADV filed by PIMC with
the Securities and Exchange Commission pursuant to the
Investment Advisers Act of 1940 (SEC File No. 801-13304).
Set forth below are the names and principal businesses of the
directors and certain executives of PNC Bank who are engaged
in any other business, profession, vocation or employment of a
substantial nature.
<TABLE>
<CAPTION>
POSITION WITH TYPE
PNC BANK NAME OTHER BUSINESS CONNECTIONS OF BUSINESS
- -------- ---- -------------------------- -----------
<S> <C> <C> <C>
Director B.R. Brown President and C.E.O. of Coal
Consol, Inc.
Consol Plaza
Pittsburgh, PA 15241
</TABLE>
C-5
<PAGE> 65
<TABLE>
<CAPTION>
POSITION WITH TYPE
PNC BANK NAME OTHER BUSINESS CONNECTIONS OF BUSINESS
- -------- ---- -------------------------- -----------
<S> <C> <C> <C>
Director Constance E. Clayton Associate Dean, School of Medical
Health & Professor of Pediatrics
Medical College of PA
Hahnemann University
430 East Sedgwick St.
Philadelphia, PA 19119
Director Eberhard Faber IV Chairman and C.E.O. Manufacturing
E.F.L., Inc.
450 Hedge Road
P.O. Box 49
Bearcreek, PA 18602
Director Dr. Stuart Heydt President and C.E.O. Medical
Geisinger Foundation
100 N. Academy Avenue
Danville, PA 17822
Director Edward P. Junker, III Vice Chairman Banking
PNC Bank, N.A.
Ninth and State Streets
Erie, PA 16553
Director Thomas A. McConomy President, C.E.O. and Manufacturing
Chairman, Calgon Carbon
Corporation
413 Woodland Road
Sewickley, PA 15143
Director Thomas H. O'Brien Chairman Banking
PNC Bank, National Association
One PNC Plaza, 30th Floor
Pittsburgh, PA 15265
Director Dr. J. Dennis O'Connor Provost, The Smithsonian Education
Institution
1000 Jefferson Drive, S.W.
Room 230, MRC 009
Washington, DC 20560
Director Rocco A. Ortenzio Chairman and C.E.O. Medical
Continental Medical Systems, Inc.
P.O. Box 715
Mechanicsburg, PA 17055
Director Jane G. Pepper President Horticulture
Pennsylvania Horticulture Society
325 Walnut Street
Philadelphia, PA 19106
Director Robert C. Robb, Jr. President, Lewis, Eckert, Robb Financial and
& Company Management
425 One Plymouth Meeting Consultants
Plymouth Meeting, PA 19462
</TABLE>
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<PAGE> 66
<TABLE>
<CAPTION>
POSITION WITH TYPE
PNC BANK NAME OTHER BUSINESS CONNECTIONS OF BUSINESS
- -------- ---- -------------------------- -----------
<S> <C> <C> <C>
Director James E. Rohr President and C.E.O. Bank Holding
PNC Bank, National Association Company
One PNC Plaza, 30th Floor
Pittsburgh, PA 15265
Director Daniel M. Rooney President, Pittsburgh Steelers Football
Football Club of the National
Football League
300 Stadium Circle
Pittsburgh, PA 15212
Director Seth E. Schofield Chairman and C.E.O. Airline
USAir, Inc.
2345 Crystal Drive
Arlington, VA 22227
</TABLE>
PNC BANK, NATIONAL ASSOCIATION
OFFICERS
<TABLE>
<CAPTION>
NAME POSITION WITH PNC BANK
---- ----------------------
<S> <C>
John E. Alden Senior Vice President
James C. Altman Senior Vice President
Lila M. Bachelier Senior Vice President
R. Perrin Baker Chief Market Counsel, Northwest PA
James R. Bartholomew Senior Vice President
Peter R. Begg Senior Vice President
Donald G. Berdine Senior Vice President
Ben Berzin, Jr. Senior Vice President
James H. Best Senior Vice President
Eva T. Blum Senior Vice President
Susan B. Bohn Senior Vice President
George Brikis Executive Vice President
Michael Brundage Senior Vice President
Anthony J. Cacciatore Senior Vice President
Richard C. Caldwell Executive Vice President
Craig T. Campbell Senior Vice President
J. Richard Carnall Executive Vice President
</TABLE>
C-7
<PAGE> 67
<TABLE>
<CAPTION>
NAME POSITION WITH PNC BANK
---- ----------------------
<S> <C>
Edward V. Caruso Executive Vice President
Peter K. Classen President & CEO, PNC Bank, Northeast, Pa
Andra D. Cochran Senior Vice President
Sharon Coghlan Coordinating Market Chief Counsel,
Philadelphia
James P. Conley Senior Vice President/Credit Policy
C. David Cook Senior Vice President
Alfred F. Cordasco Supervising Counsel, Pittsburgh, PA
Robert Crouse Senior Vice President
Peter M. Crowley Senior Vice President
Keith P. Crytzer Senior Vice President
John J. Daggett Senior Vice President
Peter J. Donchak Senior Vice President
Anuj Dhanda Senior Vice President
Victor M. DiBattista Chief Regional Counsel
Frank H. Dilenschneider Senior Vice President
Thomas C. Dilworth Senior Vice President
Alfred J. DiMatteis Senior Vice President
James Dionise Senior Vice President and C.F.O.
Patrick S. Doran Vice President, Head of Consumer Lending
Robert D. Edwards Senior Vice President
David J. Egan Senior Vice President
J. Lynn Evans Senior Vice President & Controller
William E. Fallon Senior Vice President
James M. Ferguson, III Senior Vice President
Charles J. Ferrero Senior Vice President
Frederick C. Frank, III Executive Vice President
</TABLE>
C-8
<PAGE> 68
<TABLE>
<CAPTION>
NAME POSITION WITH PNC BANK
---- ----------------------
<S> <C>
William J. Friel Executive Vice President
John F. Fulgoney Senior Counsel and Corporate Secretary
Brian K. Garlock Senior Vice President
George D. Gonczar Senior Vice President
Richard C. Grace Senior Vice President
James S. Graham Senior Vice President
Michael J. Hannon Senior Vice President
Stephen G. Hardy Senior Vice President
Michael J. Harrington Senior Vice President
Marva H. Harris Senior Vice President
Maurice H. Hartigan, II Executive Vice President
G. Thomas Hewes Senior Vice President
Sylvan M. Holzer Executive Vice President
Bruce C. Iacobucci Senior Vice President
John M Infield Senior Vice President
Philip C. Jackson Senior Vice President
William J. Johns Controller
William R. Johnson Audit Director
Edward P. Junker, III Vice Chairman
Robert D. Kane Senior Vice President
Michael D. Kelsey Chief Compliance Counsel
Jack Kelly Senior Vice President
Geoffrey R. Kimmel Senior Vice President
Randall C. King Senior Vice President
Christopher M. Knoll Senior Vice President
Richard C. Krauss Senior Vice President
Frank R. Krepp Senior Vice President & Chief Credit Policy
Officer
Kenneth P. Leckey Senior Vice President & Cashier
</TABLE>
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<PAGE> 69
<TABLE>
<CAPTION>
NAME POSITION WITH PNC BANK
---- ----------------------
<S> <C>
Marilyn R. Levins Senior Vice President
Carl J. Lisman Executive Vice President
George Lula Senior Vice President
Jane E. Madio Senior Vice President
Nicholas M. Marsini, Jr. Senior Vice President
John A. Martin Senior Vice President
David O. Matthews Senior Vice President
Walter B. McClellan Senior Vice President
James F. McGowan Senior Vice President
Charlotte B. McLaughlin Senior Vice President
James C. Mendelson Senior Vice President
James W. Meighen Senior Vice President
Scott C. Meves Senior Vice President
Ralph S. Michael, III Executive Vice President
J. William Mills Senior Vice President
Barbara A. Misner Senior Vice President
Marlene D. Mosco Senior Vice President
Peter F. Moylan Senior Vice President
Michael B. Nelson Executive Vice President
Thomas J. Nist Senior Vice President
Thomas H. O'Brien Chairman
James F. O'Day Senior Vice President
Cynthia G. Osofsky Senior Vice President
Thomas E. Paisley, III Senior Vice President
Barbara Z. Parker Executive Vice President
George R. Partridge Senior Vice President
Daniel J. Panlick Senior Vice President
David M. Payne Senior Vice President
</TABLE>
C-10
<PAGE> 70
<TABLE>
<CAPTION>
NAME POSITION WITH PNC BANK
---- ----------------------
<S> <C>
Charles C. Pearson, Jr. President and CEO, PNC Bank, Central PA
Helen P. Pudlin Senior Vice President
Edward V. Randall, Jr. President and CEO, PNC Bank, Pittsburgh
Arthur F. Rodman, III Senior Vice President
Richard C. Rhoades Senior Vice President
Bryan W. Ridley Senior Vice President
James E. Rohr President and Chief Executive Officer
Gary Royer Senior Vice President
Robert T. Saltarelli Senior Vice President
Robert V. Sammartino Senior Vice President
William Sayre, Jr. Senior Vice President
Alfred J. Schiavetti Senior Vice President
David W. Schoffstall Executive Vice President
Seymour Schwartzberg Senior Vice President
Timothy G. Shack Senior Vice President
Douglas E. Shaffer Senior Vice President
Alfred A. Silva Senior Vice President
George R. Simon Senior Vice President
Richard L. Smoot President and CEO of PNC Bank, Philadelphia
Timothy N. Smyth Senior Vice President
Kenneth S. Spatz Senior Vice President
Darcel H. Steber Senior Vice President
Robert L. Tassome Senior Vice President
Jane B. Tompkins Senior Vice President
Robert B. Trempe Senior Vice President
Kevin M. Tucker Senior Vice President
Alan P. Vail Senior Vice President
Frank T. VanGrofski Executive Vice President
</TABLE>
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<PAGE> 71
<TABLE>
<CAPTION>
NAME POSITION WITH PNC BANK
---- ----------------------
<S> <C>
Ronald H. Vicari Senior Vice President
William A. Wagner Senior Vice President
Patrick M. Wallace Senior Vice President
Annette M. Ward-Kredel Senior Vice President
Robert S. Wrath Senior Vice President
Arlene M. Yocum Senior Vice President
Carole Yon Senior Vice President
George L. Ziminski, Jr. Senior Vice President
</TABLE>
ITEM 29. PRINCIPAL UNDERWRITER
(a) PDI currently acts as distributor for, in
addition to the Registrant, Trust for Federal
Securities, Municipal Fund for Temporary Investment,
Municipal Fund for California Investors, Inc. and
Municipal Fund for New York Investors, Inc.
(b) The information required by this Item 29 with respect to
each director, officer or partner of PDI is incorporated by
reference to Schedule A of Form BD filed by PDI with the
Securities and Exchange Commission pursuant to the Securities
Exchange Act of 1934 (SEC File No. 8-46564).
(c) The following represents all commissions and other
compensation received by each principal underwriter who is not
an affiliated person of the registrant:
<TABLE>
<CAPTION>
NAME OF NET UNDERWRITING COMPENSATION ON
PRINCIPAL DISCOUNTS AND REDEMPTION AND BROKERAGE OTHER
UNDERWRITER COMMISSIONS REPURCHASE COMMISSIONS COMPENSATION
- ----------- ----------- ---------- ----------- ------------
<S> <C> <C> <C> <C>
Provident
Distributors, Inc. $0 $0 $0 $0
</TABLE>
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<PAGE> 72
ITEM 30. LOCATION OF ACCOUNTS AND RECORDS
(1) PNC Bank, National Association, 1600 Market
Street, Philadelphia, Pennsylvania 19103
(records relating to its functions as sub-
investment adviser).
(2) PNC Bank, National Association, 200 Stevens
Drive, Lester, Pennsylvania 19113 (records
relating to its functions as custodian).
(3) Provident Distributors, Inc., Four Falls
Corporate Center, 6th Floor, West
Conshohocken, Pennsylvania 19428 (records
relating to its functions as co-
administrator and distributor).
(4) PNC Institutional Management Corporation,
Bellevue Park Corporate Center, 400 Bellevue
Parkway, Wilmington, Delaware 19809 (records
relating to its functions as investment
adviser).
(5) PFPC Inc., 400 Bellevue Parkway, Bellevue
Park Corporate Center, Wilmington, Delaware
19809 (records relating to its functions as
co- administrator, transfer agent, registrar
and dividend disbursing agent).
(6) Drinker Biddle & Reath LLP, Philadelphia
National Bank Building, 1345 Chestnut Street,
Philadelphia, Pennsylvania 19107
(Registrant's Charter, By-Laws, and Minutes
Books).
ITEM 31. MANAGEMENT SERVICES
None.
ITEM 32. UNDERTAKINGS
Registrant hereby undertakes to furnish its Annual Report
to Shareholders upon request and without charge to any
person to whom a prospectus is delivered.
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<PAGE> 73
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and
the Investment Company Act of 1940, the Registrant certifies that it meets all
of the requirements for effectiveness of this Post-Effective Amendment No. 57
to its Registration Statement pursuant to Rule 485(b) under the Securities Act
of 1933 and has duly caused this Post-Effective Amendment No. 57 to its
Registration Statement to be signed on its behalf by the undersigned, thereto
duly authorized, in the City of Wilmington, and State of Delaware, on August 4,
1997.
TEMPORARY INVESTMENT FUND, INC.
/s/G. Willing Pepper
---------------------------------------
G. Willing Pepper
Chairman of the Board and President
Pursuant to the requirements of the Securities Act of 1933,
this Post-Effective Amendment No. 57 to Registrant's Registration Statement has
been signed below by the following persons in the capacities and on the dates
indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- --------- ----- ----
<S> <C> <C>
*G. Nicholas Beckwith, III Director August , 1997
- -------------------------- ---------
G. Nicholas Beckwith, III
* Philip E. Coldwell Director August , 1997
- -------------------------- ---------
Philip E. Coldwell
* Robert R. Fortune Director August , 1997
- -------------------------- ------
Robert R. Fortune
* Jerrold B. Harris Director August , 1997
- -------------------------- ---------
Jerrold B. Harris
* Rodney D. Johnson Director August , 1997
- -------------------------- ---------
Rodney D. Johnson
/s/G. Willing Pepper Chairman of August 4, 1997
- --------------------------- --------
G. Willing Pepper the Board and
President
/s/Edward J. Roach Vice President August 4, 1997
- --------------------------- --------
Edward J. Roach and Treasurer
(Principal Financial
and Accounting
Officer)
</TABLE>
*By:/s/Edward J. Roach
-------------------------------
Edward J. Roach
Attorney-in-Fact
<PAGE> 74
TEMPORARY INVESTMENT FUND, INC.
POWER OF ATTORNEY
I hereby appoint G. Willing Pepper or Edward J. Roach attorney for me,
with full power of substitution, and in my name and on my behalf as a director
to sign any Registration Statement or Amendment thereto of TEMPORARY INVESTMENT
FUND, INC. (Registration No. 2-47015) to be filed with the Securities and
Exchange Commission under the Securities Act of 1933, and generally to do and
perform all things necessary to be done in that connection.
I have signed this Power of Attorney on January 22, 1997.
/s/ G. Nicholas Beckwith, III
-----------------------------
G. Nicholas Beckwith, III
<PAGE> 75
TEMPORARY INVESTMENT FUND, INC.
POWER OF ATTORNEY
I hereby appoint G. Willing Pepper or Edward J. Roach attorney for me,
with full power of substitution, and in my name and on my behalf as a director
to sign any Registration Statement or Amendment thereto of TEMPORARY INVESTMENT
FUND, INC. (Registration No. 2-47015) to be filed with the Securities and
Exchange Commission under the Securities Act of 1933, and generally to do and
perform all things necessary to be done in that connection.
I have signed this Power of Attorney on January 21, 1997.*
/s/ Philip E. Coldwell
----------------------
Philip E. Coldwell
* With the understanding that all amendments will be sent to me in
advance.
<PAGE> 76
TEMPORARY INVESTMENT FUND, INC.
POWER OF ATTORNEY
I hereby appoint G. Willing Pepper or Edward J. Roach attorney for me,
with full power of substitution, and in my name and on my behalf as a director
to sign any Registration Statement or Amendment thereto of TEMPORARY INVESTMENT
FUND, INC. (Registration No. 2-47015) to be filed with the Securities and
Exchange Commission under the Securities Act of 1933, and generally to do and
perform all things necessary to be done in that connection.
I have signed this Power of Attorney on January 31, 1997.
/s/ Robert R. Fortune
---------------------
Robert R. Fortune
<PAGE> 77
TEMPORARY INVESTMENT FUND, INC.
POWER OF ATTORNEY
I hereby appoint G. Willing Pepper or Edward J. Roach attorney for me,
with full power of substitution, and in my name and on my behalf as a director
to sign any Registration Statement or Amendment thereto of TEMPORARY INVESTMENT
FUND, INC. (Registration No. 2-47015) to be filed with the Securities and
Exchange Commission under the Securities Act of 1933, and generally to do and
perform all things necessary to be done in that connection.
I have signed this Power of Attorney on January 22, 1997.
/s/ Jerrold B. Harris
---------------------
Jerrold B. Harris
<PAGE> 78
TEMPORARY INVESTMENT FUND, INC.
POWER OF ATTORNEY
I hereby appoint G. Willing Pepper or Edward J. Roach attorney for me,
with full power of substitution, and in my name and on my behalf as a director
to sign any Registration Statement or Amendment thereto of TEMPORARY INVESTMENT
FUND, INC. (Registration No. 2-47015) to be filed with the Securities and
Exchange Commission under the Securities Act of 1933, and generally to do and
perform all things necessary to be done in that connection.
I have signed this Power of Attorney on January 20, 1997.
/s/ Rodney D. Johnson
---------------------
Rodney D. Johnson
<PAGE> 79
EXHIBIT INDEX
EXHIBIT NO. DESCRIPTION
(1) Articles of Restatement.
(2) By-laws.
(5)(a) Investment Advisory Agreement between
Registrant and PNC Institutional
Management Corporation ("PIMC").
(5)(b) Sub-Advisory Agreement between PIMC and
PNC Bank, National Association ("PNC
Bank").
(6) Distribution Agreement between
Registrant and Provident Distributors,
Inc. ("PDI").
(7) Registrant's Fund Office Retirement
Profit-Sharing Plan and Trust Agreement.
(8)(a) Custodian Agreement between Registrant
and PNC Bank.
(9)(a) Administration Agreement between
Registrant, PDI and PFPC Inc. ("PFPC").
(9)(b) Transfer Agency Agreement between
Registrant and PFPC.
(11) Consent of Coopers & Lybrand L.L.P.
(17) Financial Data Schedules.
<PAGE> 1
ARTICLES OF RESTATEMENT
OF
TEMPORARY INVESTMENT FUND, INC.
Temporary Investment Fund, Inc. a Maryland corporation having
its principal office in the City of Baltimore, State of Maryland (hereinafter
called the "Corporation"), hereby certifies to the State Department of
Assessments and Taxation of Maryland:
ARTICLE I
The charter of the Corporation is restated as follows:
FIRST: THE UNDERSIGNED, LARRY P. SCRIGGINS, being at least
twenty-one years of age, acting as incorporator under and by virtue of the
General Laws of the State of Maryland authorizing the formation of corporations,
does hereby form a corporation (hereinafter called the "Corporation").
SECOND: The name of the Corporation is TEMPORARY INVESTMENT
FUND, INC.
THIRD: The purpose for which the Corporation is formed is to
act as an open-end investment company of the management type registered as such
with the Securities and Exchange Commission pursuant to the Investment Company
Act of 1940 and to exercise and generally to enjoy all of the powers, rights and
privileges granted to, or conferred upon, corporations by the General Laws of
the State of Maryland now or hereafter in force.
FOURTH: The post-office address of the principal office of the
Corporation in this State is c/o The Corporation Trust Incorporated, 32 South
Street, Baltimore, Maryland 21202. The name of the resident agent of the
Corporation in this State is The Corporation Trust Incorporated, a corporation
of this State, and the post-office address of the resident agent is 32 South
Street, Baltimore, Maryland 21202.
FIFTH: The total number of shares of stock which the
Corporation shall have authority to issue is Forty Billion (40,000,000,000)
shares of Common Stock, of which, subject to the power of the Board of Directors
to classify or reclassify any unissued shares of Common Stock from time to time,
Five Billion (5,000,000,000) shares of the par value of One Mill ($.001) each
shall be Class A Common Stock, Fifteen Billion (15,000,000,000) shares of the
par value of One Mill ($.001) each shall be Class B Common Stock, Ten Billion
(10,000,000,000) shares of the par value of One Mill ($.001) each shall be Class
C Common Stock, and the remaining Ten Billion (10,000,000,000) shares of the par
<PAGE> 2
value of One Mill ($.001) each shall be unclassified. The aggregate par value of
all Common Stock having par value is Forty Million Dollars ($40,000,000). [See
revisions effected by Articles Supplementary in Article FOURTEENTH.]
(b) Each class of Common Stock shall have the respective
preferences, conversion and other rights, voting powers, restrictions,
limitations as to dividends, qualifications, and terms and conditions of
redemption as set forth in Articles EIGHTH and TENTH of these Articles and as
set forth herein or as set or changed by the Board of Directors pursuant to its
power to classify or reclassify any unissued shares. The Class A Common Stock
and the Class B Common Stock shall be identical in all respects, except that the
Board of Directors in its discretion may, in declaring any dividend, establish
one record date with respect to the Class A Common Stock and a different record
date with respect to the Class B Common Stock for the purpose of determining
which stockholders are entitled to receive a dividend.
(c) Except to the extent otherwise provided by applicable law,
the Board of Directors shall have the power to classify or reclassify any
unissued shares of Common Stock from time to time by setting or changing the
preferences, conversion or other rights, voting powers, restrictions,
limitations as to dividends, qualifications, or terms or conditions of
redemption of the stock. The power of the Board of Directors to classify or
reclassify any of the unissued shares of Common Stock shall include, without
limitation, authority to classify or reclassify any such stock into a class or
classes of Common Stock and to divide and classify unissued shares of any class
into one or more series of such class.
(d) As used in these Articles of Incorporation, the term
"Common Stock" shall refer to the Class A Common Stock and the Class B Common
Stock and any other shares of Common Stock classified or reclassified by or
pursuant to these Articles.
SIXTH: The number of directors of the Corporation may be
increased or decreased in accordance with the By-Laws of the Corporation so long
as the number is never less than three (3).
SEVENTH: (a) The Board of Directors is empowered to authorize
the issuance from time to time of shares of Common Stock of the Corporation,
whether now or hereafter authorized; provided, however, that the consideration
per share to be received by the Corporation upon the issuance or sale of any
shares of any class of its Common Stock shall be the net asset value per share
determined in accordance with the requirements of the Investment Company Act of
1940 and the applicable rules and regulations of the Securities and Exchange
Commission (or any
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<PAGE> 3
succeeding governmental authority) and in conformity with generally accepted
accounting practices and principles.
(b) No holder of shares of Common Stock shall have pre-emptive
rights, and the Corporation shall have the right to issue and sell to any person
or persons any shares of its Common Stock or any option rights exercisable for,
or securities convertible into shares of its Common Stock without first offering
such shares, rights or securities to the holders of any shares of its Common
Stock.
EIGHTH: (a) To the extent the Corporation has funds or
property legally available therefor, each stockholder of the Corporation shall
have the right at such times as may be permitted by the Corporation, but no less
frequently than once each week, to require the Corporation to redeem all or any
part of his shares of any class of Common Stock at a redemption price equal to
the net asset value per share of the particular class of Common Stock next
determined after the shares are tendered for redemption; said determination of
the net asset value per share of any share of Common Stock to be made in
accordance with the requirements of the Investment Company Act of 1940 and the
applicable rules and regulations of the Securities and Exchange Commission (or
any succeeding governmental authority) and in conformity with generally accepted
accounting practices and principles.
Notwithstanding the foregoing, the Corporation may postpone
payment or deposit of the redemption price and may suspend the right of the
holders of Common Stock to require the Corporation to redeem shares of such
Common Stock during any period when (i) the New York Stock Exchange is closed
for other than weekends and holidays; (ii) the Securities and Exchange
Commission has by order permitted such suspension; (iii) an emergency as defined
by rules of the Securities and Exchange Commission exists, making disposal of
portfolio securities or valuation of net assets of the Corporation not
reasonably practicable; or (iv) trading on the New York Stock Exchange is
restricted under conditions set forth in the rules and regulations of the
Securities and Exchange Commission.
(b) Each share of Common Stock of the Corporation is subject
to redemption by the Corporation at the redemption price computed in the manner
set forth in Paragraph EIGHTH (a) of these Articles of Incorporation at any time
if the Board of Directors of the Corporation determines in its sole discretion
that failure to so redeem may have materially adverse consequences to the
holders of the Common Stock of the Corporation.
(c) Transfers of shares of Common Stock will be recorded on
the stock transfer records of the Corporation only at such times as stockholders
shall have the right to require the
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<PAGE> 4
Corporation to redeem shares pursuant to Paragraph EIGHTH (a) of these Articles
of Incorporation and at such other times as may be permitted by the Corporation.
NINTH: In furtherance and not in limitation of the
powers conferred by the laws of the State of Maryland, the Board
of Directors is expressly authorized:
(a) To make, alter or repeal the By-Laws of the
Corporation, except as otherwise required by the
Investment Company Act of 1940.
(b) Without the assent or vote of the stockholders, to
authorize and issue obligations of the
Corporation, secured or unsecured, as the Board of
Directors may determine, and to authorize and
cause to be executed mortgages and liens upon the
property of the Corporation, real or personal, but
only to the extent permitted by the fundamental
policies of the Corporation recited in its
registration statement filed pursuant to the
Investment Company Act of 1940.
(c) To enter into a written contract or contracts with
any person, including any firm, corporation, trust
or association in which any officer, other
employee, director or stockholder of the
Corporation may be interested, providing for the
furnishing of management, investment advisory,
custodial, stock distribution and administrative
services; provided, however, that performance
under these contracts shall be subject always Lo
the direction of the Board of Directors. The
terms and conditions, methods of approval,
authorization, renewal, amendment, and termination
of the aforesaid contracts shall be as determined
by the Board of Directors, subject, however, to
the provisions of these Articles of Incorporation,
the By-Laws of the Corporation, the applicable
laws of Maryland, the Investment Company Act of
1940 and the rules and regulations of the
Securities and Exchange Commission. The
compensation payable by the Corporation under such
contracts shall be such as is deemed fair and
equitable to both parties by the Board of
Directors of the Corporation.
(d) To determine from time to time whether and to what
extent and at what times and place and under what
conditions and regulations the books and accounts of
the Corporation, or any of them other than the stock
ledger, shall be open to the inspection of
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<PAGE> 5
the stockholders, and no stockholder shall have any
right to inspect any account or book or document of
the Corporation, except as conferred by law or
authorized by resolution of the Board of Directors or
of the stockholders.
(e) To determine the time, date and manner in which
redemption orders and purchase orders shall be
made.
(f) To determine in accordance with generally accepted
accounting principles and practices what
constitutes net profits, earnings, surplus or net
assets in excess of capital, and to determine what
accounting periods shall be used by the
Corporation for any purpose, whether annual or any
other period, including daily; to set apart out of
any funds of the Corporation such reserves for
such purposes as it shall determine and to abolish
the same; to declare and pay dividends and
distributions in cash, securities or other
property from surplus or any funds legally
available therefor, at such intervals (which may
be as frequently as daily) or on such other
periodic basis, as it shall determine, to declare
such dividends or distributions by means of a
formula or other method of determination, at
meetings held less frequently than the frequency
of the effectiveness of such declarations; to
establish payment dates for dividends or any other
distributions on any basis, including dates
occurring less frequently than the effectiveness
of declarations thereof; and to provide for the
payment of declared dividends on a date earlier or
later than the specified payment date in the case
of stockholders of the Corporation redeeming their
entire ownership of the Corporation.
(g) In addition to the powers and authorities by these
Articles of Incorporation or by statute expressly
conferred upon it, to exercise all such powers and
do all such acts and things as may be exercised or
done by the Corporation, subject, however, to the
provisions of these Articles of Incorporation, the
By-Laws of the Corporation, the applicable laws of
Maryland, the Investment Company Act of 1940 and
the rules and regulations of the Securities and
Exchange Commission.
TENTH: Notwithstanding any provision of Maryland law requiring
more than a majority vote of the Common Stock (or of each or any class or
classes of Common Stock voting as a class)
-5-
<PAGE> 6
in connection with any corporate action (including but not limited to amendments
to these Articles of Incorporation), unless otherwise provided in these Articles
of Incorporation, the Corporation may take or authorize such action upon the
favorable vote of the holders of a majority of the outstanding shares of Common
Stock of the Corporation entitled to vote thereon (voting without regard to
class).
ELEVENTH: The Corporation reserves the right from time to time
to make any amendment of these Articles of Incorporation now or hereafter
authorized by law, including amendments which alter any or all rights set forth
in these Articles of Incorporation. All rights conferred upon stockholders in
these Articles of Incorporation are granted subject to this reservation.
TWELFTH: So long as permitted by Maryland law, the books of
the Corporation may be kept outside of the State of Maryland at such place or
places as may be designated from time to time by the Board of Directors or in
the By-Laws of the Corporation.
THIRTEENTH: The duration of the Corporation shall be
perpetual.
FOURTEENTH: Pursuant to Article FIFTH of the Corporation's
Articles of Incorporation, the Board of Directors, by way of Articles
Supplementary dated December 2, 1991 and January 16, 1992, increased the total
number of shares of stock which the Corporation is presently authorized to issue
and on January 24, 1984 classified Common Stock of the Corporation into a new
class and on October 10, 1985 reclassified Common Stock of the Corporation into
a new series. The total number of shares of stock which the Corporation is
presently authorized to issue to Sixty Billion (60,000,000,000) shares of Common
Stock, of which Forty Billion (40,000,000,000) shares of the par value of One
Mill ($.001) each are Class B Common Stock, Five Billion (5,000,000,000) shares
of the par value of One Mill ($.001) each are Class B - Special Series 1 Common
Stock, Five Billion (5,000,000,000) shares of the par value of One Mill ($.001)
each are Class C Common Stock, and the remaining Ten Billion (10,000,000,000)
shares of the par value of One Mill ($.001) each are Class C - Special Series 1
Common Stock. The aggregate par value of all Common Stock having par value is
increased to Sixty Million Dollars ($60,000,000). The preferences, conversion
and other rights, voting powers, restrictions, limitations as to dividends,
qualifications and terms and conditions of redemption with respect to Class C
Common Stock, Class B - Special Series 1 Common Stock and Class C - Special
Series 1 Common Stock, respectively, are set forth in the Charter of the
Corporation and in the following paragraphs:
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<PAGE> 7
1. Shares of Class C Common Stock shall have the
preferences, conversion and other rights, voting powers,
restrictions, limitations as to dividends, qualifications and
terms and conditions of redemption set forth in the Charter of
the Corporation with respect to shares of Common Stock and in
the following paragraphs:
(A) Assets Belonging to Class C Common Stock. All
consideration received by the Corporation for the issue or
sale of shares of the Class C Common Stock of the Corporation,
together with all income, earnings, profits and proceeds
thereof, including any proceeds derived from the sale,
exchange or liquidation thereof, any funds or payments derived
from any reinvestment of such proceeds in whatever form the
same may be, and any general assets of the Corporation not
belonging to any class of Common Stock of the Corporation
which the Board of Directors may, in its sole discretion,
allocate to the Class C Common Stock of the Corporation, shall
irrevocably belong to the Class C Common Stock of the
Corporation for all purposes, subject only to the rights of
creditors, and shall be so handled upon the books of account
of the Corporation. Such assets, consideration, income,
earnings, profits and proceeds thereof, including any proceeds
derived from the sale, exchange or liquidation thereof, and
any assets derived from any reinvestment of such proceeds in
whatever form, are herein referred to as "assets belonging to"
the Class C Common Stock of the Corporation.
(B) Liabilities Belonging to Class C Common Stock.
The assets belonging to the Class C Common Stock of the
Corporation shall be charged with the liabilities in respect
to such class, and shall also be charged with such class's
proportionate share of the general liabilities of the
Corporation as determined by comparing, before the allocation
of the general liabilities of the Corporation, the asset value
of the Class C Common Stock with the aggregate asset value of
all of the several classes of Common Stock of the Corporation.
The liabilities so allocated to the Class C Common Stock of
the Corporation are herein referred to as "liabilities
belonging to" such class.
(C) Dividends and Distributions. Shares of Class C
Common Stock of the Corporation shall be entitled to such
dividends and distributions, in stock or in cash or both, as
may be declared from time to time by the Board of Directors,
acting in its sole discretion, with respect to such class;
provided, however, that
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<PAGE> 8
dividends and distributions on shares of the Corporation's
Class C Common Stock shall be paid only out of the lawfully
available "assets belonging to" such class as such phrase is
defined in Paragraph (A) of these Articles Supplementary.
(D) Liquidating Dividends and Distributions. In the
event of the liquidation or dissolution of the Corporation,
stockholders of Class C Common Stock of the Corporation shall
be entitled to receive, as a class, out of the assets of the
Corporation available for distribution to stockholders, but
other than general assets not belonging to any particular
class of stock, the assets belonging to such class; and the
assets so distributable to the stockholders of Class C Common
Stock of the Corporation shall be distributed among such
stockholders in proportion to the number of shares of such
class held by them and recorded on the books of the
Corporation. In the event that there are any general assets
not belonging to any particular class of Common Stock of the
Corporation and available for distribution, the stockholders
of the Corporation's Class C Common Stock shall receive a
proportionate share of such general assets of the Corporation
as determined by comparing, before the allocation of such
general assets, the asset value of the Class C Common Stock
with the aggregate asset value of all of the several classes
of Common Stock of the Corporation.
(E) Voting. Each stockholder of Class C Common Stock
of the Corporation shall be entitled to one vote for each
share of Class C Common Stock then standing in his name on the
books of the Corporation, and on any matter submitted to a
vote of stockholders, all shares of Class C Common Stock then
issued and outstanding and entitled to vote shall be voted
together with the shares of all other classes of Common Stock
of the Corporation, and not by class, except that: (1) when
expressly required by law, or when otherwise permitted by the
Board of Directors acting in its sole discretion, shares of
Class C Common Stock shall be voted by class; and (2) shares
of Class C Common Stock shall be entitled to vote only on
matters affecting such class.
(F) Termination of Class C Common Stock. Without the
vote of the shares of Class C Common stock of the Corporation
then outstanding (unless stockholder approval is otherwise
required by applicable law), the Corporation may, if so
determined by the Board of Directors:
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<PAGE> 9
(1) Sell and convey the assets belonging to the Class
C Common Stock to another trust or corporation that is a
management investment company (as defined in the Investment
Company Act of 1940) and is organized under the laws of any
state of the United States for consideration which may include
the assumption of all outstanding obligations, taxes and other
liabilities, accrued or contingent, belonging to such class
and which may include securities issued by such trust or
corporation. Following such sale and conveyance, the
Corporation may, at its option, redeem all shares of Class C
Common Stock outstanding at the net asset value thereof;
provided that the Board of Directors makes provision for the
payment of any liabilities belonging to the Class C Common
Stock that are not assumed by the purchaser of the assets
belonging to the Class C Common Stock; and provided further
that such provision is reflected in the determination of the
net asset value of shares of the outstanding Class C Common
Stock. The redemption price may be paid in cash or by
distribution of the securities or other consideration received
by the Corporation for the assets belonging to the Class C
Common Stock upon such conditions as the Board of Directors
deems, in its sole discretion, to be appropriate consistent
with applicable law and the Charter of the Corporation;
(2) Sell and convert the assets belonging to the
Class C Common Stock into money and, after making provision
for the payment of all obligations, taxes and other
liabilities, accrued or contingent, belonging to the Class C
Common Stock, the Corporation may, at its option, (i) redeem
all shares of Class C Common Stock outstanding at the net
asset value thereof determined after taking into account the
provision made for payment of such liabilities upon such
conditions as the Board of Directors deems, in its sole
discretion, to be appropriate consistent with applicable law
and the Charter of the Corporation, or (ii) combine the assets
belonging to the Class C Common Stock following such sale and
conversion with the assets belonging to any one or more other
classes of Common Stock of the Corporation pursuant to and in
accordance with Paragraph (F)(3) of these Articles
Supplementary; or
(3) Combine the assets belonging to the Class C
Common Stock with the assets belonging to any one or more
other classes of Common Stock of the Corporation if the Board
of Directors reasonably determines that such combination will
not have a material adverse effect on the stockholders of the
Class C Common Stock and of each other class of Common Stock
of the
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<PAGE> 10
Corporation participating in such combination. In connection
with any such combination of assets the shares of Class C
Common Stock of the Corporation then outstanding may, if so
determined by the Board of Directors, be converted into shares
of any other class or classes of Common Stock of the
Corporation with respect to which conversion is permitted by
applicable law, or may be redeemed, at the option of the
Corporation at the net asset value thereof upon such
conditions as the Board of Directors deems, in its sole
discretion, to be appropriate consistent with applicable law
and the Charter of the Corporation. Any redemption price, or
part thereof, paid pursuant to this Paragraph (F)(3) may be
paid in shares of any other existing or future class or
classes of Common Stock of the Corporation.
(G) General. Any determination made in good faith
and, so far as accounting matters are involved, in accordance
with generally accepted accounting principles by or pursuant
to the direction of the Board of Directors as to the
allocation of any assets or liabilities to the Class C Common
Stock of the Corporation shall be final and conclusive, and
shall be binding upon the Corporation and all holders of its
Class C Common Stock, past, present and future, and shares of
the Class C Common Stock of the Corporation are issued and
sold on the condition and understanding, evidenced by the
purchase of shares of Class C Common Stock or acceptance of
share certificates, that any and all such determinations shall
be binding as aforesaid.
2. Each share of Class B Common Stock - Special
Series 1 shall be charged equally with each other share now or
hereafter designated as Class B Common Stock (irrespective of
whether said share has been designated as part of a Special
Series of said Class and, if so designated as a part of a
Special Series, irrespective of the particular Series
designation) with the expenses and liabilities of the
Corporation in respect of shares of Class B Common Stock -
Special Series 1 or such other shares and in respect of any
general expenses and liabilities of the Corporation allocated
to shares of Class B Common Stock - Special Series 1 or such
other shares in accordance with the Charter of the
Corporation, except that:
(a) shares of Class B Common Stock - Special Series 1
shall bear the expenses and liabilities of payments to
institutions under any agreements entered into by or on behalf
of the Corporation which provide for services by the
institutions to their customers who
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<PAGE> 11
beneficially own such shares but do not provide for services
to any beneficial owners of shares of capital stock of the
Corporation other than shares of Class B Common Stock -
Special Series 1; and
(b) shares of Class B Common Stock - Special Series 1
shall not bear the expenses and liabilities of payments to
institutions under any agreements entered into by or on behalf
of the Corporation which provide for services by the
institutions to their customers who beneficially own shares of
capital stock of the Corporation other than shares of Class B
Common Stock - Special Series 1 but do not provide for
services to any beneficial owners of shares of Class B Common
Stock - Special Series 1;
Each share of Class B Common Stock - Special Series 1
shall otherwise have the same preferences, conversion and
other rights, voting powers, restrictions, limitations as to
dividends, qualifications and terms and conditions of
redemption as each other share now or hereafter designated as
Class B Common Stock (irrespective of whether said share has
been designated as part of a Special Series of said Class and,
if so designated as part of a Special Series, irrespective of
the particular Series designation), except that:
(a) on any matter that pertains to the agreements or
expenses and liabilities described in clause (a) of the
immediately preceding resolution (or to any plan or other
document adopted by the Corporation relating to said
agreements, expenses or liabilities) and is submitted to a
vote of shareholders of the Corporation, only shares of Class
B Common Stock - Special Series 1 shall be entitled to vote,
except that: (i) if said matter affects shares of capital
stock of the Corporation other than shares of Class B Common
Stock Special Series 1, such other affected shares of capital
stock shall also be entitled to vote, and in such case shares
of Class B Common Stock - Special Series 1 shall be voted in
the aggregate together with such other affected shares and not
by class or series except where otherwise required by law and
permitted by the Board of Directors of the Corporation; and
(ii) if said matter does not affect shares of Class B Common
Stock - Special Series 1, said shares shall not be entitled to
vote (except where otherwise required by law or permitted by
the Board of Directors) even though the matter is submitted to
a vote of the holders of shares of capital stock of the
Corporation other than shares of Class B Common Stock Special
Series 1; and
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<PAGE> 12
(b) on any matter that pertains to the agreements or
expenses and liabilities described in clause (b) of the
immediately preceding resolution (or any plan or other
document adopted by the Corporation relating to said
agreements, expenses or liabilities) and is submitted to a
vote of shareholders of the Corporation, shares of Class B
Common Stock - Special Series 1 shall not be entitled to vote,
except where otherwise required by law or permitted by the
Board of Directors of the Corporation, and except that if said
matter affects shares of Class B Common Stock - Special Series
1 such shares shall be entitled to vote, and in such case
shares of Class B Common Stock - Special Series 1 shall be
voted in the aggregate together with all other shares of
capital stock of the Corporation voting on the matter and not
by class or series except where otherwise required by law or
permitted by the Board of Directors.
3. All consideration received by the Corporation for
the issue or sale of shares of Class C Common Stock - Special
Series 1 shall be invested and reinvested with the
consideration received by the Corporation for the issue and
sale of all other shares now or hereafter designated as Class
C Common Stock (irrespective of whether said shares have been
designated as Special Series of said Class; and, if so
designated as a Special Series, irrespective of the particular
Series designations), together with all income, earnings,
profits and proceeds thereof, including any proceeds derived
from the sale; exchange or liquidation thereof, any funds or
payments derived from any reinvestment of such proceeds in
whatever form the same may be, and any general assets of the
Corporation allocated to the shares of Class C Common Stock -
Special Series 1 or such other shares by the Board of
Directors in accordance with the Charter of the Corporation,
and each share of Class C Common Stock - Special Series 1
shall share equally with each such other share in such
consideration and other assets, income, earnings, profits and
proceeds thereof, including any proceeds derived from the
sale, exchange or liquidation thereof, and any assets derived
from any reinvestment of such proceeds in whatever form;
Each share of Class C Common Stock - Special Series 1
shall be charged equally with each other share now or
hereafter designated as Class C Common Stock (irrespective of
whether said share has been designated as part of a Special
Series of said Class and, if so designated as a part of a
Special Series, irrespective of the particular Series
designation) with the expenses
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<PAGE> 13
and liabilities of the Corporation in respect of shares of
Class C Common Stock - Special Series 1 or such other shares
and in respect of any general expenses and liabilities of the
Corporation allocated to shares of Class C Common Stock -
Special Series 1 or such other shares in accordance with the
Charter of the Corporation, except that:
(a) shares of Class C Common Stock - Special Series 1
shall bear the expenses and liabilities of payments to
institutions under any agreements entered into by or on behalf
of the Corporation which provide for services by the
institutions to their customers who beneficially own such
shares but do not provide for services to any beneficial
owners of shares of capital stock of the Corporation other
than shares of Class C Common Stock - Special Series 1; and
(b) shares of Class C Common Stock - Special Series 1
shall not bear the expenses and liabilities of payments to
institutions under any agreements entered into by or on behalf
of the Corporation which provide for services by the
institutions to their customers who beneficially own shares of
capital stock of the Corporation other than shares of Class C
Common Stock - Special Series 1 but do not provide for
services to any beneficial owners of shares of Class C Common
- Stock Special Series 1;
Each share of Class C Common Stock - Special Series 1
shall otherwise have the same preferences, conversion and
other rights, voting powers, restrictions, limitations as to
dividends, qualifications and terms and conditions of
redemption as each other share now or hereafter designated as
Class C Common Stock (irrespective of whether said share has
been designated as part of a Special Series of said Class and,
if so designated as part of a Special Series, irrespective of
the particular Series designation), except that:
(a) on any matter that pertains to the agreements or
expenses and liabilities described in clause (a) of the
immediately preceding resolution (or to any plan or other
document adopted by the Corporation relating to said
agreements, expenses or liabilities) and is submitted to a
vote of shareholders of the Corporation, only shares of Class
C Common Stock - Special Series 1 shall be entitled to vote,
except that: (i) if said matter affects shares of capital
stock of the Corporation other than shares of Class C Common
Stock - Special Series 1, such other affected shares of
capital
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<PAGE> 14
stock shall also be entitled to vote, and in such case shares
of Class C Common Stock - Special Series 1 shall be voted in
the aggregate together with such other affected shares and not
by class or series except where otherwise required by law or
permitted by the Board of Directors of the Corporation; and
(ii) if said matter does not affect shares of Class C Common
Stock - Special Series 1, said shares shall not be entitled to
vote (except where otherwise required by law or permitted by
the Board of Directors) even though the matter is submitted to
a vote of the holders of shares of capital stock of the
Corporation other than shares of Class C Common Stock Special
Series 1; and
(b) on any matter that pertains to the agreements or
expenses and liabilities described in clause (b) of the
immediately preceding resolution (or any plan or other
document adopted by the Corporation relating to said
agreements, expenses or liabilities) and is submitted to a
vote of shareholders of the Corporation, shares of Class C
Common Stock - Special Series 1 shall not be entitled to vote,
except where otherwise required by law or permitted by the
Board of Directors of the Corporation, and except that if said
matter affects shares of Class C Common Stock - Special Series
1 shall be entitled to vote, and in such case shares of Class
C Common Stock - Special Series 1 shall be voted in the
aggregate together with all other shares of capital stock of
the Corporation voting on the matter and not by class or
series except where otherwise required by law or permitted by
the Board of Directors.
FIFTEENTH: The shares of Common Stock of the Corporation
reclassified pursuant to Articles Supplementary have been reclassified by the
Corporation's Board of Directors under the authority contained in the Charter of
the Corporation.
ARTICLE II
The Corporation desires to restate its Charter as currently in
effect. The provisions set forth in these Articles of Restatement are all the
provisions of the Charter currently in effect. The current address of the
principal office of the Corporation, and the name and address of the
Corporation's current resident agent are set forth herein.
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<PAGE> 15
ARTICLE III
The number of directors of the corporation as of the date
hereof is seven (7). The names of the directors of the Corporation currently in
office are:
Phillip E. Coldwell
Robert E. Fortune
Rodney D. Johnson
G. Willing Pepper
Anthony M. Santomero
Henry M. Watts, Jr.
David R. Wilmerding, Jr.
ARTICLE IV
The restatement of the Charter of the Corporation hereinabove
set forth has been duly approved by a majority of the entire board of directors.
ARTICLE V
The Charter is not amended by these Articles of Restatement.
IN WITNESS WHEREOF, Temporary Investment Fund, Inc. has
caused these Articles of Restatement to be signed in its name and
on its behalf by its President, G. Willing Pepper, and attested
by its Secretary, W. Bruce McConnel, III, on [3/30/94,].
The President acknowledges these Articles of Restatement to be
the corporate act of the Corporation and states that to the best of his
knowledge, information and belief, the matters and facts set forth in these
Articles with respect to the authorization and approval of the restatement of
the Corporation's Articles of Incorporation are true in all material respects
and that this statement is made under penalties of perjury.
By: /s/G. Willing Pepper
------------------------
President
ATTEST:
/s/W. Bruce McConnel, III
- ---------------------------
Secretary
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<PAGE> 1
TEMPORARY INVESTMENT FUND, INC.
Amendment to By-Laws
Adopted by the Board of Directors
on January 21, 1993
RESOLVED, that Section 4 of Article II of the Company's
By-Laws be, and hereby is, amended and restated in its entirety
to read as follows:
SECTION 4. Special Meetings. Special meetings of the Board
of Directors shall be held whenever called by the President,
Vice President, Secretary, by two or more directors or by a
majority of the Executive Committee, either in writing or by
vote at a meeting.
<PAGE> 2
TEMPORARY INVESTMENT FUND, INC.
BY-LAWS
AMENDED AND RESTATED AS OF NOVEMBER 14, 1993
ARTICLE I
STOCKHOLDERS
SECTION 1. No Annual Meeting Required. No Annual Meeting of
Stockholders of the Corporation shall be held unless required by applicable law
or otherwise determined by the Board of Directors. Any Annual Meeting shall be
held on such date and at such time and place as the Board of Directors may
designate.
SECTION 2. Special Meetings. Special meetings of the
stockholders for any purpose or purposes, unless otherwise proscribed by statute
or by the Charter, may be held at any place, within or without the State of
Maryland, and may be called at any time by the Board of Directors or by the
President, and shall be called by the President or Secretary at the request in
writing of a majority of the Board of Directors or at the request in writing of
stockholders entitled to cast at least twenty-five (25) percent of the votes
entitled to be cast at such a meeting. Such request shall state the purpose or
purposes of the proposed meeting.
SECTION 3. Notice of Meetings. Written or printed notice of
the purpose or purposes and of the time and place of every meeting of the
stockholders shall be given by the Secretary of the Corporation to each
stockholder of record entitled to vote at the meeting, by placing such notice in
the mail at least ten days, but not more than ninety days, prior to the day
named for the meeting addressed to each stockholder at his address appearing on
the books of the Corporation or supplied by him to the Corporation for the
purpose of notice. The notice of every meeting of stockholders may be
accompanied by a form or proxy approved by the Board of Directors in favor of
such actions or persons as the Board of Directors may select.
SECTION 4. Record Date. The Board of Directors may fix a date,
not less than ten or more than sixty days preceding the date of any meeting of
stockholders, as a record date for the determination of stockholders entitled to
notice of, or to vote at, any such meeting. The Board of Directors shall not
close the
<PAGE> 3
books of the Corporation against transfers of shares during the whole or any
part of such period except as provided in Section 2 of Article IV.
SECTION 5. Quorum. Except as otherwise provided by law or by
the Charter of the Corporation, as from time to time amended, or by these
By-laws, the presence in person or by proxy of stockholders of the Corporation
entitled to cast at least a majority of the votes to be cast thereat shall
constitute a quorum at each meeting of the stockholders and all questions shall
be decided by majority vote of the shares so represented in person or by proxy
at the meting and entitled to vote thereat. The stockholders present at any duly
organized meeting may continue to do business until adjournment, notwithstanding
the withdrawal of enough stockholders to leave less than a quorum.
SECTION 6. Adjournment. Any meeting of the stockholders may be
adjourned from time to time, without notice other than by announcement at the
meeting at which such adjournment is taken, and at any such adjourned meeting at
which a quorum shall be present any action may be taken that could have been
taken at the meeting originally called; provided that if the adjournment is for
more than thirty days, or if after the adjournment a new record date is fixed
for the adjourned meeting, a notice of the adjourned meeting shall be given to
each stockholder of record entitled to vote at the adjourned meeting.
ARTICLE II
BOARD OF DIRECTORS
SECTION 1. Election and Powers. The business, affairs and
property of the Corporation shall be managed by a Board of five (5) Directors
which may exercise all such powers of the corporation and do all such lawful
acts and things as are not by statute or by the Charter or by these By-laws
required to be exercised or done by the stockholders. The number of Directors
comprising the Board may be increased to not more than ten (10) and decreased to
not less than three (3) by a vote of the majority of the Board of Directors then
in office. Subject to the provisions of Article I, Section 1, the members of the
Board of Directors shall be elected by the Stockholders at their Annual Meeting
and each Director shall hold office until the Annual Meeting next after his
election and until his successor shall have been duly elected and qualified, or
until he shall have resigned, or until shall have been removed as provided in
Section 10 of this Article II.
SECTION 2. First Regular Meeting. After each meeting the
stockholders at which a Board of Directors shall have been
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<PAGE> 4
elected, the Board of Directors so elected shall meet as soon as practicable for
the purpose of organization and the transaction of other business, at such time
and place as may be designated by the President; and in the event that no other
place or earlier time is designated by the President, the Board of Directors
shall meet at the office of the Corporation in the City of Washington, District
of Columbia, at nine-thirty o'clock A.M., local time, on the second day
following such meeting, if not a legal holiday, and if a legal holiday, then on
the first day following which is not a legal holiday. No notice of such first
meeting shall be necessary if held as hereinabove provided.
SECTION 3. Additional Regular Meetings. In addition to the
first regular meeting, regular meetings of the Board of Directors shall be held
on such dates as may be fixed, from time to time, by the Board of Directors.
SECTION 4. Special Meetings. Special meetings of the Board of
Directors shall be held whenever called by the President, Vice President,
Secretary, by two or more directors or by a majority of the Executive Committee,
either in writing or by vote at a meeting.
SECTION 5. Place of Meetings. Subject to the provisions of
Section 2 of this Article II, the Board of Directors may hold its regular and
special meetings at such place or places within or without the State of Maryland
as it may, from time to time, determine.
SECTION 6. Notice of Meetings. Subject to the provisions of
Section 2 of this Article II, notice of the place, day and hour of every regular
and special meeting shall be delivered personally to each director or mailed,
telegraphed or cabled to his address on the books of the Corporation at least
one day before the meeting. It shall not be requisite to the validity of any
meeting of the Board of Directors that notice thereof shall have been given to
any director who is present thereat, or if absent waives notice thereof in
writing filed with the records of the meeting either before or after the holding
thereof. No notice of any adjourned meeting of the Board of Directors need by
given.
SECTION 7. Quorum. A majority of the Board of Directors then
in office, but in no case less than two (2) directors, shall be necessary to
constitute a quorum for the transaction of business at every meeting of the
Board of Directors; but if at any meeting there be less than a quorum present, a
majority of those present may adjourn the meeting from time to time, but not for
a period over thirty days at any one
time, without notice other than by announcement at the meeting until a quorum
shall attend. At any such adjourned meeting at which a quorum shall be present,
any business may be transacted
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<PAGE> 5
which might have been transacted at the meeting as originally notified.
SECTION 8. Vacancies. Any vacancy occurring by reason of an
increase in the number of directors may be filled by a majority of the entire
Board of Directors. Any vacancy occurring for any other cause, except removal by
the stockholders, may be filled by a majority of the remaining members of the
Board of Directors. Any director chosen to fill a vacancy shall hold office
until the next annual meeting of stockholders and until his successor shall have
been duly chosen and qualified.
SECTION 9. Compensation. Any director, whether or not he is a
salaried officer or employee of the Corporation, may be compensated for his
services as director or as a member of a committee, or as Chairman of the Board
of Directors or Chairman of a committee, and in addition may be reimbursed for
transportation and other expenses, all in such manner and amounts as the
director may from time to time determine.
SECTION 10. Removal. At any meeting of the stockholders called
for that purpose, any director may, by vote of stockholders entitled to cast a
majority of the votes, be removed from office, with or without cause, and
another may be elected in the place of the person so removed, to serve for the
remainder of his term.
SECTION 11. Executive Committee. The Board of Directors may,
by resolution adopted by a majority of the whole Board, designate two (2) or
more of its members to constitute an Executive Committee which committee, during
intervals between meetings of the Board, shall have and exercise the authority
of the Board of Directors in the management of the business of the Corporation
to the extent permitted by law. In the absence of any member of the Executive
Committee, the member or members thereof present at any meeting, whether or not
he or they constitute a quorum, may appoint a member of the Board of Directors
to act in the place of the absent member.
SECTION 12. Qualifications of Directors. No person over the
age 75 shall be eligible to serve as a director of the Fund. Directors of the
Fund (excluding those persons serving as a director of the Fund on October 8,
1993) shall retire as directors as of the Fund's fiscal year during which they
first attain the age of 75.
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<PAGE> 6
ARTICLE III
OFFICERS
SECTION 1. Executive Officers. The Board of Directors, at its
first meeting following the annual meeting of stockholders, shall elect a
President, one or more Vice Presidents, one of whom may be elected Vice
President-Finance, a Secretary and a Treasurer, and from time to time may
appoint such Assistant Secretaries, Assistant Treasurers and such other
officers, agents, and employees as it may deem proper. Two or more offices,
except those of President and Vice President, may be held by the same person.
The President shall be chosen from among the Directors. The Board may appoint
such other officers, agents and employees as it shall deem necessary who shall
have such authority and shall perform such duties as from time to time shall be
prescribed by the Board.
SECTION 2. Term. The term of office of all officers shall be
one year and until their respective successors are elected and qualify, but any
officer may be removed from office, either with or without cause, at any time by
the affirmative vote of a majority of the members of the Board of Directors then
in office. A vacancy in any office arising from any cause may be filled for the
unexpired portion of the term by the Board of Directors.
SECTION 3. President. The President shall be the chief
executive and administrative officer of the Corporation; he shall have the
management of the business of the Corporation and shall see that all orders and
resolutions of the Board are carried into effect.
SECTION 4. Vice Presidents. The Corporation shall have one or
more Vice Presidents, one of whom may be elected Vice President-Finance. The
Vice President-Finance shall serve as the principal assistant to the President
in the performance of the President's duties as chief executive officer of the
Corporation, and shall perform such of the duties and exercise such of the
powers of the President as shall be delegated or assigned to the Vice
President-Finance by the President or by the Board of Directors. He shall,
subject to the control of the Board of Directors, perform the duties of the
President in the President's absence or inability to act and shall have general
supervision over the other Vice Presidents in the performance of their duties.
Each other Vice President shall perform such duties as may be assigned to him by
the Board of Directors, the President or the Vice President-Finance.
SECTION 5. Secretary. The Secretary shall attend all
meetings of the Board of Directors and all meetings of the
stockholders and record all the proceedings of the meetings of
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<PAGE> 7
the stockholders and of the Board of Directors in a book to be kept for that
purpose. He shall give, or cause to be given, notice of all meetings of the
stockholders and special meetings of the Board of Directors, and shall perform
such other duties as may be prescribed by the Board of Directors or President,
under whose supervision he shall be. He shall keep in safe custody the seal of
the Corporation and, when authorized by the Board of Directors, affix the same
to any instrument requiring it, and, when so affixed, it shall be attested by
his signature or by the signature of the Treasurer or an Assistant Secretary.
SECTION 6. Treasurer. The Treasurer shall have the custody of
the corporate funds and securities and shall keep full and accurate accounts of
receipts and disbursements in books belonging to the Corporation and shall
deposit all monies and other valuable effects in the name and to the credit of
the Corporation in such depositories as may be designated by the Board of
Directors. He shall disburse the funds of the Corporation as may be ordered by
the Board, taking proper vouchers for such disbursements, and shall render to
the President and Directors at the regular meetings of the Board, or whenever
they may require it, an account of all his transactions as Treasurer and of the
financial condition of the Corporation.
SECTION 7. Assistant Officers. The Board of Directors may
elect one or more Assistant Secretaries and one or more assistant Treasurers.
Each Assistant Secretary, if any, and each Assistant Treasurer, if any, shall,
at the request of or in the absence or disability of the Secretary or the
Treasurer, as the case may be, perform the duties and exercise the powers of the
Secretary or the Treasurer, as the case may be. They shall perform such other
duties and have such other powers as the Board of Directors may from time to
time prescribe.
ARTICLE IV
STOCK
SECTION 1. Certificates. Each stockholder shall be entitled
upon written request to a stock certificate or certificates, certifying the
number and kind of shares owned by him, signed by the President or a Vice
President and the Treasurer or an Assistant Treasurer, which signatures may be
either manual or facsimile signatures, and sealed with the seal of the
Corporation, which seal may be either facsimile or any other form of seal. Stock
certificates shall be in such form, not inconsistent with law or with the
certificate of incorporation, as shall be approved by the Board of Directors.
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<PAGE> 8
SECTION 2. Transfer of Shares. Shares of stock shall be
transferable on the books of the Corporation by the holder thereof, in person or
by duly authorized attorney, upon the surrender of the certificate representing
the shares to be transferred, properly endorsed, at such times as provided in
the Charter.
SECTION 3. Transfer Agents and Registrars. The Corporation may
have one or more Transfer Agents and one or more Registrars of its stock, whose
respective duties the Board of Directors may, from time to time, define. No
certificate of stock shall be valid until countersigned by a Transfer Agent, if
the Corporation shall have a Transfer Agent, or until registered by a Registrar,
if the Corporation shall have a Registrar. The duties of Transfer Agent and
Registrar may be combined.
SECTION 4. Mutilated, Lost or Destroyed Certificates. The
holder of any certificate representing shares of stock of the Corporation shall
immediately notify the Corporation of any mutilation, loss or destruction
thereof, and the Board of Directors may in its discretion cause one or more new
certificates, for the same number of shares in the aggregate, to be issued to
such holder upon the surrender of the mutilated certificate, or in case of loss
or destruction of the certificate, upon satisfactory proof of such loss or
destruction, and the deposit of indemnity by way of bond or otherwise, in such
form and amount and with such sureties or securities as the Board of Directors
may require to indemnify the Corporation against loss or liability by reason of
the issuance of such new certificates, but the Board of Directors may in its
discretion refuse to issue such new certificate, save upon the order of some
court having jurisdiction in such matters.
SECTION 5. Stock Ledgers. The Corporation shall not be
required to keep original or duplicate stock ledgers at its principal office in
the City of Baltimore, Maryland, but stock ledgers shall be kept at the
respective offices of the Transfer Agents of the Corporation's capital stock.
ARTICLE V
SEAL
The seal of the Corporation shall be in such form as the Board
of Directors shall prescribe.
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<PAGE> 9
ARTICLE VI
SUNDRY PROVISIONS
SECTION 1. Amendments. Except as otherwise provided in the
Charter, the Laws of Maryland or the Investment Company Act of 1940, the By-laws
of the Corporation may be amended, added to, rescinded or repealed by a majority
vote of the stock entitled to vote present or represented at any annual or
special meeting of the stockholders, provided notice of the proposed change is
given in the notice of the meeting. Subject to the power of the stockholders to
alter, amend or repeal any By-laws made by the Board of Directors, the Board of
Directors at any meeting thereof may make additional By-laws for the Corporation
and may from time to time amend, add to, rescind or repeal these By-laws.
SECTION 2. Indemnification of Directors and Officers.
(a) Indemnification. The Corporation shall indemnify its
directors to the fullest extent that indemnification of directors is permitted
by the Maryland General Corporation Law. The Corporation shall indemnify its
officers to the same extent as its directors and to such further extent as is
consistent with law. The Corporation shall indemnify its directors and officers
who while serving as directors or officers also serve at the request of the
Corporation as a director, officer, partner, trustee, employee, agent or
fiduciary of another corporation, partnership, joint venture, trust, other
enterprise or employee benefit plan to the same extent as its directors and, in
the case of officers, to such further extent as is consistent with law. This
Article shall not protect any such person against any liability to the
Corporation or any stockholder thereof to which such person would otherwise be
subject by reason of willful misfeasance, bad faith, gross negligence or
reckless disregard of the duties involved in the conduct of his office
("disabling conduct").
(b) Advances. Any current or former director or officer of the
Corporation claiming indemnification within the scope of this Section 2 shall be
entitled to advances from the Corporation for payment of the reasonable expenses
incurred by him in connection with proceedings to which he is a party in the
manner and to the full extent permissible under the General Laws of the State of
Maryland, the Securities Act of 1933 and the Investment Company Act of 1940, as
such statues are now or hereafter in force.
(c) Procedure. On the request of any current or former
director or officer requesting indemnification or an
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<PAGE> 10
advance under this Section 2, the Board of Directors shall determine, or cause
to be determined, in a manner consistent with the General Laws of the State of
Maryland, the Securities Act of 1933 and the Investment Company Act of 1940, as
such statues are now or hereafter in force, whether the standards required by
this Section 2 have been met.
(d) Other Rights. The indemnification provided by this Section
2 shall not be deemed exclusive of any other right, in respect of
indemnification or otherwise, to which those seeking such indemnification may be
entitled under any insurance or other agreement, vote of stockholders or
disinterested directors or otherwise, both as to action by a director or officer
of the Corporation in his official capacity and as to action by such person in
another capacity while holding such office or position, and shall continue as to
a person who has ceased to be a director or officer and shall inure to the
benefit of the heirs, executors and administrators of such a person.
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<PAGE> 1
ADVISORY AGREEMENT
AGREEMENT made as of March 11, 1987 between TEMPORARY
INVESTMENT FUND, INC., a Maryland corporation (herein called the "Company"), and
PROVIDENT INSTITUTIONAL MANAGEMENT CORPORATION, a Delaware corporation (herein
called the "Investment Adviser"), registered as an investment adviser under the
Investment Advisers Act of 1940 and wholly-owned by Provident National Bank
(herein called "Provident").
WHEREAS, the Company is registered as an open-end.
diversified, management investment company under the Investment Company Act of
1940 and presently offers five classes of shares representing interests in two
separate investment portfolios; and
WHEREAS, the Company desires to retain the Investment Adviser
to render investment advisory and administrative services to the Company, and
the Investment Adviser is willing to so render such services;
NOW, THEREFORE, this Agreement
WITNESSETH:
In consideration of the premises and mutual covenants herein
contained, it is agreed between the parties hereto as follows:
1. Appointment.
(a) The Company hereby appoints the Investment
Adviser to act as investment adviser to the Company for its TempFund portfolio
(herein called "TempFund") and its TempCash portfolio (herein called "TempCash")
(collectively, herein called the "Portfolios") for the period and on the terms
set forth in this Agreement. The Investment Adviser accepts such appointment and
agrees to render the services herein set forth, for the compensation herein
provided.
(b) In the event that the Company establishes one or
more portfolios other than the Portfolios with respect to which it desires to
retain the Investment Adviser to act as investment adviser hereunder, the
Company shall notify the Investment Adviser in writing. If the Investment
Adviser is willing to render such services it shall notify the Company in
writing whereupon, subject to such shareholder approval as may be required
pursuant to Paragraph 10 hereof, such portfolio shall become a Portfolio
hereunder and the compensation payable by such new Portfolio to the Investment
Adviser will be as agreed in writing at the time.
<PAGE> 2
2. Delivery of Documents. The Company has furnished the
Investment Adviser with copies properly certified or authenticated of each of
the following:
(a) Articles of Incorporation of the Company, filed
with the Secretary of State of Maryland on February 8. 1973, as amended (such
Articles of Incorporation, as presently in effect and as they shall from time to
time be amended, herein called the "Articles of Incorporation");
(b) By-Laws of the Company, as amended (such By-
Laws, as presently in effect and as they shall from time to time be amended,
herein called the "By-Laws");
(c) Resolutions of the Board of Directors of the
Company authorizing the appointment of the Investment Adviser and the execution
and delivery of this Agreement;
(d) Registration Statement under the Securities Act
of 1933, as amended, on Form S-5 (No. 2-47015) relating to shares of the
Company's common stock, $.001 par value, representing interests in TempFund, and
all amendments thereto, and the Registration Statement under the Securities Act
of 1933, as amended, on Form N-1 (No. 2-87227) relating to shares of the
Company's common stock, $.001 par value, representing interests in TempCash
(collectively, such shares of common stock are herein called "Shares") and all
amendments thereto;
(e) Registration Statement of the Company under the
Investment Company Act of 1940 on Form N-8B-1 (No. 811-2354) as filed with the
Securities and Exchange Commission on February 9, 1973 and all amendments
thereto;
(f) Notification of Registration of the Company under
the Investment Company Act of 1940 on Form N-8A as filed with the Securities and
Exchange Commission on February 9, 1973 and all amendments thereto; and
(g) Prospectuses of the Company's Portfolios in
effect under the Securities Act of 1933 (such prospectuses, as presently in
effect and as they shall from time to time be amended and supplemented, herein
called the "Prospectuses").
The Company will furnish the Investment Adviser from time to
time with copies, properly certified or authenticated, of all amendments of or
supplements to the foregoing, if any.
3. Management. Subject to the supervision of the Board of
Directors of the Company, the Investment Adviser will provide a continuous
investment program for each of the Portfolios, including investment research and
management with
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<PAGE> 3
respect to all securities, investments, cash and cash equivalents in the
Portfolios. The Investment Adviser will determine from time to time what
securities and other investments will be purchased, retained or sold by the
Company for each of its Portfolios. The Investment Adviser will provide the
services rendered by it hereunder in accordance with the investment objective
and policies of each of the Portfolios as stated in their respective
Prospectuses. The Investment Adviser further agrees that it:
(a) will conform with all applicable Rules and
Regulations of the Securities and Exchange Commission (herein called the
"Rules"), and will in addition conduct its activities under this Agreement in
accordance with regulations of the Board of Governors of the Federal Reserve
System pertaining to the investment advisory activities of bank holding
companies to the same extent as if such regulations were by their terms
applicable to the activities of the Investment Adviser;
(b) will not invest its assets or the assets of any
accounts advised by it or by Provident in Shares, make loans for the purpose of
purchasing or carrying Shares, or make interest-bearing loans to the Company;
(c) will place orders pursuant to its investment
determinations for each Portfolio either directly with the issuer or with any
broker or dealer. In placing orders with brokers and dealers, the Investment
Adviser will attempt to obtain the best net price and the most favorable
execution of its orders. Consistent with this obligation, when the execution and
price offered by two or more brokers or dealers are comparable, the Investment
Adviser may, in its discretion, purchase and sell portfolio securities to and
from brokers and dealers who provide the Company with research advice and other
services. In no instance will portfolio securities be purchased from or sold to
the Company's principal underwriter, the Investment Adviser or any affiliated
person thereof, except to the extent permitted by the Securities and Exchange
Commission;
(d) will, together with Provident, maintain all books
and records with respect to the securities transactions of the Portfolios, keep
their respective books of account and will render to the Company's Board of
Directors such periodic and special reports as the Board may request; and
(e) will compute the respective net asset value and
net income for each of the Portfolios.(and each series or subclass thereof) on
each business day as described in their respective Prospectuses or as more
frequently requested by the Company.
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<PAGE> 4
4. Services Not Exclusive. The investment management services
rendered by the Investment Adviser hereunder are not to be deemed exclusive, and
the Investment Adviser shall be free to render similar services to others so
long as its services under this Agreement are not impaired thereby.
5. Sub-Advisory Agreement. Notwithstanding anything herein to
the contrary, this Agreement shall not be effective until the Investment Adviser
and Provident deliver to the Company a duly executed copy of the Sub-Advisory
Agreement in substantially the form attached as Exhibit A-1 hereto (the
"Sub-Advisory Agreement") pursuant to which Provident will provide the
Investment Adviser with certain investment advisory services on behalf of each
Portfolio. The Investment Adviser agrees to give the Company prompt written
notice of any termination of or notice to terminate the Sub-Advisory Agreement
by any person other than the Company.
6. Books and Records. In compliance with the requirements of
Rule 31a-3 of the Rules, the Investment Adviser hereby agrees that all records
which it maintains for each Portfolio are the property of the Company and
further agrees to surrender promptly to the Company any of such records upon the
Company's request. The Investment Adviser further agrees to preserve for the
periods prescribed by Rule 31a-2 the records required to be maintained by Rule
31a-1 of the Rules.
7. Expenses. During the term of this Agreement, the Investment
Adviser will pay all expenses incurred by it in connection with its activities
under this Agreement other than the cost of (including brokerage commissions, if
any) securities purchased for the Portfolios.
In addition, if the expenses borne by any Portfolio in any
fiscal year exceed the applicable expense limitations imposed by the securities
regulations of any state in which the Shares are registered or qualified for
sale to the public, the Investment Adviser shall reimburse such Portfolio for
one-half of any excess up to the amount of the fees payable by the particular
Portfolio to it during such fiscal year pursuant to paragraph 8 hereof;
provided, however, that notwithstanding the foregoing, the Investment Adviser
shall reimburse such Portfolio for one-half of such excess expenses regardless
of the amount of such fees payable to it during such fiscal year to the extent
that the securities regulations of any state in which the Shares are registered
or qualified for sale so require.
8. Compensation.
(a) For the services provided and the expenses
assumed pursuant to this Agreement with respect to TempFund, the Company will
pay the Investment Adviser from the assets of
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<PAGE> 5
TempFund and the Investment Adviser will accept as full compensation therefor a
fee, computed daily and payable monthly, at the following annual rate: .175% of
the first $1 billion of TempFund's average net assets, plus .15% of the next $1
billion of its average net assets, plus .125% of the next $1 billion of its
average net assets, plus .1% of the next $1 billion of its average net assets,
plus .095% of the next $1 billion of its average net assets, plus .09% of the
next $1 billion of its average net assets, plus .08% of the next $1 billion of
its average net assets, plus .075% of the next $1 billion of its average net
assets, plus .07% of its average net assets over $8 billion. The fee will be
reduced by one-half of the amount necessary to ensure that the ordinary
operating expenses (excluding interest, taxes, brokerage, payments to Service
Organizations pursuant to Servicing Agreements and extraordinary expenses) of
TempFund do not exceed .45% of TempFund's average net assets for any fiscal
year.
(b) For the services provided and the expenses
assumed pursuant to this Agreement with respect to TempCash, the Company will
pay the Investment Adviser from the assets of TempCash and the Investment
Adviser will accept as full compensation therefor a fee, computed daily and
payable monthly, at the following annual rate: .175% of the first $1 billion of
TempCash's average net assets, plus .15% of the next $1 billion of its average
net assets, plus .125% of the next $1 billion of its average net assets, plus
.1% of the next $1 billion of its average net assets, plus .095% of the next $1
billion of its average net assets, plus .09% of the next $1 billion of its
average net assets, plus .085% of the next $1 billion of its average net assets,
plus .08% of its average net assets over $7 billion.
The fee attributable to each Portfolio shall be the several
(and not joint or joint and several) obligation of each such Portfolio.
9. Limitation of Liability of the Investment Adviser. Neither
Provident nor the Investment Adviser shall be liable for any error of judgment
or mistake of law or for any loss suffered by the Company in connection with the
matters to which this Agreement relates, except a loss resulting from a breach
of fiduciary duty with respect to the receipt of compensation for services or a
loss resulting from willful misfeasance, bad faith or gross negligence on the
part of the Investment Adviser in the performance of its duties or from reckless
disregard by it of its obligations and duties under this Agreement.
Notwithstanding the foregoing, the Investment Adviser shall be liable to the
Company for the acts and omissions of Provident to the extent that Provident is
liable to the Investment Adviser for such acts or omissions under the
Sub-Advisory Agreement between the Investment Adviser and Provident.
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<PAGE> 6
10. Duration and Termination. This Agreement shall become
effective with respect to a Portfolio upon approval of this Agreement by vote of
a majority of the outstanding voting securities of such Portfolio and, unless
sooner terminated as provided herein, shall continue with respect to such
Portfolio until March 31, 1988. Thereafter, if not terminated, this Agreement
shall continue with respect to a Portfolio for successive annual periods ending
on March 31, provided such continuance is specifically approved at least
annually (a) by the vote of a majority of those members of the Board of
Directors of the Company who are not parties to this Agreement or interested
persons of any such party, cast in person at a meeting called for the purpose of
voting on such approval, and (b) by the Board of Directors of the Company or by
vote of a majority of the outstanding voting securities of such Portfolio;
provided, however, that this Agreement may be terminated with respect to a
Portfolio by the Company at any time, without the payment of any penalty, by the
Board of Directors of the Company or by vote of a majority of the outstanding
voting securities of such Portfolio, on 60 days' written notice to the
Investment Adviser, or by the Investment Adviser at any time, without payment of
any penalty, on 90 days' written notice to the Company. This Agreement will
immediately terminate in the event of its assignment and will immediately
terminate with respect to a Portfolio upon any termination with respect to such
Portfolio of the Sub-Advisory Agreement. (As used in this Agreement, the terms
"majority of the outstanding voting securities," "interested person" and
"assignment" shall have the same meaning as such terms have in the Investment
Company Act of 1940.)
11. Amendment of this Agreement. No provision of this
Agreement may be changed, discharged or terminated orally, but only by an
instrument in writing signed by the party against which enforcement of the
change, discharge or termination is sought, and no amendment of this Agreement
affecting a Portfolio shall be effective until approved by vote of the holders
of a majority of the outstanding voting securities of such Portfolio.
12. Miscellaneous. The captions in this Agreement are included
for convenience of reference only and in no way define or delimit any of the
provisions hereof or otherwise affect their construction or effect. If any
provision of this Agreement shall be held or made invalid by a court decision,
statute, rule or otherwise, the remainder of this Agreement shall not be
affected thereby. This Agreement shall be binding upon and shall inure to the
benefit of the parties hereto and their respective successors and shall be
governed by Delaware law.
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<PAGE> 7
IN WITNESS WHEREOF, the parties hereto have caused this
instrument to be executed by their officers designated below as of the day and
year first above written.
TEMPORARY INVESTMENT FUND, INC.
Attest:
/s/ Robert E. Putney, III By /s/ Edward J. Roach
- ------------------------------- -------------------------------
Vice President
(Corporate Seal)
PROVIDENT INSTITUTIONAL MANAGEMENT
CORPORATION
Attest:
/s/ John D. Silcox, Jr. By /s/ Thomas H. Nevin
- ------------------------------- -------------------------------
President
(Corporate Seal)
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<PAGE> 1
SUB-ADVISORY AGREEMENT
AGREEMENT dated as of March 11, 1987 between PROVIDENT
NATIONAL BANK, a national banking association (herein called "Provident") and
PROVIDENT INSTITUTIONAL MANAGEMENT CORPORATION, a Delaware corporation
registered as an investment adviser under the Investment Advisers Act of 1940
and wholly-owned by Provident (herein called "PIMC").
WHEREAS, PIMC is the investment adviser to Temporary
Investment Fund, Inc. (herein called the "Company"), an open-end, diversified,
management investment company registered under the Investment Company Act of
1940; and
WHEREAS, PIMC wishes to retain Provident to provide it with
investment research administrative, and statistical services in connection with
PIMC's advisory activities on behalf of the Company's TempFund portfolio (herein
called "TempFund") and its TempCash portfolio (herein called "TempCash")
(collectively, herein called the "Portfolios"); and
WHEREAS, Provident is willing to provide such services to PIMC
upon the conditions and for the compensation set forth below,
NOW THEREFORE, in consideration of the premises and mutual
covenants herein contained, it is agreed between the parties hereto as follows:
1. Appointment. (a) PIMC hereby appoints Provident its
sub-adviser with respect to the Portfolios as required by the Advisory Agreement
between PIMC and the Company dated as of March 11, 1987 (such Agreement or the
most recent successor advisory agreement between such parties is herein called
the "Advisory Agreement"). Provident accepts such appointment and agrees to
render the services herein set forth for the compensation herein provided.
(b) In the event that the Company establishes one or
more portfolios other than the Portfolios and PIMC has agreed to act as
investment adviser to such new portfolio under the Advisory Agreement, and PIMC
desires to retain Provident to act as its sub-adviser with respect thereto, PIMC
shall notify Provident in writing. If Provident is willing to render such
services it shall notify PIMC in writing whereupon, subject to such shareholder
approval as may be required pursuant to Paragraph 8 hereof, such portfolio shall
become a Portfolio hereunder and the compensation payable by PIMC to Provident
with respect to the services provided for such Portfolio shall be as agreed in
writing at the time.
<PAGE> 2
2. Sub-Advisory Services. Subject to the supervision of the
Board of Directors of the Company, Provident, through its Trust Division and on
behalf of the Company, will provide the Company investment research and credit
analysis concerning prospective and existing investments for each of the
Portfolios, make recommendations with respect to the continuous investment
program for each such Portfolio, supply PIMC computer facilities and operating
personnel, and provide certain statistical services as PIMC may from time to
time reasonably request. Provident will provide the services rendered by it
hereunder in accordance with the investment objective, policies and restrictions
as stated in the respective prospectuses of each of the Portfolios, as presently
in effect and as they may be amended or supplemented from time to time.
Provident further agrees that it:
(a) will use the same skill and care in providing such
services as it uses in providing services to fiduciary accounts for
which it has investment responsibilities;
(b) will conform with all applicable Rules and Regulations of
the Securities and Exchange Commission (herein called the "Rules"), and
will in addition conduct its activities under this Agreement in
accordance with the regulations of the Board of Governors of the
Federal Reserve System pertaining to the investment advisory activities
of bank holding companies to the same extent as if such regulations
were by their terms applicable to its activities hereunder;
(c) will not invest its assets or assets of any. fiduciary
account managed by it in shares of the Company, make loans for purposes
of purchasing or carrying such shares, or make interest-bearing loans
to the Company;
(d) will maintain or cause PIMC to maintain all books and
records with respect to the securities transactions of the Portfolios
and shall keep or cause PIMC to keep their respective books of account;
(e) will render to the Company's Board of Directors such
periodic and special reports as the Board may request; and
(f) will maintain its policy and practice of conducting its
Trust Division independently of its Commercial Division. In making
investment recommendations for the Portfolios, Trust Division personnel
will not inquire or take into consideration whether the issuers of
securities proposed for purchase or sale for the account of a Portfolio
are customers of the Commercial Division. In dealing with commercial
customers, the Commercial Division will not
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<PAGE> 3
inquire or take into consideration whether securities of those
customers are held by the Portfolios.
3. Services Not Exclusive. Provident's services hereunder are
not deemed to be exclusive, and Provident shall be free to render similar
services to others so long as its services under this Agreement are not impaired
thereby.
4. Books and Records. In compliance with the requirements of
Rule 3la-3 of the Rules, Provident hereby agrees that all records which it
maintains for the Company are the property of the Company and further agrees to
surrender promptly to the Company any of such records upon the Company's
request. Provident further agrees to preserve, or cause PIMC to preserve, for
the periods prescribed by Rule 3la-2, the records required to be maintained by
Rule 3la-1 of the Rules.
5. Expenses. During the term of this Agreement, Provident will
pay all expenses incurred by it in connection with its activities under this
Agreement.
6. Compensation. For the services which Provident will render
to PIMC under this Agreement, PIMC will pay to Provident a monthly fee equal to
75% of each month's advisory fee received by PIMC from the Company on behalf of
each Portfolio pursuant to the Advisory Agreement between PIMC and the Company.
Notwithstanding the foregoing, the fee payable to Provident shall be adjusted
each quarter as necessary to assure that PIMC has income from all sources before
application of Federal, state, or other income taxes of at least $22,500 during
each quarter. The sub-advisory fee shall be paid by PIMC to Provident at least
quarterly.
7. Limitation on Liability. Provident will not be liable for
any error of judgment or mistake of law or for any loss suffered by PIMC or by
the Company in connection with the matters to which this Agreement relates,
except a loss resulting from a breach of fiduciary duty with respect to the
receipt of compensation for services or a loss resulting from willful
misfeasance, bad faith or gross negligence on its part in the performance of its
duties or from reckless disregard by it of its obligations or duties under this
Agreement.
8. Duration and Termination. This Agreement shall become
effective with respect to a Portfolio upon approval of this Agreement by vote of
a majority of the outstanding voting securities of such Portfolio and, unless
sooner terminated as provided herein, shall continue with respect to such
Portfolio until March 31, 1988. Thereafter, if not terminated, this Agreement
shall continue with respect to a Portfolio for successive annual periods ending
on March 31, provided such continuance is specifically approved at least
annually (a) by the
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<PAGE> 4
vote of a majority of those members of the Board of Directors of the Company who
are not parties to this Agreement or interested persons of the Company or any
such party, cast in person at a meeting called for the purpose of voting on such
approval, and (b) by the Board of Directors of the Company or by vote of a
majority of the outstanding voting securities of such Portfolio; provided,
however, that this Agreement may be terminated with respect to a Portfolio by
the Company at any time, without the payment of any penalty, by the Board of
Directors of the Company or by vote of a majority of the outstanding voting
securities of such Portfolio, on 60 days' written notice to PIMC, and will be
terminated upon any termination of the Advisory Agreement between the Company
and PIMC. This Agreement will also immediately terminate in the event of its
assignment. (As used in this Agreement, the terms "majority of the outstanding
voting securities," "interested person" and "assignment" shall have the same
meaning as such terms have in the Investment Company Act of 1940.)
9. Amendment of this Agreement. No provision of this Agreement
may be changed, discharged or terminated orally, but only by an instrument in
writing signed by the party against which enforcement of the change, discharge
or termination is sought, and no amendment of this Agreement affecting a
Portfolio shall be effective until approved by vote of the holders of a majority
of the outstanding voting securities of such Portfolio.
10. Miscellaneous. The captions in this Agreement are included
for convenience of reference only and in no way define or delimit any of the
provisions hereof or otherwise affect their construction or effect. If any
provision of this Agreement shall be held or made invalid by a court decision,
statute, rule or otherwise, the remainder of this Agreement shall not be
affected thereby. This Agreement shall be binding upon and shall inure to the
benefit of the parties hereto and their respective successors and shall be
governed by Delaware law.
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<PAGE> 5
IN WITNESS WHEREOF, the parties hereto have caused this
instrument to be executed by their officers designated below as of the day and
year first above written.
PROVIDENT NATIONAL BANK
Attest:
/s/ John D. Silcox, Jr. By: /s/ John Karis
PROVIDENT INSTITUTIONAL MANAGEMENT
CORPORATION
/s/ John D. Silcox, Jr. By: /s/ Thomas H. Nevin
[Corporate Seal]
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<PAGE> 1
TEMPORARY INVESTMENT FUND, INC.
DISTRIBUTION AGREEMENT
Agreement dated January 31, 1994 between TEMPORARY INVESTMENT
FUND, INC. a Maryland corporation, (the "Company"), and PROVIDENT DISTRIBUTORS,
INC., a Delaware corporation (the "Distributor").
WHEREAS, the Company is an open-end, diversified management
investment company and is so registered under the Investment Company Act of
1940, as amended (the "1940 Act"); and
WHEREAS, the Company desires to retain the Distributor as its
distributor to provide for the sale and distribution of each class and subclass
of shares ("shares") in each of the Company's investment portfolios
(individually, a "Fund," collectively, the "Funds") as listed on Appendix A (as
such Appendix may, from time to time, be supplemented (or amended)), and the
Distributor is willing to render such services;
NOW, THEREFORE, in consideration of the premises and mutual
covenants set forth and intending to be legally bound, the parties hereto agree
as follows:
1. APPOINTMENT OF DISTRIBUTOR. The Company hereby appoints the
Distributor as distributor of each class and subclass of shares in each of the
Company's Funds on the terms and for the period set forth in this Agreement. The
Distributor hereby accepts such appointment and agrees to render the services
and duties set forth in Section 3 below. In the event that the Company
establishes additional classes or investment portfolios other than the Funds
listed on Appendix A with respect to which it desires to retain the Distributor
to act as distributor hereunder, the Company shall notify the Distributor,
whereupon such Appendix A shall be supplemented (or amended) and such portfolio
shall become a Fund hereunder and shall be subject to the provisions of this
Agreement to the same extent as the Funds (except to the extent that said
provisions may be modified in writing by the Company and Distributor at the
time).
2. DELIVERY OF DOCUMENTS. The company has furnished the
Distributor with copies, properly certified or authenticated, of each of the
following documents and will deliver to it all future amendments and
supplements, if any:
a. The Company's Articles of Incorporation, filed
with the Secretary of State of Maryland on February 8, 1973, as amended and
supplemented (the "Charter"),
b. The Company's By-Laws, as amended and supplemented
("By-Laws");
<PAGE> 2
c. Resolutions of the Company's Board of Directors
authorizing the execution and delivery of this Agreement;
d. The Company's most recent amendment to its
Registration Statement under the Securities Act of 1933, as amended (the "1933
Act"), and the 1940 Act on Form N-1A as filed with the Securities and Exchange
Commission (the "Commission") relating to its Funds (the Registration Statement,
as presently in effect and as amended or supplemented from time to time, is
herein called the "Registration Statement");
e. The Company's most recent Prospectuses and
Statements of Additional Information and all amendments and supplements thereto
(such Prospectuses and Statements of Additional Information and supplements
thereto, as presently in effect and as from time to time amended and
supplemented, are herein called the "Prospectuses").
3. SERVICES AND DUTIES. The Distributor enters into the
following covenants with respect to its services and duties:
a. The Distributor agrees to sell, as agent, from
time to time during the term of this Agreement, shares upon the terms and at the
current offering price as described in the Prospectuses. The Distributor will
act only in its own behalf as principal in making agreements with selected
dealers. No broker-dealer or other person which enters into a selling or
servicing agreement with the Distributor shall be authorized to act as agent for
the Company or its Funds in connection with the offering or sale of shares to
the public or otherwise. The Distributor shall use its best efforts to sell
shares of each class or subclass of each of the Funds but shall not be obligated
to sell any certain number of shares.
b. The Distributor shall prepare or review, provide
advice with respect to, and file with the federal and state agencies or other
organization as required by federal, state, or other applicable laws and
regulations, all sales literature (advertisements, brochures and shareholder
communications) for each of the Funds and any class or subclass thereof.
c. In performing all of its services and duties as
Distributor, the Distributor will act in conformity with the Charter, By-Laws,
Prospectuses and resolutions and other instructions of the Company's Board of
Directors and will comply with the requirements of the 1933 Act, the Securities
Exchange Act of 1934, the 1940 Act and all other applicable federal or state
law.
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<PAGE> 3
d. The Distributor will bear the cost of (i) printing
and distributing any Prospectus (including any supplement thereto) to persons
who are not shareholders, and (ii) preparing, printing and distributing any
literature, advertisement or material which is primarily intended to result in
the sale of shares; provided, however, that the Distributor shall not be
obligated to bear the expenses incurred by the Company in connection with the
preparation and printing of any amendment to any Registration Statement or
Prospectus necessary for the continued effective registration of the shares
under the 1933 Act and state securities laws and the distribution of any such
document to existing shareholders of the Company's Funds.
e. The Company shall have the right to suspend the
sale of shares at any time in response to conditions in the securities markets
or otherwise, and to suspend the redemption of shares of any Fund at any time
permitted by the 1940 Act or the rules and regulations of the Commission
("Rules").
f. The Company reserves the right to reject any order
for shares but will not do so arbitrarily,or without reasonable cause.
4. LIMITATIONS OF LIABILITY. The Distributor shall not be
liable for any error of judgment or mistake of law or for any loss suffered by
the Company in connection with the matters to which this Agreement relates,
except a loss resulting from willful misfeasance, bad faith or gross negligence
on its part in the performance of its duties or from reckless disregard by it of
its obligations and duties under this Agreement.
5. PROPRIETARY AND CONFIDENTIAL INFORMATION. The Distributor
agrees on behalf of itself and its employees to treat confidentially and as
proprietary information of the Company all records and other information
relative to the Company and its Funds and prior, present or potential
shareholders, and not to use such records and information for any purpose other
than performance of its responsibilities and duties hereunder, except after
prior notification to and approval in writing by the Company, which approval
shall not be unreasonably withheld and may not be withheld where the Distributor
may be exposed to civil or criminal contempt proceedings for failure to comply,
when requested to divulge such information by duly constituted authorities, or
when so requested by the Company.
6. INDEMNIFICATION.
a. The Company represents and warrants to the
Distributor that the Registration Statement contains, and that the Prospectuses
at all times will contain, all statements required by the 1933 Act and the Rules
of the Commission, will in all material respects conform to the applicable
requirements of
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<PAGE> 4
the 1933 Act and the Rules and will not include any untrue statement of a
material fact or omit to state any material fact required to be stated therein
or necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading, except that no representation or warranty
in this Section 6 shall apply to statements or omissions made in reliance upon
and in conformity with written information furnished to the Company by or on
behalf of the Distributor or either of the Company's co-administrators expressly
for use in the Registration Statement or Prospectuses.
b. The Company on behalf of each Fund agrees that
each Fund will indemnify, defend and hold harmless the Distributor, its several
officers, and directors, and any person who controls the Distributor within the
meaning of Section 15 of the 1933 Act, from and against any losses, claims,
damages or liabilities, joint or several, to which the Distributor, its several
officers, and directors, and any person who controls the Distributor within the
meaning of Section 15 of the 1933 Act, may become subject under the 1933 Act or
otherwise, insofar as such losses, claims, damages or liabilities (or actions or
proceedings in respect thereof) arise out of, or are based upon any untrue
statement or alleged untrue statement of a material fact contained in the
Registration Statement, the Prospectuses or in any application or other document
executed by or on behalf of the Company with respect to such Fund or are based
upon information furnished by or on behalf of the Company with respect to such
Fund filed in any state in order to qualify the shares under the securities or
blue sky laws thereof ("Blue Sky application") or arise out of, or are based
upon, the omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein not misleading,
and will reimburse the Distributor, its several officers, and directors, and any
person who controls the Distributor within the meaning of Section 15 of the 1933
Act, for any legal or other expenses reasonably incurred by the Distributor, its
several officers, and directors, and any person who controls the Distributor
within the meaning of Section 15 of the 1933 Act, in investigating, defending or
preparing to defend any such action, proceeding or claim; provided, however,
that the Company shall not be liable in any case to the extent that such loss,
claim, damage or liability arises out of, or is based upon, any untrue
statement, alleged untrue statement, or omission or alleged omission made in the
Registration Statement, the Prospectus or any Blue Sky application with respect
to such Fund in reliance upon and in conformity with written information
furnished to the Company by or on behalf of the Distributor or either of the
Company's co-administrators specifically for inclusion therein or arising out of
the failure of the Distributor to deliver a current Prospectus.
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<PAGE> 5
c. The Company on behalf of each Fund shall not
indemnify any person pursuant to this Section 6 unless the court or other body
before which the proceeding was brought has rendered a final decision on the
merits that such person was not liable by reason of his or her willful
misfeasance, bad faith or gross negligence in the performance of his or her
duties, or his or her reckless disregard of any obligations and duties, under
this Agreement ("disabling conduct") or, in the absence of such a decision, a
reasonable determination (based upon a review of the facts) that such person was
not liable by reason of disabling conduct has been made by the vote of a
majority of a quorum of the directors of the Company who are neither "interested
parties" (as defined in the 1940 Act) nor parties to the proceeding, or by
independent legal counsel in a written opinion.
d. The Distributor will indemnify and hold harmless
the Company and each of its Funds and its several officers and directors, and
any person who controls the Company within the meaning of Section 15 of the 1933
Act, from and against any losses, claims, damages or liabilities, joint or
several, to which any of them may become subject under the 1933 Act or
otherwise, insofar as such losses, claims, damages or liabilities (or actions or
proceedings in respect thereof) arise out of, or are based upon, any untrue
statement or alleged untrue statement of a material fact contained in the
Registration Statement, the Prospectus or any Blue Sky application, or arise out
of, or are based upon, the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, which statement or omission was made in reliance upon
and in conformity with information furnished in writing to the Company or any of
its several officers and directors by or on behalf of the Distributor or either
of the Company's co-administrators specifically for inclusion therein, and will
reimburse the Company and its several officers, directors and such controlling
persons for any legal or other expenses reasonably incurred by any of them in
investigating, defending or preparing to defend any such action, proceeding or
claim.
e. The obligations of each Fund under this Section 6
shall be the several (and not the joint or joint and several) obligation of each
Fund.
7. DURATION AND TERMINATION. This Agreement shall become
effective upon its execution as of the date first written above and, unless
sooner terminated as provided herein, shall continue until March 31, 1995.
Thereafter, if not terminated, this Agreement shall continue automatically for
successive terms of one year, provided that such continuance is specifically
approved at least annually (a) by a vote of a majority of those members of the
Company's Board of Directors who are not parties to this Agreement or
"interested persons" of any such party, cast
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<PAGE> 6
in person at a meeting called for the purpose of voting on such approval, and
(b) by the Company's Board of Directors or by vote of a "majority of the
outstanding voting securities" of the Company; provided, however, that this
Agreement may be terminated by the Company at any time, without the payment of
any penalty, by vote of a majority of the entire Board of Directors or by a vote
of a "majority of the outstanding voting securities" of the Company on 60-days'
written notice to the Distributor, or by the Distributor at any time, without
the payment of any penalty, on 90-days' written notice to the Company. This
Agreement will automatically and immediately terminate in the event of its
"assignment." (As used in this Agreement, the terms "majority of the outstanding
voting securities," "interested person" and "assignment" shall have the same
meanings as such terms have in the 1940 Act.)
8. AMENDMENT OF THIS AGREEMENT. No provision of this Agreement
may be changed, waived, discharged or terminated orally, but only by an
instrument in writing signed by the patty against which an enforcement of the
change, waiver, discharge or termination is sought.
9. NOTICES. Notices of any kind to be given to the Company
hereunder by the Distributor shall be in writing and shall be duly given if
mailed or delivered to the Company at Bellevue Park Corporate Center, Suite 152,
103 Bellevue Parkway, Wilmington, Delaware 19809, Attention: Mr. Edward J.
Roach, Treasurer, with a copy to Philadelphia National Bank Building, 1345
Chestnut Street, Philadelphia Pennsylvania 19107-3496, Attention: W. Bruce
McConnel, III, Secretary, or at such other address or to such individual as
shall be so specified by the Company to the Distributor. Notices of any kind to
be given to the Distributor hereunder by the Company shall be in writing and
shall be duly given if mailed or delivered to Provident Distributors, Inc., 259
Radnor-Chester Road, Suite 120, Radnor, Pennsylvania 19087, Attention: Monroe J.
Haegele or at such other address or to such other individual as shall be so
specified by the Distributor to the Company.
10. MISCELLANEOUS. The captions in this Agreement are included
for convenience of reference only and in no way define or delimit any of the
provisions hereof or otherwise affect their construction or effect. If any
provision of this Agreement shall be held or made invalid by a court decision,
statute, rule or otherwise, the remainder of this Agreement shall not be
affected thereby. This Agreement shall be binding upon and shall inure to the
benefit of the parties hereto and their respective successors.
11. COUNTERPARTS. This Agreement may be executed in
counterparts, all of which together shall constitute one and the same
instrument.
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<PAGE> 7
IN WITNESS WHEREOF, the parties hereto have caused this
instrument to be executed by their officers designated below as of the day and
year first above written.
TEMPORARY INVESTMENT FUND, INC.
By /s/ G. Willing Pepper
----------------------------
President
PROVIDENT DISTRIBUTORS, INC.
By /s/ Nancy Wolfe
----------------------------
Title
-7-
<PAGE> 8
APPENDIX A
to the
DISTRIBUTION AGREEMENT
between
Temporary Investment Fund, Inc.
and
Provident Distributors, Inc.
TempFund (Class B shares and Class B - Special Series 1 shares (also known as
the "Dollar shares"))
TempCash (Class C (also known as the "Dollar shares") and Class C - Special
Series 1 shares)
-8-
<PAGE> 1
PART II
[MUNICIPAL FUND FOR TEMPORARY INVESTMENT]
NAME OF ADOPTING EMPLOYER
DEFINED CONTRIBUTION PLAN
(PROFIT-SHARING OR PROFIT-SHARING 401(K))
REGIONAL PROTOTYPE PLAN NUMBER 001
ADOPTION AGREEMENT
DRINKER BIDDLE & REATH
REGIONAL PROTOTYPE DEFINED CONTRIBUTION PLAN AND TRUST AGREEMENT
[FUND OFFICE RETIREMENT PROFIT-SHARING PLAN]
NAME OF PLAN
(REV. 06/94)
(C) DRINKER BIDDLE & REATH 1995
<PAGE> 2
INTERNAL REVENUE SERVICE DEPARTMENT OF THE TREASURY
DISTRICT DIRECTOR
31 HOPKINS PLAZA
BALTIMORE, MD 21201-0000
Employer Identification Number:
Date: JAN 04, 1993 23-1423089
File Folder Number:
DRINKER BIDDLE & REATH 521006125
PHILADELPHIA NATIONAL BANK BLDG Person to Contact:
C/O HOMER L ELLIOTT ESQUIRE G.N. Wallace
DRINKER BIDDLE & REATH Contact Telephone Number:
1345 CHESTNUT STREET PH NAT BK BLDG (410) 962-2973
PHILADELPHIA, PA 19107-3496 Plan Name:
REGIONAL PROTOTYPE
DEFINED CONTRIBUTION PLAN
Plan Number: 001
Letter Serial Number:
D8520005
Dear Applicant:
The amendment to the form of the plan identified above is acceptable
under section 401(a) or 403(a) of the Internal Revenue Code. This letter relates
only to the amendment to the form of the plan. It is not a determination of any
other amendment or of the form of the plan as a whole, or on the effect of other
federal or local statutes.
You must furnish a copy of this letter and the enclosed publication to
each employer who adopts this plan. You must also send a copy of this letter, a
copy of the approved form of the plan, and any approved amendments and related
documents to each key District Director of the Internal Revenue Service in whose
jurisdiction there are adopting employers.
The acceptability of the form of the plan is not a ruling or
determination as to whether an employer's plan qualifies under Code section
401(a). To adopt the form of the plan, the employer should apply for a
determination letter by filing an application with the key District Director of
the Internal Revenue Service on Form 5307, Application for Determination for
Adopters of Master or Prototype, Regional Prototype or Volume Submitter Plans.
For purposes of sections 15.02 and 15.03 of Rev. Proc. 89-13, 1989-1
C.B. 801, your application was received before March 31, 1991.
Please advise those adopting the plan to contact you if they have any
questions about the operation of the plan.
We have sent a copy of this letter to your representative as indicated
in your Power of Attorney.
If you have any questions on our processing of this case, please call
the above telephone number. If you write, please provide your telephone number
and the most convenient time for us to call in case we need more information.
Whether you call or write, please refer to the Letter Serial Number and File
Folder Number shown in the heading of this letter.
You should keep this letter as a permanent record.
Sincerely yours,
/s/ H.J. Hightower
District Director
Enclosure(s)
Publication 1488 Letter 2026/DO/CG)
A-2
<PAGE> 3
Department of the Treasury Internal Revenue Service
PUBLICATION 1488
(Rev. February 1991)
FAVORABLE NOTIFICATION LETTER
INTRODUCTION
This publication is issued in conjunction with a favorable notification letter.
It explains the significance of your letter, points out some features that may
affect the qualified status of the plan, and provides information on the
reporting requirements for the plan.
An employee retirement plan qualified under Internal Revenue Code
section 401(a) or 403(a) (qualified plan) is entitled to favorable tax
treatment. For example, contributions made in accordance with the plan document
are generally currently deductible. Participants will not include these
contributions into income until the time they receive a distribution from the
plan, at which time special income averaging rates for lump sum distributions
may serve to reduce the tax liability. In some cases, taxation may be further
deferred by rollover to another qualified plan or individual retirement
arrangement. See Publication 575, Pension and Annuity Income (Including
Simplified General Rule), for further details. Finally, plan earnings may
accumulate free of tax.
Employee retirement plans that fail to satisfy the requirements under
section 401(a) or 403(a) are not entitled to this favorable tax treatment.
Therefore, many employers desire advance assurance that the terms of their plans
satisfy the qualification requirements. The Service provides such advance
assurance for regional prototype plans by issuing favorable notification
letters. However, in some cases, a determination letter is also required for
reliance.
SIGNIFICANCE OF A FAVORABLE NOTIFICATION LETTER
Notification letters are issued by the Service to sponsors of regional prototype
plans. Plan sponsors then make the plan available to employers who may adopt the
plans for the benefit of their employees.
The significance of a favorable notification letter differs for
standardized plans and nonstandardized plans. A standardized plan can be
identified by the number 2, 5, or 7 appearing in the second position of the
letter serial number (the number following the alpha character which appears in
the upper right portion of the letter). A nonstandardized plan may be identified
by the number 3, 6, or 8 appearing in the second position.
STANDARDIZED PLANS. A standardized plan is designed to be automatically
acceptable under any fact pattern, except as indicated below. Therefore, there
is no need to request a determination letter for such plans, provided the
employer does not amend the plan and chooses only those options in the adoption
agreement that were approved by the Service. Although a determination letter is
not requested, the employer must still inform interested parties of the
establishment or amendment of the plan. However, a determination letter is
required for advance assurance that the provisions of the plan satisfy the
qualification requirements if the employer maintains or has maintained another
qualified plan. The Employer is not considered to have maintained another plan
merely because the plan was previously not a standardized plan. Under certain
circumstances, employers who have adopted standardized defined benefit plans may
wish to request a determination letter that their plans prior benefit structure
satisfies the requirements of Internal Revenue Code section 401(a)(26).
Paired plans are standardized plans that are designed to work together.
A paired plan may be recognized by the phrase "other than a specified paired
plan" appearing in the fifth or sixth paragraph of the notification letter. If
the employer maintains and has maintained only paired plans, a determination
letter is not needed.
NONSTANDARDIZED PLANS. It is possible that the unique fact patterns applicable
to a specific employer may cause a nonstandardized plan to fail qualification.
Therefore, to obtain advance assurance that the plan is qualified, the plan must
be submitted for a determination letter. A determination letter is similar to an
insurance policy that will, in many cases, protect the employer and plan
beneficiaries from adverse tax consequences if the plan is later found to be
nonqualified in the absence of a change in law, provided the plan is being
operated in good faith in accordance with plan provisions. This advance
assurance is a service provided by the Internal Revenue Service, and is not
required for qualification. Form 5307, Application for Determination for
Adopters of Master or Prototype Regional Prototype or Volume Submitter Plans, is
used to request a determination letter, along with Form 5302, Employee Census,
Form 8717 (explained later), a copy of the adoption agreement, a copy of the
notification letter, a certification from the plan sponsor that the plan has not
been withdrawn and is still in effect, and a copy of any separate trust or
custodial account document.
USER FEE. There is a charge for requesting a determination letter, but the
charge is significantly reduced for regional prototype plans. Please complete
and attach Form 8717, User Fee for Employee Plan Determination Letter Request,
to Form 5307 when requesting a determination letter.
A-3
<PAGE> 4
LAW CHANGES AFFECTING THE PLAN. Plans must be amended to retain their qualified
status if any plan provision fails qualification requirements because of changes
in the law becoming effective subsequent to the issuance of the notification
letter. If the plan is not amended, the plan will become nonqualified without
specific notice from the Service. This will occur even if the employer has
received a favorable determination letter in addition to the notification
letter. The employer and plan participants may be subject to adverse tax
consequences if the plan is nonqualified.
The first character of the serial number assigned to the plan indicates
the latest law change for which the plan had been amended. For example, the
letter "D" indicates the plan was amended for the Tax Reform Act of 1986, which
generally became effective for plan years after the 1988 plan year.
A notification letter will not be applicable after a change in
qualification requirements unless the plan sponsor requests a new notification
letter within 12 months after the change. The plan sponsor must provide those
employers for whom the employer is continuing to sponsor the plan with a copy of
the amendments and the new notification letter within 60 days of the receipt of
the new letter. If a change requires modification of the adoption agreement,
employers must execute the new agreement by the later of 6 months after issuance
of the new notification letter, or the end of the period specified in Internal
Revenue Code section 401(b).
If the application for a notification letter was submitted to the
Service within certain time frames, the plan generally need not be amended again
unless required to do so by legislation. The application was submitted to the
Service within these time frames, if the following paragraph appears in the
notification letter: "For purposes of sections 15.02 and 15.03 of Rev. Proc.
89-13, 1989-1 C.B. 801, your application was received timely".
REQUIRED NOTIFICATIONS TO ADOPTING EMPLOYERS. The plan sponsor must provide
adopting employers with annual notifications indicating whether the sponsor
intends to continue to sponsor the plan, and whether amendments have been made
to the plan. The plan sponsor must also notify employers within 60 days if the
plan sponsor discontinues its sponsoring of the plan.
REQUIRED NOTIFICATIONS TO THE INTERNAL REVENUE SERVICE. On each anniversary of
the date of issuance of the notification letter, the plan sponsor must advise
the Service whether the sponsor has made any changes to the plan, and whether
the plan is still being made available for adoption by employers. The plan
sponsor must also provide a listing of adopting employers, and a statement that
the plan sponsor has provided employers with the notification described in the
above paragraph.
REPORTING REQUIREMENTS. Most plan administrators or employers who maintain an
employee benefit plan must file an annual return/report with the Internal
Revenue Service. The following forms should be used for this purpose:
FORM 5500EZ - generally for a "One-Participant Plan," which is a plan that
covers only: (1) an individual, or an individual or his or her spouse who wholly
owns a business, whether incorporated or not, or (2) partner(s) in a partnership
or the partner(s) and their spouse(s). If Form 5500EZ cannot be used, the
one-participant plan should use 5500-C or 5500-R, whichever applies. NOTE: Keogh
(H.R. 10) plans are required to file an annual return even if the only
participants are owner-employees. The term "owner-employee" includes a partner
who owns more than 10% interest in either the capital or the profits of the
partnership. This applies to both defined contribution and defined benefit
plans.
FILING EXCEPTION FOR PLANS THAT HAVE NO MORE THAN $100,000 IN ASSETS. An annual
return is not required to be filed for one participant plans having less than
$100,000 in assets that otherwise qualify for filing Form 5500EZ.
FORM 5500 - for a pension benefit plan with 100 or more participants at the
beginning of the plan year.
FORM 5500-C - for a pension benefit plan with more than one but fewer than 100
participants at the beginning of the plan year.
FORM 5500-R - for a pension benefit plan with more than one but fewer than 100
participants at the start of the plan year for which 5500-C is not filed. NOTE:
For 1989 and subsequent years Form 5500-R is part of the Form 5500C/R package.
Filing only the first two pages of the Form 5500C/R package constitutes the
filing of a Form 5500-R.
WHEN TO FILE. Forms 5500 and 5500EZ must be filed annually. Form 5500-C must be
filed for (i) the initial plan year, (ii) the year a final return/report would
be filed, and (iii) at three-year intervals. Form 5500-R must be filed in the
years when Form 5500-C is not filed (See Note above). However, 5500-C will be
accepted in place of 5500-R.
DISCLOSURE. The Internal Revenue Service will process the returns and provide
the Department of Labor and the Pension Benefit Guarantee Corporation with the
necessary information and copies of the returns on microfilm for disclosure
purposes.
A-4
<PAGE> 5
PART II
[MUNICIPAL FUND FOR TEMPORARY INVESTMENT]
DEFINED CONTRIBUTION PLAN
(PROFIT-SHARING OR PROFIT-SHARING 401(K))
REGIONAL PROTOTYPE PLAN NUMBER 001
ADOPTION AGREEMENT
DRINKER BIDDLE & REATH
REGIONAL PROTOTYPE DEFINED CONTRIBUTION PLAN AND TRUST AGREEMENT
NOTES TO ADOPTING EMPLOYERS AND TO ADOPTING AFFILIATED EMPLOYERS:
THIS ADOPTION AGREEMENT MAY ONLY BE USED WITH THE DRINKER BIDDLE & REATH
REGIONAL PROTOTYPE DEFINED CONTRIBUTION PLAN.
FAILURE TO PROPERLY FILL OUT THIS ADOPTION AGREEMENT MAY RESULT IN THE
DISQUALIFICATION OF THE PLAN AS ADOPTED BY THE EMPLOYER.
A CASH OR DEFERRED ARRANGEMENT MAY NOT BE ADOPTED BY A TAX EXEMPT OR
GOVERNMENTAL ORGANIZATION WITH THE EXCEPTION OF CERTAIN PRE-EXISTING PLANS.
DRINKER BIDDLE & REATH, THE SPONSORING ORGANIZATION OF THIS PLAN, WILL INFORM
THE ADOPTING EMPLOYER AND/OR ADOPTING AFFILIATED EMPLOYER OF ANY AMENDMENTS MADE
TO THE PLAN OR OF THE DISCONTINUANCE OR ABANDONMENT OF THE PLAN.
DRINKER BIDDLE & REATH IS THE SPONSORING ORGANIZATION OF THIS PLAN. ITS ADDRESS
IS PHILADELPHIA NATIONAL BANK BUILDING, 1345 CHESTNUT STREET, PHILADELPHIA, PA
19107-3496 AND ITS TELEPHONE NUMBER IS (215) 988-2855.
(FILL IN BLANKS AND INDICATE SELECTION WHERE REQUIRED)
The undersigned Employer hereby (check applicable box)
[ ] adopts
[ X ] adopts, as an amendment to a predecessor plan and
trust agreement of the Employer,
the DRINKER BIDDLE & REATH REGIONAL PROTOTYPE DEFINED CONTRIBUTION PLAN AND
TRUST AGREEMENT, consisting of Part I, the Plan and Trust Agreement, and Part
II, this Adoption Agreement. The Plan and Trust Agreement, as so adopted, shall
be known as the [FUND OFFICE RETIREMENT PROFIT-SHARING PLAN AND TRUST AGREEMENT]
(the "Plan"), a DEFINED CONTRIBUTION PLAN (PROFIT-SHARING OR PROFIT-SHARING
401(K)) AND TRUST AGREEMENT. The Employer and Trustee, by signing this Adoption
Agreement, mutually agree and consent to the terms of the Plan and Trust,
consisting of Part I, the Plan and Trust Agreement, and Part II, this Adoption
Agreement.
(C) DRINKER BIDDLE & REATH 1995
A-5
<PAGE> 6
NAME OF ADOPTING EMPLOYER: [MUNICIPAL FUND FOR TEMPORARY INVESTMENT]
ADDRESS OF ADOPTING EMPLOYER:[Bellevue Park Corporate Center
400 Bellevue Parkway, Suite 100
Wilmington, DE 19809 ]
ADOPTING EMPLOYER'S EMPLOYER IDENTIFICATION NUMBER: [ 6742 ]
ADOPTING EMPLOYER'S BUSINESS CODE NUMBER: [ 51-0241021 ]
TYPE OF ENTITY (check one): [ ] Corporation [ ] S Corporation
[ ] Sole Proprietor [ ] Partnership [ ] Church
[ ] Tax Exempt Organization [ ] Governmental Organization
[ ] Professional Corporation
[ X ] Other (Specify): [ BUSINESS TRUST ]
PLACE OF INCORPORATION OR OTHER ORGANIZATION (SPECIFY): [
PENNSYLVANIA ]
DATE OF INCORPORATION OR DATE BUSINESS BEGAN: [ 1979 ]
ADMINISTRATIVE COMMITTEE EMPLOYER IDENTIFICATION NUMBER: [23-2118138]
PLAN NAME: [ FUND OFFICE RETIREMENT PROFIT-SHARING PLAN ]
PLAN IDENTIFICATION NUMBER: [ 001 (333 FOR FORM 5500C/R) ]
----------------------------------------
TRUST NAME: [ FUND OFFICE RETIREMENT PROFIT-SHARING PLAN TRUST ]
TRUST EMPLOYER IDENTIFICATION NUMBER (IF ANY): [ 23-2487197 ]
REGIONAL PROTOTYPE (PROFIT-SHARING (401(K)) PLAN NOTIFICATION
LETTER NUMBER: D8520005 (PN:001 JANUARY 4, 1993)
FROZEN PLAN: If the Employer has discontinued all further
contributions to the Plan, check here [ ]. The Employer and the
Trustee shall, however, continue to maintain the Plan and Trust in
accordance with the requirements of the Internal Revenue Code and
the Treasury regulations thereunder.
TYPE PLAN: The Plan, as adopted under this Adoption Agreement, is a
(check one):
[ X ] (A) Profit-Sharing Plan.
[ ] (B) Profit-Sharing 401(k) Plan.
A.1.1 ACCRUAL COMPUTATION PERIOD. The Accrual Computation Period is the
(check one):
[ X ] (A) Plan Year
[ ] (B)(A consecutive 12-month period ending with
or within the Plan Year.) Enter the day and the
month this period begins: [ ](day) [ ](month).
For Employees whose date of hire is less than 12
months before the end of the 12-month period
designated, Compensation will be determined over
the Plan Year.
A.1.4 ADMINISTRATIVE COMMITTEE. The name(s) and address(es) of the
member(s) of the Administrative Committee are:
A-6
<PAGE> 7
[(A) EDWARD H. ROACH
Bellevue Park Corporate Center
400 Bellevue Parkway, Suite 100
Wilmington, DE 19809
(B)
(C)
]
A.1.10 COMPENSATION. Compensation shall be determined over the
Accrual Computation Period elected in Section A.1.1.
(A) Compensation shall (check one):
[ X ] (1) Include [ ] (2) Not include
Employer contributions made pursuant to a salary reduction agreement which
are not includible in the gross income of the Employee under sections 125,
402(e)(3), 402(h)(1)(B) or 403(b) of the Code.
(B) Compensation shall exclude (specify): [
N/A .]
(Note that this exclusion applies only to the manner of determining
contributions to the Plan and for no other purpose; if not applicable,
insert letters N/A in blanks).
A.1.12 CONTROLLED GROUP.
(A) Is the adopting Employer a member of a Controlled Group
(check one)?
[ ] (1) Yes [ X ] (2) No
(B) If Section A.1.12(A)(1) is checked, is the adopting
Employer a member of an affiliated service group (check one)?
[ ] (1) Yes [ ] (2) No [ X ] (3) N/A
If Section A.1.12(A)(1) is checked, list the name and address of each
member in the following blanks (and if Section A.1.12(B)(1) is also
checked, indicate whether the member is an affiliated service group
member): [ N/A
]
(If Section A.1.12(A)(2) is checked, the letters N/A should be inserted
in these blanks)
A.1.17 CONTRIBUTIONS ON BEHALF OF DISABLED PARTICIPANTS. The Employer
(check one):
[ ] (A) Will [ X ] (B) Will not
make contributions on behalf of disabled Participants on the basis of the
compensation each such Participant would have received for the Limitation
Year if the Participant had been paid at the rate of compensation paid
immediately before becoming permanently and totally disabled.
Such imputed compensation for the disabled Participant may be taken into
account only if the Participant is not a Highly Compensated Employee, and
A-7
<PAGE> 8
contributions made on behalf of such Participant shall be
nonforfeitable when made.
A.1.18 EARLY RETIREMENT DATE.
(A) Shall the Plan provide for an Early Retirement Date (check
one)?
[ ] (1) Yes [ X ] (2) No
If Section A.1.18(A)(1) is checked, complete the following:
(B) Early Retirement Date shall mean the (check one):
[ ] (1) Last day of the Plan Year
[ ] (2) Last day of the month (must
coincide with a Valuation Date)
[ ] (3) [ ] (fill in date)
(must coincide with a Valuation Date)
in which the Participant attains age [ ] (not later than age 64)
and completes [ ] Years of Service for Benefit Accrual with the
Employer.
A.1.19 EARNED INCOME. This Section shall apply only if the Plan,
as adopted by the adopting Employer, covers Self-Employed Persons.
A.1.20 EFFECTIVE DATE. If the adoption of this Plan and Trust
Agreement constitutes the adoption of a new plan and trust agreement, check (A)
and fill in blank. If the adoption of this Plan and Trust Agreement constitutes
the restatement of an existing plan and trust agreement (including a prior
version of this Plan and Trust Agreement), check (B) and fill in blanks.
[ ] (A) NEW PLAN. The Effective Date of the Plan
and Trust Agreement is [ ].
[ X ] (B) RESTATED PLAN. The original effective
date of the predecessor plan and trust agreement
was [SEPTEMBER 18, 1981]. Except as otherwise
specifically provided herein, the Effective Date
of the Plan and Trust Agreement, as restated
herein, is [DECEMBER 1, 1989].
A.1.24 ELIGIBILITY COMPUTATION PERIOD. If Section A.1.33(A)(4) is
checked or if the elapsed time method is checked under Section A.2.2(B)(2),
check here [ ] and do NOT complete the remainder of this Section A.1.24.
Otherwise, the Eligibility Computation Period shall be calculated as follows:
(A) COMPUTATION PERIOD. The Eligibility Computation
Period shall be calculated pursuant to (check (1) or (2)):
[ X ] (1) NORMAL RULE. The Eligibility
Computation Period(s) shall be
determined under Section 1.24(A) of the
Plan.
[ ] (2) ALTERNATE RULE. The Eligibility
Computation Period(s) shall be
determined under Section 1.24(B) of the
Plan.
(B) HOURS OF SERVICE REQUIRED. The number of Hours of
Service which must be completed in order to meet the Eligibility
Computation Period requirements of the Plan is [ 1 ] (fill in blank but
not to exceed 1,000 Hours of Service).
A-8
<PAGE> 9
A.1.27 EMPLOYEE PENSION BENEFIT PLAN. Does the Employer or any
member of its Controlled Group maintain or has the Employer or any member of its
Controlled Group maintained any other Employee Pension Benefit Plan (check one)?
[ X ] (A) Yes [ ] (B) No
If Section A.1.27(A) is checked, list such Employee Pension Benefit Plan(s) in
the following Lines: [CHESTNUT STREET EXCHANGE FUND RETIREMENT PROFIT-SHARING
PLAN; INDEPENDENCE SQUARE INCOME SECURITIES, INC. RETIREMENT PROFIT-SHARING
PLAN; TEMPORARY INVESTMENT FUND, INC. RETIREMENT PROFIT-SHARING PLAN; AND TRUST
FOR SHORT TERM FEDERAL SECURITIES RETIREMENT PROFIT-SHARING PLAN. ALL OF THE
FOREGOING PLANS WERE MERGED INTO THIS PLAN EFFECTIVE DECEMBER 1, 1987. ]
(If Section A.1.27(B) is checked, the letters N/A should be inserted in
these blanks).
A.1.33 ENTRY DATE. Entry Date shall mean (check (A) or (B)):
[ X ] (A) REGULAR METHOD.
[ ] (1) The first day of the Plan Year
(this option cannot be used unless the
maximum age and service requirements are
reduced by 1/2 year (i.e., age 20 1/2 or
less must be selected in Section
A.2.2(B)(1)(a)(ii) and the service
requirement in Section A.2.2(B)(1)(a)
(i) must be reduced by 1/2 year),
coincident with, or, if the first day of
the Plan Year does not so coincide, the
first day of the Plan Year next
following, the date on which an Employee
meets the eligibility requirements of
Article II of the Plan.
[ ] (2) The first day of the Plan Year or
the date six months after the first day
of the Plan Year (whichever date is
earlier), coincident with, or if such
dates do not so coincide, the first day
of the Plan Year or the date six months
after the first day of the Plan Year
(whichever date is earlier) next
following, the date on which an Employee
meets the eligibility requirements of
Article II of the Plan.
[ ] (3) The first day of the month
coincident with, or if the first day of
the month does not so coincide, the
first day of the month next following,
the date on which an Employee meets the
eligibility requirements of Article II
of the Plan.
[ ] (4) The Employee's date of hire.
[ X ] (5) The date on which the
eligibility requirements of Article II
of the Plan are met.
[ ] (6) The first day of the quarter (in
the Plan Year) coincident with, or if
the first day of the quarter does not so
coincide, the first day of the quarter
(in the Plan Year) next following, the
date on which an Employee meets the
eligibility requirements of Article II
of the Plan.
[ ] (7) The first day of the Plan Year in
which an Employee meets the eligibility
requirements of Article II of the Plan.
A-9
<PAGE> 10
[ ] (B) ELAPSED TIME METHOD. The Employee's first
day of employment or reemployment in accordance
with the rules of Section 1.55(B) of the Plan.
A.1.35 EXCESS COMPENSATION. Excess Compensation shall mean
Compensation in excess of (check applicable block):
[ ] (A) Taxable Wage Base.
[ ] (B) [$ ] (if (B) is checked, insert dollar
amount not to exceed the Taxable Wage Base).
[ X ] (C) N/A (The Plan is not integrated with Social
Security).
A.1.38 HIGHLY COMPENSATED EMPLOYEE.
(A) CALENDAR YEAR ELECTION. Does the Employer
desire to make the calendar year election provided in Section 1.38 of the
Plan for purposes of determining the look-back year calculation (check
one)?
[ ] (1) Yes [ X ] (2) No
IF THIS ELECTION IS MADE, SUCH ELECTION MUST APPLY TO ALL PLANS, ENTITIES AND
ARRANGEMENTS OF THE EMPLOYER.
(B) SIMPLIFIED DEFINITION. If the Employer
maintains significant business activities (and employs Employees) in at
least two significantly separate geographic areas, the Employer may elect
the simplified definition of Highly Compensated Employee in Section 1.38 of
the Plan. Does the Employer desire to make this election (check one):
[ ] (1) Yes [ X ] (2) No [ ] (3) N/A
A.1.44 INVESTMENT MANAGER. The name and address of the Investment
Manager are: [ N/A
]
(If no Investment Manager has been appointed by the Employer, the letters N/A
should be inserted in these blanks).
A.1.46 LEASED EMPLOYEES. Does the Employer have any Leased
Employees (check one)?
[ ] (A) Yes [ X ] (B) No
If Section A.1.46(A) is checked, complete Section A.2.3(H) below.
A.1.47 LIMITATION COMPENSATION. Limitation Compensation shall
mean all of each Participant's (check one):
[ X ] (A) Wages, Tips and Other Compensation as
Reported on Form W-2.
[ ] (B) Code Section 3401(a) Wages.
[ ] (C) Code Section 415 Safe-Harbor Compensation.
A.1.48 LIMITATION YEAR. The Limitation Year is the (check
applicable block):
[ ] (A) Calendar year.
[ X ] (B) Twelve-consecutive month period ending
(insert month and day) [ NOVEMBER 30 ].
A-10
<PAGE> 11
A.1.53 NORMAL RETIREMENT AGE. Normal Retirement Age shall mean
(check one):
[ X ] (A) Age [ 65 ] (fill in blank but not earlier
than age 62 and not later than age 65).
[ ] (B) The later of age [ ] fill in blank but not
earlier than age 62 and not later than age 65) or
the [ ] (fill in blank but not to exceed 5th)
anniversary of the first day of the first Plan
Year in which the Participant commenced
participation in the Plan.
A.1.55 ONE-YEAR BREAK IN SERVICE. A One-Year Break In Service
shall be determined by the following method (check one):
[ X ] (A) REGULAR METHOD. If this method is
selected, a One- Year Break In Service shall
occur in any Computation Period in which the
Employee completes not more than [ 100] (fill in
blank, but not to exceed 500) Hours of Service.
[ ] (B) ELAPSED TIME METHOD.
A.1.56 OWNER-EMPLOYEES OR SHAREHOLDER-EMPLOYEES.
(A) Does the Plan cover any Owner-Employees, as
defined in Section 1.56 of the Plan (check one)?
[ ] (1) Yes [ ] (2) No
[ X ] (3) N/A (This Plan does not cover any
Self-Employed Persons)
If Section A.1.56(A)(1) is checked, see Section 2.4 of the Plan.
(B) Does the Plan cover any shareholder-employees, as
defined in Section 7.11(A)(7) of the Plan (check one)?
[ ] (1) Yes [ ] (2) No
[ X ] (3) N/A (The Employer is not an
electing S corporation)
If Section A.1.56(B)(1) is checked, see Section 7.11(A)(7) of the Plan.
A.1.63 PLAN SPONSOR. The name(s) and address(es) of the Plan
Sponsor(s) are: [ MUNICIPAL FUND FOR TEMPORARY INVESTMENT
BELLEVUE PARK CORPORATE CENTER
400 BELLEVUE PARKWAY, SUITE 100
WILMINGTON, DE 19809 ]
A.1.64 PLAN YEAR. The Plan Year shall be the Computation Period
ending (insert month and day) [ NOVEMBER 30 ].
A.1.72 QUALIFYING EMPLOYER SECURITIES. If this Adoption Agreement
provides for investments in Qualifying Employer Securities, the Employer may
restrict the types of Employer Securities so qualifying by indicating the
restrictions in the following blanks: [ NO RESTRICTIONS
]
(If investment in Qualifying Employer Securities is not restricted to type,
insert in the blanks the words "No Restrictions"; if investment in Qualifying
Employer Securities is not permitted, insert the letters N/A in the blanks).
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A.1.78 SELF-EMPLOYED PERSONS. Does the Plan cover Self-Employed
Persons (check one)?
[ ] (A) Yes [ X ] (B) No
A.1.79 SERVICE.
(A) If not otherwise required by the Plan, shall
service with predecessor employer(s) (to the extent specified in
Section A.1.79 (B) and (C)) be treated as Service with the Employer
(check one)?
[ ] (1) Yes [ ] (2) No
[ X ] (3) N/A (No predecessor employer)
(B) If Section A.1.79(A)(1) is checked, service
with the predecessor employer(s) specified in Section A.1.79 (C) shall
be treated as Service with the Employer for purposes of (check
applicable blank(s)):
[ ] (1) Eligibility for Participation
[ ] (2) Vesting
[ X ] (3) N/A
(C) If Section A.1.79(A)(1) is checked, indicate
the name of the predecessor employer(s) in the following blanks: [N/A]
(If Section A.1.79(A)(2) or (3) is checked, insert the letters N/A in
the blanks).
(D) If Section A.18.17(A) is checked, and the
Prior Plan credited service under the elapsed time method, indicate the
equivalency (if any) which is to be used to credit service in the
Computation Period in which the amendment is effective, if the
effective date of the amendment is other than the first day of the
Computation Period (check one):
[ ] Daily [ ] Monthly
[ ] Weekly [ X ] N/A
[ ] Semi-Monthly
A.1.83 TAXABLE YEAR. The Employer's Taxable Year is the year
ending (insert month and day) [ NOVEMBER 30 ].
A.1.85 TOP-HEAVY RATIO. For purposes of establishing present value
to compute the Top-Heavy Ratios of Section 1.85 of the Plan, any benefit shall
be discounted only for mortality and interest based on the following:
(A) INTEREST RATE (check one):
[ X ] (1) APPLICABLE INTEREST RATE (For
purposes of this Section A.1.85, "Applicable
Interest Rate" shall mean the interest rate
or rates which would be used, as of the date
distribution commences under a Defined
Benefit Plan, by the Pension Benefit
Guaranty Corporation for purposes of
determining the present value of a
participant's benefits under such Defined
Benefit Plan if such Defined Benefit Plan
had terminated on the date distribution
commences with insufficient assets to
provide benefits guaranteed by the Pension
Benefit Guaranty Corporation on that date.
For purposes of this
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<PAGE> 13
provision, the "date distribution commences"
shall mean the Top-Heavy Valuation Date).
[ ] (2) OTHER (specify) [ ]%
(B) MORTALITY TABLE: [ 1984 UNISEX MORTALITY TABLE]
A.1.86 TOP-HEAVY VALUATION DATE. The Top-Heavy Valuation Date, for
purposes of calculating the Top-Heavy Ratios shall be (fill in blank) [ THE LAST
DAY ] of each Plan Year.
A.1.91 TRUSTEE(S). The name(s) and address(es) of the Trustee(s)
are:
[(A) ROBERT R. FORTUNE
Bellevue Park Corporate Center
400 Bellevue Parkway, Suite 100
Wilmington, DE 19809
(B) EDWARD J. ROACH
Bellevue Park Corporate Center
400 Bellevue Parkway, Suite 100
Wilmington, DE 19809
(C)
A.1.93 VALUATION DATE. Valuation Date shall mean:
(A) For purposes of determining a Participant's
Accrued Benefit which is distributable in accordance with Article VII
of the Plan (check one):
[ ] (1) Last day of Plan Year.
[ X ] (2) Last day of Plan Year and [ THE
LAST DAY OF EVERY OTHER CALENDAR MONTH
DURING THE PLAN YEAR
] (insert date(s)).
(B) For purposes of determining the fair market
value of assets in the Trust Fund and allocating the increase or
decrease in the assets in accordance with Sections 5.3 and 5.4 of the
Plan (check one):
[ X ] (1) The date(s) specified in Section
A.1.93(A).
[ ] (2) Last day of Plan Year and [-------
--------------] (insert date(s)).
A.1.97 YEAR OF SERVICE FOR BENEFIT ACCRUAL.
(A) GENERAL. A Year of Service for Benefit
Accrual shall be determined by the following method (check one):
[ X ] (1) REGULAR METHOD. (This method
must be selected if Section A.1.55(A) is
checked). In order for a Participant to
have a Year of Service for Benefit
Accrual for any Plan Year, the
Participant must complete the number of
Hours of Service indicated (check either
(a) and fill in blank or (b)):
[ X ] (a) The number of Hours of
Service which must be completed
with the Employer in order for
a Participant to have a Year of
Service for Benefit Accrual is
[ 200 ] (fill in blank but not
to exceed 1,000 Hours of
Service).
A-13
<PAGE> 14
[ ] (b) The number of Hours of
Service which must be completed
with the Employer in order for a
Participant to have a Year of
Service for Benefit Accrual for a
Plan Year is 501 if the Participant
is not an active Employee on the
last day of the Plan Year; if the
Participant is an active Employee
on the last day of the Plan Year,
only one Hour of Service with the
Employer must be completed in order
for the Participant to have a Year
of Service for Benefit Accrual for
such Plan Year.
NOTE: UNDER PROPOSED TREAS. REG. SECTIONS
1.410(b) AND 1.401(a)(26), IT MAY BE NECESSARY TO
PROVIDE THAT NO MORE THAN 501 HOURS OF SERVICE ARE
REQUIRED FOR A YEAR OF SERVICE FOR BENEFIT ACCRUAL
FOR ANY PARTICIPANT WHO HAS TERMINATED EMPLOYMENT AND
IS NOT AN ACTIVE EMPLOYEE ON THE LAST DAY OF THE PLAN
YEAR AND THAT NO MORE THAN ONE HOUR OF SERVICE IS
REQUIRED FOR A YEAR OF SERVICE FOR BENEFIT ACCRUAL
FOR ANY PARTICIPANT WHO IS AN ACTIVE EMPLOYEE ON THE
LAST DAY OF THE PLAN YEAR. (PROPOSED TREAS. REG.
SECTIONS 1.410(b)-3(c) AND 1.401(a)(26)-3(b)(8)).
[ ] (2) ELAPSED TIME METHOD. (This method must
be selected if Section A.1.55(B) is
checked).
(B) ELECTIVE DEFERRAL CONTRIBUTIONS. If
Elective Deferral Contributions are provided for under Section A.3.4 of
the Adoption Agreement, the number of Hours of Service which a
Participant must complete in a Year of Service for Benefit Accrual is [
N/A] (fill in blank but not to exceed 1,000 Hours of Service unless
Section A.1.97(A)(2) is checked, in which case insert letters "ET" and
the elapsed time rules apply; if there are no Elective Deferral
Contributions, insert letters "N/A") in order for the Participant to
have Elective Deferral Contributions made on his behalf under the Plan.
(C) MATCHING CONTRIBUTIONS. If Matching
Contributions by the Employer are provided for under Section A.3.5 of
the Adoption Agreement, the number of Hours of Service which a
Participant must complete in a Year of Service for Benefit Accrual is [
N/A ] (fill in blank (if there are no Matching Contributions, insert
letters "N/A") but not to exceed 1,000 Hours of Service unless Section
A.1.97(A)(2) is checked, in which case insert letters "ET" and the
elapsed time rules apply) in order for the Employer to match
Participant Contributions or Elective Deferral Contributions of such
Participant under Section A.3.5 of the Adoption Agreement.
Except as provided in Sections A.1.97(B) and A.1.97(C), a Year of
Service for Benefit Accrual shall be determined under Section
A.1.97(A).
A.1.98 YEAR OF SERVICE FOR ELIGIBILITY. The number of Hours of
Service which must be completed in order for an Employee to have a Year of
Service for Eligibility is [ 1 ] (fill in blank, but not to exceed 1,000 Hours
of Service; insert letters N/A if Section A.1.33(A)(4) is checked or if the
elapsed time method is selected under Section A.2.2.(B)(2).
A.1.99 YEAR OF SERVICE FOR VESTING. A Year of Service for Vesting
shall be determined by the following method (check one):
[ X ] (A) REGULAR METHOD. (This method must be
selected if Section A.1.55(A) is checked). The
number of Hours of Service which must be
completed in order for a Participant to have a
Year of Service for Vesting is [ 200 ] (fill in
blank but not to exceed 1,000 Hours of Service).
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<PAGE> 15
[ ] (B) ELAPSED TIME METHOD. (This method must be
selected if Section A.1.55(B) is checked).
[ ] (C) N/A (Plan provides 100% immediate vesting).
A.2.2 ELIGIBILITY REQUIREMENTS.
(A) ELIGIBLE CLASSES OF EMPLOYEES:
(1) Except as provided in (2) below, the
following Employees are or shall be
eligible to participate in the Plan
(check one):
[ X ] (a) All Employees
[ ] (b) Salaried Employees only
(as defined in Section 1.77 of
the Plan)
[ ] (c) Hourly Employees only (as
defined in Section 1.40 of the
Plan)
[ ] (d) All Employees except
(specify class or classes of
Employees to be excluded): [
]
(2) The following Employees shall not be
eligible to participate in the Plan
(check block(s) if such Employees are to
be excluded):
[ X ] (a) Union Employees (as
defined in Section 1.92 of the
Plan)
[ X ] (b) Non-Resident Aliens (as
defined in Section 1.52 of the
Plan)
(B) LENGTH OF SERVICE; MINIMUM AGE:
Participation in the Plan shall be determined under either the regular
method or the elapsed time method (check (1) or (2)):
[ X ] (1) REGULAR METHOD. If the regular
method is selected, check (a) or (b):
[ ] (a) SERVICE AND AGE
REQUIREMENT. In order to
participate in the Plan, an
Employee shall meet the
following requirements
(complete blanks):
(i) SERVICE.
(AA) ELECTIVE DEFERRAL
CONTRIBUTIONS. An
Employee shall have
completed [ ] Year of
Service for
Eligibility (not more
than one Year of
Service for
Eligibility) to be
eligible to make
Elective Deferral
Contributions.
(BB) MATCHING
CONTRIBUTIONS. An
Employee shall have
completed [ ] Year(s)
of Service for
Eligibility (not more
than two Years of
Service for
Eligibility) to be
eligible for Matching
Contributions.
(CC) EMPLOYER
CONTRIBUTIONS AND ALL
OTHER PURPOSES. An
Employee shall have
completed [ ]
Year(s) of Service
A-15
<PAGE> 16
for Eligibility (not
more than two Years of
Service for
Eligibility) for
Employer Contributions
and for all other
purposes of the Plan.
Note that in Section
A.2.2(B)(1)(a)(i)(BB) and (CC)
not more than one Year of
Service for Eligibility may be
selected, if the option under
Section A.7.6(B)(1)(a) is not
elected nor more than two Years
of Service for Eligibility if
the option under Section
A.7.6(B)(1)(a) is elected. For
purposes of this Section
A.2.2(B)(1)(a)(i), Service
includes service with a
predecessor employer if the
Employer adopting the Plan is
maintaining the plan of a
predecessor employer. Such
Service also includes
predecessor service to the
extent required by the
Secretary of the Treasury or
his delegate.
Service for purposes of
eligibility also includes
service with a predecessor
employer if such service is not
otherwise required to be
included under Sections 1.79
and 2.2 of the Plan to the
extent provided in Section
A.1.79.
(ii) AGE. An Employee
shall have attained
[ ] years of age (not
more than age 21).
[ X ] (b) NO SERVICE OR AGE
REQUIREMENT. The Plan shall
cover Employees in eligible
classes effective on the first
Entry Date coinciding with, or
next following, their date of
hire.
[ ] (2) ELAPSED TIME METHOD. The Employee
shall be eligible to participate in the
Plan on his first day of employment or
reemployment in accordance with the
rules of Section 1.55(B) of the Plan.
A.2.3 ADDITIONAL RULES.
(A)-(F) RESERVED.
(G) ALLOCATIONS TO PARTICIPANTS. Except as
otherwise provided below, a Participant shall share in Employer
contributions in any Plan Year if the Participant completes a Year of
Service for Benefit Accrual during such Plan Year. Notwithstanding any
other provision of the Plan or this Adoption Agreement, any Participant
making Elective Deferral or Participant Contributions to the Plan for
any Plan Year shall be entitled to such Elective Deferral or
Participant Contributions.
(1) EMPLOYER CONTRIBUTIONS. This
provision shall only apply if Section
A.1.97(A)(1) is checked and then only to
the extent permitted by Section 3.11 of
the Plan.
(a) SEPARATION FROM SERVICE FOR
REASONS OTHER THAN DISABILITY, DEATH
OR RETIREMENT.
(i) Shall Participants who
separate from the service
of the Employer (for
reasons other than
Disability, death or
retirement) before the end
of the Plan Year even if
they have completed a Year
of Service for Benefit
Accrual share in Employer
A-16
<PAGE> 17
contributions for such Plan
Year (check one)?
[ X ] (AA) Yes [ ] (BB) No
[ ] (CC) N/A (Section A.1.97(A)(2)
checked)
NOTE THAT SECTION A.2.3(G)(1)(a)(i)(AA) MUST BE CHECKED IF
SECTION A.1.97(A)(1)(b) IS CHECKED.
(ii) If Section A.2.3(G)(1)(a)(i)(AA) is
checked, shall such Participant share in
Employer contributions for such Plan Year if
such Participant has not completed a Year of
Service for Benefit Accrual (check one)?
[ X ] (AA) Yes [ ] (BB) No
[ ] (CC) N/A (Section A.2.3 (G)(1)
(a)(i)(AA) not checked)
(b) DISABILITY, DEATH OR RETIREMENT.
(i) Shall Participants who separate from the
service of the Employer because of
Disability, death or retirement before the
end of the Plan Year even if they have
completed a Year of Service for Benefit
Accrual share in Employer contributions for
such Plan Year (check one)?
[ X ] (AA) Yes [ ] (BB) No
[ ] (CC) N/A (Section A.1.97(A)(2)
checked)
NOTE THAT SECTION A.2.3(G)(1)(b)(i)(AA) MUST BE CHECKED IF
SECTION A.1.97(A)(1)(b) IS CHECKED.
(ii) If Section A.2.3(G)(1)(b)(i)(AA) is
checked, shall such Participant share in
Employer contributions for such Plan Year if
such Participant has not completed a Year of
Service for Benefit Accrual (check one)?
[ X ] (AA) Yes [ ] (BB) No
[ ] (CC) N/A (Section A.2.3(G)(1)(b)
(i)(AA) not checked)
(2) MATCHING CONTRIBUTIONS. This provision shall
only apply if Section A.1.97(A)(1) is checked.
(a) SEPARATION FROM SERVICE FOR REASONS OTHER
THAN DISABILITY, DEATH OR RETIREMENT.
(i) Shall Participants who separate from the
service of the Employer (for reasons other
than Disability, death or retirement) before
the end of the (check one) [ ] (aa) month [
] (bb) quarter [ ] (cc) Plan Year for which
the Matching Contribution is being made even
if they have completed a Year of Service for
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<PAGE> 18
Benefit Accrual share in Matching
Contributions for such period (check one)?
[ ] (AA) Yes [ ] (BB) No
[ X ] (CC) N/A (No Matching Contributions
or Section A.1.97(A)(2) checked)
NOTE THAT SECTION A.2.3(G)(2)(a)(i)(AA) MUST BE CHECKED IF
SECTION A.1.97 (A)(1)(b) IS CHECKED.
(ii) If Section A.2.3(G)(2)(a)(i) (AA) is
checked, shall such Participant share in
Matching Contributions for such (check one)
[ ] (aa) month [ ] (bb) quarter [ ] (cc)
Plan Year if such Participant has not
completed a Year of Service for Benefit
Accrual (check one)?
[ ] (AA) Yes [ ] (BB) No
[ X ] (CC) N/A (Section A.2.3(G)(2)(a)(i)
(AA) not checked)
(b) DISABILITY, DEATH OR RETIREMENT.
(i) Shall Participants who separate from the
service of the Employer because of
Disability, death or retirement before the
end of the (check one) [ ] (aa) month [ ]
(bb) quarter [ ] (cc) Plan Year for which
the Matching Contribution is being made even
if they have completed a Year of Service for
Benefit Accrual share in Matching
Contributions for such period (check one)?
[ ] (AA) Yes [ ] (BB) No
[ X ] (CC) N/A (no Matching
Contributions or Section A.1.97(A)
(2) checked)
NOTE THAT SECTION A.2.3(G)(2)(b)(i)(AA) MUST BE CHECKED IF
SECTION A.1.97(A)(1)(b) IS CHECKED.
(ii) If Section A.2.3(G)(2)(b) (i)(AA) is
checked, shall such Participant share in
Matching Contributions for such (check one)
[ ] (aa) month [ ] (bb) quarter [ ] (cc)
Plan Year if such Participant has not
completed a Year of Service for Benefit
Accrual (check one):
[ ] (AA) Yes [ ] (BB) No
[ X ] (CC) N/A (Section A.2.3(G)(2)(b)(i)
(AA) not checked.
(H) LEASED EMPLOYEES. Shall Leased Employees be
eligible to participate in the Plan (check applicable block)?
[ ] (1) Yes [ ] (2) No [ X ] (3) N/A
If Section A.2.3(H)(1) is checked, describe Leased Employees to be covered
by the Plan and conditions and other limitations on such coverage in the
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<PAGE> 19
following lines: [ N/A
]
(If not applicable, insert letters N/A in these blanks)
A.2.4 PLANS COVERING OWNER-EMPLOYEES. Section 2.4 of the Plan
does not apply unless Section A.1.56(A) is checked.
A.3.1 EMPLOYER CONTRIBUTIONS.
(A) EMPLOYER CONTRIBUTIONS.
(1) GENERAL. Shall the Employer, in its
sole discretion, be permitted to make
Employer Contributions to the Plan
(check one)?
[ X ] (a) Yes [ ] (b) No
If Section A.3.1(A)(1)(a) is checked,
such Employer Contributions shall be
allocated under Section A.5.1(A).
(2) PROFIT REQUIREMENTS. Shall Profits
be required for Employer Contributions
to the Plan (check one)?
[ ] (a) Yes [ X ] (b) No
(B) QUALIFIED NONELECTIVE CONTRIBUTIONS.
(1) ELECTION. May the Employer be
permitted to make, in its sole
discretion, Qualified Nonelective
Contributions to the Plan (check one)?
[ ] (a) Yes [ ] (b) No
[ X ] (c) N/A (No Elective Deferral or
Participant Contributions)
(2) AMOUNT. If the Employer does make
such contributions to the Plan, then the
amount of such contributions for each
Plan Year shall be (check one):
[ ] (a) [ ] percent (not to
exceed 15 percent) of the
Compensation of all
Participants eligible to share
in the allocation.
[ ] (b) [ ] percent of the
Profits, but in no event more
than [$ ] for any Plan Year.
[ ] (c) An amount determined by the
Employer.
[ X ] (d) N/A (Qualified Nonelective
contributions not permitted).
(3) PARTICIPANTS ELIGIBLE FOR
ALLOCATION. Allocation of Qualified
Nonelective Contributions shall be made
to the accounts of (check one):
[ ] (a) All Participants
[ ] (b) Only Participants who are
Non-Highly Compensated Employees
[ ] (c) Only Participants who are
Non-Highly Compensated Employees
and who are (specify group to
which allocations are to be
made) [
A-19
<PAGE> 20
]
[ X ] (d) N/A (Qualified Nonelective Contributions
not permitted)
(4) MANNER OF ALLOCATION. Allocation of Qualified
Nonelective Contributions shall be made (check one):
[ ] (a) In the ratio which each
affected Participant's
Compensation for the Plan Year
bears to the total Compensation
of all affected Participants
for such Plan Year.
[ ] (b) In the ratio which each
affected Participant's
Compensation not in excess of
[$ ] for the Plan Year bears to
the total Compensation of all
affected Participants not in
excess of [$ ] for such Plan
Year.
[ X ] (c) N/A (Qualified Nonelective Contributions
not permitted).
(C) QUALIFIED MATCHING CONTRIBUTIONS.
(1) ELECTION. May the Employer be permitted to
make Qualified Matching Contributions to the Plan?
[ ] (a) Yes [ ] (b) No
[ X ] (c) N/A (No Elective Deferrals or Participant
Contributions)
(2) ALLOCATION. The Employer shall, in its sole
discretion, make Qualified Matching Contributions to
the Plan on behalf of (check one):
[ ] (a) All Participants
[ ] (b) All Participants who are Non-Highly
Compensated Employees
[ ] (c) All Participants who are Non-Highly
Compensated Employees and who are (specify
group to which allocations are to be made) [
]
[ X ] (d) N/A (No Qualified Matching Contributions)
If Section A.3.1(C)(2)(a), (b) or (c) is
checked, the allocation shall be made to
applicable Participants who make (check
(i) and/or (ii) or (iii)):
[ ] (i) Elective Deferral Contributions
[ ] (ii) Participant Contributions
[ X ] (iii) N/A (No Qualified Matching
Contributions)
(3) AMOUNT. The Employer shall contribute and
allocate to each Participant's Qualified Matching
A-20
<PAGE> 21
Contribution account an amount
determined as follows (check applicable
block(s)):
[ ] (a) ELECTIVE DEFERRAL CONTRIBUTIONS. The
Employer shall contribute an amount equal to
(check one):
[ ] (i) [ ] percent of the
Participant's Elective
Deferral Contributions; or
[ ] (ii) that
percent of the
Participant's
Elective Deferral
Contributions, as
determined by the
Employer, in its
sole discretion,
for the Plan Year.
[ ] (b) PARTICIPANT CONTRIBUTIONS. The
Employer shall contribute an amount equal
to (check one):
[ ] (i) [ ] percent of the
Participant's Participant
Contributions; or
[ ] (ii) that
percent of the
Participant's
Participant
Contributions, as
determined by the
Employer, in its
sole discretion,
for the Plan Year.
[ X ] (c) N/A (No Qualified Matching
Contributions).
The Employer shall not match amounts provided above in excess of
[$ N/A ], or in excess of [N/A] percent of the Participant's
Compensation (if there are no limitations or if this provision is
not otherwise applicable, insert letters N/A in blank(s)).
A.3.2 PARTICIPANT CONTRIBUTIONS.
(A) PERMISSIBILITY. Participant Contributions shall
(check (1), (2) or (3)):
[ X ] (1) Not be permitted under the Plan
(NOTE: THIS BLOCK MUST BE CHECKED UNLESS
THE PLAN HAS A CODA AS INDICATED BY
CHECKING SECTION A.3.4(A)(2)).
[ ] (2) Be permitted (but not required) in
the amounts provided by Section 3.2 of
the Plan but subject to the limitations
of Section 3.8 of the Plan.
[ ] (3) Be required in order for an Employee to
participate in the Plan. Such Participant
Contributions shall be made by payroll
deduction and shall equal no less than [ ]
percent but shall not exceed [ ] percent
(not to exceed 6 percent) of the
Participant's Compensation for the Plan
Year. The Employee shall enter into an
agreement with the Employer providing for
Participant Contributions in any amount from
[ ] percent to [ ] percent (not to exceed 6
percent) of the Participant's Compensation
for the Plan Year. In addition, the Employee
may, but is not required to, make voluntary
Participant Contributions in the amounts
provided
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<PAGE> 22
for in Section 3.2 of the Plan subject to the
limitations of Section 3.8 of the Plan.
(B) PAYROLL DEDUCTION. Participant Contributions by
payroll deduction (check (1), (2) or (3)):
[ ] (1) Shall not be permitted.
[ ] (2) Shall be permitted.
[ X ] (3) Are N/A (No Participant
Contributions).
A.3.4 ELECTIVE DEFERRAL CONTRIBUTIONS.
(A) ELECTION. Elective Deferral Contributions shall
(check (1) or (2)):
[ X ] (1) Not be permitted under the Plan.
[ ] (2) Be permitted in accordance with
the provisions of Section 3.4 of the
Plan.
If Section A.3.4(A)(2) is checked, a salary reduction agreement must be
completed and filed by the Participant with the Administrative Committee
prior to the date the Elective Deferral Contributions are made.
(B) ELECTION CHANGES. If Section A.3.4(A)(2) is
checked, the Participant shall be permitted to enter into a new salary
reduction agreement (check one):
[ ] (1) Monthly [ ] (2) Quarterly
[ ] (3) Semi-Annually [ ] (4) Annually
[ ] (5) Other (Specify): [ ]
[ X ] (6) N/A
A salary reduction agreement shall remain in effect until revoked or changed.
(C) REVOCATION OF ELECTION. A Participant shall be
permitted to revoke his salary reduction agreement (check one):
[ ] (1) Only as permitted under Section
A.3.4(B).
[ ] (2) Upon 15 days' written notice to
the Administrative Committee on the
Appropriate Form.
[ X ] (3) N/A.
(D) INCLUSION OF QUALIFIED MATCHING AND QUALIFIED
NONELECTIVE CONTRIBUTIONS. Qualified Matching Contributions and Qualified
Nonelective Contributions may be taken into account as Elective Deferral
Contributions for purposes of calculating the "Actual Deferral
Percentages." In determining Elective Deferral Contributions for the
purpose of the ADP test, the Employer shall include, under the Plan or any
other plan of the Employer as provided by Treasury regulations under the
Code, (check one):
[ ] (1) Qualified Matching Contributions.
[ ] (2) Qualified Nonelective Contributions.
[ X ] (3) N/A (Elective Deferral
Contributions are not permitted or
Employer does not desire to make this
election or no Qualified Matching or
Qualified Nonelective Contributions are
permitted).
A-22
<PAGE> 23
(E) QUALIFIED MATCHING CONTRIBUTIONS - AMOUNT. The
amount of Qualified Matching Contributions made under Sections 3.1 of the Plan
and A.3.1 of this Adoption Agreement and taken into account as Elective Deferral
Contributions for purposes of calculating the "Actual Deferral Percentages,"
subject to such other requirements as may be prescribed by the Secretary of the
Treasury, shall be (check one):
[ ] (1) All such Qualified Matching
Contributions.
[ ] (2) Such Qualified Matching
Contributions that are needed to meet
the "Actual Deferral Percentage" test
stated in Section 3.4(B)(2) of the Plan.
[ X ] (3) N/A (Elective Deferral
Contributions not permitted and/or
Qualified Matching Contributions not
permitted).
(F) QUALIFIED NONELECTIVE CONTRIBUTIONS - AMOUNT. The
amount of Qualified Nonelective Contributions made under Sections 3.1 of
the Plan and A.3.1 of this Adoption Agreement and taken into account as
Elective Deferral Contributions for purposes of calculating the "Actual
Deferral Percentages," subject to such other requirements as may be
prescribed by the Secretary of the Treasury, shall be (check one):
[ ] (1) All such Qualified Nonelective
Contributions.
[ ] (2) Such Qualified Nonelective
Contributions that are needed to meet
the Actual Deferral Percentage test
stated in Section 3.4(B)(2) of the Plan.
[ X ] (3) N/A (Elective Deferral
Contributions and/or Qualified
Nonelective Contributions not
permitted).
A.3.5 MATCHING CONTRIBUTIONS.
(A) ELECTION. Matching Contributions by the Employer
(check (1), (2) or (3)):
[ ] (1) Shall not be permitted under the
Plan.
[ ] (2) Shall be permitted in accordance
with the provisions of Section 3.5 of
the Plan and Section A.3.5(B) of the
Adoption Agreement.
[ X ] (3) Are N/A (No Elective Deferral or
Participant Contributions).
If Section A.3.5(A)(2) is checked, the Employer may, in its sole
discretion, match, in accordance with Section A.3.5(B), the
Elective Deferral Contributions of a Participant made pursuant to
Section A.3.4 or Participant Contributions made pursuant to
Section A.3.2.
(B) ALLOCATION OF MATCHING CONTRIBUTIONS.
(1) AMOUNT. If Section A.3.5(A)(2) is
checked, Matching Contributions for the
Plan Year shall be allocated to the
Matching Account of each Participant, on
whose behalf Elective Deferral
Contributions for the Plan Year are
being made, in an amount equal to (check
one):
[ ] (a) [ ] (insert
percentage) percent of the
(check applicable block): (i)
[ ] Elective Deferral
Contribution; (ii)[ ]
A-23
<PAGE> 24
Participant Contribution made
on behalf of each Participant
for such Plan Year; or
[ ](b) that percent of the (check
applicable block): (i) [ ]
Elective Deferral
Contribution; (ii) [ ]
Participant Contribution made
on behalf of each Participant
for such Plan Year as
determined by the Employer, in
its sole discretion, for such
Plan Year.
[ X ] (c) N/A (No Matching
Contributions).
In no event shall such Matching
Contribution exceed the lesser of (aaa)
(insert percentage) [ ] percent of such
Participant's Compensation for such Plan
Year or (bbb) (insert amount, if any, of
dollar limitation) [$ ].
(2) ALLOCATION DATE. Shall Matching
Contributions be allocated effective as
of a date or dates other than the last
day of the Plan Year (check one)?
[ ] (a) Yes [ ] (b) No
[ X ] (c) N/A
(aaa) If Section A.3.5(B)(2)(a) is
checked, list the date(s) (month and
day) in each Plan Year as of which
Matching Contributions shall be
allocated: [
].
(bbb) If Section A.3.5(B)(2)(a) is
checked, a Participant who is employed
as of a date specified for the
allocation of Matching Contributions
and on whose behalf Elective Deferral
Contributions or Participant
Contributions are being made shall
receive an allocation of Matching
Contributions as of such date
regardless of the number of Hours of
Service credited to the Participant for
purposes of a Year of Service for
Benefit Accrual as of such date,
notwithstanding anything in the Plan to
the contrary.
(C) VESTING. Matching Contributions shall be
vested in accordance with the following schedule (check one):
[ ] (1) Nonforfeitable when made.
[ ] (2) The Plan's general vesting
schedule, other than that for Elective
Deferral Contributions.
[ ] (3) [The sponsor may add elections for
one or more of the vesting schedules
that comply with section 411(a)(2) of
the Code: [
].
[ X ] (4) N/A (No Matching Contributions).
A-24
<PAGE> 25
(D) "AVERAGE CONTRIBUTION PERCENTAGE" COMPUTATIONS.
(1) In computing the "Average Contribution Percentage" with
respect to Participant Contributions and Matching
Contributions, the Employer shall take into account, under
this Plan or any other plan of the Employer, as provided by
Treasury regulations, and include as "Contribution Percentage
Amounts" (check applicable block or blocks):
[ ] (a) Elective Deferral Contributions.
[ ] (b) Qualified Nonelective Contributions.
[ X ] (c) N/A (There are no Participant or Matching
Contributions, or Employer does not desire to make this
election).
(2) The amount of Qualified Nonelective Contributions that are
made under Section 3.1 of the Plan and Section A.3.1 and taken
into account as "Contribution Percentage Amounts" for purposes
of calculating the "Average Contribution Percentage," subject
to such other requirements as may be prescribed by the
Secretary of the Treasury, shall be (check one):
[ ] (a) All such Qualified Nonelective Contributions.
[ ] (b) Such Qualified Nonelective Contributions that are
needed to meet the "Average Contribution Percentage" test
stated in Section 3.2 of the Plan.
[ X ] (c) N/A (No Participant or Matching Contributions or
Employer does not desire to make this election).
(3) The amount of Elective Deferral Contributions made under
Section 3.4 of the Plan and Section A.3.4 and taken into
account as "Contribution Percentage Amounts" for purposes of
calculating the "Average Contribution Percentage", subject to
such other requirements as may be prescribed by the Secretary
of the Treasury, shall be:
[ ] (a) All such Elective Deferral Contributions.
[ ] (b) Such Elective Deferral Contributions that are needed
to meet the "Average Contribution Percentage" test stated in
Section 3.2 of the Plan.
[ X ] (c) N/A (There are no Elective Deferral Contributions
under the Plan or Employer did not make election under Section
A.3.5(D)(1)).
(4) To the extent forfeitable, forfeitures of "Excess
Aggregate Contributions" shall be:
[ ] (a) Applied to reduce Employer contributions.
A-25
<PAGE> 26
[ ] (b) Allocated, after all other forfeitures
under the Plan, to each Participant's
Matching Account in the ratio which each
Participant's Compensation for the Plan Year
bears to the total Compensation of all
Participants for such Plan Year. Such
forfeitures shall not be allocated to the
account of any Highly Compensated Employee.
[ X ] (c) N/A (No Matching Contributions).
A.3.8 LIMITATIONS ON ALLOCATIONS.
(A) GENERAL RULES. If the Employer maintains or ever
maintained another qualified plan (other than a paired defined contribution
regional prototype plan) in which any Participant in this Plan is (or was) a
participant or could become a participant, the Employer must complete this
Section A.3.8. The Employer must also complete this Section A.3.8 if it
maintains a Welfare Benefit Fund or an individual medical benefit account, as
defined in section 415(l)(2) of the Code, under which amounts are treated as
"Annual Additions" with respect to any Participant in this Plan. Does the
Employer maintain or has the Employer maintained any such plan(s) (check one):
[ ] (1) Yes [ X ] (2) No
If Section A.3.8(A)(1) is checked, complete Section A.3.8(B) and/or
(C).
(B) MAINTENANCE OF OTHER DEFINED CONTRIBUTION PLAN. If the
Participant is covered under another qualified Defined Contribution Plan
maintained by the Employer, other than a regional prototype plan (check
applicable provisions as necessary):
[ ] (1) The provisions of Section 3.8(B) of
the Plan shall apply as if the other plan
were a regional prototype plan.
[ X ] (2) Provide the method under which the
plans will limit the total "Annual
Additions" to the "Maximum Permissible
Amount", and will properly reduce any
"Excess Amounts", in a manner that
precludes Employer discretion: [CERTAIN OF
THE PARTICIPATING EMPLOYERS HAVE MAINTAINED
OTHER QUALIFIED DEFINED CONTRIBUTION PLANS.
ALL SUCH PLANS WERE MERGED INTO THIS PLAN
EFFECTIVE DECEMBER 1, 1987. TO THE EXTENT
REQUIRED, ALL ADJUSTMENTS SHALL BE MADE
UNDER THIS PLAN.].
[ ] (3) N/A (No other qualified Defined
Contribution Plan (other than a regional
prototype plan), Defined Benefit Plan,
Welfare Benefit Fund or individual
medical benefit account maintained).
(C) MAINTENANCE OF A DEFINED BENEFIT PLAN. If a Participant is
or has ever been a participant in a Defined Benefit Plan maintained by the
Employer, check either (1) or (2) and complete as necessary:
[ ] (1) The limitations set forth in
Section 3.8(C)(2) through (4) of the
Plan shall apply.
[ ] (2) Provide the method under which the Plan
will satisfy the 1.0 limitation of section
415(e) of the Code (such language must
preclude employer discretion; see Treas.
Reg. Section 1.415-1 for guidance) in the
following blanks: [
A-26
<PAGE> 27
].
IF ADDITIONAL SPACE IS REQUIRED THE EMPLOYER IS TO INSERT
APPLICABLE LIMITATIONS IN AN ATTACHMENT TO THIS ADOPTION
AGREEMENT. SUCH ATTACHMENT SHALL BE ADDED TO, AND MADE A
PART OF, THIS ADOPTION AGREEMENT.
A.3.9 ROLLOVERS.
(A) PARTICIPANT ROLLOVERS. May Participants be
permitted to make Rollover Contributions to the Plan (check one)?
[ X ] (1) Yes [ ] (2) No
--- --
(B) NON-PARTICIPANT ROLLOVERS. May Employees other
than Participants be permitted to make Rollover Contributions to the Plan (check
one)?
[ ] (1) Yes [ X ] (2) No
--- ---
A.3.10 TRANSFERS.
(A) PARTICIPANT DIRECT TRANSFERS. May Participants be
permitted to have direct transfers made on their behalf to the Plan (check one)?
[ X ] (1) Yes [ ] (2) No
--- --
(B) NON-PARTICIPANT DIRECT TRANSFERS. May Employees
other than Participants be permitted to have direct transfers made on their
behalf to the Plan (check one)?
[ ] (1) Yes [ X ] (2) No
--- ---
(C) TRANSFERS OF ACCOUNTS. Are assets being
transferred to this Plan from a qualified plan covering Key Employees in a
Top-Heavy Plan or five-percent owners (within the meaning of section 416(i)(1)
of the Code) (check one)?
[ ] (1) Yes [ X ] (2) No
--- ---
If such assets are transferred, the restrictions of Section 3.10(B) of the
Plan apply.
A.3.11 TOP-HEAVY PROVISIONS.
(A) APPLICATION OF PROVISIONS AND ADJUSTMENTS.
(1) APPLICATION. Is the Plan a Top-
Heavy Plan on the Effective Date (check
one):
[ ] (a) Yes [ X ] (b) No
--- ---
[ ] (c) Uncertain (Note that if
--- this box is checked and the
Plan is a Top-Heavy Plan, the
Top-Heavy Plan provisions as
set forth herein shall apply)
(2) ADJUSTMENTS. If the Employer
maintains more than one plan in a
Permissive or Required Aggregation
Group, set forth here any adjustments to
be made for Employer contributions or
benefits attributable to Employer
contributions under such other plan(s)
in determining the amount of
contributions to be made under the
Top-Heavy
A-27
<PAGE> 28
provisions of this Plan (if not
applicable, insert letters N/A)): [
N/A
]
(B) VESTING. The nonforfeitable interest of each
Employee in his account balance attributable to Employer contributions shall be
determined on the basis of the following (check either (1) or (2) and fill in
blank(s):
[ ] (1) 100% vesting after [ ]
(not to exceed 3) Years of
Service for Vesting;
[ X ] (2) [ 10 ]% (no minimum) vesting
after 1 Year of Service for
Vesting;
[ 25 ]% (not less than 20)
vesting after 2 Years of
Service for Vesting;
[ 50 ]% (not less than 40)
vesting after 3 Years of
Service for Vesting;
[ 75 ]% (not less than 60)
vesting after 4 Years of
Service for Vesting;
[ 100 ]% (not less than 80)
vesting after 5 Years of
Service for Vesting;
100% vesting after 6 Years of
Service for Vesting.
If the vesting schedule under the Plan shifts in or out of the above
schedule for any Plan Year because of the Plan's top-heavy status, such
shift is an amendment to the vesting schedule and the election in
Section 15.2(G) of the Plan applies.
A.5.1 ALLOCATIONS. If Section A.3.1(A)(1)(a) is checked,
complete the following:
(A) ALLOCATION OF EMPLOYER CONTRIBUTIONS.
(1) METHOD. Shall Employer Contributions
(if any) to the Employer Accounts of
Participants be integrated with Social
Security contributions, subject to the
overall permitted disparity limits set
forth below (check (a) if integrated,
(b) if not integrated)?
[ ] (a) Yes
The annual Employer Contribution shall
not exceed the limitations set forth in
Section A.5.1(A)(2). In any Plan Year in
which there are Employer Contributions,
such Employer Contributions shall,
subject to the Top-Heavy Plan
provisions, be allocated to each
Participant's Employer Account as
follows:
(i) ALLOCATION OF EMPLOYER
CONTRIBUTIONS FOR PLAN
YEARS IN WHICH PLAN IS A
TOP-HEAVY PLAN. If the Plan
is a Top-Heavy Plan for the
Plan Year, the Employer
Contribution for such Plan
Year shall be allocated to
each Participant's Employer
Account as follows:
A-28
<PAGE> 29
(aa) "BASE CONTRIBUTION
PERCENTAGE". First, (check
either (aaa) or (bbb))(percent
in either (aaa) or (bbb) must
not be less than the "Minimum
Top-Heavy Rate"):
[ ] (aaa) [ ] (insert percent),
or
[ ] (bbb) that percent
determined by the Employer for
the Plan Year
of the Participant's "Base
Compensation" for such Plan
Year shall be allocated to the
Employer Account of such
Participant;
(bb) "EXCESS CONTRIBUTION
PERCENTAGE". Second, (check
either (aaa) or (bbb))(percent
in either (aaa) or (bbb) must
not be less than the "Minimum
Top-Heavy Rate" and must not
exceed the "Maximum Excess
Allowance"):
[ ] (aaa)[ ] (insert percent)
percent, or
[ ] (bbb) that percent
determined by the Employer for
the Plan Year
of the Participant's Excess
Compensation for such Plan Year
shall be allocated to the
Employer Account of such
Participant (for purposes of
this allocation, forfeitures
allocated to a Participant in
the Plan Year shall be treated
as Employer Contributions);
however, in the case of any
Participant who has exceeded
the cumulative permitted
disparity limit described
below, the Employer shall
contribute for such Participant
an amount equal to the "Excess
Contribution Percentage"
multiplied by the Participant's
total Compensation for the Plan
Year; and
(cc) "ADDITIONAL CONTRIBUTION
PERCENTAGE". Lastly, any excess
over (aa) and (bb) shall be
allocated to each Participant's
Employer Account in the same
ratio as his Compensation for
such Plan Year bears to the
Compensation of all
Participants for such Plan
Year.
(ii) ALLOCATION OF EMPLOYER
CONTRIBUTIONS FOR PLAN YEARS IN
WHICH PLAN IS NOT A TOP-HEAVY
PLAN. The Employer Contribution
for the Plan Year, if the Plan
is not a Top-Heavy Plan for
the Plan Year, shall be
allocated as follows:
(aa) "BASE CONTRIBUTION
PERCENTAGE". First, (check
either (aaa) or (bbb)):
A-29
<PAGE> 30
[ ] (aaa)[ ] (insert percent)
percent, or
[ ] (bbb) that percent
determined by the Employer for
the Plan Year
of the Participant's "Base
Compensation" for such Plan
Year shall be allocated to the
Employer Account of such
Participant;
(bb) "EXCESS CONTRIBUTION
PERCENTAGE". Second, (check
either (aaa) or (bbb))(percent
in either (aaa) or (bbb) must
not exceed the "Maximum Excess
Allowance"):
[ ] (aaa)[ ] (insert percent)
percent, or
[ ] (bbb) that percent
determined by the Employer for
the Plan Year
of the Participant's Excess
Compensation for such Plan Year
shall be allocated to the
Employer Account of such
Participant (for purposes of
this allocation, forfeitures
allocated to a Participant in
the Plan Year shall be treated
as Employer Contributions);
however, in the case of any
Participant who has exceeded
the cumulative permitted
disparity limit described
below, the Employer shall
contribute for such Participant
an amount equal to the "Excess
Contribution Percentage"
multiplied by the Participant's
total Compensation for the Plan
Year; and
(cc) "ADDITIONAL CONTRIBUTION
PERCENTAGE". Lastly, any excess
over (aa) and (bb) shall be
allocated to each Participant's
Employer Account in the same
ratio as his Compensation for
such Plan Year bears to the
Compensation of all
Participants for such Plan
Year.
With respect to any Employee who is a Participant in
the Plan for only a portion of the Plan Year for
which the Employer Contribution is made, the
allocation to such Employee of the Employer
Contribution (other than the Top-Heavy portion, if
the Plan is a Top-Heavy Plan), shall be (check one):
[ ] (AA) Based only upon the amount
of "Base Compensation", Excess
Compensation and/or Compensation
earned by such Employee and all
other Employees during the portion
of the Plan Year in which they are
or were Plan Participants.
[ ] (BB) Based upon the amount of
"Base Compensation", Excess
Compensation and/or Compensation
earned by such Employee and all
other Employees during the entire
Plan Year.
A-30
<PAGE> 31
NOTE THAT THIS PLAN MAY NOT PROVIDE FOR PERMITTED DISPARITY IF THE EMPLOYER
MAINTAINS ANY OTHER PLAN THAT PROVIDES FOR PERMITTED DISPARITY AND BENEFITS
ANY OF THE SAME PARTICIPANTS.
[ X ] (b) No
The annual Employer Contributions (if any) shall be
determined by the Employer for each Plan Year but
shall not exceed the limitations of Section
A.5.1(A)(2). In any Plan Year in which there are
Employer Contributions, such Employer Contributions
shall, subject to the Top-Heavy Plan provisions, be
allocated to such Participant's Employer Account as
follows:
(i) ALLOCATION OF EMPLOYER
CONTRIBUTIONS FOR PLAN
YEARS IN WHICH PLAN IS A
TOP-HEAVY PLAN. If the Plan
is a Top-Heavy Plan for the
Plan Year, the Employer
Contribution for such Plan
Year shall be first
allocated to each
Participant's Employer
Account in the same ratio
as his Compensation for
such Plan Year bears to the
Compensation of all
Participants for such Plan
Year, in an amount which is
not less than the "Minimum
Top-Heavy Rate". The
balance of the Employer
Contribution for such Plan
Year shall be allocated to
each Participant's Employer
Account as follows (check
one):
[ ] (aa) In the
same ratio as
his
Compensation
for such Plan
Year bears to
the
Compensation
of all
Participants
for such Plan
Year.
[ X ] (bb) In
the same ratio
as his
Compensation
for the
portion of the
Plan Year in
which he was a
Participant
bears to the
Compensation
of all
Participants
for the
portion of the
Plan Year in
which they
were
Participants.
(ii) ALLOCATION OF EMPLOYER
CONTRIBUTIONS FOR PLAN
YEARS IN WHICH PLAN IS NOT
A TOP-HEAVY PLAN. The
Employer Contribution for
the Plan Year, if the Plan
is not a Top-Heavy Plan
for the Plan Year, shall be
allocated to each
Participant's Employer
Account as follows (check
one):
[ ] (aa) In the
same ratio as
his
Compensation
for such Plan
Year bears to
the
Compensation
of all
Participants
for such Plan
Year.
[ X ] (bb) In
the same ratio
as his
Compensation
for the
portion of the
Plan Year in
which he was a
Participant
bears to the
Compensation
of all
Participants
for the
portion of the
Plan Year in
which they
were
Participants.
[ ] (c) N/A (Section A.3.1(A)(1)
(b) checked)
A-31
<PAGE> 32
(2) LIMITATIONS ON EMPLOYER CONTRIBUTIONS.
The following limitations on Employer
Contributions apply:
(a) DEDUCTION LIMITATIONS. The
annual Employer, Matching, and
Elective Deferral Contributions
and any other Employer
contribution shall, in the
aggregate, not exceed the
greater of:
(i) the Employer's "Primary
Limitation" (as defined
below) for the Taxable Year
which ends with or within
the Plan Year for which the
Employer, Matching, and/or
Elective Deferral
Contribution and/or other
Employer contribution is
being made: or
(ii) the Employer's
"Secondary Limitation" (as
defined below) for the
Taxable Year which ends
with or within the Plan
Year for which the
Employer, Matching, and/or
Elective Deferral
Contribution and/or other
Employer contribution is
being made.
(b) CODE SECTION 415 LIMITATION. The
allocation of the Employer contributions for
the Plan Year shall be further limited by
Section 3.8 of the Plan (Limitations on
Allocations).
(c) OVERALL PERMITTED DISPARITY LIMITS.
(i) ANNUAL OVERALL
PERMITTED DISPARITY LIMIT.
Notwithstanding the
preceding paragraphs, for
any Plan Year this Plan
"Benefits" any Participant
who "Benefits" under
another qualified plan or
simplified employee
pension, as defined in
section 408(k) of the Code,
maintained by the Employer
that provides for permitted
disparity (or imputes
disparity), Employer
contributions and
forfeitures shall be
allocated to the account of
every Participant otherwise
eligible to receive an
allocation in the ratio
that such Participant's
total Compensation bears to
the total Compensation of
all Participants.
(ii) CUMULATIVE PERMITTED
DISPARITY LIMIT. Effective
for Plan Years beginning on
or after January 1, 1995,
the cumulative permitted
disparity limit for a
Participant is 35 total
cumulative permitted
disparity years. Total
cumulative permitted years
means the number of years
credited to the Participant
for allocation or accrual
purposes under this Plan,
any other qualified plan or
simplified employee pension
plan (whether or not
terminated) ever maintained
by the Employer. For
purposes of determining the
Participant's cumulative
permitted disparity limit,
all years ending in the
same calendar year are
treated as the same year.
If the Participant has not
"Benefitted" under a
defined benefit or target
benefit plan for
A-32
<PAGE> 33
any year beginning on or
after January 1, 1994, the
Participant has no
cumulative disparity limit.
(3) DEFINITIONS. For purposes of this
Section A.5.1(A), the following definitions
apply:
(a) "BASE CONTRIBUTION
PERCENTAGE" means, for any Plan
Year, the percentage of
Compensation contributed under
the Plan with respect to that
portion of each Participant's
Compensation up to the
"Integration Level" (i.e., with
respect to such Participant's
"Base Compensation") specified
in the Plan for such Plan Year.
(b) "BASE COMPENSATION" means,
for any Plan Year, Compensation
up to the "Integration Level"
for such Plan Year.
(c) "BENEFIT" OR" BENEFITING"
means, with respect to a
Participant, that such
Participant is treated as
benefiting under the Plan for
any Plan Year during which the
Participant received or is
deemed to receive an allocation
in accordance with Treas. Reg.
Section 1.410(b)-3(a).
(d) "EXCESS CONTRIBUTION
PERCENTAGE" means, for any Plan
Year, the percentage of
Compensation which is
contributed under the Plan with
respect to that portion of each
Participant's Compensation in
excess of the "Integration
Level" (i.e., with respect to
such Participant's Excess
Compensation) specified in the
Plan for such Plan Year.
(e) "INTEGRATION LEVEL" means
the amount of Compensation
specified in the Plan at or
below which the rate of
contributions (expressed as a
percentage of such
Compensation) provided under
the Plan is less than the rate
of contributions (expressed as
a percentage of Compensation)
provided under the Plan with
respect to Compensation above
such level. The "Integration
Level" for any Plan Year may in
no event exceed the Taxable
Wage Base as in effect on the
first day of such Plan Year.
(f) "MAXIMUM EXCESS ALLOWANCE"
means, for any Plan Year
beginning before January 1,
1989, the "Base Contribution
Percentage" plus 5.7% and for
any Plan Year beginning after
December 31, 1988, the
percentage determined under
either (i) or (ii):
(i) If the "Integration
Level" for such Plan Year
is equal to the Taxable
Wage Base, in effect on the
first day of such Plan
Year, or if the
"Integration Level" is a
uniform dollar amount for
all Participants which is
no greater than the greater
of $10,000 or 1/5 of the
Taxable Wage Base in effect
on the first day of such
Plan Year, then the
"Maximum Excess
A-33
<PAGE> 34
Allowance" for such Plan Year is the lesser
of:
(aa) The "Base Contribution
Percentage", or
(bb) The greater of (AA) 5.7%
or (BB) the percentage equal to
the rate of tax under section
3111(a) of the Code (in effect
on the first day of the Plan
Year) which is attributable to
the old age insurance portion
of the Old Age, Survivors and
Disability Insurance provisions
of the Social Security Act.
(ii) If the "Integration Level" for such
Plan Year is greater than the greater of
$10,000 or 1/5 of the Taxable Wage Base in
effect on the first day of such Plan Year
but less than the Taxable Wage Base in
effect on the first day of such Plan Year
then the "Maximum Excess Allowance" shall be
determined as follows:
-----------------------------------------------------------
|IF THE "INTEGRATION LEVEL" | THE "MAXIMUM EXCESS |
----------------------------------
|IS MORE THAN BUT NOT MORE THAN | ALLOWANCE" IS |
---------------------------------- ----------------------
| | |
|(1) X* 80% OF TAXABLE | |
| WAGE BASE | 4.3% |
| | |
|(2) 80% OF Y** | |
| TAXABLE | |
| WAGE BASE | 5.4% |
| | |
-----------------------------------------------------------
* x=The greater of $10,000 or 1/5 of Taxable
Wage Base
**y=Any amount more than 80% of Taxable Wage
Base but less than 100% of Taxable Wage
Base.
(g) "MINIMUM TOP-HEAVY RATE" means a rate of
at least three percent (unless the total
Employer contribution to the Plan is less
than three percent), or, in certain cases
where a Defined Benefit Plan is maintained,
five percent or seven and one-half percent
(whichever is applicable) of each
Participant's Compensation for such Plan
Year; if the Plan is integrated with Social
Security, the "Base Contribution Percentage"
plus the "Excess Contribution Percentage"
plus the "Additional Contribution
Percentage" (if any) must be no less than
the "Minimum Top-Heavy Rate" as set forth
in the preceding clause.
(h) "PRIMARY LIMITATION" means 15 percent of
the Compensation otherwise paid or accrued
by the Employer during such Taxable Year to,
or for, the Participants in the Plan.
A-34
<PAGE> 35
(i) "SECONDARY LIMITATION" means the lesser
of:
(i) 25 percent of the
Participants' Compensation for
the Taxable Year which ends
with or within the Plan Year
for which the Employer,
Matching, and/or Elective
Deferral Contribution or other
Employer contribution is being
made, or
(ii) Any excess of (aa) the
aggregate of the "Primary
Limitations" for all Taxable
Years beginning before January
1, 1987, over (bb) the
aggregate of the deductions
allowed or allowable (for
Employer, Matching, and
Elective Deferral Contributions
or other Employer contributions
paid or deemed paid to the
Plan) under section
404(a)(3)(A) of the Code for
all Taxable Years beginning
before January 1, 1987, which
excess is available as a
carryforward to the current
Taxable Year from such prior
Taxable Year(s) under said
section 404(a)(3)(A).
(B) OTHER ALLOCATIONS. Other contributions shall be
allocated in accordance with the Plan document.
A.5.4 ALLOCATION OF INCREASES AND DECREASES. Allocation of
increases or decreases in the fair market value of assets described in Section
5.4 of the Plan shall be made on the basis of the amounts in the Accounts under
the Plan (as adjusted under Section 5.4 of the Plan) as determined on (check
either (A) or (B)):
[ X ] (A) First day of the period in which the
Valuation Date occurs (except that the last day
of the period shall be used for the initial
allocation).
[ ] (B) Last day of the period in which the Valuation
Date occurs.
A.5.5 ALLOCATION OF FORFEITURES.
(A) Shall forfeitures be allocated in accordance with
Section 5.5 of the Plan (check one)?
[ X ] (1) Yes [ ] (2) No
[ ] (3) N/A (No forfeitures)
If Section A.5.5(A)(1) is checked, such allocation shall be effected as of
the last day of the (check one): [ ] (a) month [ ] (b) quarter [ X ] (c)
Plan Year in which the forfeiture occurs under Section 7.6(c) of the Plan,
in proportion to the Employer and/or Matching Contributions (as applicable)
allocated to the remaining Participants for the period for which the
allocation is effected.
(B) If Section A.5.5(A)(2) is checked, forfeitures
shall be allocated as follows (check applicable block):
[ ] (1) Matching Account forfeitures shall
be used to reduce Matching Contributions
for the Plan Year in which such
forfeitures occur but otherwise the
provisions of Section 5.5 of the Plan
shall apply.
A-35
<PAGE> 36
[ ] (2) All Matching and Employer Account
forfeitures shall be used to reduce
Matching and Employer Contributions for
the Plan Year in which such forfeitures
occur.
[ X ] (3) N/A (Forfeitures shall be
allocated under Section 5.5 of Plan or
no forfeitures).
A.6.1 INVESTMENT OF ACCOUNTS.
(A) INVESTMENT POWER. Investment of Trust assets
shall be directed as follows (check (1), (2) or (3)):
[ X ] (1) Subject to the terms of the Plan,
the Trustee shall, subject to any
limitations indicated below, have the sole
power and authority to direct investment of
Trust assets.
[ ] (2) Subject to the terms of the Plan,
the Investment Manager shall, subject to
any limitations indicated below, have
the sole power and authority to direct
investment of Trust assets held in
(check applicable block(s)):
[ ] Employer Accounts [ ] Matching Accounts
[ ] Participant Accounts [ ] Elective Deferral
Accounts
[ ] QVEC Accounts [ ] Rollover Accounts
[ ] Transfer Accounts [ ] Other Accounts
Subject to the terms of the Plan, the Trustee shall have
the sole power and authority to direct investment of Trust
assets not committed to the direction of the Investment
Manager.
[ ] (3) Subject to the terms of the Plan,
each Plan Participant or Beneficiary
shall, subject to any limitations
indicated below, have the sole power and
authority to direct investment of the
Trust assets held in (check applicable
block(s)):
[ ] Employer Accounts [ ] Matching Accounts
[ ] Participant Accounts [ ] Elective Deferral
Accounts
[ ] QVEC Accounts [ ] Rollover Accounts
[ ] Transfer Accounts [ ] Other Accounts
The investments which the Participant or Beneficiary
may select are any one or more of the following
(specify investment selections available): [
]
Investment instructions shall be given by the Participant
or Beneficiary on the Appropriate Form to the
Administrative Committee not later than (fill in blank) [
] days before the Valuation Date preceding the effective
date of the investment direction. The Administrative
Committee shall deliver such instructions to the Trustee.
Such investment instructions shall be effected by the
Trustee not later than (fill in blank) [ ] days following
the Valuation Date coincident with or next
A-36
<PAGE> 37
following the date on which the investment
instructions are delivered to the Administrative
Committee.
Subject to the terms of the Plan, the Trustee shall have
the sole power and authority to direct investment of Trust
assets not committed to the direction of the Participant
or Beneficiary.
(B) LIMITATIONS. List any limitations on types of
investments and transitional investment rules (if none, write "none"): [
NONE
]
(C) QUALIFYING EMPLOYER SECURITIES. May Plan assets
be invested in Qualifying Employer Securities (check one)?
[ X ] (1) Yes [ ] (2) No
In no event may Employer, Participant, Elective Deferral, Matching,
Rollover or Qualified Voluntary Employee Contributions or other Employer
contributions or direct transfers or Employer, Participant, Elective
Deferral, Matching, Rollover, Transfer or QVEC Accounts or other accounts
be invested in Qualifying Employer Securities unless such investment is in
compliance with applicable Federal and state securities laws (including any
necessary filings under such Federal and state securities laws) and the
requirements of the Plan.
If such investment is in compliance with such laws (including any required
filings) and Plan requirements, the prohibition on investment of Plan
assets in Qualifying Employer Securities does not apply and up to [ 100 ]
(insert percentage; if not applicable, insert letters N/A in blank) percent
of Plan assets may be so invested.
If any such required filings have not been made, only Employer
Contributions and Employer Accounts not subject to Participant or
Beneficiary directed investment may be invested in Qualifying Employer
Securities. In such case, indicate the percentage of Employer Contributions
and Employer Accounts which may be invested in Qualifying Employer
Securities in the following blank: [ 100 ] percent (insert percentage; if
not applicable, insert letters N/A in blank).
A.7.6 SEPARATION FROM SERVICE.
(A) DISTRIBUTION OF ACCRUED BENEFITS UPON SEPARATION
FROM SERVICE.
(1) NORMAL RULES. Upon separation of a
Participant from the service of his
Employer under Section 7.6(A) of the
Plan, distribution of such Participant's
Vested Accrued Benefit shall be made
(check only one block (i.e., (a), (b) or
(c)):
[ ] (a) Upon the request of the
Participant in writing on the
Appropriate Form, within 60 days
following the last day of the Plan
Year in which such Participant
incurs five consecutive One-Year
Breaks In Service but if
distribution is not so requested
by the Participant, distribution
shall be made on the date the
Participant would have attained
his Normal Retirement Age had he
remained in the employ of the
Employer;
[ X ] (b) Upon the request of the
Participant in writing on the
Appropriate Form, at any time
A-37
<PAGE> 38
following the first Valuation
Date coincident with or next
following the date such
Participant separates from the
service of the Employer;
however, if distribution is not
so requested by the Participant
earlier, distribution shall be
made no later than 60 days
following the date the
Participant would have attained
his Normal Retirement Age had
he remained in the employ of
the Employer; or
[ ] (c) Within 60 days following
the date the Participant would
have attained his Normal
Retirement Age had he remained
in the employ of the Employer.
Notwithstanding any other provision in the Plan or Adoption
Agreement, if the Plan provides for distribution on an Early
Retirement Date and if a separated Participant met the service but
not the age requirement for such Early Retirement Date on the date
of his separation from the service of his Employer, upon meeting
such age requirement after separation, such Participant, if he so
requests in writing on the Appropriate Form, shall commence
receiving his deferred Vested Accrued Benefit no later than the
date which would have been his Early Retirement Date had he
continued in the service of the Employer. If no such request is
made, distribution shall be made in accordance with Section
A.7.6(A)(1)(a), (b) or (c), as elected by the Employer in this
Adoption Agreement. All requests for payment under this Section
A.7.6(A) shall be made within the 90-day period preceding the date
payment is to commence.
(2) EXCEPTION. If a Participant
separates from the service of the
Employer and the value of the
Participant's Vested Accrued Benefit
does not exceed and at the time of any
prior distribution did not exceed
$3,500, the Participant shall
automatically, whether or not he
requests distribution, receive, in one
lump sum, a distribution of his entire
Vested Accrued Benefit (and if the
Vested Accrued Benefit is $-0-, he shall
be deemed to have received such Vested
Accrued Benefit) within 60 days
following the first Valuation Date
coincident with or next following the
date such Participant separates from the
service of the Employer.
This provision shall only apply if this block is checked [ X ].
If the above block is not checked or if the value of the
Participant's Vested Accrued Benefit exceeds or at the time of a
prior distribution exceeded $3,500, the election made under
Section A.7.6(A)(1) shall apply to the distribution of the
Participant's Vested Accrued Benefit under the Plan.
(B) VESTING UPON SEPARATION FROM SERVICE.
(1) Except as otherwise provided in the
Plan and in Sections A.3.5 and A.3.11,
the interest of each Participant in his
Employer Account and Matching Account
shall vest as follows (check one and
complete applicable blanks):
[ ] (a) 100 percent vesting
immediately. (This alternative
must be chosen if a period of
more than one year has been
designated in Section
A.2.2(B)(1)(a)(i)).
A-38
<PAGE> 39
[ ] (b) [ ] percent for each Year
of Service for Vesting (not
less than 20 percent for each
Year of Service for Vesting,
but not more than 100 percent).
[ ] (c) Nothing for the first five
Years of Service for Vesting
and 100 percent thereafter.
[ ] (d) Nothing for the first [ ]
Years of Service for Vesting,
then [ ] percent for each Year
of Service for Vesting
thereafter, but not more than
100 percent. (Full vesting must
occur after five Years of
Service for Vesting).
[ ] (e) In accordance with the
following table
IF YEARS OF SERVICE
FOR VESTING THEN THE VESTED
EQUAL OR EXCEED - PERCENTAGE IS
--------------- - -------------
3..................................20
4..................................40
5..................................60
6..................................80
7 or more.........................100
[ X ] (f) [Other. (This
alternative, if chosen, must
provide a percentage of vesting
which is not less than the
percentage that would be
provided under options (c) or
(e) used consistently) -
Specify:
[IF YEARS OF SERVICE
FOR VESTING THEN THE VESTED
EQUAL OR EXCEED - PERCENTAGE IS
--------------- - -------------
1..................................10
2..................................25
3..................................50
4..................................75
5 OR MORE.........................100
(2) For purposes of Section A.7.6(B)(1)
above and for purposes of Section A.3.5
and Section 3.11(B) of the Plan, Years
of Service for Vesting attributable to
the following shall be disregarded
(check applicable blocks):
[ ] (a) Service prior to the
attainment of age 18, exclusive
of the year within which the
Employee attained age 18.
[ ] (b) Service during any period
for which the Employer did not
maintain this Plan or a
predecessor trust or plan.
[ ] (c) Service before January 1,
1971, unless the Employee has
had at least three years of
credited service after December
31, 1970, determined without
application of paragraphs (a),
(b), (d) and (e) hereof if
selected by the Employer.
A-39
<PAGE> 40
[ X ] (d) If an Employee is
reemployed by the Employer
following a One-Year Break In
Service, service before such
One-Year Break In Service, if the
Employee has not completed a Year
of Service for Vesting after such
One-Year Break In Service, for the
purpose of determining the vested
percentage in his Employer-derived
Accrued Benefit which accrues after
such One-Year Break In Service.
[ X ] (e) If an Employee is
reemployed by the Employer
following five consecutive One-Year
Breaks In Service (check only (i)
or (ii) whichever is to apply):
[ ] (i) Service after such
five consecutive One-Year
Breaks In Service, for the
purpose of determining the
vested percentage in his
Employer-derived Accrued
Benefit which accrued before
such five consecutive
One-Year Breaks In Service
but both pre-Break and post-
Break service will count for
purposes of determining the
vested percentage in his
Employer-derived Accrued
Benefit which accrued after
such Break.
[ X ] (ii) Service after such
five consecutive One-Year
Breaks In Service, for the
purpose of determining the
vested percentage in his
Employer-derived Accrued
Benefit which accrued before
such five consecutive
One-Year Breaks In Service
and, if the Employee had no
vested interest in his
Employer-derived Accrued
Benefit prior to such
Break(s) and the number of
consecutive One-Year Breaks
In Service equals or exceeds
the aggregate Years of
Service for Vesting, service
before such five consecutive
One-Year Breaks In Service
for the purpose of
determining the vested
percentage in his
Employer-derived Accrued
Benefit which accrues after
such five consecutive
One-Year Breaks In Service.
To the extent required by the Plan, separate
accounts shall be maintained for the
Participant's pre-Break and post-Break
Employer-derived account balances.
(3) Except as otherwise provided in Section
7.6(C) of the Plan relating to benefits
accruing before a separation from service,
if a Participant separates from service and
thereafter returns to employment with the
Employer without incurring five consecutive
One-Year Breaks In Service, he shall
continue to vest in his Accrued Benefit.
(4) In the event that an Employee who is not
a member of the eligible class of Employees
becomes a
A-40
<PAGE> 41
member of the eligible class, such
Employee shall, subject to any
applicable limitation set forth in this
Section A.7.6, receive credit, for
vesting purposes, for Service with the
Employer while such Employee was not a
member of the eligible class.
(5) Service, for purposes of Section
A.7.6(B)(1), includes service with a
predecessor employer if the Employer
adopting the Plan is maintaining the
Plan as a plan of a predecessor
employer.
Service, for purposes of Section A.7.6(B)(1), also includes
service with a predecessor employer whose plan is not being
continued by the Employer to the extent provided in Section
A.1.79.
(C) FORFEITURES. If the provisions of Section
7.6(C)(1)(b) of the Plan are to apply, check this block [ X ]; otherwise
the provisions of Section 7.6(C)(1)(a) of the Plan shall apply.
A.7.9 COMMENCEMENT OF PAYMENTS; DEFERRAL OF PAYMENTS; MINIMUM
DISTRIBUTION REQUIREMENTS.
(A) DATE PAYMENTS TO COMMENCE. This provision is contained in
the Plan.
(B) DEFERRAL OF PAYMENTS. Shall a Participant, to the extent
permitted by the Plan, be permitted to defer payment of benefits under
Sections 7.3, 7.4, 7.5 and 7.7 of the Plan (check one)?
[ X ] (1) Yes [ ] (2) No
--- ---
(C) MINIMUM DISTRIBUTION REQUIREMENTS. This provision is
contained in the Plan.
A.7.10 WITHDRAWALS DURING EMPLOYMENT.
(A) WITHDRAWALS FROM PARTICIPANT ACCOUNTS. Shall withdrawals
of Participant Accounts (other than the portion of such Participant
Accounts attributable to required Participant Contributions and to
Participant Contributions which are matched by the Employer) be
permitted (check one)?
[ ] (1) Yes [ ] (2) No [ X ] (3) N/A
--- --- ---
(B) WITHDRAWALS FROM QVEC ACCOUNTS. Shall withdrawals
of QVEC Accounts be permitted (check one)?
[ ] (1) Yes [ ] (2) No [ X ] (3) N/A
--- --- ---
(C) WITHDRAWALS FROM ROLLOVER ACCOUNTS. Shall
withdrawals of Rollover Accounts be permitted (check one)?
[ ] (1) Yes [ X ] (2) No [ ] (3) N/A
--- --- ---
(D) HARDSHIP AND POST - 59 1/2 WITHDRAWALS FROM
ELECTIVE DEFERRAL ACCOUNTS. Shall withdrawals of Elective Deferral Accounts be
permitted (if such withdrawals are to be permitted, check either (1) or (2) or
both) [ ] (1) on account of hardship [ ] (2) after reaching age 59-1/2 (check
one)?
[ ] (a) Yes [ ] (b) No [ X ] (c) N/A
--- --- ---
(E) HARDSHIP AND POST - 59 1/2 WITHDRAWALS FROM
EMPLOYER, PARTICIPANT, ROLLOVER AND TRANSFER ACCOUNTS. Shall withdrawals of
Employer, Participant, Rollover and Transfer Accounts be permitted (if such
withdrawals
A-41
<PAGE> 42
are to be permitted, check either (1) or (2) or both) [ ] (1) on account of
hardship [ ] (2) after reaching age 59-1/2 (check one)?
[ ] (a) Yes [ X ] (b) No
--- ---
(F) HARDSHIP AND POST - 59 1/2 WITHDRAWALS FROM
MATCHING ACCOUNTS. Shall hardship and post - age 59 1/2 withdrawals of Matching
Accounts be permitted (if such withdrawals are to be permitted, check either (1)
or (2) or both) [ ] (1) on account of hardship [ ] (2) after reaching age 59-1/2
(check one)?
[ ] (a) Yes [ ] (b) No [ X ] (c) N/A
--- --- ---
(G) OTHER PRE-59-1/2 IN-SERVICE WITHDRAWALS. Shall
withdrawals of a Participant's Vested Accrued Benefit attributable to
Participant Contributions, Employer Contributions, and Matching Contributions
after such Participant completes five Years of Service for Benefit Accrual but
before he attains age 59 1/2 be permitted (check one)?
[ ] (1) Yes [ X ] (2) No
--- ---
WITHDRAWALS SHALL ONLY BE MADE IN ACCORDANCE WITH THE PROVISIONS OF SECTION
7.10 OF THE PLAN.
A.7.11 LOANS.
(A) Shall loans to Participants and Beneficiaries if
such Beneficiaries are parties-in-interest (as defined in the Plan) be permitted
(check one)?
[ X ] (1) Yes [ ] (2) No
--- ---
NOTE: NO LOANS MAY BE MADE TO OWNER-EMPLOYEES OR TO
SHAREHOLDER EMPLOYEES (AS DEFINED IN SECTION 7.11(A)(7) OF THE PLAN).
(B) The interest rate shall be determined as follows:
[ THE INTEREST RATE SHALL EQUAL ONE PERCENTAGE POINT ABOVE THE PRIME INTEREST
RATE AS PUBLISHED IN THE WALL STREET JOURNAL ON THE FIRST BUSINESS DAY OF THE
WEEK IN WHICH THE LOAN IS MADE. ]
(C) Shall the exception to the 50% of Vested Accrued
Benefit limitation on loans not in excess of $10,000 apply?
[ ] (1) Yes [ X ] (2) No
--- ---
[ ] (3) N/A (No loans permitted)
---
If the exception is to apply, note that only 50% of the Vested Accrued
Benefit may be used as security for the loan. Additional security must
be provided by the Participant or Beneficiary. Specify the type of
additional collateral which will be used to secure the remainder of the
loan: [ N/A
-----------------------------------------------------------
----------------------------------------------------------------------
----------------------------------------------------------------------]
(D) Specify the types of collateral to be used to secure loans
under the Plan: [ ONE HALF OF THE PRESENT VALUE OF THE PARTICIPANT'S OR
BENEFICIARY'S VESTED ACCRUED BENEFIT UNDER THE PLAN. ]
(E) If Section A.7.11(A)(1) is checked, indicate any additional
limitations to be placed on loans (if none, so state; if not applicable, insert
letters N/A):[ LOANS FROM THE PLAN WILL BE PERMITTED ONLY IN THE EVENT OF A
PERSONAL EMERGENCY OR FINANCIAL HARDSHIP IN ACCORDANCE WITH THE GUIDELINES SET
FORTH IN SECTION 7.10(C)(3) OF THE PLAN.]
A-42
<PAGE> 43
(F) Shall loans to a Participant be treated as an
investment by such Participant for his Accounts only (check one)?
[ X ] (1) Yes [ ] (2) No
[ ] (3) N/A (No loans permitted)
A.7.14 JOINT AND SURVIVOR ANNUITY. The provisions of Section 7.14
of the Plan shall not apply to the Plan, as adopted under this Adoption
Agreement.
A.8.2 SPECIAL PROVISION WITH RESPECT TO QUALIFIED DOMESTIC
RELATIONS ORDERS. Shall the special provision of Section 8.2 of the Plan with
respect to Qualified Domestic Relations Orders apply to the Plan as adopted by
the Employer (check one)?
[ X ] (A) Yes [ ] (B) No
A.15.1 AMENDMENT. THE CHANGES MADE BY THIS AMENDMENT AND
RESTATEMENT SHALL BE DEEMED ADOPTED BY EACH ADOPTING EMPLOYER ON THE DATE THE
NOTIFICATION LETTER IS ISSUED BY THE DISTRICT OFFICE OF THE INTERNAL REVENUE
SERVICE WITHOUT FURTHER ACTION ON THE PART OF THE ADOPTING EMPLOYER EXCEPT THAT
SUCH ADOPTING EMPLOYER MUST SEND A NOTICE TO INTERESTED PARTIES INFORMING SUCH
INTERESTED PARTIES THAT THE PLAN HAS BEEN AMENDED. SUCH NOTICE MUST BE GIVEN IN
ACCORDANCE WITH THE RULES OF SECTION 15.1(C) OF THE PLAN. SEE SECTION 15.1(C) OF
THE PLAN FOR FURTHER INFORMATION.
A.18.4 AGENT FOR SERVICE OF LEGAL PROCESS. The name(s) and
address(es) of the agent(s) for service of legal process under the Plan are:
[ ADMINISTRATIVE COMMITTEE, FUND OFFICE RETIREMENT PROFIT-SHARING PLAN
C/O MUNICIPAL FUND FOR TEMPORARY INVESTMENT
BELLEVUE PARK CORPORATE CENTER
400 BELLEVUE PARKWAY, SUITE 100
WILMINGTON, DE 19809
A.18.17 RESTATEMENT.
(A) RESTATEMENT OF EXISTING PLAN. The Employer may
adopt the Plan as an amendment and restatement of any Prior Plan (including a
prior version of this Plan and Trust Agreement). Adoption shall not require
termination of the Prior Plan, except that amendment and restatement of an
existing Defined Benefit Plan into the Plan shall be deemed to be a termination
of such Prior Plan for the purposes of Title IV of ERISA. Upon adoption of this
Plan, the assets of the Prior Plan shall be invested in accordance with the
provisions of this Plan. Check if applicable:
[ X ] This is an amendment and restatement of the [FUND
OFFICE RETIREMENT PROFIT-SHARING] PLAN, an existing qualified
[PROFIT-SHARING] plan, which was adopted effective as of
[SEPTEMBER 18, 1981].
(B) LIMITATIONS APPLICABLE TO PLAN PROVISIONS. Except
as otherwise provided in Section 3.11 of the Plan, the participation and/or
vesting provisions of the Plan, as adopted by the Employer, shall apply as
follows (check applicable block or blocks; to the extent not checked, the Plan
shall apply in accordance with the terms set forth herein):
[ ] (1) The participation provisions of
this Plan, as adopted by the Employer,
shall apply only to Employees hired on
or after the date the Plan is adopted by
the Employer. The participation
provisions of the Prior Plan shall
otherwise apply.
[ ] (2) The vesting provisions of this
Plan, as adopted by the Employer, shall
apply only to Employees hired on or
after the date the Plan is adopted by
the
A-43
<PAGE> 44
Employer. The vesting provisions of the
Prior Plan shall otherwise apply.
[ X ] (3) N/A.
(C) Incorporation of Applicable Prior Plan
Provisions and Transitional Rules. If the Employer checked A.18.17(A),
such Employer shall insert here any Prior Plan provisions and any
transitional rules which such Employer desires or is required to make
applicable to this Plan (if none, write the word "none"):
[ (1) Merger of Plans. Effective December 1, 1987, the Chestnut Street Exchange
Fund Retirement Profit-Sharing Plan, the Independence Square Income Securities,
Inc. Retirement Profit-Sharing Plan, the Temporary Investment Fund, Inc.
Retirement Profit-Sharing Plan, and the Trust for Short-Term Federal Securities
Retirement Profit-Sharing Plan were merged into, and their assets transferred
into, the Plan.
(2) Change in Accrual Computation Periods, Limitation Years, Plan Years
and Vesting Computation Periods. As a result of the merger and transfer of
assets, the Accrual Computation Periods, Limitation Years, Plan Years and
Vesting Computation Periods for the Chestnut Street Exchange Fund, Independence
Square Income Securities, Inc., Temporary Investment Fund, Inc., and Trust for
Federal Securities Retirement Profit-Sharing Plans have been changed as follows:
<TABLE>
<CAPTION>
Plan Old (under old Plan) New (under this Plan)
---- -------------------- ---------------------
<S> <C> <C>
Chestnut Street Ex-
change Fund 1/1 to 12/31 12/1 to 11/30
Independence Square
Income Securities,
Inc. 1/1 to 12/31 12/1 to 11/30
Temporary Investment
Fund, Inc. 10/1 to 9/30 12/1 to 11/30
Trust for Federal
Securities 11/1 to 10/31 12/1 to 11/30
</TABLE>
This resulted in the following short Accrual Computation Periods,
Limitation Years, Plan Years and Vesting Computation Periods:
<TABLE>
<CAPTION>
Plan Short Period/Year
---- -----------------
<S> <C>
Chestnut Street 1/1/87 to 11/30/87
Independence Square Income Securities, Inc. 1/1/87 to 11/30/87
Temporary Investment Fund, Inc. 10/1/87 to 11/30/87
Trust for Federal Securities 11/1/87 to 11/30/87
</TABLE>
(a) Change in Vesting Computation Periods. Each Participant in the
above listed Plans received vesting credit for two Years of
Service for Vesting provided such Participant completed 200 or
more Hours of Service in both the Old Vesting Computation Period
and the New Vesting Computation Period as set forth above.
(b) Change in Accrual Computation Periods. Any Participant in the
above listed Plans who completed 200 Hours of Service multiplied
by the number of months in the short Accrual Computation Period
divided by twelve received his proportionate share of Employer
Contributions during the short Accrual Computation Period set
forth above.
(c) Change in Limitation Years. For the short Limitation Years, the
dollar limitations under section 415(c)(1)(A) of the Code were
adjusted as provided under Treas. Reg. Section 1.415-2(b)(4).
The above changes were made pursuant to the automatic approval
provisions of Rev. Proc. 87-27, 1987-25 I.R.B. 41. ]
A-44
<PAGE> 45
A.18.18 Individual Provisions. Any provisions applicable to the
adopting Employer only should be inserted here (if none, write the word "none"):
[ (A) Employer Amendment of Plan and/or Trust. Any Employer amendment of the
Plan and/or Trust permitted by Section 15.1 of the Plan and Trust Agreement
shall be effected by resolution of the Employer's Board of Directors adopted at
a duly held meeting of said Board or by unanimous written consent of said Board,
if the Employer is incorporated and otherwise by appropriate written action of
Employer's owner or other governing entity under State law. A certified copy of
such resolutions or other written action shall be delivered to the
Administrative Committee and the Trustee.
(B) Termination or Partial Termination of Plan and/or Trust. Termination or
partial termination of the Plan and/or Trust under Article XVI of the Plan and
Trust Agreement shall be effected by resolution of the Employer's Board of
Directors adopted at a duly held meeting of said Board or by unanimous written
consent of said Board, if such Employer is incorporated and otherwise by
appropriate written action of Employer's owner or other governing entity under
State law. A certified copy of such resolutions or other written action shall be
delivered to the Administrative Committee and the Trustee.
(C) Adoption of Plan by Other Employers.
(1) Effective Date. This Section A.18.18(C) shall be effective as of
December 1, 1989.
(2) Adoption of Plan and Trust. Any other employer may adopt the terms
of this Plan as adopted by the adopting Employer, and thereby become a
"Participating Employer," provided:
(a) The Board of Directors or other governing entity of the
adopting Employer consents to such adoption;
(b) The Board of Directors or other governing entity of the
adopting Participating Employer adopts this Plan by appropriate action;
(c) The adopting Participating Employer executes the Adoption
Agreement; and
(d) The adopting Participating Employer executes such other
documents as may be required to make such adopting Participating
Employer a party to the Plan and Trust as a Participating Employer
(except as provided below).
A Participating Employer which adopts the Plan and Trust Agreement is
thereafter an Employer with respect to its employees for purposes of the
Plan, the Trust Agreement and this Adoption Agreement except that such
Participating Employer delegates to the adopting Employer the power to
amend the Adoption Agreement on its behalf and on behalf of the adopting
Employer and each other Participating Employer, provided such amendment
does not materially affect the substance of the Plan with respect to the
adopting Employer or any Participating Employer or materially affect the
costs of the adopting Employer or any Participating Employer. A
Participating Employer reserves the power to withdraw from the Plan, as
provided in Section A.18.18(C)(3), and to terminate the Plan and Trust
Agreement with respect to such Participating Employer, as provided in
Section A.18.18(5).
(3) Withdrawal from Plan. Subject to the requirements of Article XVII,
any Participating Employer may, at any time, withdraw from the Plan upon
giving the Board of Directors or other governing entity of the adopting
Employer, the Administrative Committee and the Trustee at least 30 days
notice in writing of its intention to withdraw. Upon the withdrawal of a
Participating Employer pursuant to this Section A.18.18(C)(3), the Trustee
shall segregate a portion of the assets in the Trust as set forth below,
the value of which shall equal the total amount credited to the accounts of
Participants employed by the withdrawing Participating Employer. Subject to
the requirements of Article XVII, the determination of which assets are to
be
A-45
<PAGE> 46
so segregated shall be made by the Trustee in its sole discretion as set forth
below.
The Administrative Committee may, at any time, direct the Trustee to
segregate from the Trust such part thereof as the Administrative Committee shall
determine to be held for the benefit of the employees of a Participating
Employer, and shall give a copy of such directions to the adopting Employer and
each Participating Employer. Such directions shall specify the assets of the
Trust to be segregated. Unless the adopting Employer or any Participating
Employer files with the Trustee a written protest within 30 days after delivery
of such directions to the Trustee, such directions shall conclusively establish
that the assets specified therein represent the part of the Trust held for the
benefit of the Employees of the adopting Employer and of each Participating
Employer.
After the expiration of such 30 day period, and after settlement of any
such protest, the Trustee shall follow the Administrative Committee's
directions, including any modification thereof adopted in settlement of any
protest. Any part of the Trust segregated pursuant to such directions shall
thereafter be held in a separate trust identical in terms to the Trust hereby
established or maintained, except that, with respect to such separate trust,
this Plan and Trust Agreement shall be construed as if such Participating
Employer were the adopting Employer and all powers and authority conferred upon
the adopting Employer or its Board or other governing entity and the
Administrative Committee shall devolve upon such Participating Employer or its
Board of Directors or other governing entity. At any time thereafter, such
Participating Employer and the Trustee may (but they shall not be required to)
enter into a separate agreement stating the terms of such separate plan and
trust agreement which may be the DRINKER BIDDLE & REATH REGIONAL PROTOTYPE
DEFINED CONTRIBUTION PLAN AND TRUST AGREEMENT. If the DRINKER BIDDLE & REATH
REGIONAL PROTOTYPE DEFINED CONTRIBUTION PLAN AND TRUST AGREEMENT is not so
adopted, the plan and trust agreement with respect to the withdrawing
Participating Employer shall be considered an individually designed plan.
(4) Exclusive Purpose of Trust. Neither the segregation and transfer of
the Trust assets upon the withdrawal of a Participating Employer nor the
execution of a new plan and trust agreement by such withdrawing Participating
Employer shall operate to permit any part of the Trust to be used for, or
diverted to, purposes other than for the exclusive benefit of the Participants
or their Beneficiaries.
(5) Application of Withdrawal Provisions. The withdrawal provisions
contained in Section A.18.18(C)(3) and (4) shall be applicable only if the
withdrawing Participating Employer continues to cover its Participants and
eligible Employees in another plan and trust qualified under sections 401 and
501 of the Code. Otherwise, the termination provisions of the Plan and Trust
Agreement shall apply with respect to the withdrawing Participating Employer.
(6) Single Plan. Notwithstanding any other provision set forth herein,
the Plan, as adopted pursuant to this Section A.18.18(C) by the adopting
Employer and each Participating Employer, shall constitute a single plan, as
such term is defined in Treas. Reg. Section 1.414(1)-1(b)(1), as to the adopting
Employer and each Participating Employer.
(7) Qualifying Employer Securities. For purposes of Sections A.1.72 and
A.6.1(B), and for all other purposes of the Plan and Trust Agreement, the stock
of any adopting Employer and any Participating Employer shall be treated as
Qualifying Employer Securities.
(8) Adopting Employer Appointed Agent of Participating Employers. Each
Participating Employer appoints the Board of Directors or other governing entity
of the adopting Employer as its agent to exercise on its behalf all of the
administrative power and authority conferred upon the adopting Employer by this
Plan and Trust Agreement, including the power to amend the Adoption Agreement on
its behalf and on behalf of the adopting Employer and
A-46
<PAGE> 47
each other Participating Employer as set forth in Article XV, provided such
amendment does not materially affect the substance of the Plan with respect to
the adopting Employer or any Participating Employer or materially affect the
cost of the adopting Employer or any Participating Employer. The authority of
the Board of Directors or other governing entity of the adopting Employer to act
as agent of any Participating Employer, in accordance with Sections
A.18.18(C)(2) and A.18.18(C)(8), shall terminate only if the part of the Plan's
assets held for the benefit of the employees of such Participating Employer
shall be segregated in a separate trust as provided in Section A.18.18(C)(3) and
such Participating Employer thereupon withdraws from the Plan in accordance with
Section A.18.18(C)(3). Any material amendment (i.e., any amendment materially
affecting the substance of the Plan with respect to the adopting Employer or any
Participating Employer or materially affecting the costs of the adopting
Employer or any Participating Employer can only be adopted by the adopting
Employer and all Participating Employers. Each Participating Employer
exclusively reserves the power to terminate this Plan and/or the Trust Agreement
as set forth in Article XVI with respect to such Participating Employer. The
complete termination of the Plan can only be effected by action of the adopting
Employer and all Participating Employers.
(9) Name of Adopting Employer. The MUNICIPAL FUND FOR TEMPORARY
INVESTMENT is the adopting Employer.
(10) Participating Employers. The names and pertinent data for the
Participating Employers are as follows:
(a) CHESTNUT STREET EXCHANGE FUND:
Address: Bellevue Park Corporate Center
400 Bellevue Parkway, Suite 100
Wilmington, DE 19809
Employer Identification Number:51-0199471
Taxable Year: January 1 - December 31
Business Code Number: 6742
Type of Entity: Partnership
Place of Organization: California
(b) INDEPENDENCE SQUARE INCOME SECURITIES, INC.:
Address: One Aldwyn Center
Villanova, PA 19085
Employer Identification Number:23-1861553
Taxable Year: January 1 - December 31
Business Code Number: 6742
Type of Entity: Corporation
Place of Organization: Maryland
(c) TEMPORARY INVESTMENT FUND, INC.:
Address: Bellevue Park Corporate Center
400 Bellevue Parkway, Suite 100
Wilmington, DE 19809
Employer Identification Number:52-0983343
A-47
<PAGE> 48
Taxable Year: October 1 - September 30
Business Code Number: 6742
Type of Entity: Corporation
Place of Organization: Maryland
(d) TRUST FOR FEDERAL SECURITIES:
Address: Bellevue Park Corporate Center
400 Bellevue Parkway, Suite 100
Wilmington, DE 19809
Employer Identification Number:52-1036683
Taxable Year: November 1 - October 31
Business Code Number: 6742
Type of Entity: Business Trust
Place of Organization: Pennsylvania
(e) MUNICIPAL FUND FOR CALIFORNIA INVESTORS, INC.:
Address: Bellevue Park Corporate Center
400 Bellevue Parkway, Suite 100
Wilmington, DE 19809
Employer Identification Number:51-0266273
Taxable Year: February 1 - January 31
Business Code Number: 6742
Type of Entity: Corporation
Place of Organization: Maryland
(f) MUNICIPAL FUND FOR NEW YORK INVESTORS, INC.:
Address: Bellevue Park Corporate Center
400 Bellevue Parkway, Suite 100
Wilmington, DE 19809
Employer Identification Number:51-0270312
Taxable Year: August 1 - July 31
Business Code Number: 6742
Type of Entity: Corporation
Place of Organization: Maryland
(g) PORTFOLIOS FOR DIVERSIFIED INVESTMENT:
Address: Bellevue Park Corporate Center
400 Bellevue Parkway, Suite 100
Wilmington, DE 19809
Employer Identification Number:51-0300345
Taxable Year: July 1 - June 30
A-48
<PAGE> 49
Business Code Number: 6742
Type of Entity: Business Trust
Place of Organization: Massachusetts
(h) THE PNC(R) FUND:
Address: Bellevue Park Corporate Center
400 Bellevue Parkway, Suite 100
Wilmington, DE 19809
Employer Identification Number:51-0318674
Taxable Year: October 1 - September 30
Business Code Number: 6742
Type of Entity: Business Trust
Place of Organization: Massachusetts
(i) THE RBB FUND, INC.:
Address: Bellevue Park Corporate Center
400 Bellevue Parkway, Suite 100
Wilmington, DE 19809
Employer Identification Number:51-0312196
Taxable Year: September 1 - August 31
Business Code Number: 6742
Type of Entity: Corporation
Place of Organization: Maryland
(j) PROVIDENT INSTITUTIONAL FUNDS, INC. (effective February 16,
1995):
Address: Bellevue Park Corporate Center
400 Bellevue Parkway, Suite 100
Wilmington, DE 19809
Employer Identification Number:41-1769812
Taxable Year: January 1 - December 31
Business Code Number: 6742
Type of Entity: Corporation
Place of Organization: Maryland ]
A.19.1 Adoption of Plan and Trust by Affiliated Employers. Shall
Article XIX of the Plan apply (check one)?
[ ] (A) Yes [ ] (B) No
[ X ] (C) N/A (No Affiliated Employers adopting Plan)
A-49
<PAGE> 50
If Section A.19.1(A) is checked, fill in the following blanks:
Name of Adopting Employer: [ ]
---------------------------------------------
Name(s), Address(es), Type of Entity and Tax Identification
Number(s) of Adopting Affiliated Employer(s):[
---------------------------
-------------------------------------------------------------------------
-------------------------------------------------------------------------]
The adopting Employer and each adopting Affiliated Employer must adopt the Plan
and execute the Adoption Agreement upon the initial adoption by an adopting
Affiliated Employer of the Plan. Thereafter the adopting Affiliated Employer,
pursuant to Article XIX of the Plan, authorizes the adopting Employer to take
all further action including, but not limited to, the amendment and/or
termination of the Plan, on behalf of the adopting Affiliated Employer under the
Plan (unless such adopting Affiliated Employer withdraws from the Plan pursuant
to Article XIX of the Plan) and such adopting Affiliated Employer need not be a
party to this Adoption Agreement with respect to any such subsequent action
relating to the Plan and Trust Agreement and/or Adoption Agreement.
THE ADOPTING EMPLOYER OR ADOPTING AFFILIATED EMPLOYER MAY NOT RELY ON THE
NOTIFICATION LETTER ISSUED BY THE NATIONAL OR DISTRICT DIRECTOR OF THE INTERNAL
REVENUE SERVICE AS EVIDENCE THAT THE PLAN IS QUALIFIED UNDER SECTION 401 OF THE
INTERNAL REVENUE CODE. IN ORDER TO OBTAIN RELIANCE WITH RESPECT TO PLAN
QUALIFICATION, THE ADOPTING EMPLOYER AND/OR ADOPTING AFFILIATED EMPLOYER MUST
APPLY TO THE APPROPRIATE KEY DISTRICT OFFICE FOR A DETERMINATION LETTER.
Executed at [Wilmington ], [ Delaware ], on this the [ ] day
---
of [ ], 19[95].
--------------------
ADOPTING EMPLOYER:
Attest: MUNICIPAL FUND FOR TEMPORARY
INVESTMENT
- -------------------------------- --------------------------------
[SEAL] Name of Adopting Employer
By:
- -------------------------------- --------------------------------
Morgan R. Jones, Secretary G. Willing Pepper, President
PARTICIPATING EMPLOYERS:
Attest: CHESTNUT STREET EXCHANGE FUND
Name of Participating Employer
[SEAL]
By:
- -------------------------------- --------------------------------
Morgan R. Jones, Secretary Robert R. Fortune, President
Attest: INDEPENDENCE SQUARE INCOME
SECURITIES, INC.
[SEAL] Name of Participating Employer
By:
- -------------------------------- --------------------------------
Gary M. Gardner, Secretary Robert R. Fortune, President
Attest: TEMPORARY INVESTMENT FUND, INC.
Name of Participating Employer
[SEAL]
By:
- -------------------------------- --------------------------------
W. Bruce McConnel, III, Secretary G. Willing Pepper, President
A-50
<PAGE> 51
Attest: TRUST FOR FEDERAL SECURITIES
Name of Participating Employer
[SEAL]
By:
- -------------------------------- --------------------------------
W. Bruce McConnel, III, Secretary G. Willing Pepper, President
Attest: MUNICIPAL FUND FOR CALIFORNIA
INVESTORS, INC.
[SEAL] Name of Participating Employer
By:
- -------------------------------- --------------------------------
Morgan R. Jones, Secretary G. Willing Pepper, President
Attest: MUNICIPAL FUND FOR NEW YORK
INVESTORS, INC.
[SEAL] Name of Participating Employer
By:
- -------------------------------- --------------------------------
Morgan R. Jones, Secretary Edward J. Roach, Vice President
Attest: PORTFOLIOS FOR DIVERSIFIED
INVESTMENT
[SEAL] Name of Participating Employer
By:
- -------------------------------- --------------------------------
W. Bruce McConnel, III, Secretary G. Willing Pepper, President
Attest: THE PNC(R) FUND
Name of Participating Employer
[SEAL]
By:
- -------------------------------- --------------------------------
Morgan R. Jones, Secretary G. Willing Pepper, President
Attest: THE RBB FUND, INC.
Name of Participating Employer
[SEAL]
By:
- -------------------------------- --------------------------------
Morgan R. Jones, Secretary Edward J. Roach, President
Attest: PROVIDENT INSTITUTIONAL FUNDS, INC.
[SEAL] Name of Participating Employer
By:
- -------------------------------- --------------------------------
W. Bruce McConnel, III, Secretary G. Willing Pepper, President
The undersigned hereby agree(s) to serve as the Trustee(s) under the Plan and
Trust Agreement.
EDWARD J. ROACH ROBERT R. FORTUNE
- -------------------------------- --------------------------------
Name of Trustee Name of Trustee
- -------------------------------- --------------------------------
Witness Signature
- -------------------------------- --------------------------------
Witness Signature
A-51
<PAGE> 1
CUSTODIAN AGREEMENT
THIS AGREEMENT is made as of June 1, 1989 by and between
TEMPORARY INVESTMENT FUND, INC., a Maryland corporation (the "Company"), and
PROVIDENT NATIONAL BANK, a national banking association ("Provident").
W I T N E S S E T H
WHEREAS, the Company is registered as an open-end, diversified
management investment company under the Investment Company Act of 1940, as
amended (the "1940 Act"); and
WHEREAS, the Company currently offers shares of series
representing interests in two separate investment portfolios, known as TempFund
and TempCash (each a "Fund"), and classes of shares in each such Fund; and
WHEREAS, Provident has served as the Company's Custodian
pursuant to an Amended and Restated Custodian and Services Agreement dated as of
November 19, 1979, as amended on January 16, 1981, November 30, 1981, March 22,
1982, July 2, 1982, January 12, 1984, April 11, 1984, November 1, 1984, and May
9, 1986; and
WHEREAS, the Company desires to continue to retain Provident
to serve as the Company's custodian and Provident is willing to serve as the
Company's custodian;
<PAGE> 2
NOW, THEREFORE, in consideration of the premises and mutual
covenants herein contained, it is agreed between the parties hereto as follows:
1. Appointment. The Company hereby appoints Provident to act
as custodian of the portfolio securities, cash and other property belonging to
the Company for the period and on the terms set forth in this Agreement.
Provident accepts such appointment and agrees to furnish the services herein set
forth in return for the compensation as provided in Paragraph 21 of this
Agreement. Provident agrees to comply with all relevant provisions of the 1940
Act and applicable rules and regulations thereunder. The Company has, and may
from time to time continue to issue additional Funds and classes of such Funds,
or classify and reclassify shares of such current or future Funds or classes.
Provident shall identify to each such Fund or class property belonging to such
Fund or class in such reports, confirmations and notices to the Company called
for under this Agreement. In the event that the Company establishes additional
Funds or classes, the Company shall notify Provident in writing. if Provident is
willing to render such services, it shall notify the Company in writing,
whereupon such Funds or classes shall become a Fund or class hereunder, and the
compensation payable by such new Fund or class to Provident will be agreed in
writing at the time, pursuant to Paragraph 21 hereof.
-2-
<PAGE> 3
2. Delivery of Documents. The Company has furnished Provident
with copies properly certified or authenticated of each of the following:
(a) Resolutions of the Company's Board of Directors
authorizing the appointment of Provident as custodian of the portfolio
securities, cash and other property belonging to the Company and approving this
Agreement;
(b) Appendix A identifying and containing the
signatures of the Company's President and Treasurer and/or other persons
authorized to issue Oral Instructions and to sign Written Instructions, as
hereinafter defined, on behalf of the Company;
(c) The Company's Articles of Incorporation filed
with the Department of Assessments and Taxation of the State of Maryland on
February 8, 1973 and all Articles of Amendment and Articles Supplementary
thereto (such Articles of Incorporation, as presently in effect and as they
shall from time to time be amended, are herein called the "Charter");
(d) The Company's By-Laws dated February 9, 1973 and
all amendments thereto (such By-Laws, as presently in effect and as they shall
from time to time be amended, are herein called the "By-Laws");
(e) The Investment Advisory Agreement between
Provident Institutional Management Corporation (the "Advisor") and the Company
dated as of March 11, 1987 (such Advisory Agreement as presently in effect and
with any future addenda is herein called the "Advisory Agreement"),
-3-
<PAGE> 4
(f) The Sub-Advisory Agreement between Provident
National Bank and the Advisor dated as of March 11, 1987 (such Sub-Advisory
Agreement as presently in effect and with any future addenda, is herein called
the "Sub-Advisory Agreement");
(g) Each Distribution Agreement between the Company
and Shearson Lehman Hutton Inc. ("Shearson") dated April 14, 1983 and February
21, 1984 (collectively, the "Distribution Agreement");
(h) The Transfer Agency Agreement between Provident
Financial Processing Corporation (the "Transfer Agent") and the Company dated as
of June 1, 1989 (the "Transfer Agency Agreement);
(i) The Administration Agreement between The Boston
Company Advisors, Inc. and the Company dated March 11, 1987 (such Administration
Agreement as presently in effect and with any future addenda is herein called
the "Administration Agreement");
(j) The Company's most recent Post-Effective
Amendment to its Registration Statements on Form N-IA under the Securities Act
of 1933, as amended ("the 1933 Act") (Registration No. 2-47015) and
(Registration No. 2-87227) and under the 1940 Act as filed with the SEC on
December 2, 1988 relating to shares of the Company's Common Stock, $.001 par
value ("Shares"), and all amendments thereto as well as such prior Registration
Statements or Amendments as Provident may request; and
-4-
<PAGE> 5
(k) The Company's most recent prospectuses
(prospectus herein is deemed to include the Statement of Additional Information)
relating to Shares (such prospectuses as presently in effect and all amendments
and supplements thereto are herein called the "Prospectus").
The Company will furnish Provident from time to time with
copies, properly certified or authenticated, of all amendments of or supplements
to the foregoing, if any.
3. Definitions.
(a) "Authorized Person." As used in this Agreement,
the term "Authorized Person" means the President and Treasurer of the Company
and any other person, whether or not any such person is an officer or employee
of the Company, duly authorized by the Board of Directors of the Company to give
Oral and Written Instructions on behalf of the Company and listed on the
Certificate annexed hereto as Appendix A or any amendment thereto as may be
received by Provident from time to time.
(b) "Book-Entry System." As used in this Agreement,
the term "Book-Entry System" means the Federal Reserve/Treasury book-entry
system for United States and federal agency securities, its successor or
successors and its nominee or nominees and any book-entry system maintained by a
clearing agency registered with the SEC under Section 17A of the Securities
Exchange Act of 1934 (the "1934 Act").
(c) "Oral Instructions." As used in this Agreement,
the term "Oral Instructions" means oral instructions
-5-
<PAGE> 6
actually received by Provident from an Authorized Person or from a person
reasonably believed by Provident to be an Authorized Person. The Company agrees
to deliver to Provident, at the time and in the manner specified in Paragraph
8(b) of this Agreement, Written Instructions confirming Oral Instructions.
(d) "Property." The term "Property," as used in this
Agreement, means:
(i) any and all securities and other
property which the Company may from time to time deposit, or cause to
be deposited, with Provident or which Provident may from time to time
hold for the Company including securities and Property deposited on
behalf of the Company with the Book-Entry System;
(ii) all income in respect of any of such
securities or other property;
(iii) all proceeds of the sale of any of
such securities or other property; and
(iv) all proceeds of the sale of securities
issued by the Company, which are received by Provident from time to
time from or on behalf of the Company.
(e) "Written Instructions." As used in this
Agreement, the term "Written Instructions" means written instructions delivered
by hand, mail, tested telegram, cable, telex or facsimile sending device, and
received by Provident and signed by an Authorized Person.
-6-
<PAGE> 7
4. Delivery and Registration of the Property. The Company will
deliver or cause to be delivered to Provident all securities and all moneys
owned by it, including cash received for the issuance of its Shares, at any time
during the period of this Agreement. Provident will not be responsible for such
securities and such moneys until actually received by it. All securities
delivered to Provident (other than in bearer form) shall be registered in the
name of the Company or in the name of a nominee of the Company or in the name of
Provident or in the name of any nominee of Provident (with or without indication
of fiduciary status), or in the name of any sub-custodian or any nominee of any
such sub-custodian appointed pursuant to Paragraph 6 hereof or shall be properly
endorsed and in form for transfer satisfactory to Provident.
5. Receipt and Disbursement of Money.
(a) Provident shall open and maintain a separate
custodial account or accounts in the name of the Company, subject only to draft
or order by Provident acting pursuant to the terms of this Agreement, and shall
hold in such account or accounts, subject to the provisions hereof, all cash
received by it from or for the account of the Company. Provident shall make
payments of cash to, or for the account of, the Company from such cash only (i)
for the purchase of securities for the Company's portfolio as provided in
Paragraph 13 hereof; (ii) upon receipt of Written Instructions, for the payment
of interest, dividends, taxes, administration, accounting, distribution,
advisory or management
-7-
<PAGE> 8
fees or expenses which are to be borne by the Company under the terms of this
Agreement, the Advisory Agreement, the Administration Agreement, the Transfer
Agency Agreement and the Distribution Agreement, as well as fees borne by the
Company under its agreements with institutional investors with respect to the
provision of support services to their customers who beneficially own from time
to time Shares of a Fund which has entered into such agreements; (iii) upon
receipt of Written Instructions, for payments in connection with the conversion,
exchange or surrender of securities owned or subscribed to by the Company and
held by or to be delivered to Provident; (iv) to a sub-custodian pursuant to
Paragraph 6 hereof; (v) for the redemption of Company Shares; (vi) for payment
of the amount of dividends received in respect of securities sold short; (vii)
for payment against receipt of securities loaned pursuant to a specified
agreement for loaning the Company's securities; or (viii) upon receipt of
Written Instructions, for other proper Company purposes. No payment pursuant to
(i) above shall be made unless Provident has received a copy of the broker's or
dealer's confirmation or the payee's invoice, as appropriate.
(b) Provident is hereby authorized to endorse and
collect all checks, drafts and other negotiable instruments or other orders for
the payment of money received as custodian for the account of the Company.
-8-
<PAGE> 9
6. Receipt of Securities.
(a) Except as provided by Paragraph 7 hereof,
Provident shall hold and physically segregate in a separate account,
identifiable at all times from those of any other persons, firms, or
corporations, all securities and non-cash property received by it for the
account of the Company. All such securities and non-cash property are to be held
or disposed of by Provident for the Company pursuant to the terms of this
Agreement. In the absence of Written Instructions accompanied by a certified
resolution of the Company's Board of Directors authorizing the transaction,
Provident shall have no power or authority to withdraw, deliver, assign,
hypothecate, pledge or otherwise dispose of any such securities and investments
except in accordance with the express terms provided for in this Agreement. In
no case may any director, officer, employee or agent of the Company withdraw any
securities. In connection with its duties under this Paragraph 6, Provident may,
at its own expense, enter into sub-custodian agreements with other banks or
trust companies for the receipt of certain securities and cash to be held by
Provident for the account of the Company pursuant to this Agreement; provided
that each such bank or trust company has an aggregate capital, surplus and
undivided profits, as shown by its last published report, of not less than one
million dollars ($1,000,000) for a Provident subsidiary or affiliate, or of not
less than twenty million dollars ($20,000,000) if such bank or trust company is
not a Provident subsidiary or affiliate and that
-9-
<PAGE> 10
in either case such bank or trust company agrees with Provident to comply with
all relevant provisions of the 1940 Act and applicable rules and regulations
thereunder. Provident shall remain responsible for the performance of all of its
duties under this Agreement and shall hold the Company harmless from the acts
and omissions, under the standards of care provided for herein, of any bank or
trust company that it might choose pursuant to this Paragraph 6.
(b) Where securities are transferred to an account of
the Company established pursuant to Paragraph 7 hereof, Provident shall also by
book-entry or otherwise identify as belonging to the Company the quantity of
securities in a fungible bulk of securities registered in the name of Provident
(or its nominee) or shown in Provident's account on the books of the Book-Entry
System. At least monthly and from time to time, Provident shall furnish the
Company with a detailed statement of the Property held for the Company under
this Agreement.
7. Use of Book-Entry System. The Company shall deliver to
Provident certified resolutions of the Board of Directors of the Company
approving, authorizing and instructing Provident on a continuous and ongoing
basis until instructed to the contrary by Oral or Written Instructions actually
received by Provident (a) to deposit in a Book-Entry System all securities
belonging to the Company eligible for deposit therein and (b) to utilize the
Book-Entry System to the extent possible in connection with settlements of
purchases and sales of securities
-10-
<PAGE> 11
by the Company, and deliveries and returns of securities loaned, subject to
repurchase or reverse repurchase agreements or used as collateral in connection
with borrowings. Without limiting the generality of such use, it is agreed that
the following provisions shall apply thereto:
(a) Securities and any cash of the Company deposited
in the Book-Entry System will at all times be segregated from any assets and
cash controlled by Provident in other than a fiduciary or custodian capacity but
may be commingled with other assets held in such capacities. Provident and its
sub-custodian, if any, will pay out money only upon receipt of securities and
will deliver securities only upon the receipt of money.
(b) All books and records maintained by Provident
which relate to the Company's participation in the Book-Entry System will at all
times during Provident's regular business hours be open to the inspection of the
Company's duly authorized employees or agents, and the Company will be furnished
with all information in respect of the services rendered to it as it may
require.
(c) Provident will provide the Company with copies of
any report obtained by Provident on the system of internal accounting control of
the Book-Entry System promptly after receipt of such a report by Provident.
Provident will also provide the Company with such reports on its own system of
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<PAGE> 12
internal control as the Company may reasonably request from time to time.
8. Instructions Consistent with Charter, etc.
(a) Unless otherwise provided in this Agreement,
Provident shall act only upon Oral and Written Instructions. Although Provident
may know of the provisions of the Charter and By-Laws of the Company, Provident
may assume that any Oral or Written Instructions received hereunder are not in
any way inconsistent with any provisions of such Charter or By-Laws or any vote,
resolution or proceeding of the Shareholders, or of the Board of Directors, or
of any committee thereof.
(b) Provident shall be entitled to rely upon any Oral
Instructions and any Written Instructions actually received by Provident
pursuant to this Agreement. The Company agrees to forward to Provident Written
Instructions confirming Oral Instructions in such manner that the Written
Instructions are received by Provident by the close of business of the same day
that such Oral Instructions are given to Provident. The Company agrees that the
fact that such confirming Written Instructions are not received by Provident
shall in no way affect the validity of the transactions or enforceability of the
transactions authorized by the Company by giving Oral Instructions. The Company
agrees that Provident shall incur no liability to the Company in acting upon
Oral Instructions given to Provident hereunder concerning such transactions
provided Provident
-12-
<PAGE> 13
reasonably believes such instructions have been received from an Authorized
Person.
9. Transactions Not Requiring Instructions. In the absence of
contrary Written Instructions, Provident is authorized to take the following
actions:
(a) Collection of Income and Other Payments.
Provident shall:
(i) collect and receive for the account of
the Company, all income and other payments and distributions, including
(without limitation) stock dividends, rights, bond coupons, option
premiums and similar items, included or to be included in the Property,
and promptly advise the Company of such receipt and shall credit such
income, as collected, to the Company's custodian account;
(ii) endorse and deposit for collection, in
the name of the Company, checks, drafts, and other negotiable
instruments or other orders for the payment of money on the same day as
received;
(iii) receive and hold for the account of
the Company all securities received as a distribution on the Company's
portfolio securities as a result of a stock dividend, share split-up or
reorganization, recapitalization, readjustment or other rearrangement
or distribution of rights or similar securities issued with
-13-
<PAGE> 14
respect to any portfolio securities belonging to the Company held by
Provident hereunder;
(iv) present for payment and collect the
amount payable upon all securities which may mature or be called,
redeemed, or retired, or otherwise become payable on the date such
securities become payable; and
(v) take any action which may be necessary
and proper in connection with the collection and receipt of such income
and other payments and the endorsement for collection of checks,
drafts, and other negotiable instruments as described in Paragraph 24
of this Agreement.
(b) Miscellaneous Transactions. Provident is
authorized to deliver or cause to be delivered Property against payment or other
consideration or written receipt therefor in the following cases:
(i) for examination by a broker selling for
the account of the Company in accordance with street delivery custom;
(ii) for the exchange of interim receipts or
temporary securities for definitive securities; and
(iii) for transfer of securities into the
name of the Company or Provident or nominee of either, or for exchange
of securities for a different number of bonds, certificates, or other
evidence, representing the same
-14-
<PAGE> 15
aggregate face amount or number of units bearing the same interest
rate, maturity date and call provisions, if any; provided that, in any
such case, the new securities are to be delivered to Provident.
10. Transactions Requiring Instructions. Upon receipt of Oral
or Written Instructions and not otherwise, Provident, directly or through the
use of the Book-Entry System, shall:
(a) execute and deliver to such persons as may be
designated in such Oral or Written Instructions, proxies, consents,
authorizations, and any other instruments whereby the authority of the
Company as owner of any securities may be exercised;
(b) deliver any securities held for the Company
against receipt of other securities or cash issued or paid in
connection with the liquidation, reorganization, refinancing, tender
offer, merger, consolidation or recapitalization of any corporation, or
the exercise of any conversion privilege;
(c) deliver any securities held for the Company to
any protective committee, reorganization committee or other person in
connection with the reorganization, refinancing, merger, consolidation,
recapitalization or sale of assets of any corporation, and receive and
hold under the terms of this Agreement such certificates of deposit,
interim receipts or other instruments or documents as may be issued to
it to evidence such delivery;
-15-
<PAGE> 16
(d) make such transfers or exchanges of the assets of
the Company and take such other steps as shall be stated in said Oral
or Written Instructions to be for the purpose of effectuating any duly
authorized plan of liquidation, reorganization, merger, consolidation
or recapitalization of the Company;
(e) release securities belonging to the Company to
any bank or trust company for the purpose of pledge or hypothecation to
secure any loan incurred by the Company; provided, however, that
securities shall be released only upon payment to Provident of the
monies borrowed, except that in cases where additional collateral is
required to secure a borrowing already made, subject to proper prior
authorization, further securities may be released for that purpose; and
repay such loan upon redelivery to it of the securities pledged or
hypothecated therefor and upon surrender of the note or notes
evidencing the loan;
(f) release and deliver securities owned by the
Company in connection with any reverse repurchase agreement entered
into on behalf of the Company, but only on receipt of payment therefor;
and pay out moneys of the Company in connection with such reverse
repurchase agreements, but only upon the delivery of the securities;
(g) pay out moneys of the Company in connection with
any repurchase agreement entered into on behalf of the Company, but
only upon the delivery of the subject
-16-
<PAGE> 17
securities; and release and deliver such securities in connection with
such repurchase agreements, but only on receipt of payment therefor;
and
(h) otherwise transfer, exchange or deliver
securities in accordance with Oral or Written Instructions.
11. Segregated Accounts. Provident shall upon receipt of
Written or Oral Instructions establish and maintain a segregated account or
accounts on its records for and on behalf of the Company, into which account or
accounts may be transferred cash and/or securities, including securities in the
Book-Entry System (i) for the purposes of compliance by the Company with the
procedures required by a securities or option exchange, providing such
procedures comply with the 1940 Act and Release No. 10666 or any subsequent
release or releases of the SEC relating to the maintenance of segregated
accounts by registered investment companies, and (ii) for other proper corporate
purposes, but only, in the case of clause (ii), upon receipt of Written
Instructions.
12. Dividends and Distributions. The Company shall furnish
Provident with appropriate evidence of action by the Company's Board of
Directors declaring and authorizing the payment of any dividends and
distributions. Upon receipt by Provident of Written Instructions with respect to
dividends and distributions declared by the Company's Board of Directors and
payable to Shareholders who have elected in the proper manner to receive their
distributions or dividends in cash, and in
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<PAGE> 18
conformance with procedures mutually agreed upon by Provident, the Company, and
the Company's Transfer Agent, Provident shall pay to the Company's Transfer
Agent, as agent for the Shareholders, an amount equal to the amount indicated in
said Written Instructions as payable by the Company to such Shareholders for
distribution in cash by the Transfer Agent to such Shareholders. In lieu of
paying the Company's Transfer Agent cash dividends and distributions, Provident
may arrange for the direct payment of cash dividends and distributions to
Shareholders by Provident in accordance with such procedures and controls as are
mutually agreed upon from time to time by and among the Company, Provident and
the Company's Transfer Agent.
13. Purchases of Securities. Promptly after each decision to
purchase securities by the Advisor, the Company, through the Advisor, shall
deliver to Provident Oral Instructions specifying with respect to each such
purchase: (a) the name of the issuer and the title of the securities, (b) the
number of shares or the principal amount purchased and accrued interest, if any,
(c) the date of purchase and settlement, (d) the purchase price per unit, (e)
the total amount payable upon such purchase and (f) the name of the person from
whom or the broker through whom the purchase was made. Provident shall upon
receipt of securities purchased by or for the Company pay out of the moneys held
for the account of the Company the total amount payable to the person from whom
or the broker through whom the purchase was
-18-
<PAGE> 19
made, provided that the same conforms to the total amount payable as set forth
in such Oral Instructions.
14. Sales of Securities. Promptly after each decision to sell
securities by the Advisor or exercise of an option written by the Company, the
Company, through the Advisor, shall deliver to Provident Oral Instructions,
specifying with respect to each such sale: (a) the name of the issuer and the
title of the security, (b) the number of shares or principal amount sold, and
accrued interest, if any, (c) the date of sale, (d) the sale price per unit, (e)
the total amount payable to the Company upon such sale, and (f) the name of the
broker through whom or the person to whom the sale was made. Provident shall
deliver the securities upon receipt of the total amount payable to the Company
upon such sale, provided that the same conforms to the total amount payable as
set forth in such Oral Instructions. Subject to the foregoing, Provident may
accept payment in such form as shall be satisfactory to it, and may deliver
securities and arrange for payment in accordance with the customs prevailing
among dealers in securities.
15. Records. The books and records pertaining to the Company
which are in the possession of Provident shall be the property of the Company.
Such books and records shall be prepared and maintained as required by the 1940
Act and other applicable securities laws and regulations. The Company, or the
Company's authorized representatives, shall have access to such books and
records at all times during Provident's normal business
-19-
<PAGE> 20
hours. Upon the reasonable request of the Company, copies of any such books and
records shall be provided by Provident to the Company or the Company's
authorized representative at the Company's expense.
16. Reports.
(a) Provident shall furnish the Company the following
reports:
(1) such periodic and special reports as the
Company may reasonably request;
(2) a monthly statement summarizing all
transactions and entries for the account of the Company,
listing the portfolio securities belonging to the Company with
the adjusted average cost of each issue and the market value
at the end of such month, and stating the cash account of the
Company including disbursements;
(3) the reports to be furnished to the
Company pursuant to Rule 17f-4; and
(4) such other information as may be agreed
upon from time to time between the Company and Provident.
(b) Provident shall transmit promptly to the Company
any proxy statement, proxy materials, notice of a call or conversion or similar
communications received by it as Custodian of the Property.
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<PAGE> 21
17. Cooperation with Accountants. Provident shall cooperate
with the Company's independent public accountants and shall take all reasonable
action in the performance of its obligations under this Agreement to assure that
the necessary information is made available to such accountants for the
expression of their opinion, as such may be required from time to time by the
Company.
18. Confidentiality. Provident agrees on behalf of itself and
its employees to treat confidentially all records and other information relative
to the Company and its prior, present, or potential Shareholders, except, after
prior notification to and approval in writing by the Company, which approval
shall not be unreasonably withheld and may not be withheld where Provident may
be exposed to civil or criminal contempt proceedings for failure to comply, when
requested to divulge such information by duly constituted authorities, or when
so requested by the Company.
19. Right to Receive Advice.
(a) Advice of Company. If Provident shall be in doubt
as to any action to be taken or omitted by it, it may request, and shall
receive, from the Company directions or advice, including Oral or Written
Instructions where appropriate.
(b) Advice of Counsel. If Provident shall be in doubt
as to any question of law involved in any action to be taken or omitted by
Provident, it may request advice at its own
-21-
<PAGE> 22
cost from counsel of its own choosing (who may be counsel for the Advisor, the
Company or Provident, at the option of Provident).
(c) Conflicting Advice. In case of conflict between
directions, advice or Oral or Written Instructions received by Provident
pursuant to subparagraph (a) of this paragraph and advice received by Provident
pursuant to subparagraph (b) of this paragraph, Provident shall be entitled to
rely on and follow the advice received pursuant to the latter provision alone.
(d) Protection of Provident. Provident shall be
protected in any action or inaction which it takes in reliance on any
directions, advice or Oral or Written Instructions received pursuant to
subparagraphs (a) or (b) of this paragraph which Provident, after receipt of any
such directions, advice or Oral or Written Instructions, in good faith believes
to be consistent with such directions, advice or Oral or Written Instructions,
as the case may be. However, nothing in this paragraph shall be construed as
imposing upon Provident any obligation (i) to seek such directions, advice or
Oral or Written Instructions, or (ii) to act in accordance with such directions,
advice or Oral or Written Instructions when received, unless, under the terms of
another provision of this Agreement, the same is a condition to Provident's
properly taking or omitting to take such action. Nothing in this subsection
shall excuse Provident when an action or omission on the part of Provident
constitutes willful
-22-
<PAGE> 23
misfeasance, bad faith, gross negligence or reckless disregard by Provident of
any duties or obligations under this Agreement.
20. Compliance with Governmental Rules and Regulations. The
Company assumes full responsibility for ensuring that the Company complies with
all applicable requirements of the 1933 Act, the 1934 Act, the 1940 Act, and any
laws, rules and regulations of governmental authorities having jurisdiction
except insofar as Provident has assumed a specific responsibility for compliance
hereunder.
21. Compensation. As compensation for the services rendered by
Provident during the term of this Agreement, the Company will pay to Provident
monthly fees that shall be agreed upon from time to time in writing by Provident
and the Company.
22. Indemnification. The Company, as sole owner of the
Property, agrees to indemnify and hold harmless Provident and its nominees from
all taxes, charges, expenses, assessments, claims and liabilities (including,
without limitation, liabilities arising under the 1933 Act, the 1934 Act, the
1940 Act, and any state and foreign securities and blue sky laws, all as or to
be amended from time to time) and expenses, including (without limitation)
attorneys' fees and disbursements, arising directly or indirectly (a) from the
fact that securities included in the Property are registered in the name of any
such nominee or (b) without limiting the generality of the foregoing clause (a)
from any action or thing which Provident takes or does or omits to take or do
(i) at the request or on the direction of or in
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<PAGE> 24
reliance on the advice of the Company or (ii) upon Oral or Written Instructions,
provided, that neither Provident nor any of its nominees shall be indemnified
against any liability to the Company or to its Shareholders (or any expenses
incident to such liability) arising out of Provident's or such nominee's own
willful misfeasance, bad faith, negligence or reckless disregard of its duties
or responsibilities specifically described in this Agreement. In the event of
any advance of cash for any purpose made by Provident resulting from oral or
Written Instructions of the Company, or in the event that Provident or its
nominee shall incur or be assessed any taxes, charges, expenses, assessments,
claims or liabilities in connection with the performance of this Agreement,
except such as may arise from its or its nominee's own negligent action,
negligent failure to act or willful misconduct, any Property at any time held
for the account of the Company shall be security therefor.
23. Responsibility of Provident. Provident shall be under no
duty to take any action on behalf of the Company except as specifically set
forth herein or as may be specifically agreed to by Provident in writing. In the
performance of its duties hereunder, Provident shall be obligated to exercise
care and diligence and to act in good faith and to use its best efforts within
reasonable limits to insure the accuracy and completeness of all services
performed under this Agreement. Provident shall be responsible for its own
negligent failure to perform its duties under this Agreement, but to the extent
that duties,
-24-
<PAGE> 25
obligations and responsibilities are not specifically set forth in this
Agreement, Provident shall not be liable for any act or omission which does not
constitute willful misfeasance, bad faith or gross negligence on the part of
Provident or reckless disregard of such duties, obligations and
responsibilities. Without limiting the generality of the foregoing or of any
other provision of this Agreement, Provident in connection with its duties under
this Agreement shall not be under any duty or obligation to inquire into and
shall not be liable for or in respect of (a) the validity or invalidity or
authority or lack thereof of any Oral or Written Instruction, notice or other
instrument which conforms to the applicable requirements of this Agreement, if
any, and which Provident reasonably believes to be genuine; (b) the validity or
invalidity of the issuance of any securities included or to be included in the
Property, the legality or illegality of the purchase of such securities, or the
propriety or impropriety of the amount paid therefor; (c) the legality or
illegality of the sale (or exchange) of any Property or the propriety or
impropriety of the amount for which such Property is sold (or exchanged); or (d)
delays or errors or loss of data occurring by reason of circumstances beyond
Provident's control, including acts of civil or military authority, national
emergencies, labor difficulties, fire, mechanical breakdown, flood or
catastrophe, acts of God, insurrection, war, riots or failure of the mails,
transportation, communication or power supply, nor shall Provident be under any
duty or obligation to
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<PAGE> 26
ascertain whether any Property at any time delivered to or held by Provident may
properly be held by or for the Company.
24. Collections. All collections of monies or other property
in respect, or which are to become part, of the Property (but not the
safekeeping thereof upon receipt by Provident) shall be at the sole risk of the
Company. In any case in which Provident does not receive any payment due the
Company within a reasonable time after Provident has made proper demands for the
same, it shall so notify the Company in writing, including copies of all demand
letters, any written responses thereto, and memoranda of all oral responses
thereto and to telephonic demands, and await instructions from the Company.
Provident shall not be obliged to take legal action for collection unless and
until reasonably indemnified to its satisfaction. Provident shall also notify
the Company as soon as reasonably practicable whenever income due on securities
is not collected in due course.
25. Duration and Termination. This Agreement shall continue
until termination by the Company or by Provident in either case on sixty (60)
days written notice. Upon any termination of this Agreement, pending appointment
of a successor to Provident or vote of the Shareholders of the Company to
dissolve or to function without a custodian of its cash, securities or other
property, Provident shall not deliver cash, securities or other property of the
Company to the Company, but may deliver them to a bank or trust company of its
own selection, having an aggregate capital, surplus and undivided profits, as
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<PAGE> 27
shown by its last published report, of not less than twenty million dollars
($20,000,000) as a custodian for the Company to be held under terms similar to
those of this Agreement.
26. Notices. All notices and other communications, including
Written Instructions (collectively referred to as "Notice" or "Notices" in this
paragraph), hereunder shall be in writing or by confirming telegram, cable,
telex or facsimile sending device. Notices shall be addressed (a) if to
Provident at Provident's address, Airport Business Center, International Court
2, 200 Stevens Drive, Lester, Pennsylvania 19113 marked for the attention of the
Custodian Services Department (or its successor); (b) if to the Company, at the
address of the Company; or (c) if to neither of the foregoing, at such other
address as shall have been notified to the sender of any such Notice or other
communication. If the location of the sender of a Notice and the address of the
addressee thereof are, at the time of sending, more than 100 miles apart, the
Notice may be sent by first-class mail, in which case it shall be deemed to have
been received five days after it is sent, or if sent by confirming telegram,
cable, telex or facsimile sending device, it shall be deemed to have been
received immediately, and, if the location of the sender of a Notice and the
address of the addressee thereof are, at the time of sending, not more than 100
miles apart, the Notice may be sent by first-class mail, in which case it shall
be deemed to have been received three days after it is sent, or if sent by
messenger, it shall be deemed to have been received on
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<PAGE> 28
the day it is delivered. All postage, cable, telegram, telex and facsimile
sending device charges arising from the sending of a Notice hereunder shall be
paid by the sender.
27. Further Actions. Each party agrees to perform such further
acts and execute such further documents as are necessary to effectuate the
purposes hereof.
28. Amendments. This Agreement or any part hereof may be
changed only by an instrument in writing signed by the party against which
enforcement of such change is sought.
29. Delegation. On thirty (30) days prior written notice to
the Company, Provident may assign its rights and delegate its duties hereunder
to any wholly-owned direct or indirect subsidiary of Provident National Bank or
PNC Financial Corp, provided that (i) the delegate agrees with Provident to
comply with all relevant provisions of the 1940 Act; and (ii) Provident and such
delegate shall promptly provide such information as the Company may request, and
respond to such questions as the Company may ask, relative to the delegation,
including (without limitation) the capabilities of the delegate. Such delegate
shall be bound by the terms of this Agreement as though an original party
hereto. Provident shall unconditionally guarantee the performance of the
delegate under the terms and conditions of this Agreement.
30. Counterparts. This Agreement may be executed in two or
more counterparts, each of which shall be deemed an
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<PAGE> 29
original, but all of which together shall constitute one and the same
instrument.
31. Miscellaneous. This Agreement embodies the entire
agreement and understanding between the parties hereto, and supersedes all prior
agreements and understandings relating to the subject matter hereof, provided
that the parties hereto may embody in one or more separate documents their
agreement, if any, with respect to delegated and/or Oral Instructions and
compensation. The captions in this Agreement are included for convenience of
reference only and in no way define or delimit any of the provisions hereof or
otherwise affect their construction or effect. This Agreement shall be deemed to
be a contract made in Pennsylvania and governed by Pennsylvania law. If any
provision of this Agreement shall be held or made invalid by a court decision,
statute, rule or otherwise, the remainder of this Agreement shall not be
affected thereby. This Agreement shall be binding and shall inure to the benefit
of the parties hereto and their respective successors.
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<PAGE> 30
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed by their officers designated below on the day and year
first above written.
[SEAL] TEMPORARY INVESTMENT FUND, INC.
Attest: /s/ Robert E. Putney, III By /s/ Edward J. Roach
---------------------------- ----------------------------
[SEAL] PROVIDENT NATIONAL BANK
Attest: /s/ G. Gallo By /s/ A.P. Lambeck
---------------------------- ----------------------------
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<PAGE> 31
INDEX
<TABLE>
<CAPTION>
Paragraph Page
--------- ----
<S> <C>
1. Appointment.......................................................... 2
2. Delivery of Documents................................................ 3
3. Definitions.......................................................... 5
4. Delivery and Registration of the Property............................ 7
5. Receipt and Disbursement of Money.................................... 7
6. Receipt of Securities................................................ 9
7. Use of Book-Entry System............................................. 10
8. Instructions Consistent with Charter, etc............................ 12
9. Transactions Not Requiring Instructions.............................. 13
10. Transactions Requiring Instructions.................................. 15
11. Segregated Accounts.................................................. 17
12. Dividends and Distributions.......................................... 17
13. Purchases of Securities.............................................. 18
14. Sales of Securities.................................................. 19
15. Records.............................................................. 19
16. Reports.............................................................. 20
17. Cooperation with Accountants......................................... 21
18. Confidentiality...................................................... 21
19. Right to Receive Advice.............................................. 21
20. Compliance with Governmental Rules and Regulations................... 23
21. Compensation......................................................... 23
22. Indemnification...................................................... 23
23. Responsibility of Provident.......................................... 24
24. Collections.......................................................... 26
25. Duration and Termination............................................. 26
26. Notices.............................................................. 27
27. Further Actions...................................................... 28
28. Amendments........................................................... 28
29. Delegation........................................................... 28
30. Counterparts......................................................... 28
31. Miscellaneous........................................................ 29
</TABLE>
-31-
<PAGE> 1
TEMPORARY INVESTMENT FUND, INC.
ADMINISTRATION AGREEMENT
AGREEMENT dated as of January 18, 1993 between TEMPORARY
INVESTMENT FUND, INC., a Maryland corporation (the "Company"), PROVIDENT
FINANCIAL PROCESSING CORPORATION, a Delaware corporation, and MFD Group, Inc.
("MFD"), a Delaware corporation (collectively, the "Administrators").
WHEREAS, the Company is registered as an open-end, diversified
management investment company under the Investment Company Act of 1940, as
amended (the "1940 Act"); and
WHEREAS, the Company desires to retain the Administrators to
provide, as co-administrators, certain administration services for each class
and subclass of shares ("shares") in each of the Company's investment portfolios
(individually, a "Fund," collectively, the "Funds") as listed on Appendix A (as
such Appendix may, from time to time, be supplemented (or amended)) and the
Administrators are willing to furnish such services;
NOW, THEREFORE, in consideration of the premises and mutual
covenants herein contained and intending to be legally bound, it is agreed
between the parties hereto as follows:
1. APPOINTMENT OF ADMINISTRATORS. The Company hereby appoints
each of the Administrators jointly to provide administration services to each
class and subclass of shares in each of the Company's Funds on the terms and for
the period set forth in this Agreement. The Administrators accept such
appointment and agree to perform the services and duties set forth in Section 3
below in return for the compensation provided in Section 5 below. In the event
that the Company establishes additional classes or investment portfolios other
than the Funds listed on Appendix A with respect to which it desires to retain
the Administrators to act as co-administrators hereunder, the Company shall
notify the Administrators, whereupon such Appendix A shall be supplemented (or
amended) and such portfolio shall become a Fund hereunder and shall be subject
to the provisions of this Agreement to the same extent as the Funds (except to
the extent that said provisions, including the compensation payable on behalf of
such new Fund, may be modified in writing by the Company and Administrators at
the time).
2. DELIVERY OF DOCUMENTS. The Company has furnished each of
the Administrators with copies, properly certified or authenticated, of each of
the following documents and will deliver to it all future amendments and
supplements, if any:
<PAGE> 2
a. The Company's Articles of Incorporation, filed
with the Secretary of State of Maryland on February 8, 1973, as amended and
supplemented (the "Charter");
b. The Company's By-Laws, as amended and supplemented
("By-Laws");
c. Resolutions of the Company's Board of Directors
authorizing the execution and delivery of this Agreement;
d. The Company's most recent amendment to its
Registration Statement under the Securities Act of 1933, as amended, and under
the 1940 Act on Form N-1A as filed with the Securities and Exchange Commission
(the "Commission") relating to its Funds (the Registration Statement, as
presently in effect and as amended or supplemented from time to time, is herein
called the "Registration Statement");
e. The Company's most recent Prospectuses and
Statements of Additional Information and all amendments and supplements thereto
(such Prospectuses and Statements of Additional Information and supplements
thereto, as presently in effect and as from time to time amended and
supplemented, are herein called the "Prospectuses"); and
f. The Company's restated Shareholder Services Plan
and related form of shareholder servicing agreement.
3. SERVICES AND DUTIES. The Administrators enter into the following
covenants jointly and severally with respect to their services and duties:
a. Subject to the supervision and control of the
Company's Board of Directors, the Administrators shall assist in supervising all
aspects of the Funds' operations, other than those investment advisory and
accounting functions which are to be performed by the Company's investment
adviser pursuant to the Advisory Agreement and those advisory and other services
to be performed by any sub-adviser or the custodian pursuant to the Company's
Sub-Advisory Agreement and Custodian Agreement, as amended from time to time,
services to be performed by the distributor pursuant to the Company's
Distribution Agreement and the transfer agent pursuant to the Company's Transfer
Agency Agreement, as amended from time to time. In this regard, the
Administrators' responsibilities include:
(1) Providing personnel and supervising a
facility in Wilmington, Delaware (or in such other location as the
Company shall reasonably request) to receive purchase and redemption
orders via the Company's toll-free in-WATS telephone lines and
transmitting such requests to the Company's transfer agent as promptly
as practicable;
-2-
<PAGE> 3
(2) Providing for the preparing, supervising
and mailing of confirmations for all purchase and redemption orders to
shareholders of record;
(3) Providing and supervising the operation
of an automated data processing system to process purchase and
redemption orders (the Administrators assume responsibility for the
accuracy of the data transmitted for processing or storage);
(4) Maintaining a procedure external to the
transfer agent's system to reconstruct lost purchase and redemption
data;
(5) Providing daily information and
distributing written communications concerning the Funds to their
shareholders of record; handling shareholder problems and calls;
distributing weekly dividend letters and monthly listings of each money
market Fund's portfolio securities to all its shareholders of record;
and, at a shareholder's request, dividend letters and monthly listings
of each non- money market Fund's portfolio securities;
(6) Supervising the services of individuals
("shareholder representatives") provided by MFD whose principal
responsibility and function shall be to preserve and strengthen the
Company's relationships with its shareholders;
(7) Administering all activities concerning
the installation, maintenance, monitoring and inventory control of
micro-computer equipment that may be leased (on lease terms authorized
by the Company) by the Administrators and placed in the offices of
certain shareholders of the Company to facilitate shareholder access to
the Company and related shareholder services (herein called the
"Computer Access Program"). The Administrators shall provide the
directors of the Company with such reports, statistics and other
information as they may from time to time reasonably request in order
to evaluate the Computer Access Program administered by the
Administrators pursuant to this Section 3(a)(7) and the Administrators'
determination as to the costs which are reimbursable by each of the
Funds under Section 4. If this Agreement is not renewed or is
terminated, or if the Computer Access Program is discontinued, for any
reason, the Company shall have the option to assume lessee's rights and
obligations under its leases for the micro-computer equipment and under
any related maintenance, insurance or other agreements; and
(8) Monitoring the Company's arrangements
with respect to services provided by certain institutional
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<PAGE> 4
shareholders ("Service Organizations") under its restated Shareholder
Services Plan, including monitoring and reviewing the services rendered
by Service Organizations to their customers who beneficially own
shares, pursuant to agreements between the Company and such Service
Organizations ("Servicing Agreements"); reviewing the qualifications of
Service Organizations wishing to enter into Servicing Agreements with
the Company; assisting in the execution and delivery of Servicing
Agreements; reporting to the Company's Board of Directors with respect
to the amounts paid or payable by the Company from time to time under
the Servicing Agreements and the nature of the services provided by
Service Organizations; and maintaining appropriate records in
connection with such duties.
b. The Administrators shall prepare or review, and
provide advice with respect to, all sales literature (advertisements, brochures
and shareholder communications) for each of the Funds and any class or subclass
thereof.
c. The Administrators shall participate to the extent
requested by the Company and its counsel in the periodic updating of the
Company's Registration Statement; compile data and accumulate information for
and coordinate with the Company's Treasurer the preparation of reports to
shareholders of record and the Commission (e.g., Annual and Semi-Annual Reports
on Form N-SAR), it being understood that the preparation and filing of timely
Notices pursuant to Rule 24f-2 shall be performed by the Company's Treasurer
with the assistance and advice of the Company's counsel; and file with the
Commission and other federal and state agency, subject to the approval of the
Company's Treasurer, reports and documents including, without limitation, Annual
and Semi-Annual Reports on Form N-SAR and federal and state tax returns and
required tax filings other than those required to be filed by the Company's
custodian or transfer agent.
d. For so long as the Company maintains an office in
Wilmington, Delaware, the Administrators shall pay the Company on the first day
of each month during such period an amount not to exceed $1,500 (or such lesser
amount as is appropriate in the event that the combined annual expenses of the
Company, Trust for Federal Securities, Municipal Fund for California Investors,
Inc., Municipal Fund for New York Investors, Inc., Municipal Fund for Temporary
Investment, Portfolios for Diversified Investment and The PNC(R) Fund
(collectively, herein called the "Companies") in maintaining their offices in
Wilmington, Delaware total less than $18,000 divided by the number of Companies
which have maintained an office in Wilmington, Delaware during the previous
month).
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<PAGE> 5
e. The Administrators, after consultation with the
distributor and counsel for the Company, shall determine the jurisdictions in
which the Company's shares shall be registered or qualified for sale. The
Administrators shall be responsible for maintaining the registration or
qualification of shares for sale under the securities laws of any state and for
preparing compliance filings pursuant to state securities laws with the advice
of the Company's counsel. Payment of share registration fees and any fees for
qualifying or continuing the qualification of the Company or any Fund as a
dealer or broker shall be made by the Company or Fund involved.
f. Monitor, and assist in developing compliance procedures
for each of the classes and subclasses of the Company's Funds, which will
include without limitation, procedures to monitor compliance with each Fund's
investment objective, policies and limitations, tax matters, and applicable laws
and regulations.
g. The Administrators shall assist in monitoring of
regulatory and legislative developments which may affect the Company; assist in
counseling the Company with respect to regulatory examinations or investigations
of the Company; and work with the Company's counsel in connection with
regulatory matters or litigation.
h. In compliance with the requirements of Rule 31a-3 under
the 1940 Act, the Administrators agree that all records which they maintain for
the Company are the property of the Company and further agree to surrender
promptly to the Company any of such records upon the Company's request. The
Administrators further agree to preserve for the periods prescribed by Rule
31a-2 under the 1940 Act the records required to be maintained by Rule 31a-1
under said Act.
i. If the expenses borne by any Fund in any fiscal year
exceed the applicable expense limitations imposed by the securities regulations
of any state in which the Fund's shares are registered or qualified for sale to
the public, the Administrators jointly and severally agree to reimburse such
Fund for a portion of any such excess expense in an amount equal to the portion
that the administration fees otherwise payable by the Fund to the Administrators
bear to the total amount of the investment advisory and administration fees
otherwise payable by the Fund. The expense reimbursement obligation of the
Administrators is limited to the amount of their fees hereunder for such fiscal
year, provided, however, that notwithstanding the foregoing, the Administrators
shall reimburse such Fund for a portion of any such excess expenses in an amount
equal to the proportion that the fees otherwise payable to the Administrators
bear to the total amount of investment advisory and administration fees
otherwise payable by the Fund regardless of
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<PAGE> 6
the amount of fees paid to the Administrators during such fiscal year to the
extent that the securities regulations of any state having jurisdiction over the
Fund so require. Such expense reimbursement, if any, will be estimated,
reconciled and paid on a monthly basis.
j. In performing all of their services and duties as
co-administrators, the Administrators will act in conformity with the Charter,
By-Laws, Prospectuses and resolutions and other instructions of the Company's
Board of Directors and will comply with the requirements of the 1940 Act and
other applicable federal or state law.
4. EXPENSES ASSUMED AS ADMINISTRATORS. The Administrators will
bear all expenses incurred by them in performing their services and duties as
co-administrators, except as otherwise expressly provided herein. Other expenses
to be incurred in the operation of the Funds, including taxes, interest,
brokerage fees and commissions, if any, salaries and fees of officers and
directors who are not officers, directors, shareholders or employees of the
Administrators, or the Company's investment adviser or distributor for the
Funds, Commission fees and state Blue Sky qualification fees, advisory and
administration fees, charges of custodians, transfer and dividend disbursing
agents, fees, certain insurance premiums, outside auditing and legal expenses,
costs of maintaining corporate existence, typesetting and printing of
prospectuses for regulatory purposes and for distribution to current
shareholders of the Funds, costs of shareholders, reports and corporate meetings
and any extraordinary expenses, will be borne by the Company, provided, however,
that the Company will not bear, directly or indirectly, the cost of any activity
which is primarily intended to result in the sale of shares of the Funds.
Notwithstanding the above, the Company shall assume the Administrators' rights
and liabilities and obligations, as lessee, under the leases for the
micro-computer equipment referred to in Section 3(a)(7) from the date of the
termination (or any expiration without renewal) of this Agreement, or the
discontinuance of the Computer Access Program, until the conclusion of the first
year of each lease.
5. COMPENSATION. For the services provided and the expenses
assumed as Administrators pursuant to Section 4 above, the Company will:
a. (1) pay the Administrators jointly a fee with respect to
the TempFund portfolio, computed daily and payable monthly from the assets of
TempFund, at the following annual rate: .175% of the first $1 billion of
TempFund's average net assets, plus .15% or the next $1 billion of its average
net assets, plus .125% of the next $1 billion of its average net assets, plus
.1% of the next $1 billion of its average net
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<PAGE> 7
assets, plus .095% of the next $1 billion of its average net assets, plus .09%
of the next $1 billion of its average net assets, plus .08% of the next $1
billion of its average net assets, plus .075% of the next $1 billion of its
average net assets, plus .07% of its average net assets over $8 billion; and
(2) pay the Administrators jointly a fee with respect to
the TempCash portfolio, computed daily and payable monthly from the assets of
TempCash, at the following annual rate: .175% of the first $1 billion of
TempCash's average net assets, plus .15% of the next $1 billion of its average
net assets, plus .125% of the next $1 billion of its average net assets, plus
.1% of the next $1 billion of its average net assets, plus .095% of the next $1
billion of its average net assets, plus .09% of the next $1 billion of its
average net assets, plus .085% of the next $1 billion of its average net assets,
plus .08% of its average net assets over $7 billion.
b. The Company will also reimburse the Administrators
monthly for their reasonable out-of-pocket expenses incurred in leasing,
installing, maintaining and monitoring the micro-computer equipment and
administering the Computer Access Program pursuant to the provisions of Section
3(a)(7) above, provided that the Administrators will not be reimbursed for any
costs: (i) which exceed the current budget for the Computer Access Program
approved by the Company's Board of Directors; (ii) which directly or indirectly
finance any activity primarily intended to result in the sale of shares; or
(iii) which the Administrators have not reasonably determined are in the best
interests of the Company and its shareholders.
c. For the purpose of determining fees payable to the
Administrators, the value of each Fund's net assets shall be computed as
required by its Prospectuses, generally accepted accounting principles and
resolutions of the Company's Board of Directors. The fee attributable to each
Fund shall be the several (and not joint or joint and several) obligation of
each such Fund.
d. The Administrators will from time to time employ or
associate with themselves such person or persons as they may believe to be
fitted to assist them in the performance of this Agreement. Such person or
persons may be officers and employees who are employed by both the Company and
either of the Administrators. The compensation of such person or persons shall
be paid by the Administrators, and no obligation shall be incurred on behalf of
the Company in such respect.
6. PROPRIETARY AND CONFIDENTIAL INFORMATION. The
Administrators agree on behalf of themselves and their employees to treat
confidentially and as proprietary information of the Company all records and
other information relative to the Company
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<PAGE> 8
and its Funds and prior, present or potential shareholders, and not to use such
records and information for any purpose other than performance of their
responsibilities and duties hereunder, except after prior notification to and
approval in writing by the Company, which approval shall not be unreasonably
withheld and may not be withheld where the Administrators may be exposed to
civil or criminal contempt proceedings for failure to comply, when requested to
divulge such information by duly constituted authorities, or when so requested
by the Company.
7. LIMITATIONS OF LIABILITY. Neither Administrator shall be
liable for any error of judgment or mistake of law or for any loss suffered by
the Company in connection with the matters to which this Agreement relates,
except a loss resulting from willful misfeasance, bad faith or gross negligence
on its part in the performance of its duties or from reckless disregard by it of
its obligations and duties under this Agreement. Any person, even though also an
officer, director, employee or agent of either of the Administrators, who may be
or become an officer, employee or agent of the Company, shall be deemed, when
rendering services to the Company or acting on any business of the Company
(other than services or business in connection with the Administrators' duties
as co-administrator hereunder) to be rendering such services to or acting solely
for the Company and not as an officer, director, employee or agent or one under
the control or direction of the Administrators even though paid by either of
them. The Administrators agree that their liability under this Agreement, as set
forth herein, shall be joint and several.
8. DURATION AND TERMINATION. This Agreement shall become
effective upon its execution as of the date first written above and, unless
sooner terminated as provided herein, shall continue until March 31, 1994.
Thereafter, if not terminated, this Agreement shall continue automatically for
successive terms of one year, provided that such continuance is specifically
approved at least annually (a) by a vote of a majority of those members of the
Company's Board of Directors who are not parties to this Agreement or
"interested persons" of any such party, cast in person at a meeting called for
the purpose of voting on such approval, and (b) by the Company's Board of
Directors or by vote of a "majority of the outstanding voting securities" of the
Company; provided, however, that this Agreement may be terminated by the Company
at any time, without the payment of any penalty, by vote of a majority of the
entire Board of Directors or a vote of a "majority of the outstanding voting
securities" of the Company, on 60-days' written notice to the Administrators, or
by the Administrators at any time, without the payment of any penalty, on
90-days' written notice to the Company. This Agreement will automatically and
immediately terminate in the event of its assignment. (As used in this
Agreement, the terms "majority of the outstanding voting securities,"
"interested
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<PAGE> 9
person" and "assignment" shall have the same meaning as such terms have in the
1940 Act.)
9. AMENDMENT OF THIS AGREEMENT. No provision of this Agreement
may be changed, discharged or terminated orally, but only by an instrument in
writing signed by the party against which enforcement of the change, discharge
or termination is sought.
10. NOTICES. Notices of any kind to be given to the Company
hereunder by the Administrators shall be in writing and shall be duly given if
mailed or delivered to the Company at Bellevue Park Corporate Center, Suite 152,
103 Bellevue Parkway, Wilmington, Delaware 19809, Attention: Mr. Edward J.
Roach, Treasurer, with a copy to Philadelphia National Bank Building, 1345
Chestnut Street, Philadelphia Pennsylvania 19107-3496, Attention: W. Bruce
McConnel, III, Secretary, or at such other address or to such individual as
shall be so specified by the Company to the Administrators. Notices of any kind
to be given to the Administrators hereunder by the Company shall be in writing
and shall be duly given if mailed or delivered to MFD Group, Inc., 259
Radnor-Chester Road, Suite 135, Radnor, Pennsylvania 19087, Attention: Monroe J.
Haegele and to Provident Financial Processing Corporation, Bellevue Park
Corporate Center, 103 Bellevue Parkway, Wilmington, Delaware 19087, Attention:
Vincent J. Ciavardini, or at such other address or to such other individual as
shall be so specified by an Administrator to the Company.
11. MISCELLANEOUS. The captions in this Agreement are included
for convenience of reference only and in no way define or delimit any of the
provisions hereof or otherwise affect their construction or effect. If any
provision of this Agreement shall be held or made invalid by a court decision,
statute, rule or otherwise, the remainder of this Agreement shall not be
affected thereby. This Agreement shall be binding upon and shall inure to the
benefit of the parties hereto and their respective successors.
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<PAGE> 10
12. COUNTERPARTS. This Agreement may be executed in
counterparts, all of which together shall constitute one and the same
instrument.
IN WITNESS WHEREOF, the parties hereto have caused this
instrument to be executed by their officers designated below as of the day and
year first above written.
TEMPORARY INVESTMENT FUND, INC.
By: /s/G. Willing Pepper
---------------------------
PROVIDENT FINANCIAL PROCESSING
CORPORATION
By: /s/Richard Carnall
---------------------------
MFD GROUP, INC.
By: /s/Richard McCluskey
---------------------------
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<PAGE> 11
APPENDIX A
to the
ADMINISTRATION AGREEMENT
between
Temporary Investment Fund, Inc.
and
Provident Financial Processing Corporation and
MFD Group, Inc.
TempFund (Class B shares and Class B - Special Series 1 shares (also known as
the "Dollar shares"))
TempCash (Class C (also known as the "Dollar shares") and Class C - Special
Series 1 shares)
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<PAGE> 1
TRANSFER AGENCY AGREEMENT
THIS AGREEMENT is made as of the 1 day of June, 1989 between
TEMPORARY INVESTMENT FUND, INC., a Maryland corporation (the "Company"), and
PROVIDENT FINANCIAL PROCESSING CORPORATION (the "Transfer Agent"), a Delaware
corporation which is an indirect, wholly-owned subsidiary of PNC Financial Corp.
R E C I T A L
WHEREAS, the Company is registered as an open-end, diversified
management investment company under the Investment Company Act of 1940, as
amended (the "1940 Act"); and
WHEREAS, the Company currently offers shares of series
representing interests in two separate investment portfolios, known as TempFund
and TempCash (each a "Fund"), and classes of shares in each such Fund; and
WHEREAS, the Transfer Agent has served as the Company's
transfer agent, registrar and dividend disbursing agent as delegates pursuant to
an Amended and Restated Custodian and Services Agreement dated as of November
19, 1979, as amended on January 16, 1981, November 30, 1981, March 22, 1982,
July 2, 1982, January 12, 1984, April 11, 1984, November 1, 1984, and May 9,
1986; and
WHEREAS, the Company desires to continue to retain the
Transfer Agent to serve as the Company's transfer agent,
<PAGE> 2
registrar, and dividend disbursing agent, and the Transfer Agent is willing to
furnish such services;
NOW, THEREFORE, in consideration of the premises and mutual
covenants herein contained, it is agreed between the parties hereto as follows:
1. Appointment. The Company hereby appoints the Transfer Agent
to serve as transfer agent, registrar and dividend disbursing agent for the
Company with respect to the shares of the Company's Common Stock, $.001 par
value ("Shares") for the period and on the terms set forth in this Agreement.
The Transfer Agent accepts such appointment and agrees to furnish the services
herein set forth in return for the compensation as provided in Paragraph 16 of
this Agreement. The Company has, and may from time to time continue to issue
additional Funds or classes of such Funds or classify and reclassify Shares of
such current or future Funds or classes. The Transfer Agent shall identify to
each such Fund or class property belonging to such Fund or class in such
reports, confirmations and notices to the Company called for under this
Agreement. In the event that the Company establishes such additional Funds or
classes, the Company shall notify the Transfer Agent in writing. If the Transfer
Agent is willing to render such services, it shall notify the Company in
writing, whereupon such Fund or class shall become a Fund or class hereunder,
and the compensation payable by such new Fund or class to the Transfer Agent
will be agreed in writing at the time, pursuant to Paragraph 16 hereof.
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<PAGE> 3
2. Delivery of Documents. The Company has furnished
the Transfer Agent with copies properly certified or
authenticated of each of the following:
(a) Resolutions of the Company's Board of Directors
authorizing the appointment of the Transfer Agent as transfer agent and
registrar and dividend disbursing agent for the Company and approving this
Agreement;
(b) Appendix A identifying and containing the
signatures of the Company's President and Treasurer and other persons authorized
to issue Oral Instructions and to sign Written Instructions, as hereinafter
defined, on behalf of the Company and to execute stock certificates representing
Shares;
(c) The Company's Articles of Incorporation filed
with the Department of Assessments and Taxation of the State of Maryland on
February 8, 1973 and all Articles of Amendment and Articles Supplementary
thereto (such Articles of Incorporation, as presently in effect and as they
shall from time to time be amended, are herein called the "Charter");
(d) The Company's By-Laws dated February 9, 1973 and
all amendments thereto (such By-Laws, as presently in effect and as they shall
from time to time be amended, are herein called the "By-Laws");
(e) Copies of all documents relating to any voluntary
investor service plans sponsored by the Company, including periodic investment
plans such as Individual Retirement Accounts;
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<PAGE> 4
(f) The Advisory Agreement between Provident
Institutional Management Corporation (the "Advisor") and the Company dated as of
March 11, 1987 (such Advisory Agreement as presently in effect and with any
future addenda is herein called the "Advisory Agreement");
(g) The Sub-Advisory Agreement between Provident
National Bank ("Provident") and the Advisor dated as of March 11, 1987 (such
Sub-Advisory Agreement as presently in effect and with any future addenda is
herein called the "Sub-Advisory Agreement");
(h) The Custodian Agreement between Provident and the
Company dated as of June 1, 1989 (the "Custodian Agreement");
(i) The Administration Agreement between The Boston
Company Advisors, Inc. and the Company dated as of March 11, 1987 relating to
the Company (such Administration Agreement as presently in effect and with any
future addenda is called the "Administration Agreement");
(j) Each Distribution Agreement between the Company
and Shearson Lehman Hutton Inc. ("Shearson") dated April 14, 1983 and February
21, 1984 and relating to the Funds of the Company (collectively, the
"Distribution Agreement");
(k) The Company's most recent Post-Effective
Amendment to its Registration Statements on Form N-1A under the Securities Act
of 1933, as amended (the "1933 Act") (Registration No. 2-47015) and
(Registration No. 2-87227) and under the 1940
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<PAGE> 5
Act as filed with the SEC on December 2, 1988 relating to Shares, and all
Amendments thereto, as well as such prior Registration Statements or Amendments
as the Transfer Agent may request; and
(l) The Company's most recent prospectuses
(prospectus herein is deemed to include the Statement of Additional Information)
relating to Shares (such prospectuses, as presently in effect and all amendments
and supplements thereto are herein called the "Prospectus").
The Company will furnish the Transfer Agent from time to time
with copies, properly certified or authenticated, of all amendments of or
supplements to the foregoing, if any.
3. Definitions.
(a) "Authorized Person." As used in this Agreement,
the term "Authorized Person" means the Company's President and Treasurer and any
other person, whether or not any such person is an officer or employee of the
Company, duly authorized by the Board of Directors of the Company to give Oral
and Written Instructions on behalf of the Company and listed on the Certificate
annexed hereto as Appendix A or any amendment thereto as may be received by the
Transfer Agent from time to time.
(b) "Oral Instructions." As used in this Agreement,
the term "Oral Instructions" means oral instructions actually received by the
Transfer Agent from an Authorized Person or from a person reasonably believed by
the Transfer Agent to be an Authorized Person. The Company agrees to deliver to
the
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<PAGE> 6
Transfer Agent, at the time and in the manner specified in Paragraph 4(b) of
this Agreement, Written Instructions confirming
Oral Instructions.
(c) Written Instructions." As used in this
Agreement, the term "Written Instructions" means written instructions delivered
by hand, mail, tested telegram, cable, telex or facsimile sending device, and
received by the Transfer Agent and signed by an Authorized Person.
4. Instructions Consistent with Charter, etc.
(a) Unless otherwise provided in this Agreement, the
Transfer Agent shall act only upon Oral or Written Instructions. Although the
Transfer Agent may know of the provisions of the Charter and By-Laws of the
Company, the Transfer Agent may assume that any Oral or Written Instructions
received hereunder are not in any way inconsistent with any provisions of such
Charter or By-Laws or any vote, resolution or proceeding of the Shareholders, or
of the Board of Directors, or of any committee thereof.
(b) The Transfer Agent shall be entitled to rely upon
any Oral Instructions and any Written Instructions actually received by the
Transfer Agent pursuant to this Agreement. The Company agrees to forward to the
Transfer Agent Written Instructions confirming Oral Instructions in such manner
that the Written Instructions are received by the Transfer Agent by the close of
business of the same day that such Oral Instructions are given to the Transfer
Agent. The Company agrees that the fact
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<PAGE> 7
that such confirming Written Instructions are not received by the Transfer Agent
shall in no way affect the validity of the transactions or enforceability of the
transactions authorized by the Company by giving Oral Instructions. The Company
agrees that the Transfer Agent shall incur no liability to the Company in acting
upon Oral Instructions given to the Transfer Agent hereunder concerning such
transactions, provided the Transfer Agent reasonably believes such instructions
have been received from an Authorized Person.
5. Transactions Not Requiring Instructions. In the absence of
contrary Written Instructions, the Transfer Agent is authorized to take the
following actions:
(a) Issuance of Shares. Upon receipt of a purchase
order from Shearson for the purchase of Shares and sufficient information to
enable the Transfer Agent to establish a Shareholder account, and after
confirmation of receipt or crediting of Federal funds for such order from the
Company's Custodian, the Transfer Agent shall issue and credit the account of
the investor or other record holder with Shares in the manner described in the
Prospectus.
(b) Transfer of Shares; Uncertificated Securities.
Where a Shareholder does not hold a certificate representing the number of
Shares in his account and does provide the Transfer Agent with instructions for
the transfer of such Shares which include a signature guaranteed by a national
bank or registered broker/dealer and such other appropriate documentation
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<PAGE> 8
to permit a transfer, then the Transfer Agent shall register such Shares and
shall deliver them pursuant to instructions received from the transferor,
pursuant to the rules and regulations of the SEC, and the law of the State of
Maryland relating to the transfer of shares of common stock.
(c) Stock Certificates. If at any time the Company
issues stock certificates, the following provisions will apply:
(i) The Company will supply the Transfer Agent
with a sufficient supply of stock certificates representing Shares, in
the form approved from time to time by the Board of Directors of the
Company, and, from time to time, shall replenish such supply upon
request of the Transfer Agent. Such stock certificates shall be
properly signed, manually or by facsimile signature, by the duly
authorized officers of the Company, whose names and positions shall be
set forth on Appendix A, and shall bear the corporate seal or facsimile
thereof of the Company, and notwithstanding the death, resignation or
removal of any officer of the Company, such executed certificates
bearing the manual or facsimile signature of such officer shall remain
valid and may be issued to Shareholders until the Transfer Agent is
otherwise directed by Written Instructions.
(ii) In the case of the loss or destruction of
any certificate representing Shares, no new
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<PAGE> 9
certificate shall be issued in lieu thereof, unless there shall first
have been furnished an appropriate bond of indemnity issued by the
surety company approved by the Transfer Agent.
(iii) Upon receipt of signed stock
certificates, which shall be in proper form for transfer, and upon
cancellation or destruction thereof, the Transfer Agent shall
countersign, register and issue new certificates for the same number of
Shares and shall deliver them pursuant to instructions received from
the transferor, the rules and regulations of the SEC, and the law of
the State of Maryland relating to the transfer of shares of common
stock.
(iv) Upon receipt of the stock certificates,
which shall be in proper form for transfer, together with the
Shareholder's instructions to hold such stock certificates for
safekeeping, the Transfer Agent shall reduce such Shares to
uncertificated status, while retaining the appropriate registration in
the name of the Shareholder upon the transfer books.
(v) Upon receipt of written instructions from
a Shareholder of uncertificated securities for a certificate in the
number of shares in his account, the Transfer Agent will issue such
stock certificates and deliver them to the Shareholder.
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<PAGE> 10
(d) Redemption of Shares. Upon receipt of a
redemption order from Shearson, the Transfer Agent shall redeem the number of
Shares indicated thereon from the redeeming Shareholder's account and receive
from the Company's Custodian and disburse to the redeeming Shareholder the
redemption proceeds therefor, or arrange for direct payment of redemption
proceeds to such Shareholder by the Company's Custodian, in accordance with such
procedures and controls as are mutually agreed upon from time to time by and
among the Company, the Transfer Agent and the Company's Custodian.
6. Authorized Shares. The Company's authorized capital stock
consists of forty billion (40,000,000,000) shares of Common Stock, par value
$.001 per Share, of which five billion shares are classified as Class A Common
Stock, ten billion shares are classified as Class B Common Stock, five billion
shares are classified as Class B Common Stock--Special - Series 1, five billion
shares are classified as Class C Common Stock, 5 billion shares are classified
as Class C Common Stock--Special - Series 1 and ten billion shares are
unclassified. The Transfer Agent shall record issues of all Shares and shall
notify the Company in case any proposed issue of Shares by the Company shall
result in an over-issue as defined by Section 8-104(2) of Article 8 of the
Maryland Uniform Commercial Code. In case any issue of Shares would result in
such an over-issue, the Transfer Agent shall refuse to issue said Shares and
shall not countersign and issue certificates for such Shares. The Company agrees
to notify the
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<PAGE> 11
Transfer Agent promptly of any change in the number of authorized Shares and of
any change in the number of Shares registered under the 1933 Act.
7. Dividends and Distributions. The Company shall furnish the
Transfer Agent with appropriate evidence of action by the Company's Board of
Directors authorizing the declaration and payment of dividends and distributions
as described in the Prospectus. After deducting any amount required to be
withheld by any applicable tax laws, rules and regulations or other applicable
laws, rules and regulations, the Transfer Agent shall in accordance with the
instructions in proper form from a Shareholder and the provisions of the
Company's Charter and Prospectus, issue and credit the account of the
Shareholder with Shares, or pay such dividend or distribution in the manner
described in the Prospectus. In lieu of receiving from the Company's Custodian
and paying to Shareholders cash dividends or distributions, the Transfer Agent
may arrange for the direct payment of cash dividends and distributions to
Shareholders by the Company's Custodian, in accordance with such procedures and
controls as are mutually agreed upon from time to time by and among the Company,
the Transfer Agent and the Company's Custodian.
The Transfer Agent shall prepare, file with the Internal
Revenue Service and other appropriate taxing authorities, and address and mail
to Shareholders such returns and information relating to dividends and
distributions paid by
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<PAGE> 12
the Company as are required to be so prepared, filed and mailed by applicable
laws, rules and regulations, or such substitute form of notice as may from time
to time be permitted or required by the Internal Revenue Service. On behalf of
the Company, the Transfer Agent shall mail certain requests for Shareholders'
certifications under penalties of perjury and pay on a timely basis to the
appropriate Federal authorities any taxes to be withheld on dividends and
distributions paid by the Company, all as required by applicable Federal tax
laws and regulations.
8. Communications with Shareholders.
(a) Communications to Shareholders. The Transfer
Agent will address and mail all communications by the Company to its
Shareholders, including reports to Shareholders, confirmations of purchases and
sales of Company Shares, monthly statements, dividend and distribution notices
and proxy material for its meetings of Shareholders. The Transfer Agent will
receive and tabulate the proxy cards for the meetings of the Company's
Shareholders.
(b) Correspondence. The Transfer Agent will answer
such correspondence from Shareholders, securities brokers and others relating to
its duties hereunder and such other correspondence as may from time to time be
mutually agreed upon between the Transfer Agent and the Company.
9. Records. The Transfer Agent shall maintain records of the
accounts for each Shareholder showing the following information:
-12-
<PAGE> 13
(a) name, address and United States Tax
Identification or Social Security number;
(b) number and class of Shares held and number and
class of Shares for which certificates, if any, have been issued, including
certificate numbers and denominations;
(c) historical information regarding the account of
each Shareholder, including dividends and distributions paid and the date and
price for all transactions on a Shareholder's account;
(d) any stop or restraining order placed against a
Shareholder's account;
(e) any correspondence relating to the current
maintenance of a Shareholder's account;
(f) information with respect to withholdings; and,
(g) any information required in order for the
Transfer Agent to perform any calculations contemplated or required by this
Agreement.
The books and records pertaining to the Company which are in
the possession of the Transfer Agent shall be the property of the Company. Such
books and records shall be prepared and maintained as required by the 1940 Act
and other applicable securities laws and rules and regulations. The Company, or
the Company's authorized representatives, shall have access to such books and
records at all times during the Transfer Agent's normal business hours. Upon the
reasonable request of the Company,
-13-
<PAGE> 14
copies of any such books and records shall be provided by the Transfer Agent to
the Company or the Company's authorized representative at the Company's expense.
10. Ongoing Functions. The Transfer Agent will perform the
following functions on an ongoing basis:
(a) furnish state-by-state registration reports to the
Company;
(b) calculate Account Executive load or compensation
payment and provide such information to the Company, if any;
(c) calculate dealer commissions for the Company, if any;
(d) provide toll-free lines for direct Shareholder use,
plus customer liaison staff with on-line inquiry capacity;
(e) mail duplicate confirmations to dealers of their
clients' activity, whether executed through the dealer or directly with the
Transfer Agent, if any;
(f) provide detail for underwriter or broker confirmations
and other participating dealer Shareholder accounting, in accordance with such
procedures as may be agreed upon between the Company and the Transfer Agent;
(g) provide Shareholder lists and statistical information
concerning accounts to the Company;
(h) provide timely notification of Company activity and
such other information as may be agreed upon from
-14-
<PAGE> 15
time to time between the Transfer Agent and the Company, PIMC and the
Custodian, to the Company, the Custodian or PIMC; and
(i) install or cause to be installed, micro-computer
systems in the offices of certain Shareholders and shall provide or cause to be
provided, communication networks in connection with the use of such systems by
Shareholders (the "Computer Access Program") pursuant to directives given by The
Boston Company Advisors, Inc. with respect to the Computer Access Program in
accordance with the Company's Administration Agreement.
11. Cooperation with Accountants. The Transfer Agent shall
cooperate with the Company's independent public accountants and shall take all
reasonable action in the performance of its obligations under this Agreement to
assure that the necessary information is made available to such accountants for
the expression of their opinion as such may be required by the Company from time
to time.
12. Confidentiality. The Transfer Agent agrees on behalf of
itself and its employees to treat confidentially all records and other
information relative to the Company and its prior, present or potential
Shareholders, except, after prior notification to and approval in writing by the
Company, which approval shall not be unreasonably withheld and may not be
withheld where the Transfer Agent may be exposed to civil or criminal contempt
proceedings for failure to comply, when
-15-
<PAGE> 16
requested to divulge such information by duly constituted authorities, or when
so requested by the Company.
13. Equipment Failures. In the event of equipment failures
beyond the Transfer Agent's control, the Transfer Agent shall, at no additional
expense to the Company, take reasonable steps to minimize service interruptions
but shall have no liability with respect thereto. The foregoing obligation shall
not extend to computer terminals located outside of premises maintained by the
Transfer Agent. The Transfer Agent shall enter into and shall maintain in effect
with appropriate parties one or more agreements making reasonable provision for
emergency use of electronic data processing equipment to the extent appropriate
equipment is available.
14. Right to Receive Advice.
(a) Advice of Company. If the Transfer Agent shall be
in doubt as to any action to be taken or omitted by it, it may request, and
shall receive, from the Company directions or advice, including Oral or Written
Instructions where appropriate.
(b) Advice of Counsel. If the Transfer Agent shall be
in doubt as to any question of law involved in any action to be taken or omitted
by the Transfer Agent, it may request advice at its own cost from counsel of its
own choosing (who may be counsel for the Advisor, the Company or the Transfer
Agent at the option of the Transfer Agent).
(c) Conflicting Advice. In case of conflict between
directions, advice or Oral or Written Instructions
-16-
<PAGE> 17
received by the Transfer Agent pursuant to subparagraph (a) of this Paragraph
and advice received by the Transfer Agent pursuant to subparagraph (b) of this
Paragraph, the Transfer Agent shall be entitled to rely on and follow the advice
received pursuant to the latter provision alone.
(d) Protection of the Transfer Agent. The Transfer
Agent shall be protected in any action or inaction which it takes in reliance on
any directions, advice or Oral or Written Instructions received pursuant to
subparagraphs (a) or (b) of this Paragraph which the Transfer Agent, after
receipt of any such directions, advice or Oral or Written Instructions, in good
faith believes to be consistent with such directions, advice or Oral or Written
Instructions, as the case may be. However, nothing in this Paragraph shall be
construed as imposing upon the Transfer Agent any obligation (i) to seek such
directions, advice or Oral or Written Instructions, or (ii) to act in accordance
with such directions, advice or Oral or Written Instructions when received,
unless, under the terms of another provision of this Agreement, the same is a
condition to the Transfer Agent's properly taking or omitting to take such
action. Nothing in this subparagraph shall excuse the Transfer Agent when an
action or omission on the part of the Transfer Agent constitutes willful
misfeasance, bad faith, gross negligence or reckless disregard by the Transfer
Agent of its duties and obligations under this Agreement.
-17-
<PAGE> 18
15. Compliance with Governmental Rules and Regulations. The
Company assumes full responsibility for ensuring that the Company complies with
all applicable requirements of the 1933 Act, the 1934 Act, the 1940 Act, and any
laws, rules and regulations of governmental authorities having jurisdiction
except insofar as the Transfer Agent has assumed a specific responsibility for
compliance hereunder.
16. Compensation. As compensation for the services rendered by
the Transfer Agent during the term of this Agreement, the Company will pay to
the Transfer Agent monthly fees that shall be agreed to from time to time by the
Company and the Transfer Agent, plus certain of the Transfer Agent's expenses
relating to such services, as shall be agreed to from time to time by the
Company and the Transfer Agent.
17. Indemnification. The Company agrees to indemnify and hold
harmless the Transfer Agent and its nominees and subcontractors from all taxes,
charges, expenses, assessments, claims and liabilities (including, without
limitation, liabilities arising under the 1933 Act, the 1934 Act, the 1940 Act,
and any state and foreign securities and blue sky laws, all as or to be amended
from time to time) and expenses, including (without limitation) attorneys' fees
and disbursements, arising directly or indirectly from any action or thing which
the Transfer Agent takes or does or omits to take or do (i) at the request or on
the direction of or in reliance on the advice of the Company or (ii) upon Oral
or Written Instructions, provided,
-18-
<PAGE> 19
that neither the Transfer Agent nor any of its nominees or subcontractors shall
be indemnified against any liability to the Company or to its Shareholders (or
any expenses incident to such liability) arising out of the Transfer Agent's or
such nominee's or such sub-contractor's own willful misfeasance, bad faith or
negligence or reckless disregard of its duties in connection with the
performance of its duties and obligations specifically described in this
Agreement.
18. Responsibility of the Transfer Agent. The Transfer Agent
shall be under no duty to take any action on behalf of the Company except as
specifically set forth herein or as may be specifically agreed to by the
Transfer Agent in writing. In the performance of its duties hereunder, the
Transfer Agent shall be obligated to exercise care and diligence and to act in
good faith and to use its best efforts within reasonable limits to insure the
accuracy and completeness of all services performed under this Agreement. The
Transfer Agent shall be responsible for its own negligent failure to perform its
duties under this Agreement, but to the extent that duties, obligations and
responsibilities are not specifically set forth in this Agreement, the Transfer
Agent shall not be liable for any act or omission which does not constitute
willful misfeasance, bad faith or gross negligence on the part of the Transfer
Agent or reckless disregard of such duties, obligations and responsibilities.
Without limiting the generality of the foregoing or of any other provision of
this Agreement, the
-19-
<PAGE> 20
Transfer Agent in connection with its duties under this Agreement shall not be
under any duty or obligation to inquire into and shall not be liable for or in
respect of (a) the validity or invalidity or authority or lack thereof of any
Oral or Written Instruction, notice or other instrument which conforms to the
applicable requirements of this Agreement, if any, and which the Transfer Agent
reasonably believes to be genuine, or (b) delays or errors or loss of data
occurring by reason of circumstances beyond the Transfer Agent's control,
including acts of civil or military authority, national emergencies, labor
difficulties, fire, mechanical breakdown (except as provided in Paragraph 13),
flood or catastrophe, acts of God, insurrection, war, riots or failure of the
mails, transportation, communication or power supply.
19. Duration and Termination. This Agreement shall continue
until termination by the Company or by the Transfer Agent on sixty (60) days
written notice.
20. Registration as a Transfer Agent. The Transfer Agent
represents that it is currently registered with the appropriate Federal agency
for the registration of transfer agents, and that it will remain so registered
for the duration of this Agreement. The Transfer Agent agrees that it will
promptly notify the Company in the event of any material change in its status as
a registered transfer agent. Should the Transfer Agent fail to be registered
with the OCC as a transfer agent at any
-20-
<PAGE> 21
time during this Agreement, the Company may, on written notice to the Transfer
Agent, immediately terminate this Agreement.
21. Notices. All notices and other communications, including
Written Instructions (collectively referred to as "Notice" or "Notices" in this
Paragraph), hereunder shall be in writing or by confirming telegram, cable,
telex or facsimile sending device. Notices shall be addressed (a) if to the
Transfer Agent at P.O. Box 8950, Wilmington, Delaware 19899; (b) if to the
Company, at the address of the Company; or (c) if to neither of the foregoing,
at such other address as shall have been notified to the sender of any such
Notice or other communication. If the location of the sender of a Notice and the
address of the addressee thereof are, at the time of sending, more than 100
miles apart, the Notice may be sent by first-class mail, in which case it shall
be deemed to have been received five days after it is sent, or if sent by
confirming telegram, cable, telex or facsimile sending device, it shall be
deemed to have been received immediately, and, if the location of the sender of
a Notice and the address of the addressee thereof are, at the time of sending,
not more than 100 miles apart, the Notice may be sent by first-class mail, in
which case it shall be deemed to have been received three days after it is sent,
or if sent by messenger, it shall be deemed to have been received on the day it
is delivered. All postage, cable, telegram, telex and facsimile sending device
charges arising from the sending of a Notice hereunder shall be paid by the
sender.
-21-
<PAGE> 22
22. Further Actions. Each party agrees to perform such further
acts and execute such further documents as are necessary to effectuate the
purposes hereof.
23. Amendments. This Agreement or any part hereof may be
changed only by an instrument in writing signed by the party against which
enforcement of such change is sought.
24. Delegation of Duties. On thirty (30) days prior written
notice to the Company, the Transfer Agent may assign its rights and delegate its
duties hereunder to any wholly-owned direct or indirect subsidiary of Provident
National Bank or PNC Financial Corp, provided that (i) the delegate agrees with
the Transfer Agent to comply with all relevant provisions of the 1940 Act; and
(ii) the Transfer Agent and such delegate shall promptly provide such
information as the Company may request, and respond to such questions as the
Company may ask, relative to the delegation, including (without limitation) the
capabilities of the delegate. Such delegate shall be bound by the terms of this
Agreement as though an original party hereto. The Transfer Agent shall
unconditionally guarantee the performance of the delegate under the terms and
conditions of this Agreement.
By its execution of this Agreement, the Company hereby
acknowledges that it has received the notice required by this Paragraph 24 in
respect of transfer agency services to be provided by NMF, Inc., a North
Carolina business corporation.
25. Counterparts. This Agreement may be executed in two or
more counterparts, each of which shall be deemed an
-22-
<PAGE> 23
original, but all of which together shall constitute one and the
same instrument.
26. Miscellaneous. This Agreement embodies the entire
agreement and understanding between the parties hereto, and supersedes all prior
agreements and understandings relating to the subject matter hereof, provided
that the parties hereto may embody in one or more separate documents their
agreement, if any, with respect to Oral Instructions or compensation. The
captions in this Agreement are included for convenience of reference only and in
no way define or delimit any of the provisions hereof or otherwise affect their
construction or effect. This Agreement shall be deemed to be a contract made in
Delaware and governed by Delaware law. If any provision of this Agreement shall
be held or made invalid by a court decision, statute, rule or otherwise, the
remainder of this Agreement shall not be affected thereby. This Agreement shall
be binding and shall inure to the benefit of the parties hereto and their
respective successors.
IN WITNESS WHEREOF, the parties hereto have caused
-23-
<PAGE> 24
this Agreement to be executed by their officers designated below on the day and
year first above written.
[SEAL] TEMPORARY INVESTMENT
FUND, INC.
Attest: /s/Robert E. Putney, III By: /s/Edward J. Roach
------------------------ --------------------
[SEAL] PROVIDENT FINANCIAL
PROCESSING CORPORATION
Attest: By: /s/Marie S.Gipple
------------------------- --------------------
-24-
<PAGE> 25
INDEX
Paragraph Page
--------- ----
1. Appointment............................................. 2
2. Delivery of Documents................................... 3
3. Definitions............................................. 5
4. Instructions Consistent with Charter, etc............... 6
5. Transactions Not Requiring Instructions................. 7
6. Authorized Shares....................................... 10
7. Dividends and Distributions............................. 11
8. Communications with Shareholders........................ 12
9. Records................................................. 12
10. Ongoing Functions....................................... 14
11. Cooperation with Accountants............................ 15
12. Confidentiality......................................... 15
13. Equipment Failures...................................... 16
14. Right to Receive Advice................................. 16
15. Compliance with Governmental Rules and Regulations...... 18
16. Compensation............................................ 18
17. Indemnification......................................... 18
18. Responsibility of the Transfer Agent.................... 19
19. Duration and Termination................................ 20
20. Registration as a Transfer Agent........................ 20
21. Notices................................................. 21
22. Further Actions......................................... 22
23. Amendments.............................................. 22
24. Delegation of Duties.................................... 22
25. Counterparts............................................ 22
26. Miscellaneous........................................... 23
<PAGE> 1
EXHIBIT 11
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in this Post-Effective Amendment
No. 57 to the Registration Statement under the Securities Act of 1933 on Form
N-1A (File No. 2-47015) of our report dated November 1, 1996 on our audit of
the financial statements and financial highlights of Temporary Investment Fund,
Inc. We also consent to the reference to our Firm under the caption "Financial
Highlights" in the Prospectus and under the captions "Auditors" and "Financial
Statements" in the Statement of Additional Information.
/s/ Coopers & Lybrand L.L.P.
Coopers & Lybrand L.L.P.
2400 Eleven Penn Center
Philadelphia, Pennsylvania
August 13, 1997
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<ARTICLE> 6
<CIK> 0000097098
<NAME> TEMPORARY INVESTMENT FUND, INC.
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<NUMBER> 011
<NAME> TEMP FUND PORTFOLIO - CLASS B
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<PERIOD-END> MAR-31-1997
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<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 7880887647
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 205576917
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<EXPENSES-NET> 7115862
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<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 9787057
<AVERAGE-NET-ASSETS> 7261454
<PER-SHARE-NAV-BEGIN> 1.00
<PER-SHARE-NII> .026
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<PER-SHARE-DIVIDEND> .026
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<NAME> TEMPORARY INVESTMENT FUND, INC.
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<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> SEP-30-1997
<PERIOD-END> MAR-31-1997
<INVESTMENTS-AT-COST> 7905344344
<INVESTMENTS-AT-VALUE> 7905344344
<RECEIVABLES> 20771930
<ASSETS-OTHER> 38437
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 7926154711
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 45267064
<TOTAL-LIABILITIES> 45267064
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<PAID-IN-CAPITAL-COMMON> 7880872035
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<SHARES-COMMON-PRIOR> 5877073373
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<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 15612
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<INTEREST-INCOME> 205576917
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<EXPENSES-NET> 7115862
<NET-INVESTMENT-INCOME> 198461055
<REALIZED-GAINS-CURRENT> 15612
<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> 0
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<DISTRIBUTIONS-OF-INCOME> 198461055
<DISTRIBUTIONS-OF-GAINS> 49129
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 7197158542
<NUMBER-OF-SHARES-REDEEMED> 70021170882
<SHARES-REINVESTED> 53811002
<NET-CHANGE-IN-ASSETS> 2003765145
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 49129
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 4257850
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 9787057
<AVERAGE-NET-ASSETS> 278374
<PER-SHARE-NAV-BEGIN> 1.00
<PER-SHARE-NII> .025
<PER-SHARE-GAIN-APPREC> 0
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<PER-SHARE-NAV-END> 1.00
<EXPENSE-RATIO> .43
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
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<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000097098
<NAME> TEMPORARY INVESTMENT FUND, INC.
<SERIES>
<NUMBER> 021
<NAME> TEMP CASH - SHARES
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> SEP-30-1997
<PERIOD-END> MAR-31-1997
<INVESTMENTS-AT-COST> 2573699705
<INVESTMENTS-AT-VALUE> 2573699705
<RECEIVABLES> 15033094
<ASSETS-OTHER> 48885
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 2588781684
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 15139591
<TOTAL-LIABILITIES> 15139591
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 2574098586
<SHARES-COMMON-STOCK> 2574098586
<SHARES-COMMON-PRIOR> 2363739180
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (456493)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 2573642093
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 97618400
<OTHER-INCOME> 0
<EXPENSES-NET> 3869301
<NET-INVESTMENT-INCOME> 93749099
<REALIZED-GAINS-CURRENT> 126601
<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> 0
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 93749099
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 39339183749
<NUMBER-OF-SHARES-REDEEMED> 39162052633
<SHARES-REINVESTED> 33228290
<NET-CHANGE-IN-ASSETS> 210486007
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> (583094)
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 2523721
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<GROSS-EXPENSE> 5953186
<AVERAGE-NET-ASSETS> 2964661710
<PER-SHARE-NAV-BEGIN> 1.00
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<PER-SHARE-DIVIDEND> .027
<PER-SHARE-DISTRIBUTIONS> 0
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<PER-SHARE-NAV-END> 1.00
<EXPENSE-RATIO> .18
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
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<SERIES>
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<NAME> TEMP CASH - DOLLAR SHARES
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> SEP-30-1997
<PERIOD-END> MAR-31-1997
<INVESTMENTS-AT-COST> 2573699705
<INVESTMENTS-AT-VALUE> 2573699705
<RECEIVABLES> 15033094
<ASSETS-OTHER> 48885
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 2588781684
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 15139591
<TOTAL-LIABILITIES> 15139591
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 2574098586
<SHARES-COMMON-STOCK> 2574098586
<SHARES-COMMON-PRIOR> 2363739180
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (456493)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 2573642093
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 97618400
<OTHER-INCOME> 0
<EXPENSES-NET> 3869301
<NET-INVESTMENT-INCOME> 93749099
<REALIZED-GAINS-CURRENT> 126601
<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> 0
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 93749099
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 39339183749
<NUMBER-OF-SHARES-REDEEMED> 39162052633
<SHARES-REINVESTED> 33228290
<NET-CHANGE-IN-ASSETS> 210486007
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> (583094)
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 2523721
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 5953186
<AVERAGE-NET-ASSETS> 524084962
<PER-SHARE-NAV-BEGIN> 1.00
<PER-SHARE-NII> .025
<PER-SHARE-GAIN-APPREC> 0
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<PER-SHARE-NAV-END> 1.00
<EXPENSE-RATIO> .43
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
