<PAGE> 1
TEMPCASH DOLLAR SHARES
AN INVESTMENT PORTFOLIO OFFERED BY
TEMPORARY INVESTMENT FUND, INC.
Bellevue Park Corporate Center For information call: (888)UBS-FUND
400 Bellevue Parkway, (888)827-3863.
Suite 100
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 TempCash 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, U.S. and foreign bank and commercial
obligations and repurchase agreements relating to such obligations. Under normal
market conditions, at least 25% of the Fund's total assets will be invested in
obligations of issuers in the banking industry and repurchase agreements
relating to such obligations.
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. 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.") The
New York Branch of Union Bank of Switzerland acts as a Service Organization on
behalf of its customers and customers of its affiliates with respect to all
shares offered by the Prospectus.
------------------------------
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> 2
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 January
31, 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.
---------------------
January 31, 1997
-2-
<PAGE> 3
BACKGROUND AND EXPENSE INFORMATION
The Company was incorporated in Maryland on February 8, 1973 and commenced
operations of the Fund in February 1984. The Fund presently offers two separate
classes of shares -- TempCash Shares and TempCash 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>
DOLLAR
SHARES
ESTIMATED ANNUAL FUND OPERATING EXPENSES -------------
<S> <C> <C>
(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>
- -----------------
EXAMPLE
<TABLE>
<CAPTION>
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 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 .58% 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> 4
FINANCIAL HIGHLIGHTS
The following financial highlights for TempCash Dollar Shares and TempCash
Shares have been derived from the financial statements of the Fund 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 annual report to shareholders, which may be
obtained by calling (800) 821-7432.
TEMPCASH DOLLAR SHARES
The table below sets forth selected financial data for a TempCash Dollar Share
outstanding throughout each year presented.
<TABLE>
<CAPTION>
YEAR ENDED SEPTEMBER 30,
-----------------------------------------------------------------------------
1996 1995 1994 1993 1992
-------- -------- --------- -------- --------
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Year ...... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
-------- -------- --------- -------- --------
Income From Investment Operations
Net Investment Income ................. .0517 .0550 .0345 .0285 .0399
Net Realized Gains on Investments ..... -- -- -- -- .0008
-------- -------- --------- -------- --------
Total From Investment Operations ...... .0517 .0550 .0345 .0285 .0407
-------- -------- --------- -------- --------
Less Distributions
Dividends (From Net Investment Income) (.0517) (.0550) (.0345) (.0285) (.0399)
Distributions (From Capital Gains) ... -- -- -- -- (.0008)
-------- -------- --------- -------- --------
Total Distributions ................... (.0517) (.0550) (.0345) (.0285) (.0407)
-------- -------- --------- -------- --------
Net Asset Value, End of Year ............ $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
======== ======== ========= ======== ========
Total Return .......................... 5.31% 5.65% 3.51% 2.89% 4.16%
Ratios/Supplemental Data
Net Assets, End of Year (000's) ...... $527,630 $454,156 $ 397,948 $307,239 $408,900
Ratio of Expenses to Average Daily
Net Assets .......................... .43%(1) .41%(1) .41%(1) .44%(1) .45%(1)
Ratio of Net Investment Income to
Average Daily Net Assets ............ 5.17% 5.50% 3.45% 2.85% 3.89%
<CAPTION>
YEAR ENDED SEPTEMBER 30,
------------------------------------------------------------------------
1991 1990 1989 1988 1987
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Year ...... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
-------- -------- -------- -------- --------
Income From Investment Operations
Net Investment Income ................. .0651 .0805 .0886 .0698 .0597
Net Realized Gains on Investments ..... -- -- -- -- --
-------- -------- -------- -------- --------
Total From Investment Operations ...... .0651 .0805 .0886 .0698 .0597
-------- -------- -------- -------- --------
Less Distributions
Dividends (From Net Investment Income) (.0651) (.0805) (.0886) (.0698) (.0597)
Distributions (From Capital Gains) ... -- -- -- -- --
-------- -------- -------- -------- --------
Total Distributions ................... (.0651) (.0805) (.0886) (.0698) (.0597)
-------- -------- -------- -------- --------
Net Asset Value, End of Year ............ $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
======== ======== ======== ======== ========
Total Return .......................... 6.72% 8.37% 9.25% 7.20% 6.15%
Ratios/Supplemental Data
Net Assets, End of Year (000's) ...... $438,721 $317,267 $209,507 $125,166 $135,866
Ratio of Expenses to Average Daily
Net Assets .......................... .45%(1) .45%(1) .45%(1) .44%(1) .55%(1)
Ratio of Net Investment Income to
Average Daily Net Assets ............ 6.32% 7.92% 8.92% 7.08% 6.01%
</TABLE>
- ----------
(1) Without the waiver of advisory and administration fees, the ratios of
expenses to average daily net assets for TempCash Dollar Shares would have
been .58%, .55%, .58%, .62%, .58%, .59%, .64%, .66%, .68% and .68% for the
years ended September 30, 1996, 1995, 1994, 1993, 1992, 1991, 1990, 1989,
1988 and 1987, respectively.
-4-
<PAGE> 5
TEMPCASH SHARES
The table below sets forth selected financial data for a TempCash Share
outstanding throughout each period presented.
<TABLE>
<CAPTION>
YEAR ENDED SEPTEMBER 30,
--------------------------------------------------------------------------------------
1996 1995 1994 1993 1992
---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Year ...... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
---------- ---------- ---------- ---------- ----------
Income From Investment Operations
Net Investment Income ................ .0542 .0575 .0370 .0310 .0424
Net Realized Gains on Investments .... -- -- -- -- .0008
---------- ---------- ---------- ---------- ----------
Total From Investment Operations ..... .0542 .0575 .0370 .0310 .0432
---------- ---------- ---------- ---------- ----------
Less Distributions
Dividends (From Net Investment Income) (.0542) (.0575) (.0370) (.0310) (.0424)
Distributions (From Capital Gains) ... -- -- -- -- (.0008)
---------- ---------- ---------- ---------- ----------
Total Distributions .................. (.0542) (.0575) (.0370) (.0310) (.0432)
---------- ---------- ---------- ---------- ----------
Net Asset Value, End of Year ............ $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
========== ========== ========== ========== ==========
Total Return ......................... 5.56% 5.90% 3.76% 3.14% 4.41%
Ratios/Supplemental Data
Net Assets, End of Year (000's) ...... $1,835,326 $1,316,166 $2,330,456 $1,479,035 $1,492,959
Ratio of Expenses to Average Daily
Net Assets ......................... 18%(1) .16%(1) .16%(1) .19%(1) .20%(1)
Ratio of Net Investment Income to
Average Daily Net Assets ........... 5.42% 5.75% 3.70% 3.10% 4.14%
<CAPTION>
YEAR ENDED SEPTEMBER 30,
------------------------------------------------------------------------------
1991 1990 1989 1988 1987
---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Year ...... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
---------- ---------- ---------- ---------- ----------
Income From Investment Operations
Net Investment Income ................ .0676 .0830 .0911 .0723 .0622
Net Realized Gains on Investments .... -- -- -- -- --
---------- ---------- ---------- ---------- ----------
Total From Investment Operations ..... .0676 .0830 .0911 .0723 .0622
---------- ---------- ---------- ---------- ----------
Less Distributions
Dividends (From Net Investment Income) (.0676) (.0830) (.0911) (.0723) (.0622)
Distributions (From Capital Gains) ... -- -- -- -- --
---------- ---------- ---------- ---------- ----------
Total Distributions .................. (.0676) (.0830) (.0911) (.0723) (.0622)
---------- ---------- ---------- ---------- ----------
Net Asset Value, End of Year ............ $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
========== ========== ========== ========== ==========
Total Return ......................... 6.97% 8.62% 9.50% 7.45% 6.40%
Ratios/Supplemental Data
Net Assets, End of Year (000's) ...... $1,528,637 $1,179,276 $ 560,740 $ 319,267 $ 48,602
Ratio of Expenses to Average Daily
Net Assets ......................... .20%(1) .20%(1) .20%(1) .19%(1) .30%(1)
Ratio of Net Investment Income to
Average Daily Net Assets ........... 6.57% 8.17% 9.17% 7.33% 6.26%
</TABLE>
- ----------
(1) Without the waiver of advisory and administration fees, the ratios of
expenses to average daily net assets for TempCash shares would have been
.33%, .30%, .33%, .37%, .33%, .34%, .39%, .41%, .43% and .43% for the years
ended September 30, 1996, 1995, 1994, 1993, 1992, 1991, 1990, 1989, 1988,
and 1987, respectively.
-5-
<PAGE> 6
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, U.S. and foreign 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 of 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.
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.
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.
A description of applicable NRSRO ratings is in the Appendix to the Statement of
Additional Information.
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. 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
-6-
<PAGE> 7
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 obligations of issuers in the banking industry, such
as bank holding company obligations and certificates of deposit, bankers'
acceptances and time deposits, including U.S. dollar-denominated instruments
issued or supported by the credit of U.S. or foreign banks or savings
institutions having total assets at the time of purchase in excess of $1
billion. The Fund may invest substantially in obligations of foreign banks or
foreign branches of U.S. banks where the investment adviser deems the instrument
to present minimal credit risks. Such investments may nevertheless entail risks
that are different from those of investments in domestic obligations of U.S.
banks due to differences in political, regulatory and economic systems and
conditions. The Fund may also make interest-bearing savings deposits in
commercial and savings banks in amounts not in excess of 5% of its assets.
The Fund may invest in commercial paper and short-term notes and corporate
bonds that meet the Fund's quality and maturity restrictions. Commercial paper
purchased by the Fund may include instruments issued by foreign issuers, such as
Canadian Commercial Paper, which is U.S. dollar-denominated commercial paper
issued by a Canadian corporation or a Canadian counterpart of a U.S.
corporation, and in Europaper, which is U.S. dollar-denominated commercial paper
of a foreign issuer, subject to the criteria stated above for the other
commercial paper issuers.
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 rate 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 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.
-7-
<PAGE> 8
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
and collateralized mortgage obligations ("CMOs") issued or guaranteed by U.S.
Government agencies and instrumentalities or issued by private companies.
Purchasable mortgage-related securities also include adjustable rate securities.
The estimated life of certain asset-backed securities varies with the prepayment
experience with respect to the underlying debt instruments. For this and other
reasons, an asset-backed security's stated maturity may be shortened, and the
security's total return may be difficult to predict precisely. CMOs sometimes
demonstrate an additional level of volatility and may, in certain circumstances,
be less liquid than other money market instruments. The Fund currently intends
to hold CMOs only as collateral for repurchase agreements.
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.
The Fund may make investments in obligations, such as guaranteed
investment contracts and similar funding agreements (collectively "GICs"),
issued by highly rated U.S. insurance companies. A GIC is a general obligation
of the issuing insurance company and not a separate account. The Fund's
investments in GIC's are not expected to exceed 5% of its total assets at the
time of purchase absent unusual market conditions. GIC investments are subject
to the Fund's policy regarding investments in illiquid securities.
-8-
<PAGE> 9
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 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 and 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 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, 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 industry.
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> 10
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"). The New York Branch of Union Bank of Switzerland ("UBS") 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 UBS directly to PFPC, the Fund's
transfer agent. All such transactions are effected pursuant to procedures
established by UBS 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 by UBS to PFPC
in Wilmington, Delaware, by telephone 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 3:00 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 4:00 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 4:00 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.) The Fund may in its
discretion reject any order for shares.
Payment for Dollar Shares may be made only in federal 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, such as UBS, may set a higher minimum initial investment and
minimum subsequent investments for their customers.
-10-
<PAGE> 11
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, should 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 UBS to PFPC in Wilmington,
Delaware in the manner described under "Purchase Procedures." Shares are
redeemed at the net asset value per share next determined after PFPC's receipt
of the redemption order. 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 3:00 P.M., Eastern time, on a Business Day is normally made in federal
funds wired to the redeeming shareholder on the same day. Payment for redemption
orders which are received between 3:00 P.M. and 4:00 P.M., Eastern time, or 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 shareholder. 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 shareholder increases the value of its account to
$1,000 or more, no such redemption shall take place. Service Organizations, such
as UBS, may require that customers maintain share accounts with minimum balances
in excess of $1,000. In addition, the Fund may 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 4:00 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
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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 TempFund portfolio.
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 accordance with
its customer agreements, and to provide 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
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United States. PIMC and PNC Bank also serve as investment adviser and
sub-adviser, respectively, to the Company's TempFund 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 time reduce the 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 fees 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
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<PAGE> 14
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 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. The New York
Branch of Union Bank of Switzerland, 1345 Avenue of the Americas, New York, New
York 10105, will act as the Service Organization for the Dollar Shares offered
by this Prospectus to its customers and customers of its affiliates. Dollar
Shares are identical in all respects to TempCash 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
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<PAGE> 15
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 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 and 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 to shares held of
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<PAGE> 16
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.
Dividends are determined in the same manner for each class of shares of
the Fund. Dollar Shares bear all the expense of fees paid to Service
Organizations, and as a result, at any given time, the dividend on Dollar Shares
will be approximately .25% lower than the dividend on TempCash Shares.
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 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
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<PAGE> 17
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
"yields" and "effective yields" for TempCash Shares and Dollar Shares may be
quoted. Yield quotations are computed separately for TempCash Shares and Dollar
Shares. 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 yields 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 are 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 by Lipper Analytical
Services, Inc., and publications of a local or regional nature.
THE FUND'S YIELD FIGURES FOR TEMPCASH SHARES AND 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 directly to their customers
in connection with investments in Fund Shares are not reflected in the Fund's
yields;
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<PAGE> 18
such fees, if charged, would reduce the actual return received by customers on
their investments. The methods used to compute the Fund's yields are described
in more detail in the Statement of Additional Information. Investors may call
(800) 821-6006 (Dollar Shares code: 23) 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 Series 1 Common Stock.
Shares of Class C Common Stock and Class C -- Special Series 1 Common Stock
(also known as "Dollar Shares") represent interests in the Company's TempCash
portfolio. Shares of Class B Common Stock and Class B --Special Series 1 Common
Stock 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 TEMPFUND 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.
Each Fund share represents an equal, proportionate interest in the assets
belonging to the Fund. 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 TempCash 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 TempFund 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.)
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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> 20
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 ........................................................ 2
FINANCIAL HIGHLIGHTS ..................................................... 3
INVESTMENT OBJECTIVE AND
POLICIES ........................................................... 5
PURCHASE AND REDEMPTION OF
SHARES ............................................................. 7
MANAGEMENT OF THE FUND ................................................... 9
DIVIDENDS ................................................................ 11
TAXES .................................................................... 12
YIELDS ................................................................... 12
DESCRIPTION OF SHARES AND
MISCELLANEOUS ...................................................... 13
UBS
Money Market
Investment Program
IN THE TEMPCASH PORTFOLIO
(DOLLAR SHARES)
PROSPECTUS
JANUARY 31, 1997
(AS SUPPLEMENTED ON APRIL 10, 1997)
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